SPEAKERS CONTENTS INSERTS
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THREAT POSED BY THE CONVERGENCE OF ORGANIZED CRIME, DRUG TRAFFICKING,
SUBCOMMITTEE ON CRIME
COMMITTEE ON THE JUDICIARY
HOUSE OF REPRESENTATIVES
ONE HUNDRED SIXTH CONGRESS
DECEMBER 13, 2000
Serial No. 148
Printed for the use of the Committee on the Judiciary
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For sale by the U.S. Government Printing Office
Superintendent of Documents, Congressional Sales Office, Washington, DC 20402
COMMITTEE ON THE JUDICIARY
HENRY J. HYDE, Illinois, Chairman
F. JAMES SENSENBRENNER, Jr., Wisconsin
BILL McCOLLUM, Florida
GEORGE W. GEKAS, Pennsylvania
HOWARD COBLE, North Carolina
LAMAR S. SMITH, Texas
ELTON GALLEGLY, California
CHARLES T. CANADY, Florida
BOB GOODLATTE, Virginia
STEVE CHABOT, Ohio
BOB BARR, Georgia
WILLIAM L. JENKINS, Tennessee
ASA HUTCHINSON, Arkansas
EDWARD A. PEASE, Indiana
CHRIS CANNON, Utah
JAMES E. ROGAN, California
LINDSEY O. GRAHAM, South Carolina
MARY BONO, California
SPENCER BACHUS, Alabama
JOE SCARBOROUGH, Florida
Page 3 PREV PAGE TOP OF DOCDAVID VITTER, Louisiana
JOHN CONYERS, Jr., Michigan
BARNEY FRANK, Massachusetts
HOWARD L. BERMAN, California
RICK BOUCHER, Virginia
JERROLD NADLER, New York
ROBERT C. SCOTT, Virginia
MELVIN L. WATT, North Carolina
ZOE LOFGREN, California
SHEILA JACKSON LEE, Texas
MAXINE WATERS, California
MARTIN T. MEEHAN, Massachusetts
WILLIAM D. DELAHUNT, Massachusetts
ROBERT WEXLER, Florida
STEVEN R. ROTHMAN, New Jersey
TAMMY BALDWIN, Wisconsin
ANTHONY D. WEINER, New York
THOMAS E. MOONEY, SR., General Counsel-Chief of Staff
JULIAN EPSTEIN, Minority Chief Counsel and Staff Director
Subcommittee on Crime
BILL McCOLLUM, Florida, Chairman
STEVE CHABOT, Ohio
Page 4 PREV PAGE TOP OF DOCBOB BARR, Georgia
GEORGE W. GEKAS, Pennsylvania
HOWARD COBLE, North Carolina
LAMAR S. SMITH, Texas
CHARLES T. CANADY, Florida
ASA HUTCHINSON, Arkansas
ROBERT C. SCOTT, Virginia
MARTIN T. MEEHAN, Massachusetts
STEVEN R. ROTHMAN, New Jersey
ANTHONY D. WEINER, New York
SHEILA JACKSON LEE, Texas
GLENN R. SCHMITT, Chief Counsel
DANIEL J. BRYANT, Chief Counsel
RICK FILKINS, Counsel
CARL THORSEN, Counsel
BOBBY VASSAR, Minority Counsel
C O N T E N T S
December 13, 2000
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McCollum, Hon. Bill, a Representative in Congress From the State of Florida, and chairman, Subcommittee on Crime
Cilluffo, Frank, senior policy analyst and deputy director, Center for Strategic and International Studies
Marshall, Donnie R., Administrator, United States Drug Enforcement Administration
McCraw, Steven C., Inspector-Deputy Assistant Director, Information, Analysis, and Assessments Branch, Investigative Division, Federal Bureau of Investigation
Mutschke, Ralf, assistant director, Sub-Directorate for Crimes Against Persons and Property, Interpol General Secretariat, Lyon, France
Perl, Raphael, Specialist in International Affairs, Congressional Research Service, The Library of Congress
Sheehan, Michael A., Ambassador-At-Large and Coordinator for Counterterrorism, United States Department of State
LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING
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Cilluffo, Frank, senior policy analyst and deputy director, Center for Strategic and International Studies: Prepared statement
Marshall, Donnie R., Administrator, United States Drug Enforcement Administration: Prepared statement
McCraw, Steven C., Inspector-Deputy Assistant Director, Information, Analysis, and Assessments Branch, Investigative Division, Federal Bureau of Investigation: Prepared statement
Mutschke, Ralf, assistant director, Sub-Directorate for Crimes Against Persons and Property, Interpol General Secretariat, Lyon, France: Prepared statement
Perl, Raphael, Specialist in International Affairs, Congressional Research Service, The Library of Congress: Prepared statement
Scott, Hon. Robert C., a Representative in Congress From the State of Virginia: Prepared statement
Sheehan, Michael A., Ambassador-At-Large and Coordinator for Counterterrorism, United States Department of State: Prepared statement
THREAT POSED BY THE CONVERGENCE OF ORGANIZED CRIME, DRUG TRAFFICKING, AND TERRORISM
Page 7 PREV PAGE TOP OF DOCWEDNESDAY, DECEMBER 13, 2000
House of Representatives,
Subcommittee on Crime,
Committee on the Judiciary,
The subcommittee met, pursuant to call, at 10 a.m., in Room 2141, Rayburn House Office Building, Hon. Bill McCollum [chairman of the subcommittee] presiding.
Present: Representatives Bill McCollum, Steve Chabot, and George W. Gekas.
Staff Present: Daniel J. Bryant, chief counsel; Glenn R. Schmitt, chief counsel; Carl Thorsen, counsel; Veronica L. Eligan, staff assistant; and James Rybicki, staff assistant.
OPENING STATEMENT OF CHAIRMAN MCCOLLUM
Mr. MCCOLLUM. The Subcommittee on Crime will come to order.
This is a special day in a couple of ways. One, it is the last subcommittee hearing I get to chair as chairman, and I want to thank Mr. Gekas and Mr. Chabot for being here today.
Page 8 PREV PAGE TOP OF DOC It is a special day because of the subject matter, to talk about organized crime, drug trafficking and terrorism, which all have been subjects individually, which has been a passion of mine as a Member of Congress and then to have a hearing where the nexus are in some way related is a very special occasion.
Today is also a sad day and I want to comment on that. I wear two hats. I am chairman of the Crime Subcommittee and Human Intelligence, and the three of us have had a closed briefing on some of the members in that community today, and I am reminded that today we are not joined by some of our other colleagues because there will be a funeral later today for the late Julian Dixon, our colleague, who served a good number of years on the Intelligence Committee, at the time of his death was the ranking member there, and I think we should pay a moment of silence to Julian Dixon's memory, a great Member of Congress.
Now, today's hearing, I want to welcome all of the witnesses who are going to be here. We have a couple of panels.
Organized crime, drug trafficking and terrorism are three serious problems, each in their own right. Historically Americans have viewed these as separate problems, and that is still the case, but the common perception was that drugs were a danger only to a small percentage of individuals using or selling them, organized crime has been largely wiped out through the dismantling of Cosa Nostra over the last decade, and that dangers posed by terrorist groups is only present on foreign soil.
Page 9 PREV PAGE TOP OF DOC Unfortunately, that is not the reality. The convergence in many ways of organized criminal activity, including drug trafficking and terrorism, is a growing concern to the United States and the world. Some experts in the field suggest that in a growing number of cases organized crime and terrorism are being jointly orchestrated, and that this trend can be developing into a global phenomenon. If true, we face a significant new challenge from both law enforcement and national security perspectives.
But even if they are not intertwined in an immediate and direct contractual way, the reality appears to be that drug trafficking and terrorism in an organized sense is very much present, and that organizational sense alone means that is in many cases organized criminal behavior by those involved in it, whether it is Cosa Nostra or the Russian mafia or anybody like that engaged in it or not.
Drug trafficking and terrorism are illegal, clandestine activities and they have a number of common needs: the acquisition of weapons, the maintaining of anonymity, hiding assets, keeping a steady flow of cash, and they both have found their hands strengthened through the ability to operate transnationally. It is important to bear in mind for a variety of reasons, including the collapse and diminished prosperity of certain governments, state funding for terrorism is drying up and terrorists are increasingly looking to crime for funding.
Criminal drug organizations can no longer be examined simply in the context of their drug trafficking activities. Drug cartels are more sophisticated than ever before and they engage simultaneously in other forms of criminal activities, including illicit arms trading, alien smuggling, technology theft and terrorism. Drug cartels have the ability to move vast amounts of money in and out of legitimate financial systems, and as a result of the increasingly globalized economy, the trend is toward deregulation, open borders and enhanced international movement of people, goods and services. This global capitalism and free trade facilitates the ability of terrorists and their support networks to operate internationally.
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While insurgency and guerrilla warfare were threats that characterized the Cold War environment, it may be that terrorism and its coordinated criminal activity and drug trafficking will become a high priority national security concern in post Cold War America.
There are a number of regions of the world today where the convergence of organized crime, drug trafficking and terrorism is troubling. The obvious example is South America's oldest democracy, Colombia. Since the end of the Cold War, the Revolutionary Armed Forces of Colombia, known as the FARC, has expanded its use of conventional criminal activities to finance terrorist operations aimed at overthrowing the Colombian government. Its growth is directly related to its association with drug production and trafficking. In Russia, organized crime groups have developed strategic alliances globally with drug traffickers, involving themselves in transshipment of cocaine and heroin in both Latin America and Central Asia. One notorious example of such an alliance was the 1997 Cali cartel attempt to purchase a Russian submarine complete with crew to circumvent interdiction efforts.
What is alarming is that these strategic alliances may not be limited to narcotics. One especially disturbing and not unrealistic scenario is the possibility of a strategic alliance between Russian criminals and the terrorist group related to supply and shipment of weapons to be used in an attack here in the United States. There is no evidence that has occurred, but no question the possibility of that in the future exists. It is alarming as the networks continue to grow and relationships too.
I am also deeply troubled that Afghanistan, a country controlled by Islamic fundamentalist Taliban may be the world's largest source country for heroin. Our best intelligence indicates that production is on its way up and that 96 percent of the heroin is cultivated in Taliban-controlled provinces. I am interested to learn to what extent the Taliban is known to finance its military operations with narcotics revenue as well as whether any known terrorists are involved in the narcotics trade in that region.
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This morning we have some knowledgeable witnesses that will help us understand this global trend and why it is such a significant development, as well as develop a national security response.
Do any other members wish to make opening statements? Mr. Gekas.
Mr. GEKAS. I thank the Chair. My opening comments will be to endorse the timeliness of the Chair's choosing these subject matters for reintroduction into the committee process, but more importantly I simply want to place on the record my personal commendation for the work of this chairman, the gentleman from Florida, not only in this subcommittee but throughout his tenure in Congress. He has been a driving force on many of the issues that have reached the floor of the House of Representatives over the last 20 years and which have in many cases become law.
I remember his concentration very early on the question of the death penalty, particularly in courts martial military code which no one seemed to adopt as an issue at that time, and for the gentleman of Florida that was important and he took it to its ultimate. But in more recent years his ideas and innovativeness with respect to revising and reforming the bankruptcy code of our Nation and whole system were the keystone in the bankruptcy reform bill that was ultimately passed by both the House and the Senate and now is waiting the signature of the President of the United States, but his ideas, his drive, his leadership, are primarily responsible for the impetus which was gained in bringing those issues to the floor.
So he has made his mark in the Congress and it is too bad that today is his last mark in the Congress with respect to actively developing and assessing legislation. So I wish him well and we will try to continue his work in various ways.
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Mr. MCCOLLUM. Mr. Gekas, I thank you for those kind words. I sat next to you on the full committee for a number of years and I know how much you put into the bankruptcy bill itself. It is your leadership, and I am honored to play a small role.
Mr. CHABOT. I would like to reiterate Mr. Gekas' remarks and thank you for your leadership on this committee. It has been an honor to serve under you. We had very interesting hearings and your leadership has been exemplary. I look forward to serving under Mr. Gekas' chairmanship on this committee if that is where we are at. Thank you for your leadership.
Mr. MCCOLLUM. Thank you, Mr. Chabot. You have done yeoman's work in substituting for me and acting as the chairman. I appreciate your kind words.
Mr. Scott is not able to be with us today and he did want a statement introduced for the record. Without objection, so ordered.
[The prepared statement of Mr. Scott follows:]
PREPARED STATEMENT OF HON. ROBERT C. SCOTT, A REPRESENTATIVE IN CONGRESS FROM THE STATE OF VIRGINIA
I regret that I could not attend this hearing due to my attendance, along with Minority members of the Subcommittee, at the funeral this morning of our colleague, Congressman Julian Dixon, in Los Angeles, California. I also regret that this hearing could not be rescheduled to a time mutually convenient to the members of the Subcommittee and the witnesses.
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Mr. MCCOLLUM. On the first panel is Donnie R. Marshall, Administrator, Drug Enforcement Administration. He was confirmed by the Senate in May of this year and sworn in by the President June 2. A native of Dallas, Texas, he began his law enforcement career in 1969 as a special agent with the Bureau of Narcotics and Dangerous Drugs, a predecessor agency of the DEA. He continued with DEA, serving in many different capacities before being the first Administrator ever chosen from within the ranks of the DEA. It is a pleasure to have you again testifying before us, Mr. Marshall.
The Honorable Michael A. Sheehan is the Ambassador-at-Large and Coordinator for Counterterrorism at the United States Department of State. Prior to his present position, he served on both the National Security Council staff and as Director of Political Military Affairs and a Special Counselor to former Ambassador to the United Nations, Madeleine Albright. He is a graduate of the United States Military Academy and received Master's Degrees from Georgetown University and the U.S. Army Command and General Staff College. Ambassador Sheehan retired as a lieutenant colonel in the U.S. Army in June 1997 to join the State Department.
Your complete statements will be admitted to the record. Without objection, so ordered. I will recognize each of you to give us such summary of your statements as you choose, starting first with you, Mr. Marshall.
STATEMENT OF DONNIE R. MARSHALL, ADMINISTRATOR, UNITED STATES DRUG ENFORCEMENT ADMINISTRATION
Mr. MARSHALL. Thank you, Mr. Chairman.
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Mr. Chairman, Mr. Chabot, Mr. Gekas, it is always a pleasure for me to appear before this subcommittee, and before I start my statement I just want to tell the entire subcommittee, and particularly you, Mr. Chairman, how much the 9,000 courageous and talented men and women of DEA appreciate how much this subcommittee has done in support of DEA and particularly under your leadership. We will miss your leadership, and we look forward to continuing our relationship with this subcommittee in the next Congress.
I am here today, as you mentioned, Mr. Chairman, to talk about the threat posed by the convergence of organized crime, drug trafficking and terrorism. Now certainly as a law enforcement agency, DEA has a mission of gathering evidence sufficient to arrest, indict and convict drug criminals. We work within the legal systems of host nations as well as our own legal system. We work in cooperation with our host country police agency counterparts. With that in mind, my testimony has been presented and I will present my comments from a perspective of law enforcement; that is, the DEA perspective.
First, I want to discuss a little bit about Colombia. Attacking the Colombian organizations has to be the centerpiece of any coordinated strategy which is aimed at organized crime, drugs and terrorism. The Colombian traffickers control the manufacture of the vast majority of cocaine in South America, and what we see in the U.S. in this day and age is that the Colombian traffickers' fingerprints are on virtually every kilogram of cocaine that is sold in the U.S..
Much of the cocaine processing occurs in the eastern lowlands, the southern rain forests of Colombia, where the national government exerts very limited authority. This geographic fact poses a real challenge for the American and Colombian counterdrug policy. It makes it difficult for the Colombian government to assert sufficient authority in those areas.
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DEA of course does not have a counterterrorism or a counterinsurgency mission, but when we do acquire information of that sort in our intelligence collection programs, we share that with the appropriate U.S. and foreign agencies.
From my perspective the major two insurgent groups that are active in Colombia are the Revolutionary Armed Forces of Colombia, or the FARC, and the National Liberation Army, or the ELN. The presence of the FARC in these eastern lowlands and the southern rain forest hinders the Colombian government's ability to conduct counterdrug operations, and the presence of ELN in the northeast and central and northwestern parts of Colombia impacts on the security of oil pipelines and, more importantly to my mission, it hinders eradication operations against opium poppy and marijuana growing areas.
Now, beyond the involvement and the presence of those two organizations in the drug crop cultivation and processing areas, there do appear to be some links between traffickers and terrorists. Some of these units practice extortion or provide protection in return for weapons or cash payments. Others allegedly are engaged in cocaine laboratory operations, in transportation of drugs, storing of cocaine and marijuana, and protecting basically clandestine air strips and transportation in southern Colombia.
But these terrorists in my view and in the judgment of DEA are not the glue that holds the drug trafficking together in Colombia. We don't believe that the FARC should be viewed as equal to the traditional drug trafficking cartels. It is true that the profits represented by the drug trade have taken on a very big role and probably an ever-growing role in financing those organizations.
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Russian organized crime groups are also involved in drug trafficking. They use criminals from Russia, East Europe, and they are certainly involved here in the United States in trafficking several drugs but particularly MDMA, or Ecstasy. Internationally those Russian organized crime groups are involved in the cocaine and heroin trade to Russia, to the Soviet Union and to Europe as well. Their involvement has increased recently because of the shifting of the major trafficking routes to Europe through the Balkans and through Russia and through some of the former Soviet Union countries.
The biggest threat are the criminal organizations based in Mexico. These organizations truly pose the greatest challenge that U.S. law enforcement and drug enforcement agencies have ever faced in the history of our country. Because of the ever increasing cross border traffic and commerce between the U.S. and Mexico, a number of these international organized crime groups have established very elaborate and efficient smuggling methods across that border.
It has also been established, in addition to drug trafficking, these international organizations spawn an immense amount of violence, corruption and intimidation, and that threatens the safety of cities and towns across America.
While these Mexican organized crime groups are not terrorists in the traditional sense, in the sense that they are seeking necessarily to put some political plan in effect by violent means, they nonetheless are very efficient at using terroristic type tactics to advance their drug operations. The primary reason that those groups have been able to avoid arrest and continue their criminal enterprises is their ability to intimidate witnesses, assassinate and corrupt public officials.
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There are many clear examples of this. We have seen some recently in our efforts to apprehend members of the Arellano Felix cartel and the Cardenas Guillen cartel based in Tijuana. In November 1999 some members of the Gulf Cartel Group actually detained and assaulted two U.S. agents, a DEA agent and an FBI agent in Matamoros, Mexico, right across the international border from Brownsville, Texas. There have been literally countless kidnappings, tortures and murders of police and judicial officials in Mexico. This type of terrorism, while not traditional terrorism, is a brand of terrorism that impacts on our ability and the government of Mexico's ability to deal with these Mexico-based drug traffickers.
In conclusion, I want to say that we will continue to build judicial cases against the leaders of these criminals groups and we will do that despite the escalating threat of violence. We remain committed to our most significant goal, which is to target and arrest the most significant drug traffickers in the world. We will work with the domestic law enforcement and our host nation governments to improve our efforts against international drug smuggling and to improve exchanges of intelligence and actual enforcement results.
Again, Mr. Chairman, committee members, I want to thank you for the opportunity to appear here today and at the appropriate time I will be happy to respond to any questions you might have. Thank you.
[The prepared statement of Mr. Marshall follows:]
PREPARED STATEMENT OF DONNIE R. MARSHALL, ADMINISTRATOR, UNITED STATES DRUG ENFORCEMENT ADMINISTRATION
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Chairman McCollum, it is a pleasure for me to appear before you one last time. It is, as always, a pleasure to appear before you and the other members of the Subcommittee. We in DEA deeply appreciate your support for our fight against international drug trafficking over the years. Indeed we look forward to continuing our work with the Subcommittee on Crime in the next Congress. I appear before you today to testify on the threat posed by the convergence of organized crime, drug trafficking, and terrorism. The international drug trafficking organizations that smuggle their poison into our country, and that use terrorist violence to further their criminal activities are, indeed, a threat to the national security of the United States.
DEA's mission is to target the powerful international drug organizations that operate around the world, supplying drugs to American communities, employing thousands of individuals to transport and distribute drugs. Historically as well as today, some of these groups do not hesitate to use violence and terror to advance their interests at the expense of law-abiding citizens. We see in these groups today a merger of international organized crime, drugs, and terror. While DEA does not specifically target terrorists, per se, we can and will target drug traffickers involved in terrorist acts, wherever in the world we can find them and track them down.
As a law enforcement agency, DEA aims to gather evidence sufficient to arrest, indict, and convict criminals. When DEA operates in foreign posts, we work within the legal systems of our host nations, and of course within the structures of the U.S. legal system and in cooperation with our host nation police agency counterparts. Our evidence must be usable in a court of law, and must withstand severe scrutiny at every level of the criminal justice process. With that in mind, my testimony will be limited to presenting DEA's view from a law enforcement perspective of the evil union of drug trafficking, organized crime, and terrorism. I will also briefly describe some of the steps we are taking to counter this threat.
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INTERNATIONAL ORGANIZED CRIME AND DRUGS:
Members of international drug trafficking organizations headquartered in Colombia, Mexico, and other countries today have at their disposal sophisticated communications equipment. These technologies are being utilized by drug trafficking organizations to oversee the drug business from its raw beginnings in South American jungles to the urban areas within the United States. Modern technology and vast resources enable the leaders of international criminal groups to build organizations that reach into the heartland of America, while they themselves try to remain beyond the reach of American justice.
The traffickers also have the financial resources necessary to corrupt enough law enforcement, military, and political officials to create a relatively safe haven for themselves in the countries in which they make their headquarters. The cell or compartmentalized structure of the organizations necessitates a complex system of communications to enable the organizations' leaders to know where their stores of illegal drugs are located, how much profit is being made, and where and when deliveries will take place. These organizations have the resources to take whatever measures they feel necessary to protect their investments through bribery, corruption, intimidation, violence, and terrorism.
As complex as these communications arrangements of organized crime groups are, U.S. law enforcement agencies have been able to pierce their communications by using court-approved interceptions. With some of the top leadership of these organizations in hiding beyond the immediate reach of U.S. law enforcement, we have directed our resources at their organizational structure, and their transportation and distribution elements in the United States. By targeting these traffickers' communications, we can disrupt their operations and minimize the violence they are able to perpetrate on innocent citizens.
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THE COUNTERDRUG SITUATION IN COLOMBIA AND THE REGION
Attacking Colombian organizations must be the centerpiece of any coordinated strategy aimed at the union of organized crime, drugs and terrorism. Colombian traffickers control the manufacture of the vast majority of cocaine in South America and their fingerprints are on virtually every kilogram of cocaine sold in U.S. cities and towns.
Colombia continues, as it has for a number of years, as the key South American coca source country. Colombia has always beenand remainsthe world's number one producer of finished cocaine HCl, producing more than 70 percent of the world's cocaine HCl. The U.S. government estimates the Colombian potential cocaine production from that country's 1999 domestic coca crop at 520 metric tons. This is an increase of 85 metric tons over the 1998 crop.
In addition to its central role in coca production, Colombia is now also the world's largest producer of cocaine base (the intermediate coca product that must be further refined into finished cocaine HCl). As recently as 1995, however, Colombia only produced about one-quarter of the world's cocaine base. Each year, hundreds of tons of cocaine base were imported via aircraft into Colombia from Peru or Bolivia. Since 1995, net coca cultivation in Colombia has more than doubled (from 50,000 hectares in 1995 to 122,900 hectares in 1999). In 1999, Colombia produced approximately 68 percent of the world's cocaine base. Accordingly, Colombian traffickers are far less dependent on Peruvian or Bolivian cocaine base sources of supply.
Most of Colombia's new coca cultivation, and much of its cocaine processing, occurs in the eastern lowlands and southern rain forestareas where the national government exerts limited authority. This geographic fact poses a significant challenge to U.S. and Colombian counterdrug policy. It is difficult for the Colombian government to assert any kind of authority in the area, making it possible for Colombian cocaine trafficking organizations with bases of operations in these areas to continue to dominate the international cocaine trade.
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Notwithstanding the recent dramatic increase in Colombia's potential cocaine production, total Andean Region cocaine production has actually declined in recent years, due to unprecedented reductions in Peruvian and Bolivian cocaine production. Potential cocaine production in Bolivia decreased from 150 metric tons in 1998 to 70 metric tons in 1999, largely due to the Bolivian Government's unprecedented coca eradication program. In 1999, the Bolivian Government eradicated 16,999 hectares of coca. Potential cocaine production in Peru has decreased from 240 metric tons in 1998 to 175 metric tons in 1999. As a result of coca field abandonment and eradication, net coca cultivation in Peru has decreased from 51,000 hectares in 1998 to 38,700 hectares in 1999.
DRUGS AND TERRORISM: INSIDE COLOMBIA
There is deep concern in DEA, as in the rest of the Administration and in the Congress, about the connection between the FARC and other terrorist groups involved in the drug trade in Colombia. The Colombian government is now engaged in responding to this armed challenge with assistance from the United States. DEA will continue to pay close attention to FARC involvement in the drug trade. We will, together with our Colombian partners, take whatever steps are necessary to attack the international organized crime groups that are the driving force behind the drug trade and the armed groups that may be protecting them.
DEA has in the past demonstrated its ability and willingness to fight drug trafficking even in the face of terrorist activity. For example, we participated in the struggle with Pablo Escobar in Colombia, a trafficker who turned to terrorism when the net was closing around him.
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The same facts of geography that make it difficult for the Colombia government to exert authority over the traffickers operating in remote areas of the country also make it difficult for the Colombians to confront various terrorist or insurgent groups operating in the same region. There is, naturally, considerable interest in the extent to which the two problemsdrug trafficking and terrorismare intertwined in the region. As I have already stated, DEA does not have a counter-terrorism or counter-insurgency mission. When DEA does, however, acquire relevant information from its active drug investigations and drug intelligence collection programs, we share that information with the appropriate U.S. agenciesones that do have counter-terrorism responsibilities. DEA passes specific threat information on to the FBI in domestic cases and to the foreign intelligence community in overseas cases.
It is well known that two major insurgent groups are active in Colombia. They are the Revolutionary Armed Forces of Colombia (FARC), with some 7,000 to 11,000 active combatants, and the National Liberation Army (ELN), with some 3,000 to 6,000 active combatants. It is also known that the presence of the FARC in Colombias eastern lowlands and southern rainforestthe country's primary coca cultivation and cocaine processing regionshinders the Colombian Government's ability to conduct counterdrug operations. The presence of the ELN in the northeast, central, and northwestern parts of Colombia impacts on the security of oil pipelines, and hinders eradication operations against opium poppy and marijuana growing areas.
Beyond the FARC's and ELN's well-established presence in the drug crop cultivation and processing areas, there do appear to be some links between the traffickers and the terrorists. To be sure, there are differences of view in the United States on just how involved the FARC and ELN are in drug trafficking. DEA reporting and analysis demonstrated several areas of just such involvement. Some insurgent units raise funds through extortion or by protecting laboratory operations. In return for cash payments, or possibly in exchange for weapons, the insurgents protect cocaine laboratories in southern Colombia. Some FARC and ELN units are probably independently involved in limited cocaine laboratory operations. Some insurgent units apparently have assisted drug trafficking groups in transporting and storing cocaine and marijuana within Colombia. In particular, some insurgent units protect clandestine airstrips in southern Colombia.
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An alliance of convenience between guerillas and traffickers is nothing new. Since the 1970s, drug traffickers based in Colombia have made temporary alliances of convenience with leftist guerillas, or with right wing groups. In each case, this has been done to secure protection for the drug interests. At other times, the drug traffickers have financed their own private armies to provide security services. If the traffickers did not buy security from the FARC or ELN, they would buy it from elsewhereas they have done in the past.
The frequent ground fire sustained by CNP aircraft when engaged in eradication missions over FARC or ELN controlled areas is indicative of the extent to which the terrorists will go to protect the drug interests. Some of these shootings may well have been angry peasants lashing out at a government target. In either case, these shooting incidents pose a threat to personnel conducting counter-lab or eradication operations.
The revenues provided by the drug trade have apparently become increasingly important to many insurgent fronts. In fact, some insurgent fronts have become little more than bands of well-armed thugs that sell their services to drug traffickers. Moreover, DEA has no way to assess the total amount or even the gross proportion of the terrorists' revenues represented by drug proceeds.
On the other side of the political spectrum from the FARC and ELN, other right-wing paramilitary groups (with some 5,000 active combatants) conduct combat operations and terrorist attacks throughout Colombia against the insurgents and their alleged civilian sympathizers. Northern and central Colombia continue to be the primary base of operations for paramilitary groups. Paramilitary groups have become more active in southern Colombia.
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Colombia's paramilitary groups do not appear to be directly involved in any significant coca, opium poppy, or marijuana cultivation. However, according to press reporting, certain of the paramilitary leaders have admitted to receiving payments from coca growers in southern Colombia to protect them from guerrillas. Several paramilitary groups may also raise funds through extortion, or by protecting laboratory operations in northern and central Colombia.
The terrorists are not the glue that holds the drug trade together. DEA does not believe that the FARC should be considered another drug trafficking cartel. It is, however, certainly true that the ''cash cow'' represented by the drug trade has taken on a big, and probably growing role in financing the terrorists.
It is difficult to assess the extent to which terrorism will play a role as the U.S. expands its presence in Colombia in support of Plan Colombia. FARC leaders have stated in the past that the FARC would conduct attacks against unspecified U.S. targets.
DRUGS AND TERRORISM: INCREASED ROLE OF RUSSIAN ORGANIZED CRIME
Another possible tie between drug trafficking and terrorism involves Russian Organized Crime. This phenomenon actually involves activities of individuals or groups from Russia, East Europe, or Eurasia in criminal enterprises. Russian Organized Crime groups are involved in a wide variety of crimes, including drug trafficking to and within the United States. They are relative newcomers to the scene in the United States, and that forms the basis for the role they play, since other more well established groups already dominate drug distribution and sales in the United States.
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Internationally, Russian Organized Crime groups are involved in the heroin trade to Russia, the States of the former Soviet Union, and to Europe. Their involvement has increased as the major trafficking routes to Europe have shifted to the Balkans and through Russia and/or the former Soviet Union. Russian Organized Crime is involved in the trafficking of cocaine to Europe, and trafficking of cocaine to the United States on a generally smaller scale. Russian criminal groups have long-established ties with organized crime groups from other countries, most notably Italian Organized Crime in Italy, and Colombian Organized Crime in the cocaine trade.
While Russian Organized Crime is clearly involved in drug trafficking, especially as transportation specialists, links between their drug operations and terrorist activities are less than well established. On September 7, 2000, the Colombian National Police (CNP) seized a partially constructed, steel-hulled submarine from a warehouse outside Bogota, Colombia. All available information suggests the submarineif completedcould have been used to transport up to ten metric tons of illicit drugs from Colombia to remote off-load sites in Latin America and the Caribbean. It could well be that Russian International Organized crime was involved in this submarine project.
Russian nationals were involved in the engineering project, seeming to be organizing the project while Colombian nationals assisted in the construction work. The full extent of Russian involvement in the submarine is unclear. The Russian instruction manuals, with Spanish translations, found in the warehouse suggest that Russians might have been helping to build the submarine. Colombian authorities and DEA are actively investigating leads to determine the identities of the suspects involved in the construction of the submarine. There is, as yet, no established or suggested link between this submarine and terrorist activity. Colombian cocaine trafficking groups do generate billions of dollars in revenues each year, resources that increasingly have been used to purchase the best talent and technology available on the world market.
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DRUGS AND TERRORISM: SOUTHEAST ASIA
In years past, the Muslim separatist groups in southern Thailand and the Communist Party of Thailand dabbled in drug trafficking to raise funds to support their political and operational objectives. Today, there is little if any data linking indigenous terrorists to drug trafficking in Southeast Asia. The Communist Party has not been a viable organization in Thailand for years, and the Muslim separatist movement has fractured into a number of organizations known more for their banditry than their political activities. Drug trafficking does not, therefore, contribute to any significant terrorism on the part of these organizations.
In fact, there are no credible reports of any terrorist groups either being based in or conducting terrorist activity within the Kingdom of Thailand. Even the United Wa State Army (UWSA), across the border in Burma, is not a regional organization capable of reaching into Thailand with terrorist activities. The UWSA exists primarily as a separatist organization, seeking autonomy from the central government in Burma. It funds its separatist activities by being the major international drug trafficking organization in the region.
The only hint of a link between drug trafficking and terrorist organizations is associated with the Tamil Tigers. There are some Tamil Tigers in the Phuket area of southern Thailand reportedly involved in heroin smuggling. In addition, they are believed to have purchased weapons for transport to Sri Lanka to support their separatist activities there. The drug proceeds may have been used to purchase any weapons actually acquired, but there is no direct evidence of this link between the two activities available to DEA.
Page 27 PREV PAGE TOP OF DOC In Laos, insofar as DEA's reporting suggests, the recent spate of terrorist bombing activity is based in anti-Communist sentiment and is being financially supported not from drug proceeds but from organizations based in the U.S. with ideological ties to the terrorists in Laos. In sum, DEA has no credible information of the Tamil Tigers, or any terrorist group, using drug trafficking as a source of income for destabilizing the local government or any neighboring country's government.
CONCLUSION: HOPE FOR THE FUTURE
By way of conclusion, we can and should continue to identify and build cases against the leaders of the criminal groups involved in drug trafficking wherever they may be found. These criminals have already moved to make our task more difficult by withdrawing from positions of vulnerability and maintaining a much lower profile than their predecessors. They have not refrained from using violence to protect their interests when they are threatened.
As we concentrate our efforts on Colombia, a number of initiatives hold particular promise for success against significant traffickers, even as we face an era of political uncertainty there and possibly even greater levels of violence than we see now:
The U.S. Embassy's Information Analysis/Operations Center (IAOC) is being increasingly utilized to coordinate and analyze tactical information regarding the activities of drug trafficking groups active in the Colombian territories south and east of the Andes Mountains. The IAOC is comprised of Embassy personnel from the DEA Bogota Country Office and U.S. Military's Tactical Analysis Team. The Defense Attaché Office and the State Department also provide support and staffing. This organization serves as a central clearinghouse for counterdrug law enforcement cooperation in Colombia.
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The special unit program, funded under the Andean Initiative, makes it possible to convert existing partially vetted units of the Colombian National Police (CNP) into fully vetted teams. These teams of investigators will work closely with DEA and will conduct high-level drug investigations.
There have been several cutting-edge, sophisticated investigations, such as OPERATION MILLENIUM last year, which benefit from the closest possible cooperation between the DEA and CNP. MILLENIUM resulted in the demolition of the ''Juvenal'' organization, one of the most significant groupings of drug traffickers in Colombia. This type of investigation will lead to the dismantling of even more of the most significant drug trafficking organizations operating in Colombia today.
There is funding under ''Plan Colombia'' for a Bilateral Case Initiative and for creation of new vetted units. These new resources will improve the U.S. government's capability to target trafficking organizations in Colombia.
The CNP, with support from DEA, conducted several successful long-term investigations against major drug trafficking organizations in 2000 including: the Carlos Castro Arias cocaine trafficking group, the Ivan de la Vega cocaine trafficking group, and the Nicolas Urquijo Gaviria heroin trafficking group.
The DEA remains committed to our primary goal of targeting and arresting the most significant drug traffickers in the world today. In particular, we will continue to work with our partners in Colombia to improve our cooperative efforts against international drug smuggling. The ultimate test of success will come when we bring to justice the drug lords who control their vast empires of crime which bring misery to the nations in which they operate. They must be arrested, tried and convicted, and sentenced in their own countries to prison terms commensurate with their crimes, or, as appropriate, extradited to the United States to face American justice.
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Thank you for the opportunity to testify before the Subcommittee today. I will be happy to respond to any questions you may have.
Mr. MCCOLLUM. Thank you, Mr. Marshall.
STATEMENT OF MICHAEL A. SHEEHAN, AMBASSADOR-AT-LARGE AND COORDINATOR FOR COUNTERTERRORISM, UNITED STATES DEPARTMENT OF STATE
Mr. SHEEHAN. Thank you, Mr. Chairman, for the opportunity to testify before your subcommittee today. I would first like to pay tribute to the work done in this subcommittee regarding U.S. Government major counterterrorism laws in recent years. The Antiterrorism Effective Death Penalty Act of 1996 is very important for my office. You and your staff and Chairman Hyde of the full committee played an important role in enacting this legislation which contains major provisions aimed at terrorism fund-raising and the designation of foreign terrorist organizations, which is an extremely important diplomatic and political tool of my office in pursuing our counterterrorism objectives internationally.
Interesting, when I first arrived in my office, Mr. Chairman, I must tell you that there were many that said what good is this legislation, what role does it play. I can assure you from the 2 years in my tenure in this job, this legislation is one of the most important instruments I have in enforcing counterterrorism and achieving our goals internationally. It is an extraordinarily important instrument. I can get into that in the question and answer.
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Thank you for that legislation, Mr. Chairman.
I have a long statement which I will submit for the record, and I would like to summarize it if I could.
Looking at the broad picture, you have clearly identified there is a nexus there. When I look at two of my primary areas where I work around the world, Afghanistan and Colombia, the nexus of international terrorism and narcotics trafficking is clear.
Any terrorist act is a crime, hijacking aircraft, kidnapping innocent people, bombing buses and buildings or ships are all a crime which must be viewed separately from the so-called causes of the terrorist groups that use this instrument.
Terrorists seek to find sanctuary or bases in lawless corners of the world, including the jungles of Colombia, the mountains of Afghanistan, Sudan, Somalia, Lebanon and other places. It is not surprising there is often overlap between terrorists and those engaged in other forms of criminal activity such as narcotics trafficking or other acts. In the old days of the seventies and eighties, many of the terrorist groups such as the Red Army and the traditional groups raised money the old fashioned way, robbing banks, extorting people and raising money through nation states as well. And this still exists in the Middle East, particularly with the example of HizbullahHizbullah still receives much of its financing from Iran. However, increasingly what we see is terrorist groups around the world today as they have moved away from dependence on funding from state sponsors and moved to independent means of raising money. Some of that is siphoned off of legitimate nongovernmental organizations and other fund-raising methods, but often they move toward crime and particularly narcotics trafficking to get money to fund their terrorist objectives.
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I would like to talk about two particular examples where these come together, which I mentioned previously; that is, Colombia and Afghanistan.
In Colombia there is clearly a convergence of terrorism and narcotrafficking. Colombia is the primary example of narcoterrorism in the world where the drug trade is a major factor in terrorism activities. It is a mutually dependent relationship. The terrorists and paramilitaries gain funding from drug traffickers who look to these illegal arms groups for protection. The FARC recently began to try to establish a monopoly position over the cocaine base primarily in the southeast, referred to by administrator Marshall, and we have seen evidence that the FARC is involved in the export of cocaine. Mexican and Colombian officials have exposed a major link between the Mexican drug cartels and the FARC. FARC guerrillas supply cocaine to the cartel in exchange for cash and weapons.
Kidnapping is also a major problem in Colombia and it is associated with this same lawlessness and violence. During a recent trip to Colombia, I was taken aback by the kidnapping industry that has developed over the past years. The FARC and the National Liberation Army, the ELN, generate income from kidnapping and extortion and other types of activities. Much of it directed against foreigners. Kidnapping has increased every year since 1990, to its current level of more than 3,000 persons a year, half of the world total, out of Colombia. Since the early 1980's, the FARC, also a very violent organization, has been responsible for kidnapping 30 Americans. 13 have either been killed or remain unaccounted for.
Let me turn now to Afghanistan. The Taliban control most of Afghan territory and it has resulted in an area of lawlessness in which terrorists, drug traffickers and other criminals live with impunity. The Taliban benefits from the funds brought in by these activities.
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Therefore, they have little incentive to change their behavior regarding providing sanctuary for these types of individuals. Afghanistan is a little different from Colombia in that it harbors terrorists that have an international reach, and plan and conduct operations outside their immediate area of operations. This includes Osama bin Laden and his organization, which have been indicted for attacking our embassies in East Africa in 1998. The terrorists that have lived in Afghanistan or are headquartered there is a long one indeed, and I have included that in my testimony for the record.
At the same time in recent years Afghanistan, under Taliban control, has become the world's largest producer of opium, which is refined into heroin. Their narcotics production and trafficking victimize the population of Afghanistan and attack the political stability of Afghanistan and the entire region.
Mr. Chairman, I would like to talk a little bit about what we are trying to do about that right now in the U.N. Security Council in New York. We are seeking to put another resolution into effect that will put more pressure on the Taliban, following up on a resolution passed last year, Resolution 1267, which demanded that Taliban turn over Osama bin Laden to justice. We are seeking further international legislation in the U.N. that will impose an arms embargo against the Taliban. We are trying to increase the pressure on them to abide by international laws regarding terrorism and narcotics trafficking. The resolution also includes a measure to ban the export of a precursor chemical for heroin processing, acetic anhydride. We are trying to bring the international community together to put more pressure on the Taliban in order to get them to change their policies.
Page 33 PREV PAGE TOP OF DOC Let me summarize, Mr. Chairman, by saying you are absolutely right to bring together this discussion on the nexus of international crime, terrorism and narcotics and I applaud you for that effort. There is no easy silver bullet solution. These individuals are ruthless, well financed and fiercely determined. It will take long term effort and diplomatic pressure on behalf of the United States Government to defeat these threats to our interests.
I thank you very much for the opportunity to speak today, and I look forward to any questions you might have.
[The prepared statement of Mr. Sheehan follows:]
PREPARED STATEMENT OF MICHAEL A. SHEEHAN, AMBASSADOR-AT-LARGE AND COORDINATOR FOR COUNTERTERRORISM, UNITED STATES DEPARTMENT OF STATE
Mr. Chairman and Members of the Committee:
Thank you for the opportunity to testify today on the threat posed by the convergence of drugs, terrorism and organized crime.
Let me start by paying tribute to your work on one of the U.S. Government's major counterterrorism laws in recent years, the Antiterrorism and Effective Death Penalty Act of 1996. 1 You and your staff, and Chairman Hyde of the full Committee, have played such an important role in enacting the 1996 legislation. That bill, for those in the audience who are not familiar with it, contains major provisions making it illegal to provide funding and other forms of material support for specific terrorist acts and to groups formally designated as Foreign Terrorist Organizations. This has become a key aspect of our CcounterterrorismT tools. Let me express my thanks for your strong effort. It is great to have such an advocate on the Hill.
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TERRORISM IS A CRIME
Mr. Chairman, in looking at the broad picture of narcotics, terrorism and international crime, we should start with the basic fact that terrorism itself is a crime, not a political statement. Hijacking aircraft, kidnapping innocent people, and bombing busses, buildings or ships are all forms of a crime, which must be viewed separately from the so-called ''cause'' that prompts some people to commit this crime. This is a long-standing U.S. policy, one that is shared by the international community and demonstrated in a dozen international conventions and treaties.
BAD NEIGHBORHOODS ATTRACT BAD PEOPLE
Terrorists tend to live, operate, and derive support from the lawless corners of the world, including the jungles of Colombia, Afghanistan, Sudan, Somalia, and the Bekaa Valley of Lebanon, to name a few. Narcotraffickers and drug producers, like international criminals, also seek out those corners of the world where their behavior will not be subject to government control or punishment. So it is not surprising that there is often an overlap between those that engage in terrorism and those engaged in other internationally unacceptable behavior.
FUNDINGDIVERSIFIED FUNDING SOURCES
Many terrorist organizations have engaged in low-level local crime to finance their activities. Some groups, such as the IRA and now defunct German Red Army Faction raised money ''the old fashioned way,'' such as robbing banks. The Kurdish terrorist group (PKK) engaged in extortion against Turkish Kurdish workers and businessmen. And groups throughout the worldfrom Latin America to the Philippineshave taken hostages to obtain ransom money from the victims' families or employers.
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Historically, many terrorist groups, especially in the Middle East, looked to state sponsors of terrorism for funding. This source of funding has decreased significantly in the last couple of decades. With the exception of Iranwhich continues to actively support groups that seek to undermine the Middle East peace processterrorist states provide very limited funding to terrorist groups or individuals. Hizballah, the major international terrorist group operating in Lebanon, receives most of its financing from Iran. CIA Director George Tenant has testified before Congress that Iran remains the most active state sponsor of terrorism.
Given the overall decrease of state financial support, and in some cases because of the nature of their organization, terrorists have looked to alternative sources of funding, which have included narcotics production and trafficking. Some terrorists have developed loose mutually beneficial relationships with drug traffickers to support both the terrorists and drug traffickers' interests.
That said, I would caution against thinking that international terrorism generally is dependent upon funds from drug trafficking or international crime. There have been reports that some individuals involved in Middle East terrorism have profited from the drug trade through Lebanon. But most terrorist groups or their supporters are not dependent on drug revenues. Tthey usually have a ''diversified portfolios'' of fundraising. Sources include their ideological supporters, money siphoned off of legitimate and illegitimate charities, legitimate companies that are used to generate profits and transfer funds for terrorist groups, and ordinary crime, such as extortion and robbery.
Let me turn now to two cases in which drug trafficking does significantly impact terrorism, Colombia and Afghanistan. In both cases, there is a convergence of terrorists, drug producers and traffickers, and other criminal activity. Most importantly, there also is a lack of governmental control. This lack of control and rule of law is what allows these criminals to converge, and sometimes cooperate, in certain corners of the world.
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COLOMBIACONVERGENCE OF TERRORISM AND NARCO-TRAFFICKING
Colombia is the strongest example of what is meant by the phrase ''narco terrorism,'' and where the drug trade is a major factor. In the guerrilla and paramilitary controlled areas of Colombia, a cycle of terrorism and narco-trafficking has spiraled into a mutually dependent relationship. The terrorists and paramilitaries gain funding from the drug-traffickers who, in turn, look to these illegal armed groups for ''protection.''
Major actors include the Revolutionary Armed Forces of Colombia (FARC), one of the world's deadliest terrorist organizations and the Colombia self defense forces, or AUC.
The FARC recently sought to establish a monopoly over the commercialization of cocaine base across Colombia. We have seen evidence that the FARC is now involved in the export of cocaine. In a November 29 statement, the Department's press spokesman, Richard Boucher, noted that since late 1999, Mexican and Colombian officials have exposed a major link between the Mexican drug cartel and the FARC. Evidence shows FARC guerrillas supplied cocaine to the cartel in exchange for cash and possibly weapons.
Meanwhile, the Colombian paramilitary groups are not only funding themselves, but trying to hit the FARC where it hurts by aggressively attempting to establish control over the prime coca and heroin-growing areas currently controlled by guerrillas. Paramilitary leader, Carlos Castano, frankly acknowledges that the narcotics trade provides the bulk of the paramilitaries' financing.
Page 37 PREV PAGE TOP OF DOC Mr. Chairman, estimates of profits by the FARC and paramilitaries run into hundred of millions of dollars. But as I stated earlier, narco-trafficking is not the only source of income for terrorist groups. The FARC and the National Liberation Army (ELN) also generate income by kidnapping Colombians and foreigners.
During a recent trip to Colombia, I was taken aback by the ''kidnapping industry'' that has developed. Kidnapping has increased every year since 1990 to its current level of more than 3,000 persons a yearhalf the world total. Since the early 1980's, the FARC has been responsible for kidnapping 30 Americans. Thirteen were either killed or remain unaccounted for, representing a 43% mortality rate. The FARC was responsible for taking three New Mission missionaries hostage in 1993, but has failed to account for their whereabouts. One American was kidnapped by the FARC in November. FARC spokesmen have consistently vowed to continue the practice of kidnapping, referring to it as a war tax on Colombia's elite.
The kidnapping problem has become so severe that local criminals are even now kidnapping people and transferring them to the FARC, which in turn extorts moneyand a profit for themselvesfrom families and businesses.
These criminal activities help finance their attacks against the country's electric grid and oil pipeline, affecting local as well as American commercial interests. The paramilitaries have not only targeted Americans or American businesses; they also routinely kill scores of civilian non-combatants suspected of being guerrilla sympathizers.
Page 38 PREV PAGE TOP OF DOC Let me now turn to Afghanistan, a country that has been at the heart of our counterterrorism efforts throughout my tenure as Coordinator for Counterterrorism.
The Taliban's control over most of Afghanistan has resulted in a haven of lawlessness, in which terrorists, drug traffickers and other criminals live with impunity. The Taliban naturally benefits from the resources brought in by these sources, and thus has little incentive to change their own or their ''guests'' behavior.
Afghanistan is different from Colombia in that it harbors terrorists with an international reach, including Usama bin Ladin, indicted for masterminding the attack our embassies in East Africa in 1998. While we do not have full information on who planned and carried out the attack on the USS Cole, we do know that numerous people immediately left Yemen for Afghanistan, the safehaven where they could hide out with little fear of Taliban intervention.
The list of terrorists that live in or have lived in, have trained in, are headquartered in, or financed from Afghanistan gets longer all the time. To name a few:
Usama bin Ladinindicted for terrorist attacks, including 1999 attack on US embassies in East Africa
Mir Aimal Kansi1993 attack on US CIA workers
Ramsi Youssef1996 Bombing of the World Trade Center
Ayman al-Zawahiri, Muhammed Atef, Mohammad Rashed Daoud al-Owhali, Mohamed Sadeek Odeh, and Fazul Abdullah Mohammadallindicted for the 1998 US embassy bombings in East Africa
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Ahmed Ressam1999 planned attack launched from Canada
Raiz Basra1999 would-be assassin of former Pakistani Prime Minister Sharif
Abu Hawshar, cell leader of 1999 thwarted attack in Jordan; Raid Hijazi, deputy cell leader; and Khalil Deek and Abu Qatadah also wanted for the thwarted attack in Jordan
Taha Musaof the Egyptian Al-Gama'at al-Islamiyya organization
Ibn al Khattabfield commander in Chechnya
Shami Basayavfield commander in Chechnya
Tohir YuldashevIMU commander
These and others with an Afghan connection are wanted in many counties. It is quite a notorious list of current or former ''guests.''
At the same time, in recent years, Afghanistan under the Taliban has become the world's largest producer of illicit opium, which is refined into heroin. The narcotics production and trafficking victimize the population of Afghanistan and attack the political stability of the entire region.
To give an idea of the dimensions of the problem:
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Afghanistan's opium crop of 3,656 metric tons accounted for 72% of the world's illicit opium in 2000.
Since 1997 over 96 percent of the opium-poppy crop has been cultivated in Taliban-controlled areas.
For the last three years, opium-poppy cultivation in Afghanistan has continued to increase, in spite of a devastating drought and decrees from the Taliban leadership banning poppy cultivation.
Poppy is cultivated at the expense of wheat and other food crops desperately needed by the people of Afghanistan, and is planted on the best available land with productive soils, irrigation, and fertilizer, not on previously uncultivated or marginal lands.
Drug abuse is increasing steadily in the region, in Eastern Europe and Russia, and probably Afghanistan itself, with huge social costs.
Regional criminal syndicates with a global reach are linking up with the Afghan drug trade.
These conditions favor the development of parallel drug-based economies and new centers of drug production and trafficking, compounding exponentially our drug containment efforts.
Governments in Central and South Asia are ill equipped to battle the well-financed Afghan drug trade.
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Narcotics-linked income strengthens the Taliban's capacity to provide support for international terrorism. The Taliban admit to imposing the same ''ushr'', a 10 per cent tax, on poppy as they impose on other agricultural crops. There is clear evidence that Taliban officials have to handle opium; from the viewpoint of the farmers, this is a green light to cultivate an illicit crop.
The Taliban use the considerable profits from illegal narcotics activity to buy weapons, which are used to fight the opposition groups and maintain control over the territory where training camps are located. These camps train both domestic fighters and terrorists that are launched to any number of corners throughout the world.
U.N. SECURITY COUNCIL RESOLUTION
The Taliban so far has refused to withdraw its support for Usama bin Ladin and hand him over to a place where he can be brought to justice. As a result, the United Nations Security Council a year ago imposed sanctions against the Taliban, including freezing assets and imposing an embargo on the Ariana Afghan Airlines, the Taliban-controlled air line.
Because the Taliban still have not complied with the Security Council Resolution 1267, a new Security Council resolution is being considered this week. I was in New York last week for consultations with our U.N. Mission and other Security Council members.
The new resolution would impose an arms embargo against the Taliban, hitting the regimenot the peoplewhere it hurts. The resolution reiterates the demand that the Taliban turn over Usama bin Ladin so he can be brought to justice, and freezes bin Ladin's financial assets. The resolution also includes a measure to ban the export to Afghanistan of a precursor chemical, acetic anhydride, which is used to manufacture heroin. The international community agrees that this measure is essential because of the Taliban's refusal to put into deeds their empty promise to end opium production, which goes to support the regime and terrorists.
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The Taliban's acquiescence to or support for poppy cultivation and narcotics manufacture and trade has further exacerbated the humanitarian crisis of the Afghan people. The explosion of poppy cultivation under the Taliban has reduced agricultural land available for food crops at the very time that Afghanistan is suffering the worst drought in a generation.
All of this underscores why the UN Security Council resolution is very important to counter this support for terrorists stemming from Afghanistan and why the resolution deserves to be passed.
THE WIDER IMPACT
Terrorists and drug traffickers rely heavily on a wide international network to keep them in business. This is why the impact of the threat of terrorismlike the scourge of drugsis impacting a wider area, including the neighboring Central Asian Republics.
Terrorist groups in Central Asia have been profiting from the drug smuggling and using it to finance their purchase of weapons and other activities. Informed observers also suggest that one tactic employed is the staging of terrorist activities to divert security forces while drug shipments are being made elsewhere. In September, the Secretary of State formally designated a major group, the Islamic Movement of Uzbekistan (IMU) as a Foreign Terrorist Organization under the Antiterrorism and Effective Death Penalty Act of 1996. This is one of the many steps that we are taking to counter this widening terrorist threat.
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We are pursuing a number of initiatives to counter the international terrorist threats I discussed.
In Afghanistan, we will continue to put political, diplomatic, and economic pressure on the Taliban to make them realize that they will not be an accepted member of the international community until they comply with internationally accepted norms on terrorism.
The U.S. is encouraging the international community to help Afghanistan's neighbors build their national capacities to fight terrorism and the drug trade and its corrosive effects.
In dealing with the Colombia problem, the Department supports Plan Colombia, a balanced strategy the Administration designed to deal with the country's multiple problems. This large scale program includes economic assistance and the aerial eradication of drugs. On the counterterrorism side, my office and our antiterrorism assistance (ATA) program are looking specifically at breaking the kidnapping industry through increased training and logistical support to Colombian police and judiciary. We will also renew other ATA training to Colombia.
Implementing the 1996 Antiterrorism and Effective Death Penalty Act provisions against terrorist fund raising, the State Department, after a careful review of the records, has currently designated or redesignated 29 Foreign Terrorist Organizations. Designations require extensive Administrative records and my office has been looking at additional groups for possible designation.
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We worked with other nations in drafting the International Convention for the Suppression of Financing of Terrorism, which The President recently submitted to the U.S. Senate for its advice and consent. We hope the new Senate will act on this Convention early in the next session. This Convention is a companion piece to our efforts to encourage other countries to strengthen their laws and procedures against terrorist fund raising and money transfers.
In a related initiative, the Department's Antiterrorism Assistance (ATA) program is working with the Justice Department, FBI and Treasury, to develop training courses for foreign officials in detecting and curbing terrorist fund raising activities and money flows. The first course offerings are being scheduled for early in the new year.
We are working with individual countries and through the UN to improve regional cooperation against drugs, organized crime and terrorism.
My office, working with the Department's ATA program has held two regional conferences since June 1999 focused on South Asia and Central Asia terrorism. We also helped conduct an OAS conference to encourage regional cooperation and also helped support security efforts for the Sydney Olympics. We hope to expand the ATA program in the future and develop and expand policy-related and training programs to foster cooperation on a regional basis to counter conventional threats and weapons of mass destruction.
The Department of State's Bureau of International Narcotics and Law Enforcement Affairs (INL) oversees an extensive worldwide program to counter narcotics trafficking and transnational crime. INL led the Department's contribution to developing the President's International Crime Strategy, which includes expanding the membership of the Financial Action Task Force and taking other steps to strengthen international efforts against money laundering. INL also helps train foreign officials in the latest law enforcement techniques as well as respect for human rights.
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NO MAGIC SOLUTIONS
Mr. Chairman, in these efforts to counter terrorist fund raising, whether from narcotics, criminal activities or contributions, there are no magic solutions, easy legislative remedies, or other quick fixes.
We have to keep up the diplomatic and political pressure, bolster our allies' will and capability to help, and maintain strong diplomatic, intelligence, law enforcement and training components. The key to this is strong political will and commitment of resources. We appreciate Congress' continued support for these counterterrorism efforts.
Mr. MCCOLLUM. Thank you very much Ambassador Sheehan, and I will recognize myself for 5 minutes.
I would like to make some clarifications. It is my understanding, Mr. Sheehan, that there are some 20 or 30 recognized terrorist organizations in the world. Do you have a precise number that we currently have? I know that the law specifies your doing some assessment of that.
Mr. SHEEHAN. We have designated 29 by our foreign terrorist designation, which is a very legal and technical process. There are others that fall into groups that we keep an eye on but haven't reached the rigorous standard applied by the law, which is a good one and well respected around the world.
Page 46 PREV PAGE TOP OF DOC Mr. MCCOLLUM. Of these 29 organizations is it a very high percentage or all of them that are engaged in some kind of criminal behavior that results in eitheror should I say what percentage of them are engaged in drug trafficking or make profits from drug trafficking in order to operate? Do you have a feel for that?
Mr. SHEEHAN. Virtually every one of these organizations is involved in some type of criminal activity. I know from my close association with the FBI, that often they are able to make cases against suspected terrorists by their other criminal activity. Internationally, that trend also is the same. I was talking domestically for those here in the United States.
In terms of narcotrafficking, the primary nexus of narcotrafficking and terrorism is in Colombia. The links between groups like the FARC are very clear.
Internationally it is not as clear. They benefit from the financing of narcotics trafficking and smuggling in these areas that are outside of control, but the direct link is not always as clear. For instance, some of the bin Laden organization is probably not directly involved dramatically in narcotics trafficking.
However, the narcotics industry in Afghanistan and the enormous revenue generated from that provide a certain shield for that area of sanctuary. It hamstrings our ability to put pressure on those that provide sanctuary to terrorists because they have independent illegal means of financing and that understanding is important.
Mr. Chairman, I am glad to have an opportunity to explain that. Even though an organization may not be directly involved in smuggling of narcotics, the narcotics industry helps provide the sanctuary for them and the ability to operate and thereby attack us.
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Mr. MCCOLLUM. Mr. Marshall, you have alluded, as did Ambassador Sheehan, to the bigger picture question in Latin America with the FARC, with Colombian narcotics trafficking and Mexico. Is this one continuum of organized criminal activity between the United States and there? Or do you look at this as a montage of many independent organized criminal activities? Is there a coordinating council? Do they talk to each other? How do you describe that and how does that fit into the terrorist part of this which is principally the FARC?
Mr. MARSHALL. Right now the way that I see the organizations that are controlling drug trafficking, there are certainly a number of organizations in Colombia that control drugs coming out of Colombia. They utilize the services of some tightly controlled Mexican organized crime and from other countries as well. Frankly the picture of these drug cartels is evolving. Right now we have had quite a bit of success from law enforcement both domestically and in Colombia, particularly against the Colombian organized crime groups. They are undergoing some sort of a fundamental change in the way that they do business right now. We don't know where that is ultimately going to lead, but some of the indicators that we are seeing is that the Colombian organized crime groups are turning more and more of their U.S. operations over to Mexican based organized crime groups.
We see that in Colombia itself it is no longer the two or three huge cartels, but it is a larger number of perhaps more loosely associated groups that are controlling the traffic coming out of Colombia now.
It is, I think, when you look at the movement of drugs from Colombia and through these various other countries, including Mexico and into the United States, I think it is a continuum. I think it is a seamless continuum. I think you see the Colombian organizations that really have pretty tight control over all of the decisions that are made when the product moves up and in turn when the money moves back into Mexico.
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Mr. MCCOLLUM. They talk to each other?
Mr. MARSHALL. Absolutely. While they may be competitors today, tomorrow they may be allies. It is alliances of convenience.
Mr. MCCOLLUM. How does the FARC fit into this? Is it making money off the process? Are they one of the organized crime people that you categorize as an entity or are they associated with these cartels in some means for profit or mutual benefit?
Mr. MARSHALL. I would characterizethe best way I could describe the FARC from my point of view is that they are not a traditional drug trafficking cartel. They are not a full service drug trafficking cartel, as it were. By that I mean up until recently they haven't had any international distribution networks. We have some indication that they may be moving into that. They don't have their own retail networks. They don't have their own money laundering networks. So I wouldn't describe them as a traditional drug trafficking cartel.
Rather, I think they have alliances with all of these other Colombian cartels and they profit from the drug trade. They provide protection, logistical support. They perhaps move drugs themselves. They provide protection to the cultivation and in these areas so that essentially the Colombian authorities can't effectively deal with some of these, like in the deep demilitarized zone. They profit from the drug trade in a significant and substantial way. So they are a legitimate, I think, target of our country's anti-drug efforts, even though I wouldn't characterize them as a traditional drug trafficking cartel.
Page 49 PREV PAGE TOP OF DOC Mr. MCCOLLUM. To what extent and what percent of the FARC income comes from the drug trafficking, if you will, either protection or otherwise? I assume that they have other sources of income besides drugs?
Mr. MARSHALL. Mr. Chairman, I apologize. I don't know enough about the FARC to really say beyond a substantial portion of their income comes from drug trafficking. I couldn't give you a percentage, I'm sorry.
Mr. MCCOLLUM. Ambassador Sheehan, do you have any idea?
Mr. SHEEHAN. I am not exactly sure what the percentage is. I have been dealing with the FARC since 1980 and I can assure you what has changed the FARC so dramatically over the 20 years I have been watching them is the enormous amount of narcotics revenue that has changed the nature of that organization. It made them a much more difficult threat for the Colombian Army, that I know so well, and difficult to confront an organization which has such deep pockets. I think a great, great number of that amount of resources comes from the narcotics industry, as well as just plain old extortion and kidnapping.
Mr. MCCOLLUM. You categorize the FARC and the ELN amongst the 29 that you gave us?
Mr. SHEEHAN. Absolutely.
Mr. MCCOLLUM. Mr. Chabot.
Page 50 PREV PAGE TOP OF DOC Mr. CHABOT. Thank you, Mr. Chairman.
Starting with Colombia and the portions of the country that are underneath the control of FARC and insurgency groups, can you give us some idea about the trends? Is that area growing? Is it stable? What U.S. efforts might be helpful to the government to either retake that land or to fight the insurgencies, and I know that we have had this issue about the helicopters and could they be used, they could be used for drug fighting and not putting down insurgencies. Is anything on the horizon where we might be more helpful?
Mr. MARSHALL. From a law enforcement standpoint, the FARC's control of those southern areas where you have traditional coca growing areas and a lot of laboratory activity, their control of those areas has impeded the ability of the Colombian Army and, in our case, the Colombian police to go in there and conduct criminal investigations, to follow up on seizures that are made or even to make seizures there.
So yes, the FARC control of those areas does in fact have a negative effect on the overall effort in Colombia. Now, I think that from where I stand, I think that in order to deal adequately in those areas, we have to in some way, or the Colombian government has to in some way go back in and exert control over those areas, and it is my understanding that is the overall objective of the aid that we are giving to Colombia. I endorse the concept of that and I think we have to deal with the FARC if we are to get a handle on the overall drug trafficking situation in Colombia.
Now, having said that, I don't think that necessarily just regaining control of those areas is the total answer. We have to then support the Colombian police, we have to support the judicial systems, and we basically have to continue the law enforcement approach, which is taking out the command and control structure, the leadership of the criminal drug organizations.
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Mr. CHABOT. I have a question relative to the kidnappings. Did you say that there are 3,000 a year and 30 have been Americans? Was that over a year's time or was that over a longer period of time?
Mr. SHEEHAN. 3,000 a year is the number. 30 over a longer period.
Mr. CHABOT. And 13 were either killed or missing?
Mr. SHEEHAN. Since 1980, 13 dead or unaccounted for. It is actually 10 and 3 is how that breaks down. 10 dead and 3 unaccounted for.
Mr. CHABOT. What advice do we give to family members, relatives for getting their loved ones back, and I imagine that is a very sensitive area because obviously these are people that they love and care about, at the same time you don't want to reward bad behavior, so to speak. What do we advise these families that go through this terrible trauma?
Mr. SHEEHAN. This is a very sensitive issue, Congressman. Pure kidnapping is not in my purview because it is not terrorism unless it is done by a terrorist group or for political gain.
Clearly our policy regarding terrorism, although we negotiate with terrorists for food and the well-being of the hostagesthere is negotiation in a hijacking of an airplane, for exampleour policy is not to make concessions to terrorist organizations so they benefit from it.
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I think it is similar in kidnapping. There is negotiation that is in play led by the law enforcement community, but you try not to give concessions so that those organizations become bigger and bigger and more of a problem.
Mr. CHABOT. Thank you, Mr. Chairman.
Mr. MCCOLLUM. Thank you.
Mr. GEKAS. Thank you, Mr. Chairman.
On the question of organized Russian crime, it is largely heroin because they are in the area of Afghanistan, Pakistan, Turkey, et cetera, where heroin has its origins, but, Mr. Marshall, you also included them in the cocaine trafficking in your testimony and involvement in Colombia. That is a little strange for me to swallow because they would seem like real strangers in Colombia, unlike the Americano which would be a familiar sight there, but they are involved in the cocaine trafficking directly from Colombia?
Mr. MARSHALL. Yes. I have to share your perception. It was strange to us when we first ran across it. But they are involved in the cocaine trafficking. They do have ties into Colombia. We know that from a number of investigations. We know that they have connections with the Colombian drug traffickers. We know that they were involved. We don't know the full extent, but we know that they were involved in the building of this submarine that was seized in Colombia.
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They are involved not only in cocaine trafficking going from Colombia and Europe to the former Soviet Union, but they are, as you pointed out, involved in heroin trafficking from the ''stan'' countries and into Europe through the Balkan route. There is some consumption problem in Russia.
But I think that the most immediate impact on the United States is their involvement with the MDMA trade, or Ecstasy, in Europe and the United States. They are very, very deeply involved in that. And it is a recent thing, just in the last couple of years, they have become involved with European organized crime, Israeli organized crime and those groups are really bringing a lot of this MDMA, Ecstasy, from its sources in Europe into the United States. I would say that they are the predominant trafficking and smuggling groups of that drug into the United States. So they are involved on a lot of fronts, and it concerns us very much because we see them branching out into new drugs. We fear that they are going to become more and more involved, not just in the United States but globally as time passes.
Mr. GEKAS. But for most of that activity, it is a business activity rather than a terrorism based or terrorism inciting type of enterprise, is that correct, with the Russians?
Mr. MARSHALL. As far as the Russian organized crime goes, yes, that is correct. I think they have the potential perhaps to assist some of the terrorist groups. We have heard reports, for instance, that they have provided small arms to drug traffickers and perhaps the insurgent groups in Colombia. We have not confirmed that. We know that they were involved in the building of the submarine. We think that the potential is there probably through the provision of arms to some of these groups. But that is uncorroborated.
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Mr. GEKAS. Ambassador Sheehan, you do not list Russia as a state that sponsors terrorism or at least not officially; is that correct?
Mr. SHEEHAN. That is correct, Congressman.
Mr. GEKAS. But is there any connection among governmental officials in Russia and the activities which we now relegate to Soviet Union mafiya type or organized crime? Are there corruption elements in the Russian government that can be attached to this by our intelligence?
Mr. MARSHALL. From the DEA standpoint only. I don't see any direct established, corroborated connection. We work in fact very well with the Russian authorities and we have provided training to them. We do cooperative investigations and share intelligence information. You know, they arethey do have some problems in the transition that they are going through right now and they have a lot of problems dealing with this organized crime, but we don't see the endemic corruption there, at least with regard to the drug enforcement business.
Mr. GEKAS. I have no further questions. I thank the Chair.
Mr. MCCOLLUM. Thank you, Mr. Gekas.
I just want to follow up very briefly because I want to thank both of you to be here today. I won't take much more of your time but I am interested in following up a little bit about the Ecstasy trafficking question since this is my last chance to do that, at least on the record. If I am not mistaken, much of this comes from the Netherlands and Belgium, and I had occasion to meet with a group of those parliamentarians that were here, and I know it is sensitive with them, but are we making any progress in getting those countries to work on precursor chemical restrictions so maybe the making and production of Ecstasy will be more difficult or is that still a faint hope?
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Mr. MARSHALL. I think we have a long way to go, Mr. Chairman. I think there is perhaps some progress in that area in that we are working with a lot of the law enforcement and the chemical regulatory agencies over there and we have very good cooperation from them.
I fear, however, that you need some more of thosethose countries need some more comprehensive controls on a lot of those chemicals, and I don't see that coming about in the near future. But as far as law enforcement cooperation, we work very well with them. In the law enforcement arena, we have made a lot of progress in taking out some of the criminal organizations, and we continue to target those.
Mr. MCCOLLUM. The Russian criminal element that Mr. Gekas was referring to, is there numerous organizations or is there one monolithic organization?
Mr. MARSHALL. We are just learning right now and are in the process of figuring out how they are pieced together. It is my impression that there are a lot of different organizations involved in different types of crime in different parts of the world. I hope that I can give you a better answer to that or your successors a better answer to that in a year or so. We are still piecing that picture together.
Mr. MCCOLLUM. I want to clarify one thing, Mr. Sheehan. In the region of Osama bin Laden's world we have quite a network relative to his support of different groups. It isn't just something that he is doing here or there, it is a rather wide-ranging effort on his part. Could you put on the record a description of that network for us? What is he about beyond the fact that we suspect his involvement in the bombing of the USS Cole and doing the African bombings as opposed to the Hizbullah or other terrorist organizations? What distinguishes his activity and therefore gives us the greater importance with respect to the funding coming from the drug trafficking?
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Mr. SHEEHAN. Mr. Chairman, his organization has been described, I think correctly, as a network of networks. It is a series of small organizations that come together informally based on their contacts. Most often we see contacts based on serving together in Afghanistan. That is why they are often referred to as Afghan Arabs or Afghan alumni by some. The organization is not as tightly wired as you might think of a corporate structure, but it is one that reaches around the world through this network of networks.
Often their operations are generated from the bottom up, a small local cell looking to attack one of our interests and looking for help from outside. Sometimes they are directed from the headquarters downwards to look for alliances to make to conduct operations.
So it is a very loosely knit organization, but one that has proven to be very effective as they demonstrated by hitting two of our embassies virtually simultaneously in August 1998 in Kenya and Dar es Salaam, Tanzania. The organization is different than Hizbullah which has somewhat focused its effort recently in the Middle East. These organizations, Usama bin Laden's and others associated with it, have more of a strategic threat to the United States, have broader objectives.
Usama bin Laden's organizations in some of their political statements have specifically talked about forcing U.S. forces out of the Gulf. They consider us as desecrating certain holy lands, and also use anti-U.S. rhetoric regarding our policies with Israel in the Middle East, and generally a rhetoric that is anti-West in terms of its social implications on some of the Islamic parts of the world where they have influence.
Page 57 PREV PAGE TOP OF DOC So they have a broad agenda, and it has manifested itself in attacks against the United States to try to achieve those aims. And that is why we have focused so clearly on the threat of these groups and, particularly, those emanating from their headquarters, which are most often in Afghanistan.
Mr. MCCOLLUM. What you have told us is that Usama bin Laden's groups don't necessarily cultivate the crops to produce the opium or the heroin, but they do benefit by the culture that is there. And do they get money from these sources? I mean, he gets money from somewhere.
Mr. SHEEHAN. I think his organization has a variety of means of funding itself, all of which are very problematic for us to get after. First, he has his own personal resources, enormous wealth.
Second of all, they raise money in different parts of the world for their causes. Often that money is funneled through NGOs or other so-called charities, and some of that money is siphoned off to support his operations. Clearly, some is also generated from the narcotics business, but I would say Mr. Chairman, that is not a primary source of his funding.
The more complicated problem of narcotics trafficking in Afghanistan is because the Afghan economy and the Taliban, who provide the sanctuary for these groups, have become more and more dependent on narcotics trafficking as their principal source of revenue. It makes it that much more difficult for us to put pressure on them through sanctions or other means because they are outside of the international community. They are extralegal in their economy. It makes it more difficult for us to go after them in our traditional means of putting pressure against them.
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That is the complicating factor that makes it so much more difficult for us to bring pressure to bear on terrorist groups that find sanctuary in Afghanistan and immediately threaten American interests.
Mr. MCCOLLUM. In other words, because they don't engage or are not dependent upon normal trade and normal economic intercourse, therefore we don't have the levers against them, is what you are saying?
Mr. SHEEHAN. Exactly.
Mr. MCCOLLUM. In addition, they obviously continue to be very sympathetic to the cause of Usama bin Laden in addition to all of that.
Well, I think I have probably overstayed your time. I greatly appreciate you both being here today, and thank you again for going out of your way to be here.
I see both my colleagues have slipped out to the back room for a moment. So I know there is not a second round of questions from them. I will excuse you and call the next panel. Thank you both, Mr. Marshall and Mr. Sheehan.
The next panel consists of four witnesses. Mr. Frank Cilluffo is the senior policy analyst and deputy director of the Global Organized Crime Program at the Center for Strategic International Studies in Washington, DC. Mr. Cilluffo directs the Global Organized Crime Program, seven multiagency and multidiscipline task forces on information warfare and information assurance terrorism, Russian organized crime, Asian organized crime, the narcotics industry, financial crimes and the nuclear black market. He is currently a World Economic Forum fellow and a member of the office of the Secretary of Defense's Highlands Forum.
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The next panelist in this group is Mr. Steven McCraw, the Deputy Assistant Director of Information Analysis and Assessments Branch of the Investigative Services Division at the Federal Bureau of Investigation. After serving as a State trooper for the Texas Department of Public Safety, Mr. McCraw received his appointment as an FBI Special Agent in February 1983. He received both his bachelor of science and his master of arts degrees from West Texas State University.
Mr. Ralph Mutschke is the assistant director for Crimes Against People and Property of the Interpol General Secretariat. Mr. Mutschke is a career police officer with BKA, the Federal police agency for the Republic of Germany who has graduated from the DEA course on clandestine labs as well as the BKA specialized officers school for drugs and organized crime.
Our fourth witness is Mr. Raphael Perl, a specialist with the Congressional Research Service of the Library of Congress in the area of international terrorism, drug trafficking and crime. A graduate of Georgetown University's foreign service and law schools, Mr. Perl is also a retired Army Reserve lieutenant colonel and Desert Storm veteran.
We want to welcome the entire panel. Thank you very much for coming. Your entire statements will be submitted for the record; you may proceed to summarize them.
We will start in the order I introduced you, with Mr. Cilluffo.
STATEMENT OF FRANK CILLUFFO, SENIOR POLICY ANALYST AND DEPUTY DIRECTOR, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES
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Mr. CILLUFFO. Thank you, Mr. Chairman, for the opportunity to address the committee today on this most important national security issue. I am especially thankful to appear before you on your last hearing as chairman of this subcommittee. I think I speak for everyone when I say we are all indebted to you for your tireless efforts to advance our national interests, not just in this area, but also in terrorism and a whole host of other issues. We have had a good working relationship with you at CSIS as well.
As we begin the 21st century, America is faced with a new national security challenge that is both vexing and complex. The once clear lines between the international drug trade, terrorism, and organized crime are blurring, crossing and mutating as never before.
Unfortunately, Washington is only beginning to come to grips with this deepening phenomenon. The continued use of an inflexible 20th century bureaucratic entanglement of government agencies will not answer this call. We must see this threat clearly. We must understand its roots. We must understand what it means to our future.
The challenge of terrorism of course is nothing new. It has been and always will remain a weapon of the weak to target the strong. It is a low-cost, high leverage tactic that enables small nations, subnational groups and even individuals to circumvent conventional projections of power such as military might, economic might and political might. And yet I think we all have come to the conclusion that this is especially true since the end of our swift and decisive victory in Desert Storm.
Few, if any, nations would attempt to confront the United States intank-for-tank, plane-for-plane in a traditional war on a conventional battlefield. Rather, they recognize that terrorism and asymmetric warfare, which we will throw in here is more effective and perhaps in some cases even unaccountable means of offsetting our strengths and exploiting our weaknesses.
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The overlapping of terrorism and the narcotics trade is not entirely new either. But many terrorist organizationsmany have always been involved in the drug trade, but we have seen a shift where many ideologically bankrupt terrorist groups shed their moral righteousness almost overnight and turned to the drug trade to further their tainted causes. Whether the terrorists actively cultivated and trafficked the drugs or taxed those who did, the financial windfall that the narcotics industry guarantees has filled the void left by state sponsors.
Organized crime and terrorism in general have two differing goals. Organized crime's business is business. The less attention brought to their lucrative enterprises, the better. The goal of terrorism is often quite the opposite. They seek a very public and profiled desired effect. Despite this, the links between organized crime and terrorism are becoming stronger, especially in regards to the drug trade.
Organized crime groups in some cases manage the trafficking organizations while the terrorists or insurgent groups, depending upon where we are looking, often control the territory where the drugs are cultivated and in some cases transported. The relationship is mutually beneficial and reinforcing. Both use funds garnered from the drug trade to finance their organizations and operations.
Funds from states that support terrorism, as Ambassador Sheehan brought up earlier, are dwindling but by no means depleted entirely. The fall of the Soviet Union, which I think it is fair to say was the ''sugar daddy'' of a lot of the terrorism, Marxist-Leninist especially, terrorism aimed against the United States and Latin America, has forced a number of groups to search for new sources of funding.
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Some groups, though, and you can't generalize because if you look at the Shining Path, they always look to indigenous forms of funding and have always been involved in the drug trade. The FARC, on the other hand, are cooperating with overseas criminal enterprises and looked to Cuba to fund their Marxist-Leninist agenda in the past. Nevertheless, I think it is evident that the distinction between terrorist groups fighting an ideological enemy and criminal organizations' pragmatic pursuit of profit is quickly becoming blurred.
In some cases, these terrorist organizations are becoming outright criminal cartels. Increasingly, involvement in the drug business guarantees financial independence from a state sponsor. Groups are no longer beholden to outsiders. That brings the realization that whatever restraint those state sponsors could impose has now more or less vanished. Likewise, any diplomatic or military pressure the United States could subject state sponsors to, to curb terrorist actions, has also diminished, except of course in the case of state-sponsored crime a la Afghanistan.
The blurring of these lines pose new challenges to the United States. The traditional organization of the U.S. national security apparatus that used to come at the troika of what was pretty clear terrorism, organized crime and narcotics trafficking is no longer applicable. In order to work toward a solution of the problem of narcoterrorism it is important to identify its implications to U.S. policy-making, and we are all fortunate that you are looking at this issue, but also its implementation.
While the unholy alliances of narcotics trafficking and terrorism span the globe from Kosovo to Kazakhstan and from Nepal to the North Korean Government, nowhere does this convergence directly impact U.S. national security more than in Afghanistan and Colombia, as was discussed earlier this morning.
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Although similar in some ways, Afghanistan and Colombia pose diverse threats to the United States, and of course the one-size-fits-all approach will not work. While drug production in Afghanistan is of interest to the U.S., the main concern is that Afghanistan is a hot bed and haven for radical Islamic fundamentalist terrorists. In this case, I think it is fair to say that counterterrorism trumps counternarcotics.
In Colombia, the stabilization of a democracy in our very backyard is ultimately the primary concern. We have to come to grips with the reality that we have a nation within a nation with respect to what we can call FARC-landia. While Mr. Marshall, I think, is correct to say that the FARC may not be the glue holding the drug industry together, they are certainly the shield, preventing authorities from making a dent in the problem. They are the ultimate shield, impacting or impeding the good guys from making headway.
Yet the underlying fact remains that Colombia accounts for a majority of the world's coca production and Afghanistan accounts for a majority of the world's opiates. As I mentioned in my prepared remarks, the trend lines are both going up. I think you can refer to them as the true Blue Chips of the narcotics industry in both these areas.
Mr. Chairman, the U.S. has devoted, as you well know, billions to the so-called ''drug war,'' which may not be the best way to think of the problem arguably, though with marginal success. At present, more than 50 Federal Government agencies, organizations, have a role in this war. Yet without clear lines of authority the absence of a lead agency and a drug czar lacking a clear mandate, the counternarcotics struggle is in jeopardy of falling between the same regional bureaucratic gaps as have other unconventional threats in the past. These problems lead to the absence, in my eyes, of effective interagency coordination, but things are improving.
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Only an integrated strategy that synchronizes the various organization efforts under a unifying concept can address these problems. Moreover, until we determine how we are going to combat the issue as a Nation, it will prove difficult for us to gain international cooperation on the scale necessary to be effective. And this is critical, as ultimately the threat is transnational and so too must portions of the response be.
As if orchestrating and marshaling the Nation's counternarcotics efforts were not daunting enough, the convergence of organized crime, drug trafficking and terrorism demands a new paradigm of strategic thinking. It cannot be seen through a diplomacy, military, law enforcement, financial or intelligence lens alone. Rather, it demands a prism of all of these to offer a comprehensive and coordinated approach. The United States cannot afford to view the world according to our agencies and their org charts.
In closing, we need an entire set of golf clubs in our Nation's golf bag. Please forgive the analogy. But we should never have to be in the position to drive with a putter or putt with a driver.
With that, Mr. Chairman, thank you for your time. I look forward to answering any questions you may have.
Mr. MCCOLLUM. Thank you.
[The prepared statement of Mr. Cilluffo follows:]
Page 65 PREV PAGE TOP OF DOCPREPARED STATEMENT OF FRANK CILLUFFO, SENIOR POLICY ANALYST AND DEPUTY DIRECTOR, CENTER FOR STRATEGIC AND INTERNATIONAL STUDIES
THE CHALLENGE WE FACE AS THE BATTLE LINES BLUR
As we begin the 21st Century, America is faced with a new national security challenge that is both vexing and complex. The once clear lines between the international drug trade, terrorism and organized crime are blurring, crossing and mutating as never before. Unfortunately, Washington is only beginning to come to grips with this deepening phenomenon. The continued use of an inflexible 20th Century bureaucratic entanglement of government agencies will not answer this call. We must see this threat clearly. We must understand its roots. We must understand what it means to our future.
The challenge of terrorism is not a new phenomenon. It has, and always will be a weapon of the weak. It is a low-cost, high-leverage method and tactic, enabling small nations, sub-national groups and even individuals to circumvent the conventional projections of national strengthi.e., political, economic or conventional military might. This is especially the case since our swift and decisive victory in Desert Storm. Few, if any nations would attempt to confront the US in a conventional war todayrecognizing that terrorism and unconventional warfare is a more effectiveand perhaps even unaccountablemeans of leveraging a superpower.
The overlapping of terrorism and the narcotics trade is not new either. Many groups have always been involved in the drug industry. But many ideologically bankrupt terrorist groups shed their moral righteousness and turned towards the drug trade to further their tainted causes. Whether the terrorists actively cultivated and trafficked the drugs or ''taxed'' those who did, the financial windfall that the narcotics industry guarantees has filled the void left by state sponsors.
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Organized crime and terrorism have two differing goals. Organized crime's business is business. The less attention brought to their organization, the easier their job is. The goal of terrorism is quite the opposite. A wide-ranging public profile is the desired effect. Despite this, the links between organized crime and terrorism are becoming stronger in regards to the drug trade. Organized crime groups often run the trafficking organizations while the terrorists and insurgent groups often control the territory where the drugs are cultivated and transported. The relationship is mutually beneficial. Both groups use funds garnered from the drug trade to finance their organizations.
Funds from states that support terrorism are dwindling, but by no means depleted entirely. The fall of the Soviet Union ended the stream of money that funded terrorists. As a result, terrorist organizations had to search for new sources of funding for their wars. Some organizations such as the Shining Path have always look towards indigenous forms of funding. Others like FARC cooperate with overseas criminal enterprises. Nevertheless, it is evident that the distinction between terrorist groups fighting an ideological enemy and criminal organizations' pragmatic pursuit of profit is quickly becoming blurred.
Involvement in the drug business is almost a guarantee of financial independence from a state sponsor. Groups are no longer beholden to outsiders. That brings the realization that whatever restraint those state sponsors could impose, has now vanished. Likewise, traditional diplomatic or military measures that the United States could subject state sponsors to curb terrorist actions is diminished.
The blurring of these lines pose new challenges to the United States. The traditional organization of the US national security apparatus used to combat the troika of the terrorist, organized crime, and narcotics trafficking threat is no longer applicable. In order to work towards a solution to the problem of narco-terrorism, it is important to identify its implications to US policymaking and its implementation.
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With the fall of the Soviet Union and the advent of increasingly tight budgets, Congress and the national security community focused on the peace dividend and budgets for counter-drugs budgets suffered. In Latin America, the rise of democratic governments led to the belief that it was not necessary to pour money into these countries. Rather, since they were no longer seen as targets for subversion by the Soviets, it was believed they could handle the problem themselves. Both Russia and the United States left the fields of Afghanistan in tumultuous local hands soon to be dominated by the a fundamentalist Taliban not adverse to the drug trade.
Despite recent efforts to fortify the counter-narcotics effort with more funding, the withdrawal of support in the mid-1990s has contributed to the emergence of the narco-democracy problem, where narcotics traffickers operate with impunity and/or state support (or even state-sponsored narcotics traffickers as in the case of the Taliban that allegedly earns up to 80% of its revenue from the drug trade). As well, a nontraditional threat such as narcotics trafficking has not seemed critical to some policy makers in the national security community, which often view it primarily as a health or law enforcement issue.
THE CHALLENGE FOR AMERICA
The US has devoted billions to the drug war, arguably with marginal success. At present more than 50 federal government organizations have a role in the effort against drugs. Yet without clear lines of authority, the absence of a lead agency, and a drug czar lacking a clear mandate, the counter-narcotics struggle is in jeopardy of falling between the same regional bureaucratic gaps as have other unconventional threats. These problems lead to the absence of effective interagency coordination. Until we determine how we are going to combat the issue as a nation it will prove difficult for us to gain international cooperation on the scale necessary to be effective.
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Only an integrated strategy that synchronizes the various organizational efforts under a unifying concept can address these problems. Such a strategy would integrate intelligence collection, linked to the full range of consumers in support of a variety of operational actionsnot just eradication, but also diplomatic efforts, law enforcement activities, covert action, and military action.
A BRIEF SNAPSHOT OF THE WORLD
Narco-terrorism is a worldwide threat. It knows no ideological or traditional territorial boundaries. Groups from the far right to the far left and every group in between is susceptible to the lure of drug money. In fact, the vast majority of major terrorist organizations rely, at least in part, on the drug trade as a source funding.
While publicly crusading against the drug trade in Ireland, there is compelling evidence that the Irish Republican Army (IRA) and its radical offshoot, the Real IRA, are involved in an unholy alliance with the Middle Eastern narcotics industry. Seizures of ecstasy and cannabis in Northern Ireland has dramatically increased is the past few years. As a result, the Royal Ulster Constabulary (RUC) have devoted more and more resources to combating the drug problem. The IRA is not the only guilty party in the conflict. Protestant paramilitaries are also heavily involved in using profits from drug sales to finance their organizations.
Turkey is strategically located between the lush poppy fields of Central Asia and the vast market of Europe. The Kurdistan Workers Party (PKK) has taken advantage of this fact and financed their separatist movement by ''taxing'' narcotic traffickers and engaging in the trade themselves. The PKK is heavily involved in the European drug trade, especially in Germany and France. French law enforcement estimates that the PKK smuggles 80 percent of the heroin in Paris.
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During the NATO campaign against the former Yugoslavia in the Spring of 1999, the Allies looked to the Kosovo Liberation Army (KLA) to assist in efforts to eject the Serbian army from Kosovo. What was largely hidden from public view was the fact that the KLA raise part of their funds from the sale of narcotics. Albania and Kosovo lie at the heart of the ''Balkan Route'' that links the ''Golden Crescent'' of Afghanistan and Pakistan to the drug markets of Europe. This route is worth an estimated $400 billion a year and handles 80 percent of heroin destined for Europe.
The Bekaa Valley continues to remain a base of operations for Hizbullah to export narcotics. Despite efforts from the Lebanese authorities to shut down cultivation in the Valley, production of drugs continue. With funding from Iran seen to be dwindling, the Hizbullah is expected to increase their drug trafficking to fill the void. There is also evidence of cooperation with the PKK to export narcotics into Europe. It is also clear that Russian Organized Crime is using Israel and Cyprus as twin bases for its operations in Western Europe and the United States.
The countries most affected by the fall of the Soviet Union are the Central Asian Republics. The void left by the authority of the Communist Party has been replaced by organized crime syndicates, narcotics traffickers, and Islamic fundamentalists. Civil war and corruption are common. The proximity of the ''Golden Crescent'' of Pakistan and Afghanistan, make Tajikistan, Uzbekistan, Kazakhstan, Turkmenistan, and Kyrgyzstan the crossroads of the opiate trade to Europe and Russia, where narcotics consumption is increasing.
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Spurred by radical Islamic fundamentalists such as Osama bin Laden, new cells of terrorists have spawned in the Central Asian Republics. The Islamic Movement of Uzbekistan (IMU) is one these groups. The IMU, using Tajikistan as a staging area, have made incursions into Kyrgyzstan on hostage-taking missions.
In the radical Islamist attempt to foment jihad in Chechnya, guerillas have also used Azerbaijan, Georgia, and Tajikistan as logistical hubs for their attacks on the Russian military.
South and East Asia
Maoist insurgent groups in Nepal have turned to drug trafficking for funding. Nepal serves as a hub for hashish trafficking in Asia. The insurgency has grown since its war with the Nepalese government began in 1996. The war began in three provinces in western Nepal, but has now spread to 68 of Nepal's 75 districts.
The LTTE (Liberation Tigers of Tamil Eelam) rely on the funding generated by expatriates in the US and Canada in their fight against the Sri Lankan government. Under the guise of humanitarian relief for victims of the civil war, the LTTE uses the funds to launch hundreds of terrorist attacks, including suicide bombing and political assassination. The Tamil Tigers have also turned to the narcotics industry. Sri Lanka lies at an important narcotics transit point and the Tamil Tigers take full advantage of this. There is evidence of a close relationship with military leaders in Myanmar. In the past, the Myanmar military has provided training and weapons in return for LTTE members acting as couriers of heroin into India and Europe. Whether or not the relationship continues is unknown.
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Evidence has also surfaced of cooperation between the LTTE and Indian organized crime. Indian traffickers supply drugs and weapons to the LTTE, who in turn sell the drugs. The profit garnered from the drugs are then used to repay the Indians for the weapons.
The Abu Sayyaf group has made headlines recently with the mass kidnapping of foreigners and the subsequent ransom provided by Libya. While kidnapping has proven to be a lucrative trade, members of Abu Sayyaf have also taken advantage of marijuana plantations in the Philippines. Abu Sayyaf is a good example of an ideologically driven group that have transformed into a criminal enterprise.
The Revolutionary Armed Forces of Colombia (known by the Spanish acronym FARC) was established as a communist insurgency group intent on overthrowing the Colombian government. In 1990, however, their ideological leader Jacobo Arenas died. His successors had very little qualms about breaching their ideological ethics. FARC had for a long time ''taxed'' narcotics traffickers. By the mid-1990s FARC guerillas began to take a more in-depth role in the trafficking process by supplanting themselves as the middlemen between the farmers and the cocaine processing labs owned by cartel bosses. The changes in FARC over the last decade have been significant. As the revenue from the drug trade has expanded, so to has the power and influence of FARC.
Page 72 PREV PAGE TOP OF DOC Of particular concern is FARC's territorial control. FARC controls an estimated 40 percent of Colombia. Included in that territory is their ''safe haven.'' Prior to peace talks in 1999 with the Colombian government, FARC negotiated for control of an immense swath of Colombian territory under the pretext of it being a demilitarized zone. The zone covers an area of approximately 42,000 square kilometers, roughly the size of Switzerland. The Colombian government have seen this as a concession to FARC to push them to the negotiating table. FARC, however, has used the safe haven to continue the cultivation of narcotics and staging grounds for assaults on the Colombian military.
Cuba had been a major contributor to the FARC cause, providing funding, training, and refuge for FARC soldiers. With the end of the Cold War came a significant reduction in Cuban support. The successful campaigns to eradicate coca crops from Bolivia and Peru pushed the trade to areas controlled by FARC in southern Colombia.
Experts estimate that over half of FARC's funding comes from drug cultivation and trafficking, with the rest coming from kidnapping, extortion, and other criminal activities. A Time Magazine article recently estimated that FARC makes $700 million annually from the drug trade.
An alarming trend has been the increasing cooperation between FARC and elements of the Russian mafia. The Colombian drug cartels had cultivated a relationship with the Russian mafia since the early 1990s. But with the decline of the drug cartels and the rise of guerilla armies in the drug trafficking business, came new relationships. Never one to shy away from opportunities with new customers, the Russian mafia increased their business deals with FARC. The Russians built a arms pipeline to Colombia, bringing in thousands of weapons, and tons of other supplies to help FARC fight their war against the Colombian government. The weapons range from assault rifles and RPGs to military helicopters and, according to media reports, shoulder-launched surface-to-air missiles. Evidence has surfaced regarding an arms-for-drugs deal between Russian organized crime groups and FARC. Russian cargo planes loaded with small arms, anti-aircraft missiles, and ammunition would take off from airstrips in Russia and Ukraine and fly to Colombia. The weapons and ammunition were unloaded and sold to FARC rebels. In return the planes were loaded with up to 40,000 kilograms of cocaine and shipped back to Russia, where the Russian mafia would distribute the drugs for profit. At the time the story broke, the operation had been on-going for two years.
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FARC is also extending its cooperation to the borders of the United States. The recent arrest of a FARC figure in Mexico have convinced Mexican and American authorities of a Colombian link to the Arellano-Felix-run Tijuana cartel. The State Department believes that FARC supplied cocaine to the Tijuana cartel in return for cash and weapons.
A defeat of FARC would not spell an end to drug trafficking out of South America. History has shown that as soon as one area has successfully been eradicated of drug crops, new areas of cultivation spring up across borders. If FARC is defeated, groups like ELN and paramilitary groups are likely to fill the vacuum. This ''balloon effect'' may further spread the drug trade and the associated violence into states bordering Colombia, such as Venezuela, Ecuador, Bolivia and Brazil.
Despite publicly announced efforts by the Taliban to combat drug cultivation and trafficking, Afghanistan continues to be the largest producer of opium in the world. And production of the crop is growing. According to the Intelligence Community's Counter-Narcotics and Crime Center, opium cultivation grew from 41,720 hectares in 1998, to 51,500 in 1999, and 64,510 in 2000, an increase of over 54 percent in two years. In some districts, as much as 60 percent of the land is used to grow poppies. The Poppy cultivation is expanding territorially in Afghanistan as well, expanding into provinces not previously used for poppy cultivation. Afghanistan became the world's leading producer of opium in 1998, and now produces more than three times as much as Myanmar, the previous leader. This, despite Afghanistan having only 58 percent of Myanmar's area of cultivation.
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The Taliban gets funding from taxing all aspects of the drug trade. Opium harvests are taxed at around 12 percent. Then the heroin manufacturing labs are taxed at $70 per kilogram of heroin. In the final stage, the Taliban gives transporters a permit for $250 per kilo of heroin to carry for presentation to Taliban checkpoints throughout the country. The Observatoire Geopolitique des Drouges estimates that this adds up to $75 million per year in taxes for the Taliban.
Unlike Latin America or Europe, where organized crime attempts to penetrate the state, North Korea is penetrating organized crime. With the economy in shambles, the government of North Korea has turned to drug trafficking and organized crime for funding. A number of indicators suggest that North Korea is involved in the methamphetamine, opium, and heroin trafficking. Not only do the North Koreans cooperate with organized crime groups, but members of the armed forces, the diplomatic corps, and the intelligence service actually engage in trafficking of narcotics.
Western intelligence agencies have confirmed the presence of large-scale opium production facilities in North Korea. But the North Koreans are not limited to drug production facilities. There is also evidence of printing plants used to produce high-quality counterfeit currency. And Japan grows increasingly nervous as members of its local Korean population with ties to the North become involved more deeply in this dirty, underground trade.
What America Must Do
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The unprecedented cooperation among drug traffickers, organized crime groups, and terrorists has exacerbated the threat of all three to the United States. The nature of the war has changed and the US reaction needs to change as well. It is a top national security problem.
Afghanistan and Colombia represent the best examples of the new threat caused by the convergence of drugs and terrorism to US national security. Although similar, Afghanistan and Colombia pose diverse threats to the United States. While drug production in Afghanistan is of significant interest to the United States, the main concern is that Afghanistan is a haven for Islamic insurgent guerillas and terrorists. In Colombia, the destabilization of a country in America's backyard is the major concern. Colombia is responsible for two-thirds of the world's production of coca. Afghanistan generates 75 percent of the worlds opiates. And the trend lines for both are going up. Afghanistan and Colombia command the market share of the opiate and cocaine production in the world. They are the blue chips of the narcotics industry.
The term ''war on drugs'' has caused us to consider the problem in an unconstructive manner. This is a challenge that can not be won or lost. The major tactical shift that needs to occur in combating organized crime and terrorism is a move to a ''campaign'' strategy. As with any campaign, and articulation of objectives, interests, and goals are required. All aspects of the effort need to be coordinated with these points in mind. A prime example of this are the long-term intelligence gathering operations that are necessary to track and ultimately penetrate these organizations to a level that the subsequent series of arrests will have lasting effect. At the moment, the focus on individual busts means that the low-level participants are filling our prisons with a negligible effect on the industry itself. We need to consider pursuing a ''string-them-along'' approach rather than simply a ''string-them-up'' approach. This requires increased interagency cooperation as well as changes in the law enforcement culture itself.
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Part of the solution is strengthening the domestic legal institutions and social organizations in the afflicted countries. The United States cannot solve the problem itself. We must provide them with the tools to help themselves. It must enlist the help of the legitimate institutions in countries where the problem is rife. The institution building must be transparent to the public in order to foster trust among the indigenous population. Without strong judicial systems, effective law enforcement and prosecution of criminals and terrorists is impossible. Without strong social organizations that promote democracy and combat corruption, effective change is impossible. Therefore it is important that the US not only fund military efforts to fight narco-terrorists, but also look to fund domestic reforms that intend to buttress legal systems and promote democracy.
Too often the debate on the narcotics problem is cast in demand-side versus supply-side termswith legalization increasingly polarized against the war on drugs approach. We should recall that solutions require initiatives from a variety of mutually exclusive sources: public health, schools, state and local community organizations, the military, local, state and national law enforcement, and the intelligence community.
WE MUST PREVAIL
The convergence of organized crime, drug trafficking, and terrorism demands a new paradigm in strategic thinking. The end of the Cold War and the mushrooming globalization of the world economy have provided the right conditions for criminal organizations to work together. The dark side of globalization is that while it has benefited legitimate people and organizations, it has also assisted criminal groups. The world's governments have not responded coherently. The threat is transnational and so to must the response. It is imperative for nations to organize as effectively as the drug traffickers and terrorists have, in order to confront the issue.
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The lines between organized crime, drug trafficking, and terrorism are quickly becoming blurred. It cannot be seen through a diplomacy, military, law enforcement, drug enforcement, or intelligence lens alone. It must be a prism of all these that offer a comprehensive and coordinated approach. The United States cannot afford to view the world according to our agencies and their org charts. As with our past successes, we need to adapt.
The United States must have all the arrows in its quiver necessary and ready to deal with this new and challenging national security threat.
Mr. MCCOLLUM. Mr. McCraw
STATEMENT OF STEVEN C. MCCRAW, INSPECTOR-DEPUTY ASSISTANT DIRECTOR, INFORMATION, ANALYSIS, AND ASSESSMENTS BRANCH, INVESTIGATIVE DIVISION, FEDERAL BUREAU OF INVESTIGATION
Mr. MCCRAW. Mr. Chairman and committee members, I first want to underscore what Administrator Marshall said and Ambassador Sheehan and thank you on behalf of the FBI for your outstanding support of law enforcement and the Intelligence Community in trying to address some of these vexing problems that we are facing today.
Clearly, your opening remarks, Mr. Chairman, were right on point. It is very difficult sometimes to look outside the box and take a look and see what's coming down the road. Frankly, I'd like right now to dispense with my written testimony since it is going to be submitted for everyone to read, and I would like to address some of the points that have been made here today.
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The FBI does not have any direct evidence in fact it is second- or third-generation relationships to drug trafficking supporting terrorism, with the exception of the FARC and the ELN, including the Usama bin Laden organization.
There has been discussionand, frankly, the Taliban government, we have had that evidence, it has been discussed before within thein front of this committeethere are drug trafficking activities that occur in Afghanistan; and frankly there are members of the organization that have and do benefit from drug trafficking from time to time. However, organizationally that particular terrorist organization does not depend upon drug trafficking as its primary source of funding to sponsor terrorism and attack the United States. In fact, as everyone is well aware, most recently the USS Cole being attacked and killing 17 of our brave U.S. servicemen and women and injuring 39 others.
In every instance, in terms of every cell that we have taken down in the United States, whether it is Hamas, the Hezbullah, Usama bin Laden, the IRA for that matter, we haven't found that link to drug trafficking.
There have been some other good points made. These are associations and they are criminal associations, and you made that point yourself. They do depend upon criminal activity. And clearly this is a case with all these terrorist organizations. In fact, whether it is organized crime or drug trafficking or whether it is terrorist organizations, their associationsand if we keep terrorism out of it for a minutethey are associations that are motivated by profit and the self-perpetuation of the organization.
Page 79 PREV PAGE TOP OF DOC If we look at terrorist organizations, the only thing that changes is the motivation, the ideology. They still depend upon and continue to want to perpetuate the organization or engage in criminal activity. Those are the only differences.
Clearly, with the worldwide changes and the political and the social and the economic and technological changes that we have experienced over the last decade, there is a convergence of criminal activity. That alone should be a great concern. Just because we don't see those particular patterns right now outside of Colombia, the FARC and ELN doesn't mean they are not going to happen in the future. It would be a conscious decision by a particular terrorist organization or one of its networks or associations to benefit or engage directly in drug trafficking.
Probably the most important point that I can make here, which underscores one of the points made by the gentleman to the right, is that there is a need, a compelling need to understand that threat, not just one aspect as you pointed out earlier; we must understand the entire enterprise. If we chop off one tentacle, or one arm, the FBI has learned from its mistakes in the past when they tried to deal with the La Cosa Nostra, you have to look at the entire enterprise, all the criminal activity. You have to look at it holistically and strategically. You must understand the threat and develop a strategy which we termed the Enterprise Theory investigation, which was nothing more than looking at, and understanding the threat from the beginning, and developing our investigative strategy, based upon reality, to attack the entire enterpriseand not just one aspect, but the entire hierarchy, as Donnie Marshall mentioned earlier.
And clearly DEA has embraced this philosophy when it has dealt with some of the cartels and many of the other trafficking organizations that we are working together to dismantle these particular groups. Several years ago the FBI, under the leadership of Director Freeh, recognized the amorphous nature of this particular threat. With the committee's support, the FBI reorganized to take a strategic approach to addressing many of these particular threats. What we found was not just from terrorism, frankly, and drug trafficking; but gangs are also another related activity. We have got drug gangs now that are actually providing hit services for Mexican drug trafficking organizations in San Diego and other places across the Southwest border. We have many of these Mexican trafficking organizations that are corrupting U.S. law enforcement officials, not local and State, but Federal gun-toting law enforcement officers. It is a serious, particular problem, again interrelated with drug crime.
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The FBI also saw that in these interrelationships, we can't even look at just those, we have to look at foreign intelligence collection as well and some of the foreign nations that are targeting the U.S. So, in fact, the threat has become so amorphous that we are seeing overlaps and seeing some of these instances where there are foreign collections, leveraging terrorist and criminal organizations to their benefit.
Without naming specific, particular groups or organizations, I can say that this is one of the threats that we are concerned with. It is one of the reasons why we had to reorganize because we couldn't do it the way the FBI did for years in terms of looking at intelligence. We had to find a new way so there we weren't merely reacting to criminal enterprise activity, terrorist activity, separately, and foreign counterintelligence even differently; but that we could get to the point where we are in a position to accurately identify it and not only understand the current threat but the future threats, both in criminal, terrorist and foreign intelligence.
And that is why the Director went to you, sought your authorityyou did support, we appreciate thatand we moved ahead by combining all of our assets so we can have a strategic analytical approach, a primary emphasis on intelligence. Because, frankly, the FBI needs and must have a preeminent intelligence capability to address these different threats and also to develop a counterterrorism division to focus on the issue of counterterrorism.
I would like to conclude at this time. And I can answer your questions any other time. But again, I want to thank you, Mr. Chairman, for this opportunity. Thank you.
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PREPARED STATEMENT OF STEVEN C. MCCRAW, INSPECTOR-DEPUTY ASSISTANT DIRECTOR, INFORMATION, ANALYSIS, AND ASSESSMENTS BRANCH, INVESTIGATIVE DIVISION, FEDERAL BUREAU OF INVESTIGATION
Mr. Chairman, members of the subcommittee, thank you for the opportunity to speak with you on this important issue. The threat posed by the convergence of organized crime, drug trafficking and terrorism is significant. Worldwide economic, political, social and technological changes over the last decade have resulted in a more dispersed, complex, asymmetric threat to our nation. Criminals and terrorists have significantly benefitted from these rapid changes which have permanently shrunk the world, made it more open and created new methods for interacting and communicating.
Organized crime, drug trafficking, and terrorist acts are no longer insular, distinct activities that can be contained and eradicated through traditional enforcement. Instead, they are integrated activities which through their very commission have a reverberating impact on our national interests.
To meet these new challenges, we can not focus on singular criminal activities. Rather, the law enforcement and intelligence communities must understand and develop strategies to address all aspects of criminal and terrorist enterprises. Thus, my testimony today will illustrate the diversity of crime within criminal enterprises and the interrelationships between gangs, drug trafficking organizations, organized crime, and terrorist groups. We must understand all aspects of the threat to address the threat.
Page 82 PREV PAGE TOP OF DOC Drug trafficking organizations engage in other criminal activities to support their operations. Similarly, organized crime groups, street gangs and some terrorist organizations are involved in drug related activities. For example, drug trafficking organizations are engaged in the corruption of U.S. law enforcement officials, kidnapings, tortures and murder to further their drug trafficking operations. Mexican drug trafficking organizations use street gangs to murder rivals and to distribute drugs throughout the United States. Russian organized crime groups, which distribute drugs in the United States, are also involved with American organized crime in sophisticated financial fraud, money laundering and other white collar crime schemes. And, Colombian drug organizations interact with some terrorist organizations.
El Paso, Texas, which is contiguous with Juarez, Mexico, has long been a gateway for drugs controlled by the Carrillo Fuentes Drug Trafficking Organization (CFO) and illustrates how violence is an integral part of drug trafficking. During the past few years, there have been approximately 300 drug related disappearances in Juarez, Mexico, including 27 U.S. citizens. In El Paso, there have been 120 drug related homicides and 73 drug related disappearances.
In ''Operation Plaza Sweep'', a joint FBI and Republic of Mexico investigation, 17 murders and 24 kidnapings were documented and eventually led to the discovery of three burial sites used by the CFO in Mexico. The positive identification of seven victims buried at these sites resulted in a superceding indictment adding murder charges to a 46 count drug indictment against Vicente Carrillo Fuentes.
When major drug trafficking organizations lose a load of drugs, they kidnap, torture and often execute those involved. If the individual responsible for the loss flees, a close family member is kidnaped and threatened until the individual turns himself into the organization.
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Drug traffickers also employ violence to escape detection and arrest. For example, on June 3, 1998, U.S. Border Patrol Agent Alexander Kirpnick confronted three drug smugglers along the Arizona/Mexico border and was shot to death. The shooter fled to Mexico and was eventually captured in Mexico and convicted in the United States for the first degree murder of a federal officer.
Drug trafficking organizations systematically engage in corruption to support their drug operations. This is particularly problematic along the southwest border of the United States. U.S. law enforcement officials along the southwest border have been convicted of participating actively in drug-related crimes, including waving drug-laden vehicles through Ports of Entry in exchange for money, coordinating the movement of drugs across the border, using their official positions to transport drugs past checkpoints without being suspected, and disclosing drug intelligence information. In an 18 month period, an FBI-led public corruption task force in Southern Arizona conducted a series of drug corruption investigations which resulted in the conviction of 10 federal officers, two deputy sheriffs, three local police officers, and one local judge.
The ''Operation Ghostload'' investigation illustrates the impact of drug related corruption in the United States. In January, 1999, four Immigration and Naturalization Service Inspectors who were assigned to the Nogales, Arizona, Port of Entry, and seven drug traffickers were arrested. These inspectors were responsible for passing over 20 tons of cocaine into the United States for which they received over $800,000 in bribes.
Clearly, international organized crime groups constitute a significant threat because of the scope and magnitude of their criminal activity. Furthermore, despite tremendous successes against organized crime, vigilance is required to minimize its impact on our financial markets. All organized crime groups are using the increased ease of international travel and the latest advances in telecommunications and technology to move large segments of their criminal enterprises into the United States market. For example, Oleg Kirillov, the leader of a Russian organized crime group based in Russia, established an operation in Miami, Florida, to launch a cocaine smuggling route between Peru and Russia. An investigation by FBI Miami determined that the network of this group stretched from various locations in the United States to Russia, Europe and South America. In addition to drug trafficking, group members were also actively engaged in a variety of criminal offenses, including stock manipulation, credit card fraud, and motor vehicle thefts. Kirillov and several of his associates were indicted and later convicted for their involvement in these criminal activities.
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Similarly, the inter-relation of drug traffickers and violent street gangs poses a challenge to law enforcement. Street gangs continue to expand their illicit activities and build strategic ties to domestic and international criminal organizations. While gangs are involved in a broad range of criminal activity, drug trafficking remains the principal source of their revenue. These criminal organizations are firmly entrenched in regions near major trans-shipment points, freight terminals or bulk warehouses. They are also responsible for moving stolen cargo and high technology commodities into other countries. These high tech shipments are then available for exploitation by major criminal organizations.
The impact of the violence these groups have in the U.S. is significant. For example, here in the Nation's Capital, neighborhood drug-based gangs have been responsible for substantial levels of violent criminal acts. Just last month, a District of Columbia Federal Grand Jury returned a 158 count indictment with 31 charges of murder and multiple violations of drug trafficking and weapons offenses against local gang members. These indictments stemmed from an FBI-led Safe Streets Task Force investigation targeting the entire criminal enterprise.
In January 1997, an FBI-led violent crime task force was initiated in Gary, Indiana, to target pervasive gang-related violence and a gang controlled street level drug trafficking. A series of criminal enterprise investigations freed the community from gang related terror, reducing the assaults with firearms by 62 percent and homicides by 24 percent.
The threat of terrorism to America continues worldwide. The increasingly prominent U.S. role in international peacekeeping, diplomacy and business has increased America's visibility and vulnerability and encouraged the increased levels of activities by terrorist groups. While there is no evidence of narco-terrorism within the United States, intelligence has revealed that some terrorist organizations, such as Columbia's FARC, and to a lesser extent the National Liberation Army (ELN), support their activities through funds acquired as the result of their protection of drug traffickers or the distribution of drugs in Columbia. These terrorists also target U.S. interests in their country. For example, in January 1993, three U.S. missionaries were kidnaped from a village in Panama by members of the FARC and remain missing. In February of last year, three U.S. citizens who were working in Colombia were kidnaped by suspected members of the FARC. These three Americans were later executed in Venezuela.
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Regardless of the source of funding, the threat of terrorism is very real here and abroad. As an example, the World Trade Center bombing in February 1993, killed six Americans, injured over 1,000 and caused property damages amounting to over half a billion dollars. Most recently, the U.S.S. Cole was attacked while in the Port of Aden, Yemen. This act of terrorism took the lives of 17 young American servicemen and women and resulted in the injury of 39 others.
I can assure you that the FBI is prepared for the substantial challenges posed by these evolving threats to our national security. As this subcommittee is aware, the FBI is a member of both the law enforcement and intelligence communities, hence we are uniquely positioned to work closely with our law enforcement and community partners to identify and neutralize the threats to our nation.
The character of these threats, increasingly an integrated conglomerate of activities inimical to our national interests, have resulted in the FBI's proactive posture which is designed to deter and prevent rather than react to criminal and terrorist activities. This proactive approach requires that the FBI have an intelligence capability far different from what has supported us in the past. In fact, to apply the FBI's enterprise theory of investigation to these increasingly compound threats requires an intelligence capability that can disaggregate these patterns of complex, intertwined behaviors and, at all times, provide an accurate understanding of the present and future threat.
The foundation of the FBI's strategy to address these activities is a preeminent intelligence capability. In November 1999, as part of our Strategic Plan, the FBI realigned its intelligence resources and placed a new emphasis on developing a strategic analytical capability. As you are aware, at that time, we placed all personnel dedicated to criminal, terrorist, and foreign intelligence analysis into a new Division and charged it with developing a comprehensive understanding of the threats faced by our nation. Through this realignment we are working toward exploiting all information, regardless of where it is collected, developing national crime and intelligence threat assessments in order to react effectively to current problems, and establishing the intelligence base from which we can project future threats.
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Again, thank you for the opportunity to testify before the subcommittee today. I would be happy to respond to any questions you have at this time.
Mr. MCCOLLUM. Mr. Mutschke.
STATEMENT OF RALF MUTSCHKE, ASSISTANT DIRECTOR, SUB-DIRECTORATE FOR CRIMES AGAINST PERSONS AND PROPERTY, INTERPOL GENERAL SECRETARIAT, LYON, FRANCE
Mr. MUTSCHKE. Thank you, Chairman McCollum, members of the subcommittee. I would like to thank you for inviting Interpol and giving me this opportunity to address you here today. I am the German senior police officer, detailed to the General Secretariat of Interpol in Lyon, France.
As you probably know, Interpol is the only global police organization comprising 178 member countries. This organization was founded in Vienna in 1923, and last month for the first time in our history a non-European was elected to the position of Secretary General. Mr. Ronald K. Noble has served in senior positions in both the U.S. Department of Justice and the U.S. Department of Treasury. He would have liked to be here today, but was unable due to another important commitment.
Structural links between political terrorism and traditional criminal activity such as drug trafficking, armed robbery or extortion have come increasingly to the attention of law enforcement authorities, security agencies, and political decision-makers. In my presentation, I will raise examples which should underscore the increased cooperation and organization among criminal groups.
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Our information is gleaned from ongoing Interpol projects and investigations reported by our member countries, as well as reports by our members and other international organizations, and is also supplemented with open source information.
I would like to start with the armed Islamic group GIA, which is a traditional, very violent terrorist group based in Algeria. The person named Mr. Ressam, who is linked to the GIA, was arrested in December last year at the U.S.-Canadian border with explosive material and a timing device in his car. Immediately prior to his arrest, he had spent a few weeks in Vancouver, Canada, in the company of Mr. Abdelmajid Dahoumane. Dahoumane is a fugitive and the subject of an Interpol Red Notice. An Interpol Red Notice is a worldwide request to national law enforcement authorities to arrest and extradite a wanted person.
In this particular case, an investigation revealed the presence of a GIA support network in Montreal, Canada, which funded its activities through the sale of valuable goods. Further investigation revealed links with Algerian armed troops in France and Bosnia. Until this point, the GIA was believed to be active only in Europe and to be financing its terrorist activities through extortion, currency counterfeiting, fraud and money laundering. Support networks and even planned activities in North America were, up until then, unknown to law enforcement.
The next example leads me to Albania.
The ethnic conscience developed in the '80's and 90's in Albania and in particular in the Kosovo region has established a sense of collective identity necessary to engage in organized crime. This is an element that links organized crime from Albania to Panalbanian ideals, politics, military activities and terrorism. Such criminal troops are hierarchically structured, extremely violent, and are mainly involved in heroin smuggling and trafficking in human beings.They have established a good working relationship with the Italian Mafia. Also, cooperative ties have been formed between Turkish and Bulgarian troops.
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About half a million Albanians have immigrated to the U.S. and Canada in the past 10 years. The European experience has shown that many Albanian immigrants were ideal candidates for recruitment by existing criminal organizations. They started to build up their own networks and through intensive use of violence managed to dissuade other competing groups. The ability they have shown in developing criminal activities in Europe suggests that Albanian crime groups could occupy an important place among criminal groups in North America in the foreseeable future.
Organized crime groups emanating from former communist countries in East Europe form strategic alliances with the Colombian cocaine cartels and also criminal groups from Israel. The numbers of those crime syndicates rise steadily and nearly all continents, including the U.S., are affected.
These few examples should illustrate the interconnected and cooperative nature of today's criminal enterprises. The very globalization of these threats calls for global strategies. Bearing in mind the magnitude of such threats to different governments, societies and economies, it is obvious that law enforcement cannot solve the problem alone. Legal and political action is required on international level.
Nevertheless, with regard to the particular role of law enforcement, Interpol believes that the following elements are essential to any effective strategy:
Setting of political priorities in order to better direct the efforts of law enforcement and to create a synergy effect;
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Movement by law enforcement toward a multi-disciplinary project-based approach on criminality as it becomes increasingly clear that separate intelligence gathering efforts in the field of drugs, organized crime and terrorism do not take into account today's reality;
Improved equipment and training assistance. Considering the difficult situationfinancial situation of countries where the aforementioned problems originate, it is difficult for them to acquire the necessary technical equipment to fulfill the law enforcement mission successfully. In this sense, the lack of communication, tools and information technology are major obstacles.
Obviously, there is no sense in investing in specialized equipment without providing the necessary training. Training should also focus on the development of an analytical capability and information-processing technique.
My role here today was to give you an overview of the convergence of several crime areas, but I sincerely hope that my organization will be instrumental not only in describing problems but also in contributing to their solutions.
This concludes my prepared remarks. I would be happy to respond to any questions you might have.
Mr. MCCOLLUM. Thank you for that summary and for being here today.
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[The prepared statement of Mr. Mutschke follows:]
PREPARED STATEMENT OF RALF MUTSCHKE, ASSISTANT DIRECTOR, SUB-DIRECTORATE FOR CRIMES AGAINST PERSONS AND PROPERTY, INTERPOL GENERAL SECRETARIAT, LYON, FRANCE
Good morning, Mr. Chairman and members of the subcommittee. I would like to thank you for the opportunity of addressing you here today on the threats posed by the increasing links between terrorist and more traditional criminal activities. I would like to start by exposing the issues and emerging trends that Interpol considers significant or potentially significant in the foreseeable future. After having done so, I would like to share some remarks on the threats posed by this problem and recommendations to combat it, before answering your questions.
LINKS BETWEEN ORGANIZED CRIME AND ''TRADITIONAL'' TERRORIST GROUPS
Structural links between political terrorism and traditional criminal activity, such as drugs trafficking, armed robbery or extortion have come increasingly to the attention of law enforcement authorities, security agencies and political decision makers. There is a fairly accepted view in the international community that in recent years, direct state sponsorship has declined, therefore terrorists increasingly have to resort to other means of financing, including criminal activities, in order to raise funds. These activities have traditionally been drug trafficking, extortion/collection of ''revolutionary taxes'', armed robbery, and kidnappings. The involvement of such groups as the PKK, LTTE, and GIA in these activities has been established.
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I would like to draw the particular attention of the Committee to the Groupe Islamique Armé (GIA), considering the events of December last year. On 14 December 1999, Ahmed Ressam, was arrested near Port Angeles, Washington State, while trying to enter the United States from Canada. He was in possession of a timing device, explosive materials and false identification documents. Ahmed Ressam is known to have shared a Montreal (Canada) apartment with Said Atmani, a known document forger for the GIA. It has been established that before Ressam attempted to enter the US, he was in the company of Abdelmajid Dahoumane in Vancouver (Canada) for a 3 to 4 week period. An Interpol Red Notice was issued regarding the latter. The investigation has revealed links between terrorists of Algerian origin and a criminal network established in Montreal and specializing in the theft of portable computers and mobile telephones. The group in Montreal was in contact with individuals involved in terrorist support activity in France, and with several Moudjahidin groups who are active in Bosnia.
Subsequent to the arrest of Ressam, the Montreal police arrested twelve persons who were committing theft of valuable goods in cars in the Montreal downtown area. The proceeds of these criminal activities were sent to an international network with links to France, Belgium, Italy, Turkey, Australia and Bosnia.
The events in Canada and the United States should be seen in a wider perspective. Indeed, intelligence shows that several Algerian terrorist leaders were present at a meeting in Albania, which could also have been attended by Usama bin Laden, who was believed to be in Albania at that time. It was during this meeting that many structures and networks were established for propaganda and fund raising activities, and for providing Algerian armed groups with logistical support. The arrest at the Canada-US border in December 1999 may indicate that the Algerian terrorists are prepared to take their terrorism campaign to North America.
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The GIA is a very active and deadly terrorist organization operating mainly in Algeria but which has also mounted several terrorist attacks in France, including the hijacking of an Air France jetliner in 1994 and a bombing campaign in 1995. Their aim is the overthrow of the Algerian Secular Government and its replacement with an Islamic state. They have developed large scale support and financing activities in Europe and other parts of the world. An analysis recently conducted at the Interpol General Secretariat has revealed GIA involvement in a number of criminal activities in several European countries. Although the information received is fragmented, it has been established that GIA support networks are involved in extortion, currency counterfeiting, fraud, and money laundering.
The above examples concern traditional terrorist groups with a well-defined political ideology who are only involved in organized crime on a secondary level. However, two of the main emerging threats today seem to emanate, on the one hand, from more hybrid groups who operate in highly unstable, often war-torn countries or regions, and, on the other hand, loose alliances and cooperation among different, already existing transnational criminal organizations. Albanian crime groups are highly representative of this trend.
ALBANIAN ORGANIZED CRIME GROUPS.
Albanian organized crime groups are hybrid organizations, often involved both in criminal activity of an organized nature and in political activities, mainly relating to Kosovo. There is certain evidence that the political and criminal activities are deeply intertwined. Also, it has become increasingly clear that Albanian crime groups have engaged in significant cooperation with other transnational crime groups.
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Several extraneous factors explain the current, relatively strong, position of Albanian organized crime:
1. Concerning Albanian organized crime in the United States, the 1986 break-up of the ''Pizza connection'' made it possible for other ethnic crime groups to ''occupy'' the terrain which had until then been dominated by the Italians. For Albanians this was especially easy since they had already been working with, or mainly for, Italian organized crime.
2. Due to a highly developed ethnic consciencefortified by a Serb anti-Albanian politics in the 80's and 90's, Albanians, particularly Kosovars, have developed a sense of collective identity necessary to engage in organized crime. It is this element, based on the affiliation to a certain group, which links organized Albanian crime to Panalbanian ideals, politics, military activities and terrorism. Albanian drug lords established elsewhere in Europe began contributing funds to the ''national cause'' in the 80's. From 1993 on, these funds were to a large extent invested in arms and military equipment for the KLA (UCAE9K) which made its first appearance in 1993.
3. From 1990 on, the process of democratization in Albania has resulted in a loss of state control in a country that had been totally dominated by the communist party and a system of repression. Many Albanians lacked respect for the law since, to them, they represented the tools of repression during the old regime. Loss of state structures resulted in the birth of criminal activities, which further contributed to the loss of state structures and control.
4. Alternative routing for about 60% of European heroin became necessary in 1991 with the outbreak of the war in Yugoslavia and the blocking of the traditional Balkan route. Heroin was thus to a large extent smuggled through Albania, over the Adriatic into Italy and from there on to Northern and Western Europe. The war also enabled organized criminal elements to start dealing arms on a large scale.
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5. Another factor which contributed to the development of criminal activities, is the embargos imposed on Yugoslavia by the international community and on the F.Y.RO.M. by Greece (19931994) in the early 90's. Very quickly, an illegal triangular trade in oil, arms and narcotics developed in the region with Albania being the only state not hit by international sanctions.
6. In 1997, the so-called pyramid savings schemes in the Albanian republic collapsed. This caused nation-wide unrest between January and March 1997, during which incredible amounts of military equipment disappeared (and partly reappeared during the Kosovo conflict): 38,000 hand-guns, 226,000 Kalashnikovs, 25,000 machine-guns, 2,400 anti-tank rocket launchers, 3,500,000 hand grenades, 3,600 tons of explosives. Even though organized crime groups were probably unable to ''control'' the situation, it seems clear that they did profit from the chaos by acquiring a great number of weapons. Albanian organized crime also profited from the financial pyramids which they seem to have used to launder money on a large scale. Before the crash, an estimated 500 to 800 million USD seem to have been transferred to accounts of Italian criminal organizations and Albanian partners. This money was then reinvested in Western countries.
7. The Kosovo conflict and the refugee problem in Albania resulted in a remarkable influx of financial aid. Albanian organized crime with links to Albanian state authorities seems to have highly profited from these funds. The financial volume of this aid was an estimated $163 million. The financial assets of Albanian organized crime were definitely augmented due to this situation.
8. When considering the presence of Albanians in Europe, one has to keep in mind the massive emigration of Albanians to Western European countries in the 90's. In 2000, estimations concerning the Albanian diaspora are as follows:
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United States and Canada: 500,000
Great Britain: 30,000
For those emigrants to EU countries or Switzerland, the temptation to engage in criminal activities is very high as most of them are young Albanian males, in their twenties and thirties, who are unskilled workers and who have difficulties finding a job. For Italian organized crime, these Albanians were ideal couriers in the drug trafficking business running through Albania as they were able to circumvent the area border patrols after the outbreak of the war in Yugoslavia. Many of them came into contact with Albanian organized crime through Albanian émigré communities located throughout Western Europe. This gave an impetus to the dispersion and internationalization of Albanian criminal groups.
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The typical structure of the Albanian Mafia is hierarchical. Concerning ''loyalty'', ''honor'' and clan traditions, (blood relations and marriage being very important) most of the Albanian networks seem to be ''old-fashioned'' and comparable to the Italian Mafia networks of thirty or forty years ago. Infiltration into these groups is thus very difficult. Heroin networks are usually made up of groups of fewer than 100 members, constituting an extended family residing all along the Balkan route from Eastern Turkey to Western Europe. The Northern Albanian Mafia which runs the drug wholesale business is also known by the name of ''The Fifteen Families.''
Regarding cooperation with other transnational criminal groups, the Albanian Mafia seems to have established good working relationships with the Italian Mafia. On the 27th of July 1999 police in DurreAE4s (Albania), with Italian assistance arrested one of the godfathers of the ''Sacra Corona Unita'', Puglia's Italian Mafia. This Albanian link seems to confirm that the Sacra Corona Unita have ''officially'' accepted Albanian organized crime as a ''partner'' in Puglia/Italy and delegated several criminal activities. This might be due to the fact that the Sacra Corona Unita is a rather recent phenomenon, not being as stable nor as strong as other Mafias in Italy. Their leaders might have decided to join forces rather than run the risk of a conflict with Albanian groups known to be extremely violent. Thus in certain areas of Italy, the market for cannabis, prostitution and smuggling of illegal immigrants is run mainly by Albanians. Links to Calabria's Mafia, the ''Ndrangheta'', exist in Northern Italy. Several key figures of the Albanian Mafia seem to reside frequently in the Calabrian towns of Africo, Plati and Bovalino (Italy), fiefs of the Ndrangheta. Southern Albanian groups also seem to have good relationships with Sicily's ''Cosa Nostra'', which seems to be moving steadily into finance and money laundering, leaving other typical illegal activities to other groups. Close relationships also exist with other criminal groups active along the Balkan route, where Turkish wholesalers, Bulgarian and Romanian traffickers are frequent business partners. There are also indications that a South American cartel has become active in Albania through Albanian middlemen, in order to place more cocaine on the European market
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The heavy involvement of Albanian criminal groups in drugs trafficking, mainly heroin is proven. Currently, more than 80% of the heroin on the European market has been smuggled through the Balkans, having mainly been produced in Afghanistan and traveled through Iran and Turkey or Central Asia. In the Balkan region, two routes seem to have replaced the former traditional route, disrupted by the Yugoslavian conflict: one Northern route running mainly through Bulgaria, then Romania and Hungary and one Southern route running from Bulgaria through F.Y.R.O.M., the Kosovo region and Albania. An average of more than a ton of heroin and more than 10 tons of hashish are seized along those Balkan routes each year. According to DEA estimations, between 4 and 6 tons of heroin leave Turkey each month bound for Western Europe, traveling along the Balkan routes.
Albanian trafficking networks are becoming more and more powerful, partly replacing Turkish networks. This is especially the case in several German speaking countries, Sweden and Norway. According to some estimations, Albanian networks control about 70% of the heroin market today in Switzerland, Germany, Austria and the Scandinavian countries. According to analyses of the Swedish and Norwegian police, 80% of the heroin smuggled into the countries can be linked to Albanian networks. In 1998, Swiss police even estimated that 90% of the narco-business in the country was dominated by Albanians. Throughout Europe, around 40% of the heroin trade seems to be controlled by Albanians. Recent refugees from the Kosovo region are involved in street sales. Tensions between the established ethnic Albanians and newcomers seem to exist, heroin prices having dropped due to their arrival and due to growing competition in the market.
Albanian networks are not only linked to heroin. In the Macedonian border region, production laboratories for amphetamine and methamphetamine drugs seem to have been set up. Currently, these pills are destined for the local market. Cannabis is grown in Albania and cultivation seems to have become more and more popular, especially in the South. Annual Albanian marijuana revenue is estimated at $40 million. In 1999, cannabis plantations existed in the regions of Kalarat (about 80 kilometers from VloreAE4/Albania) and close to GirokasteAE4r in the regions of SarandeAE4, Delvina and Permetti. Albanian cannabis is mainly sold on the Greek market. In order to transport the drugs to Greece, Albanian crime groups work together with Greek criminals.
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Albanian criminals are also involved in the traffic of illegal immigrants to Western European countries. It is part of international trafficking networks, which not only transport Albanians, but also Kurds, Chinese and people from the Indian subcontinent. The Albanian groups are mainly responsible for the crossing of the Adriatic Sea from the Albanian coast to Italy. Departures mainly take place from VloreAE4, some of them from DurreAE4s or even from Ulcinj in the South of Montenegro. By the end of 1999, the crossing costs about $1,000 USD for an adult and $500 USD for a child. It is interesting to notice that some illegal immigrants had to pay for their journey only once in their home country (e.g. $6,000 in Pakistan), but that the nationality of the trafficking groups changed as they moved along. This implies that Albanian groups are only a part of international distribution networks. In 1999, approximately 10,000 people were smuggled into EU countries via Albania every month. The Italian border patrol intercepted 13,118 illegal immigrants close to the Puglian coast from January until July 1999. It estimated arrivals only in this coastal region at 56,000 in 1999. For the Albanian crime groups, illegal immigrationeven though it can not be compared to the narco-businessis an important source of income, bringing in an estimated fifty million USD in 1999.
Immigration is not only a source of income, it is also very important in order to create networks in foreign countries and thus create bridgeheads for the Albanian Mafia abroad. Reports indicate that of the people admitted into Western European or North America as refugees during the Kosovo conflict, at least several had been carefully chosen by the Albanian Mafia to stay in the host country and act as a future liaison for the criminal networks.
Trafficking in women and forced prostitution seem to have become much more important for Albanian organized crime in 1999, with thousands of women from Kosovo having fled to Albania during the armed conflict in the region. About 300,000 women from Eastern European countries work as prostitutes in Europe. More and more seem to be ''organized'' in Albanian networks that are not only limited to ethnic Albanian prostitutes, but also comprise women from Romania, Bosnia, Moldova, Russia, etc. The pimps often pretend to be Kosovars in order to have the status of a political refugee, even though many of them come from Albania. Some seem to control the ''business'' from abroad. Belgium, in particular, seems to be the seat of several leaders of the trafficking networks. In 1999, ten people linked to Albanian crime were shot in Brussels.
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Finally, Albanian criminal groups frequently engage in burglaries, armed robberies and car theft in Europe and the United States.
There might still be links between political/military Kosovar Albanian groups (especially the KLA) and Albanian organized crime. Of the almost 900 million DM which reached Kosovo between 1996 and 1999, half was thought to be illegal drug money. Legitimate fundraising activities for the Kosovo and the KLA could have been be used to launder drug money. In 1998, the U.S. State Department listed the KLA as a terrorist organization, indicating that it was financing its operations with money from the international heroin trade and loans from Islamic countries and individuals, among them allegedly Usama bin Laden. Another link to bin Laden is the fact that the brother of a leader in an Egyptian Djihad organization and also a military commander of Usama bin Laden, was leading an elite KLA unit during the Kosovo conflict. In 1998, the KLA was described as a key player in the drugs for arms business in 1998, ''helping to transport 2 billion USD worth of drugs annually into Western Europe''. The KLA and other Albanian groups seem to utilize a sophisticated network of accounts and companies to process funds. In 1998, Germany froze two bank accounts belonging to the ''United Kosova'' organization after it had been discovered that several hundred thousand dollars had been deposited into those accounts by a convicted Kosovar Albanian drug trafficker.
The possibility of an Albanian/Kosovar drugs for arms connection is confirmed by at least two affairs in 1999:
an Italian court in Brindisi (Italy) convicted an Albanian heroin trafficker who admitted obtaining weapons for the KLA from the Mafia in exchange for drugs.
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An Albanian individual placed orders in the Czech Republic for light infantry weapons and rocket systems. According to Czech police sources, the arms were bound for the KLA.
Each KLA commander seems to have had funds at his disposal in order to be able to pay directly for weapons and ammunition for his local units' need.
It is difficult to predict the further development of Albanian organized crime. Being a recent phenomenon, its stability is difficult to estimate. Nevertheless, future threats are realistic given the ruthlessness and lack of scruples displayed by Albanian crime groups, the international links which already exist, the professionalism which characterizes most of their activities and the strong ties created by ethnic Albanian origins. Moreover, the strong position of Albanian crime groups in Kosovo, F.Y.R.O.M. and the Albanian republic itself, is definitely a cause of concern to the international community, especially when one takes into account the geo-political instability in the region and the presence of a UN peacekeeping force.
THE LINKS BETWEEN DRUG TRAFFICKING AND TERRORISM IN CENTRAL ASIA.
The breakup of the Soviet Union and its transition to a market based economy continues to have a major impact in Central Asia and Eastern Europe. Many countries in these regions continue to have economic and social problems relating to the major changes that occurred in 1991. Central Asian criminal organizations have taken advantage of these unstable conditions to become more active in such illegal activities as drug trafficking and other smuggling activities, while becoming ever more powerful. As a result of their domestic trafficking activities, drug dealers and other criminal organizations have developed transnational and international criminal connections, further spreading the flow of drugs and becoming increasingly involved in more serious criminal activity.
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A significant part of the drug trafficking activity in the area is taking place in conjunction with terrorist activity. Terrorist groups active in Central Asia are opponents of the democratic, secular societies which are in the process of being established. Over the last two years, they were responsible for car bombings, suicide bombings, massacres of innocent civilians, tourists and attacks against multi-story buildings, which resulted in massive damage and casualties in Central-Asia as well as neighboring countries. This type of terrorism has been used against the secular regimes in Central Asian and neighboring countries.
The main terrorist movement in the area, but not the only one, is the Islamic Movement of Uzbekistan (IMU). The IMU is a religious extremist coalition of terrorists and sympathizers from Uzbekistan and other Central Asian countries claiming to be acting under the guise of Islam and opposed to the secular government of the Republic of Uzbekistan. IMU's goal is to establish an Islamic State in Uzbekistan and other Central Asian countries. This group also promulgates religious and extremist propaganda including anti-western rhetoric aimed at spreading the idea of overthrowing the constitutional government in the republic. The IMU is responsible for six car bomb attacks on 16 February 1999, that resulted in the deaths of 16 people and serious injuries of 128 others in Tashkent. The car bombs exploded within minutes of each other, outside Uzbekistan's government headquarters and several other buildings in an assault apparently aimed at President Islam Karimov. We believe several suspects are currently located in Western Europe but are claiming political asylum in those countries.
Despite the political and ideological agenda of the IMU, this movement is not exclusively terrorist in nature, rather more of a hybrid organization in which criminal interests often take priority over ''political'' goals. IMU leaders have a vested interest in ongoing unrest and instability in their area in order to secure the routes they use for the transportation of drugs. Afghanistan produces around 75 % of the world's heroin supply (For 2000, the production of opium, then refined into heroin, was 3275 tons). Due to successful anti-drugs campaigns in Iran and Pakistan, traffickers were forced to transit drugs through Central-Asia, in order to reach Russia and Europe. At the same time, there has been an increase in demand for drugs on the Russian market. Approximately 60 % of the narcotics coming out of Afghanistan are now transiting through Central-Asia. The trafficking of such huge quantities implies the need to constantly find new routes, and it is also evident that an increase of efficiency of law enforcement in these countries, resulting from a stable political climate, would present a significant threat to the IMU's interests in drug trafficking. The interest of the latter in this profitable sector is rather large, according to some estimations IMU may be responsible for 70 % of the total amount of heroin and opium transiting through the area.
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In Afghanistan, the radical Islamic Taliban Militia controls over 80 percent of the country's territory and over 95 percent of the opium poppy cultivating area. Reports indicate that opium production provides the Taliban with income through the taxation of opium and heroin labs, and also gives them political leverage.
STRATEGIC ALLIANCES AND INTERNATIONAL ACTIVITIES OF EASTERN-EUROPEAN ORGANIZED CRIME
Crime groups emanating from the former Communist countries of eastern and central Europe and the republics of the former Soviet Union pose a deadly threat internationally as the number of crime syndicates rises steadily.
The G8 Law Enforcement Projects Sub-Group on Eastern European Organized Crime began an initiative to gather information on specific organized crime targets and/or organizations which were of interest to their members. At the outset they recognized that Interpol was the only organization with a centralized international database and which also had the capacity and potential to collate and analyze the information. In response to a request from this G8 Sub-Group, Interpol made a proposal to serve as an ''indices system'' to oversee the collection and analysis of the information on these crime groups. Project Millennium now serves our member countries by providing a specialized database, by collating and storing information, by producing analytical reports for use in current investigations and by assisting countries in the exchange of information on East European/Russian organized crime.
Project Millennium is a ''Pilot Project'' for Interpol and is a working example of how the organization has become a ''global coordinator'' and ''value added service provider'' for the world's law enforcement community.
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In terms of trends and threats, Interpol has clearly identified that the pervasive criminality that for so long festered within the boundaries of the former Soviet Union has now manifested itself in all corners of the globe. In contrast to the Communist period, modern organized crime in Eastern Europe and the former Soviet Union has spread well beyond the old European borders and quickly transformed the phenomenon into an urgent transnational issue.
Interpol information indicates that former USSR/Eastern European organized crime groups are now active and their influence is growing in all continents. An unusual aspect is that these crime syndicates have formed alliances of convenience and are willing to cooperate or make business arrangements with other organized crime groups, such as the LCN, the Colombian cartels, Italian mafias, and other international traditional criminal adversaries specializing in drug trafficking, prostitution rings, money laundering, and weapon smuggling.
Eastern European/Russian crime syndicates are now laundering money on a grand scale throughout the world. States with strict banking secrecy laws are particularly attractive to Eastern European and former USSR crime groups. In particular, many crime groups are seizing on loose financial regulations in foreign states to launder large amounts of illicit profits through foreign banks and business structures. One particular suspect from the British Channel Islands came to our attention due to the fact that his name appeared in a number of cases as the director or officer of numerous businesses linked to Eastern European related crime groups. It is claimed that the subject held a world record by holding over 2,400 directorships at one time. Our investigations into this one person demonstrated how the offshore business services are widely used by criminal enterprises. In these types of cases, Interpol plays an important role by collecting information from all over the world and highlighting the common suspects, trends and modus operandi. Areas and countries with these loose financial regulations span from islands in the South Pacific and Caribbean, across Europe and, in the United States. We see many leads from other countries inquiring about East European based companies incorporated in Delaware, Wyoming and Montana.
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One analysis report completed by Interpol in Project Millennium revealed how one of the leaders of the ''Chechenskaya'' criminal group, with three of his brothers as well as other accomplices, transferred money received from criminal activities in Russia to western European countries through offshore zones. One of the companies used for these money transfers was ''Benex International'' mentioned in the ''Bank of New York'' reports. The members of this group are involved in extortion, murder, armed robberies, weapons smuggling, and money laundering. This criminal leader is wanted by Interpol Moscow and has an Interpol Red Notice for murder. This investigation involves at least 12 countries (Switzerland, Hungary, Australia, Ireland, Russia, Bulgaria, Nauru, Kazakhstan, Austria, Germany the UK and the USA).
Another very interesting trend which we have seen for several years is the interest shown in Africa by Russian and Eastern European crime groups. Information we have received from Africa and elsewhere shows that many leading crime figures are traveling to African countries and some have shown an interest in setting up operations in these countries. We are aware, for example, of a meeting of several significant leaders from Eastern Europe in South Africa in 1996. One of the activities which many of these criminals are involved in is arms trafficking and the subsequent money laundering of the proceeds from that traffic.
One Russian-born subject who is suspected of arms trafficking into several African countries, was the owner of a private bank in Switzerland and the administrator of an aviation company. Other aviation companies we are tracking are incorporated in Central Asian countries but have significant links to certain Arab countries. A leading Bulgarian criminal who is a close associate of an important Eastern European crime figure has close connections with the firearms industry in Eastern European and has had significant dealings with terrorist groups and criminals operating in African countries. Interpol is attempting to track the travel activities of these criminals in an effort to supply valuable information and connections to investigators.
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STRATEGIC ALLIANCES BETWEEN CRIME GROUPS: THE COLOMBIAN NEXUS
The strategies devised by Colombian drug cartels merit a discussion in further detail. Over the years, these criminal entities have formed numerous alliances with other criminal groups in order to extend the scope of their illicit business. Their rational, and, incidentally, highly successful strategic decision making has led to providing them with a more global reach. The presence of terrorist groups in the area explains the obvious link between drugs and the arms trade in that region.
Generally speaking, the formation of alliances can be viewed as a response by a particular firm or company to overcome its own limitations. With the emergence of global markets, alliances are becoming a necessity for almost any business. Each firm has something that the other needs or wants, such as knowledge of a certain market or an established distribution network. Drug cartels, although an illegitimate business, are forming alliances with other organized criminal groups around the world to extend their operations and conquer new markets.
In order to smuggle their illicit products into the U.S., Colombian drug cartels began forming alliances with Mexican groups, who have a well-developed smuggling infrastructure for transporting drugs across the vast border with the United States. As Mexicans began to charge more for their services, Colombians established relationships with various Dominican, Jamaican, Puerto Rican, and African-American groups which act as smugglers and retailers for Colombian wholesale cocaine. Colombians have also formed an alliance with some of the Nigerian drug trafficking groups based on product exchange. In the early 1990s, Nigerian groups supplied heroin to Colombian drug traffickers in exchange for cocaine. Colombians were able to develop their own heroin market, while Nigerians started selling cocaine in Western Europe. During the late 1980s and early 1990s, an important alliance was formed between Colombian drug cartels and the Sicilian Mafia. Since the cocaine market in the U.S. was saturated, and because cocaine could be sold with higher profit margins in Europe, Colombians wanted to enter the European drug market. The Cosa Nostra's well established heroin network was easily applicable to cocaine. In addition, the Sicilians had an excellent knowledge of European conditions and were able to neutralize law enforcement officials through bribery and corruption more effectively than the Colombians. From the Sicilian perspective, the alliance with Colombians was an opportunity to regain part of the market that had been lost to Chinese heroin traffickers. In recent years, South American drug cartels have been forming alliances with East European/Russian Organized Crime Groups in order to support and diversify their operations. East European groups have offered drug cartels access to sophisticated weapons that were previously not available. Helicopters, surface-to-air missiles, rocket-propelled grenades, and even submarines are on the drug cartels' ''shopping list.'' The East European groups provided new drug markets in Russia, the former Soviet Republics, and Eastern Europe, while consumption was decreasing in the U.S. In 1993, Russian police intercepted a ton of South American cocaine which had been shipped to St. Petersburg by one Russian crime syndicate working with a Colombian drug cartel. In another example, a Russian crime leader was arrested in January 1997 in Miami by U.S. agents for the exportation of cocaine from Ecuador to St. Petersburg (Russia) and then to the United States. In exchange for these services, drug cartels pay for transactions with high quality cocaine. East European/Russian crime syndicates and corrupt military officers are supplying sophisticated weapons to Colombian rebels in exchange for huge shipments of cocaine. Although the Revolutionary Armed Forces of Colombia (FARC) receives most of the arms, some of them are distributed to Hezbollah factions.
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The financing of the two main terrorist organizations operating in Colombia, namely the FARC and the National Liberation Army (ELN), originates from several sources, with the most important one being the drug trafficking. A ''tax system'' ran by FARC collects $20 USD for each kilo of base cocaine produced, $30 USD for each kilo of crystal, and $2,500 USD for each use of a landing strip. Approximately 61% of FARC's operational area is also an area for cultivation and production of cocaine. The guerrilla members also protect the laboratories belonging to the narco-traffickers and this protection is provided in exchange for financial compensation. The largest amount, approximately $515 million dollars, was raised by Colombia's oldest guerrilla organization, FARC. The smaller National Liberation Army earned approximately $380 million dollars. These groups raised approximately $910 million dollars from abductions, extortion and drug trafficking in 1997. In the last four years, these groups' earnings soared by 130%, which surpasses the combined incomes of Colombia's seven largest firms. Since 1996, the UNHCR estimates that more than 800,000 people have been displaced in Colombia as a result of guerrilla warfare. In an attempt to negotiate peace with guerrilla groups, the Colombian government granted the ELN a demilitarized zone in the northeastern provinces of Antioquia and Bolivar in April 2000. This is the second guerrilla safe-zone created in Colombia. The FARC's own demilitarized zone, which lies in the jungles in the south, was created in 1998.
In the South American context, it is also worthwhile to mention Peru and Argentina. Like Colombia, Peru is combating guerrilla groups in the Andean jungles. The main guerrilla group is the ''Sendero Luminoso'' (Shining Path), led by Oscar Ramirez, also known as ''Comrade Feliciano.'' In order to finance their operations and terrorist attacks, they often resort to drug production and smuggling. In May 1997, a joint action by the Peruvian military and police resulted in the capture of several leaders of the Shining Path. The Shining Path operates in the Apurimac valley, the second largest coca growing area in Amazonia. The increasing poverty in the region allows the guerrilla group to recruit young people between the ages of 14 and 18 and enlarge the scope of their activities. The rebels suffered a setback in their operations, however, when one of their leader, Oscar Ramirez Durand, was arrested in 1999.
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It appears that Argentina is becoming a major money laundering center for organized criminal groups from Colombia and Mexico, and recently there appears to be activity from various East European/Russian organized crime groups. Since Argentina does not yet have an anti-laundering body, the total amount laundered annually is not known. According to a report by the International Monetary Fund (IMF), an estimated $6 billion dollars are laundered in Argentine banks each year. According to the Argentine federal police, approximately $5 billion came from Paraguay to be laundered in 1998. Allegedly, the money is usually channeled ''through front companies in Uruguay, then through banks in the Caribbean, and finally to Europe and the United States''.
Finally, the area called the ''Triple Border'', where Argentina, Brazil, and Paraguay meet is known for arms trafficking, vehicle theft, counterfeit currency, forged documents, as well as for being a refuge for Latin American, Lebanese, Russian, Chinese, and other criminal and terrorist organizations. It is not clear if the Hezbollah figures among these terrorist groups, but Islamic fundamentalists are suspected of having committed two terrorist attacks in Argentina : in 1992, a car bomb destroyed the Israeli embassy building in Buenos Aires and in 1994 another car bomb attack was directed against the ''Mutual Association''. These investigations are still ongoing and Interpol channels have been used for the exchange of information in the framework of these cases. To provide an idea of the scope of criminal activity in this area, a former President of the Brazilian Central Bank stated in 1999, that approximately $18 million USD are laundered daily in the banking agencies of the city of Foz de Iguazu (Brazil), a city which is located in this region.
The main smuggling routes to Europe originate in Brazil, Ecuador, and Venezuela. Cocaine is concealed in containers and shipped to Rotterdam (The Netherlands), Barcelona (Spain), Genoa (Italy), and the ports of some Baltic states. In addition, small boats transport cocaine from South America to Spain, where drugs are transferred aboard Spanish fishing boats. Lastly, an air route exists between West Africa and Europe. However, Spain continues to dominate as the main entrance point for Colombian drugs into Europe. In 1998, more than 31% of all cocaine seizures in Europe occurred in Spain. On August 2, 1999, the Spanish authorities seized ten metric tons of Colombian cocaine on a Russian-owned ship southwest of the Canary Islands. This shipment was the largest cocaine seizure carried out by European police. In addition, 200 kilograms of heroin were confiscated.
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What appears to be the ''forecast'' for South America? In the northern tierColombia, Venezuela, Ecuador, Bolivia, and Perudrug trafficking will continue to dominate along with insurgence of the guerrilla groups. The abundance of drugs and oil in the region, as well as guerrilla activities, is a dangerous mixture for political stability.
COOPERATION AMONG RUSSIAN AND ISRAELI CRIMINAL GROUPS IN THE TRAFFICKING OF ECSTASY
In another look at an emerging drug situation, there has been a tremendous increase in the production and trafficking of ecstasy to the United States from Europe, a trend which Interpol brought to the forefront in 1998. It has also increasingly spread to Australia, South Africa, Asia, and South America. The phenomenal demand for this drug has created a perfect opportunity for Israeli and Russian organized crime groups to become heavily involved in the trafficking of this drug, which has proven to be extremely lucrative. As the production and trafficking of ecstasy continues at an explosive rate, we are seeing increased involvement of Russian and Israeli criminal organizations as well as the increased involvement by other international criminal organizations, potentially to include Colombian and Mexican groups. As the production of this drug spreads to the east, we can expect Eastern European organizations to take advantage of this situation, which no doubt will include criminal activity directed towards the United States.
I would also like to seize this opportunity to draw the attention of the Committee to the relatively recent involvement of Organized Crime in two activities which have become increasingly important issues for law enforcement authorities, namely illegal immigration and cigarette smuggling.
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CIGARETTE SMUGGLING AND ORGANIZED CRIME
According to the British Tobacco Manufacturers' Association, cigarette smuggling is now second only to drugs in terms of consumer spending on illegal activities. An estimated 350 billion cigarettes are smuggled each year, and the number continues to grow rapidly. As a consequence, governments around the world lose approximately $16 billion annually in uncollected tax revenues.
Many organized crime groups operate based on kinship, lifelong friendship, mutual prison experience, or the membership in sects or secret societies like the Chinese Triads or the Cosa Nostra. However, none of these ties are essential in the illegal cigarette trade, as is evidenced by the numerous interethnic relations within smuggling operations and between different levels of the market. The risk of apprehension for smugglers, wholesalers, street vendors, and consumers is relatively low, due to the fact that it has not been a priority for law enforcement until very recently, and sanctions have been relatively light considering the profitability of the business. In addition, the risk of fraud is limited because, unlike illegal drugs, most cigarettes are manufactured legally so the question of the quality of the product is almost non-existent. However, the profitability of the ''business,'' combined with its visibility and illegality make street vendors of smuggled cigarettes an easy target for extortion and racketeering by organized criminal groups.
Why are cigarettes such an attractive commodity for organized crime groups? First, the difference between the duty-free and duty-paid prices are substantial, thereby allowing smugglers to make profits at relatively low street prices. Second, they are very easy to handle and transport. For example, a container load of cigarettes carries a potential tax value of $1.2 million, almost all of which is potential profit for the smuggler. Third, cigarette smuggling requires a willing market and a good local distribution network, which have already been established by drug-trafficking organizations.
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Despite considerable investments in anti-smuggling measures by law enforcement agencies, cigarette smuggling is flourishing around the world. In Europe, after the collapse of the Soviet Union, already existent smuggling trends in Italy and Spain served as a model for organized groups in other countries. Smuggling networks developed in the Balkans when international sanctions were imposed as a result of the war. In South Africa, there was a surge in cigarette smuggling after the collapse of apartheid and the lifting of international sanctions. In Colombia, well established drug routes were easily converted into cigarette-smuggling routes. Interstate cigarette smuggling is one of the fastest growing crimes in the United States, due to considerable differences in state tax rates. State taxes on cigarettes currently range between 2.5 cents to $1USD per pack. In Canada and Great Britain, extremely high cigarette taxes proved to provide the fertile ground needed for cigarette smuggling to flourish. Similar patterns continue to emerge around the world, while criminal activities continue to grow. In Colombia, cigarette smuggling is directly related to money laundering schemes through the so-called ''black market peso exchange.'' During the exchange, drug-dealers convert U.S. dollars into clean pesos, while cigarette smugglers buy U.S. dollars in order to purchase international goods. The U.S. Treasury Department calls this system ''the most dangerous and damaging form of money laundering ever encountered''. In Italy, criminal organizations sign contracts with the tobacco companies and buy enormous quantities of cigarettes. Some criminal groups are so powerful, they demand that tobacco companies refrain from selling their products to other criminal organizations. In Germany, Vietnamese groups dominate the street sale of smuggled cigarettes. With time, they have evolved from unorganized individuals into highly sophisticated groups controlling the majority of illegal sales. Along with traditional methods, more elaborate techniques have evolved for cigarette smuggling into Germany. Non-existent corporations have been established to purchase duty-free cigarettes with the intention of exporting them to Eastern Europe. However, before the cargo reaches the border, it is sold to illegal wholesale dealers. In Britain, the port of Dover has become the center of smuggling activities, taking advantage of France's lower tobacco taxes. Tobacco smuggling is a ruthlessly efficient and highly organized trade which involves some of Britain's most vicious criminal gangs, as well as the Eastern European crime groups and the Italian Mafia. British police estimate that Italian organized criminal groups account for 15% of the illegal trade, while Eastern European gangs are responsible for 10% of the smuggled cigarettes in Great Britain. The ferocity of the competition is likely to contribute to violent confrontations as the gangs compete for control.
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Organized criminal groups realize the importance of making smuggling routes and the structure of transactions as complicated as possible, and employ a great range of owners in a very short space of time to make police investigations as difficult as they can. The primary objective is to make the final owner untraceable, and to make the links between successive owners as ambiguous as possible. The more complicated the route is, the more difficult it is to uncover.
The port of Antwerp in Belgium and the port of Rotterdam in the Netherlands serve as major warehouses for imported cigarettes in Europe. The high concentration of duty-free cigarettes in these ports is likely to generate illegal activities for the European black market. It is clear why: European guidelines specify that tobacco duty must make up at least 57% of the selling price for a packet of cigarettes. From Antwerp, there are two major smuggling routes which lead to Eastern Europe and the former Soviet Union. The first route transfers cigarettes by road from Belgium to Switzerland's free zone, where they are destined for Central and Eastern Europe. The second route transfers cigarettes from ports to regional airports in Belgium or the Netherlands. Then, large aircraft fly the cigarettes to their destinations in Eastern Europe and the former Soviet Union. Eventually, most of the cigarettes return to the EU, particularly to Germany and Italy. In Germany, cigarettes are smuggled in a vast number of private cars and small vans, and this phenomenon is described as ''ant-smuggling.'' In Italy, cigarettes are smuggled by fast boats from the Republics of the former Yugoslavia and Albania. After they land along the long coastline, cigarettes are distributed on the Italian market and in other European countries. The third smuggling route transports cigarettes from Northern European ports to North Africa. However, when ships are close to the Spanish territorial waters, small fast boats smuggle cigarettes to the Spanish Coast.
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In 1993, a total of 13 million packets were exported into the principality of Andorra, compared with 1,520 million packets in 1997. It is difficult to believe that 60,000 inhabitants of Andorra consumed these quantities. A large amount of cigarettes may have been smuggled back to Great Britain through Spain, France, and Belgium. Lately, smugglers have used routes through Cyprus and the United Arab Emirates to cover their activities.
Investigators claim that British American Tobacco (BAT), the world's second largest multinational tobacco company, has encouraged tax evasion and cigarette smuggling as a means of securing a share of the tobacco market and to lure generations of new smokers in South American countries, especially Colombia. The BAT records show that cigarettes were shipped from BAT subsidiaries in the U.S., Brazil, and Venezuela to BAT's distributors in the free-trade zone in Aruba, an island just off the coast of Colombia. From Aruba, cigarettes were sold to dealers, who would then bring them to Maicao, a town in Colombia's La Guajira region. Maicao was given special customs status in order to improve the economy in the region. However, many cigarettes were moved from ''duty not paidzone into the black market in Barranquilla, Colombia.
Another route was used to smuggle cigarettes from Aruba into Colombia. This time, Panama's free-trade zone of Colon was used as a staging point into nearby Turbo (Colombia), which is also a special customs zone. Furthermore, some of the cigarettes shipped through Aruba into Maicao went back to Venezuela. In addition to South America, it is alleged that BAT encouraged cigarette smuggling into Asia through one of its main distributors in Singapore. Cigarettes were then shipped as a part of ''general trade'' (duty not paid) to Bangladesh, Pakistan, Thailand, Myanmar, Philippines, Vietnam, Laos, Afghanistan, and India. Other world smuggling routes exist from Paraguay into Argentina, from Cambodia and Thailand into Vietnam, and through Hong Kong into China.
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TRAFFIC IN HUMAN BEINGS AND ORGANIZED CRIME
According to the International Organization of Migration (IOM), there are currently from 20 to 40 million irregular migrants in the world of a total of 130 million international migrants. At any given time, about 4 million illegal migrants are on the move. An estimated 100,000 Chinese are smuggled abroad every year, mainly from the Fujian province in the south where in some villages up to 10 % of the population have emigrated over the last years. Some sources describe today's illegal migration as essentially being a Chinese problem, authorities in Hong Kong (China) even estimating that currently nine out of ten illegal migrants world-wide are ethnic Chinese. According to the U.S. Immigration and Naturalization Service (INS), up to 10,000 Chinese illegal immigrants could have reached American shores in 1999 by boat, five times more than in 1998. INS employees and the Pacific Forum in Hawaii estimate possible illegal immigration from China to the United States at 100,000 illegal immigrants per year (which would contradict the IOM figures mentioned above). The official INS estimates speak of about 30,000 illegal Chinese aliens. In Australia, unauthorized arrivals by sea have jumped from 157 in 1998 to 3,700 in 1999, the immigrants have been primarily Chinese. In Japan, 1,209 illegal Chinese migrants were apprehended in 1997 and 428 were apprehended from January until June 1998. Police authorities estimate that the overall number of Chinese who entered Japan in those years is up to ten times higher. Britain estimates the Chinese influx into the United Kingdom at over 600 people per month. Chinese migration is stimulated by a strong Chinese overseas population. In the 1950's, some 12 million Chinese were living abroad. In 1999, that number had tripled. Of those 35 million Chinese abroad in 1999, two thirds lived in Southeast Asia. It is estimated that China is currently home to a ''floating population'' (''liudong renkou'', without a permanent place of residence and employment) of 100 million people. Nevertheless, Asian migration is not exclusively linked to Chinese nationals. Especially within Asia, a Filipino, Indonesian, Bangladesh and Burmese migration is significant. Malaysia is thus home to over 500,000 Indonesian illegal immigrants (of a total of about 700,000 illegal immigrants), Thailand to about 600,000 Burmese (of a total of about one million irregular immigrants). In a 1999 IOM report, the People's Republic of China, the Philippines, Indonesia and Burma were named as being the top four source countries of irregular migration world-wide. According to the Filipino Department of Foreign Affairs, of the approximately 7 million Filipinos working abroad in 1999, 3 million were undocumented workers.
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The world-wide profits made by individual smugglers and smuggling networks for the year of 1999 were estimated to be between $3 and $10 billion USD. Already in 1994, the profits of Chinese trafficking networks were estimated to attain somewhere between $2.4 and $3.5 billion USD, while for the year 2000, this number could be as high as $30 billion USD.
Migrant trafficking is not a homogeneous criminal activity. It does not only concern the organization of the smugglers but also the role of the migrants. Their victimization is due primarily to two factors. First of all, the conditions in which they travel are often inhumane or often outright dangerous, as the high number of mortal accidents demonstrate. Secondly, the migrant is very often forced to work off his/her debts due to the costs of transportation. Their work often consists of engaging in illegal activities linked to the criminal organization responsible for the transportation. If a migrant escapes from a safe-house or tries to break out of this vicious cycle by leaving the area in which he is ''employed'', and recaptured, he is severely punished or even killed.
One of the biggest problems for the future may be the approximately 40,000 Chinese immigrants who were allowed by former Yugoslav president Slobodan Milosevic to settle in the area of Vojvodina (Northern part of the Yugoslavian Federation, close to Hungarian border). These Chinese nationals were provided with Yugoslav citizenship to attempt to influence the election result in this area. It is believed that these persons have no intention of staying in this region and, with their Yugoslav passports, they are allowed to enter the Hungarian territory without a visa. One tragic incident occurred in June 2000, when 60 of these persons started their last journey from Yugoslav territory towards United Kingdom. Their journey ended in a hermetically closed refrigerator lorry in Dover, United Kingdom, where 58 of them suffocated to death.
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The problem is not limited to these 40,000 persons. Some international organizations estimate that another 200,000 Chinese and other nationals presently in Russia, are waiting their turn for immigration to the West. The international community estimates that by 2005, a further 270 million people could be removed from China's agricultural labor force without affecting production.
Interpol has clear indications of organized crime groups involvement in every segment of an illegal immigration journey. Often, illegal immigration activity are linked to drugs smugglers. Links between Chinese and Albanian criminal groups have been documented, as well as cooperation of Chinese groups with Eastern European organized crime groups, in order to smuggle immigrants through Russia, Ukraine, the Czech Republic or Hungary. Hong Kong based 14K triad seems to be linked to trafficking to Japan, but even those trafficking operations seem to be partly run by other groups or networks formed of criminals from different ethnic backgrounds. In Japan, the Yakuza's role in alien smuggling appears to be growing. This confirms a trend towards linkages between foreign and domestic organized crime groups. Chinese Snakehead groups are not limited to mainland China or Hong Kong, but are also based in Taiwan. Snakehead links to other organized crime groups also exist.
A good example of the interaction between different organized crime groups is the ''Dover case.'' A Yugoslavian organized crime syndicate organized, in cooperation with a Hungarian group, the journey from Yugoslavia through Hungary and Austria, with the final destination the United Kingdom. There was also a Dutch/Turkish organized crime group involved. The involvement of other ethnic criminal groups which allowed the illegal immigrants to reach Yugoslavia from China is almost certain.
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When considering these factors, it becomes obvious that illegal immigration is not a question of a few isolated cases of border crossing and smuggling of peopleit is a serious organized crime problem threatening almost all developed countries around the world. A relatively recent trend is that smuggling networks seem to focus more and more on Central and South America. Allegedly, as many as 50 members of the Taiwanese United Bamboo triad are based in Guatemala City to help move illegal migrants to North America via Mexico and sustain the necessary links to Mexican traffickers. Surinam is described as being the latest ''hot-spot'' for people smugglers. There are about 50,000 ethnic Chinese living there, approximately 10% of the population.
In 1999, the Interpol General Secretariat initiated a project, named ''Bridge'' to facilitate a more effective and efficient program for the collection of information on organized crime groups involved in illegal immigration and the trafficking of persons. The member countries identified not only the need for Interpol's communication system, but also for timely intelligence and specialized analytical assistance in this field. At Interpol meetings, illegal immigration experts agreed to prioritize the combat against organized crime groups involved in the smuggling of Asian migrants, primarily Chinese, because of the highly organized aspect of these groups and the growing number of active investigations in this area. The objectives of this project are to collect information on members of groups involved in illegal immigration, specifically the routes, methods of transportation, safe houses, escorts, forged documents, and visas utilized by these groups. Emphasis was placed on obtaining information from active, ongoing investigations with numerous international connections. It was stressed that if reliable data and information on trafficking routes, the modus operandi of smuggling organizations, local crime groups utilized, and recruiters, passport and visa suppliers, escorts, providers of accommodation, couriers, and handlers in destination countries was received from member countries, then Interpol could assist the investigations by coordinated activities of police bodies and law enforcement organizations to successfully dismantle the inter-linked smuggling infrastructure.
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OVERVIEW OF THE MAIN THREATS
The development of these phenomena has several important implications.
The first threat is that the involvement in both terrorist and criminal activity by the same organizations implicates that these groups have a vested interest in destabilizing countries or even whole regions through terrorist activity, in order to ensure the survival of their criminal activity. In drug producing countries for example, it is often to the advantage of criminal organizations to have unstable political conditions with the resulting internal conflicts so that drug production areas controlled by insurgent groups are free from government interference. The most striking example of this is in Central Asia. In that region, the IMU has proven to be highly involved in drugs trafficking and this organization controls a significant portion of the drugs transiting through the Central Asian republics. The same problem occurs in Kosovo, where there is a legal vacuum, which greatly benefits Albanian criminal groups. To a certain extent, this is also true in some South American regions.
Another worrisome development is the fact that the number of countries in which there is a strong link between organized crime and the ruling government is increasing. This is for example the case in certain Eastern European countries. Once criminal entities are well positioned within the state, it is extremely difficult to reverse this situation.
From an operational perspective, the alliances between different crime groups, which results in them growing from a national threat to a regional or global level creates enormous problems for law enforcement. If a country is suddenly confronted with a significant crime rate due to the presence of an ethnic group, which until then did not constitute a threat, it will be extremely difficult to conduct investigations, recruit informants or obtain intelligence. This problem was already observed by many Western countries in their efforts to combat the threats posed by Russian speaking organized crime. A lack of knowledge of Russian, including underworld ''slang'' and of the cultural context in which these groups evolve have posed significant problems. It is, in general, particularly difficult for law enforcement to detect, in an early stage, whether a particular émigré community is used as an advance base for organized crime groups.
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Moreover, due to the increased cooperation among transnational crime groups, the threats emanating from criminal groups which are already known by law enforcement suddenly move to a more borderless dimension. More and more investigations will have international implications, which makes these investigations both more lengthy and costly, and could ultimately result in less efficiency. The current difficulties of investigating and monitoring human trafficking activities around the globe clearly illustrate these problems.
The laundering of proceeds of crime deserves special attention, because of its devastating effects on national economies. Money laundering prevention will remain difficult as long as there are countries which have lax regulations or plainly refuse to cooperate. In the light of a tendency of increasing globalization and deregulation of international financial transactions, this issue merits special attention. In terms of damage to the economy, special mention should be made of Russian organized crime groups. Unlike their Italian or Colombian counterparts, they only repatriate a very small part of their profits, but deposit most of their proceeds in foreign countries, and establish banks in offshore havens. Furthermore, large parts of the domestic banking sector are controlled by organized crime, partly as a result of the lack of tight regulations.
Globalization has also led to increased trade relationship between Western societies and countries which, due to underdevelopment, have a highly unregulated economic climate. Contract law is extremely liberal (absence of legal safeguards against abusive clauses) and the forced execution of contracts through judicial channels is almost non existent. This results all too often in foreign businesses having to operate in an environment where they cannot protect their interest in a fashion they are used to (contracts, arbitration, litigation). This presents significant opportunities for criminal entities and a danger to the overseas economic interest of countries, including the United States.
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CONCLUSION AND RECOMMENDATIONS
These findings are cause for great concern to us. In conclusion to my statement, I would like to present the Committee with a few recommendations on how to tackle these groups.
However, it should be obvious that the problems related to the trends I just described cannot be solved by law enforcement on its own. On the contrary, an integrated strategy of economic, social and legal assistance to countries which face unstable political conditions and have severe economic problems is needed. Reform of the banking sector in many countries should be one of the priorities. Also, administrative procedures should be rendered more transparent and controlled through accountability procedures, in order to avoid common bribery practices. The international community as such has an important role in this field.
As regards the role of the law enforcement community, of which Interpol, with its 178 member countries, is one of the rallying factors, I would like to make the following recommendations :
1. Priority setting at the policy level
Considering the limited resources in comparison to the scope of the problem, there is an urgent need for clear priorities to be set. This is especially true since some of our findings clearly indicate that these threats have obvious national security implications for several countries, not in the least for the United States. Interpol, with its limited resources, has had to chose which projects and initiatives it could implement at this time. I have highlighted several of these initiatives in my remarks.
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2. A more integrated approach to combating crime.
Another key element concerns the manner in which law enforcement itself operates. All too often, drugs, organized crime and terrorism are treated as separate issues by police authorities, and this prevents authorities from receiving a valid, overall view of the threat. The problem lies more in the lack of an integrated intelligence approach (i.e., collection, exchange and analysis of data), than in a lack of international cooperation, as such. Only by combining the available data from different agencies and countries, and setting up consultation mechanisms among different experts from all fields, can an adequate platform to further assess the threat and to formulate adequate counter-strategies be provided. In my opinion, the Millennium project undertaken by Interpol under the auspices of the G8, which I referred to earlier in my comments, is a good example of such an approach.
3. Training and assistance
Given the difficult financial situation in many of the Interpol member countries where the aforementioned problems originate, one of the priorities in addressing this issue should be to provide these countries with technical assistance and expertise. The possibility to build and share databases is a key factor to success. However, this requires a proper information technology infrastructure that is unfortunately beyond the financial means of many of our member countries. Training should focus on information processing techniques and the development of an analytical capability.
My role here today was to give you an overview of the problem areas, but I sincerely hope that my Organization will be instrumental not only in describing problems, but also in contributing to their solution. This concludes my prepared remarks. I would be happy to respond to any questions you may have.
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Mr. MCCOLLUM. Mr. Perl.
STATEMENT OF RAPHAEL PERL, SPECIALIST IN INTERNATIONAL AFFAIRS, CONGRESSIONAL RESEARCH SERVICE, THE LIBRARY OF CONGRESS
Mr. PERL. Mr. Chairman, in my remarks today I will highlight some observations on the relationship between drug trafficking, organized crime and terrorism, many of which have been touched upon today.
Organized crime, drug trafficking and terrorism are not new. So what is new or different here today? What most observers see as new is an expanding scale of operations by such groups, the interconnectedness of such operations. Some even refer, for example, to the relationship between the FARC and drug trafficking in Colombia as a symbiotic relationship.
What analysts point out as new is also the ability of such operations to threaten important national security and international security interests and the increasing complexity of responding to transnational criminal activity. Globalization presents the opportunity for domestic crime to transform itself into a national and international security issue.
In addition, today, we increasingly see a blurring and overlapping symbiotic relationship between drugs, terrorism, and organized crime. As a practical matter, because of a broad range of connections between these activities, drug traffickers and terrorists can become increasingly vulnerable to effective law enforcement activity. The broader the range of criminal activity these groups engage in, the more laws they break and the more likely the possibility to nail them for violating the law.
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Most of our panelists today have touched upon the issue that terrorists increasingly rely on drug money and criminal activity for funding. Ambassador Sheehan pointed to the fact that in today's world state sponsorship of terrorism is dramatically decreasing, and increasingly terrorists look to private sources of income for funding; and that criminal activity, kidnapping and drug trafficking, is an attractive alternative.
The FARC in Colombia is but one case in point. Not only are individual terrorists and terrorist groups dependent on illicit proceeds, so are states. In the case of North Korea, analysts have pointed out that North Korean government sponsored activity generates at least $100 million a year for that regime.
Another observation is that, once engaged in drug trafficking activity, organizations and nations find it hard to stop. In effect, what happens in many cases is that the activity becomes institutionalized and the profit from the trade addictive. So it has been suggested that even if organizations such as the FARC, or governments like the government of North Korea, wanted to cease their criminal activity, it would be very difficult for them to do so.
Another point raised today is that drug trafficking organizations are increasingly seen as a threat to society because of their corrupting and destabilizing influence. This means that a danger of the drug trade beyond drug use itself is the corrupting power of the organizations.
Mr. Marshall, when he talked today about the drug trafficking organizations in Mexico, spoke about the violence, intimidation and corruption, the ability of these organizations to conduct these types of activities. The policy response to this type of activity by governments in many parts of the world has been to disrupt drug trafficking organizations regardless of whether or not such activity results in a reduction of available drug supply in the country involved.
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A final observation is that governments often compartmentalize their organizational structures and response to criminal activity, drug trafficking, and terrorism. And this compartmentalization, in many instances, results in these issues being viewed as distinct and separate phenomena. However, in today's environment many analysts have suggested that some of these approaches need to be reexamined. What some have characterized as a new and growing opportunistic relationship between drugs, terrorism and crime could well result in an increased role for law enforcement and counterdrug personnel in counterterrorism policy and an expanded role for counterdrug personnel in terrorism personnel and anti-crime activities.
With that, I would like to conclude my formal remarks and welcome questions from the panel.
Mr. MCCOLLUM. I thank you very much, Mr. Perl.
[The prepared statement of Mr. Perl follows:]
PREPARED STATEMENT OF RAPHAEL PERL, SPECIALIST IN INTERNATIONAL AFFAIRS, CONGRESSIONAL RESEARCH SERVICE, THE LIBRARY OF CONGRESS
Mr. Chairman and Members of the Subcommittee.
I appear today in my capacity as a specialist at the Congressional Research Service [CRS]. I thank the Committee for the opportunity to appear here and address the issue of the threat posed by the convergence of organized crime, drug trafficking, and terrorism.
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Globalization presents the opportunity for ''domestic'' crime to transform itself into a national and international security issue.
Organized crime, drug trafficking, and terrorism are nothing new. What most observers see as new is the expanding scale of current operations; the ability of such operations to threaten important national and international interests; and the increasing complexity of responding to transnational criminal activity.
The globalization of the international economy, the internationalization of markets, and the integration of organized criminal activity into this changing market structure have transformed largely domestic criminal issues to issues with broader implications.
Many nations increasingly live in a world affected by global trends of deregulation, open borders, and freer movement of people, money, goods and services. In today's global economy we have also often witnessed the spread of (1) democracy; (2) capitalism and free trade; and (3) global access to information and new technologies.
In this connected world, this global village, traditional time, distance, and spacial barriers are increasingly broken down by advanced technology. This globalization can facilitate the ability of drug traffickers, terrorist, and other criminal organizations to operate in relatively unregulated environments. Moreover, the development of the world economy and modern communications systems have made it possible for relatively small groups and even private individuals to amass wealth at a levels generally attainable by nation states.
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Illegitimate business activity, criminal activity, and terrorist activity, like legitimate business activity, seek new opportunities for expansion, safehaven, and profit. Transnational crime goes where the money is, or where the money or the operations generating it are protected. And terrorists obviously seek soft targets and unregulated or politically friendly operating environments. In today's world, opportunities for profit, protection, and the commission of terrorist acts are often available in a global transnational environment.
The distinction between drug trafficking, terrorism, and other forms of criminal activity is becoming increasingly blurred.
Increasingly, we see a blurringan overlapping symbiotic relationshipbetween terrorism, drugs, and organized crime. Terrorism and drug trafficking are both specialized forms of criminal activity.
Drugs and terrorism often cut across traditional bureaucratic and subject jurisdictions and structures. Today there are some 50 U.S. agencies with some degree of counterdrug responsibilities and at least 12 federal agencies with important counterterrorism responsibilities.
Drug trafficking, terrorism, and other organized criminal activity are generally clandestine activities that share operational similarities. Terrorists, like drug traffickers and other criminal groups, need weapons and engage in violence to achieve goals. Terrorists, like other criminal groups, are often involved in hiding and laundering sources of funds. Terrorists, drug traffickers, and other criminal groups operate transnationally and often seek logistical and operational support from local communities.
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Terrorists and drug traffickers often rely on the criminal community for support: they may need smuggled weapons, forged documents and safehouses to operate effectively. As a practical matter, this means that drug traffickers and terrorists can become increasingly vulnerable to effective law enforcement activity.
Terrorists increasingly rely on drug money for funding.
Terrorists and criminals alike need a steady cash flow to operate. In the case of terrorists, where state sources of funding may be diminishing, drug trafficking is an attractive funding option. Increasingly, terrorist organizations are looking to criminal activity and specifically the drug trade as a source of funding. The FARC in Colombia is but one of many cases in point. It is estimated that drug trafficking activity generates between $400 and $600 million of tax free dollars a year for FARC guerrilla coffers.
In the case of North Korea, some analysts have suggested that North Korean government-supported criminal activity, carefully targeted to meet specific needs, generated at least $85 million in 1997: $71 million from drugs and $15 million from counterfeiting. Estimates vary, but most observers believe that the total figure is at least $100 million. However, there are indications that the figures may be considerably higher: $500 million to $1 billion annually generated by criminal activities.
Differences exist, however, between drugs and terrorism. The drug trade has a strong demand component. In contrast, there is no addiction-based international demand for terrorism. Profit drives the drug trade. Terrorists do need money to operate, but for the terrorist, funding generally is a means to an end and not an end in itself. Political ideology, radical religious viewpoints, alienation, or revenge, and not a desire for financial profit, usually drive terrorist activity. A central characteristic often used to distinguish terrorism from profit-motivated common crime is the willingness of terrorists to go after often random innocent targets in the claimed pursuit of some greater cause.
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Once engaged in drug trafficking activity, organizations and nations find it hard to stop.
One danger facing organizations and governments involved in drug trafficking and criminal activity is that the illicit activity can become institutionalized, and the income generated, addictive. It has been suggested that should organizations such as the FARC or the North Korean regime desire to end drug trafficking and other criminal activities, they might find it difficult to do so.
Drug trafficking organizations are increasingly seen as a threat to society because of their corrupting and politically destabilizing influence.
To many drug policy analysts, a danger of the drug trade beyond drug use itself is the corrupting power of the organizations engaged in the trade. Funded by drug trafficking, organizations can gain the resources, routes, and networks to engage in a whole series of other forms of criminal activity, including illicit arms trading, possible proliferation of chemical and nuclear weapons, technology theft, smuggling of aliens, extortion, and even smuggling of stolen body parts. The policy response to such developments by a number of governments has been to disrupt drug organizations wherever possible, regardless of whether such activity results in a reduction of available drug supply in the involved country.
After the collapse of the Soviet empire and as some nations attempt to redefine themselves geographically with borders to accommodate indigenous ethic groups, what is often a loss of centralized control provides fertile ground for breakdowns in law and order. A growth of criminal organizations, particularly those engaged in the illicit production and smuggling of narcotics, can easily follow, especially if financed from without. Such organizations can threaten the stability of fragile governments and subvert emerging democratic institutions. Moreover, opportunities for active expansion of their smuggling activities into the national security-sensitive areas such as weapons proliferation may be available. A related problem arises as members of ruling elites use state-protected channels to facilitate drug-trafficking activities. The possible emergence of such ''narcocracies,'' proliferating criminal organizations engaged in the drug trade could be an increasing problem in the coming decade.
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Insurgency and limited guerrilla warfare were threats that characterized the cold war environment. Drug trafficking, terrorism, and crime appear to be growing threats in the post cold war environment. And as we move into the twenty-first century, the transnational criminal or terrorist may become a more important actor.
Governments often compartmentalize their organizational structures and response to criminal activity when drug trafficking and terrorism are involved.
To some degree governments have established an compartmentalized way of looking at drugs, terrorism, and crime as phenomena distinct and separate in and of themselves. In today's environment, these approaches may need to be reexamined. What some have characterized as a new and growing opportunistic relationship between drugs, terrorism, and organized crime could well result in an increased role of law enforcement and counterdrug personnel in counterterrorism, and an expanded role for counterdrug and terrorism personnel in anti-crime policy planning and implementation. Changes of this kind could prompt a reassessment of concepts, responsibilities, capabilities, and methodologies. For example, the incorporation of the State Department's Bureau of International Narcotics Matters (INM) into the Bureau of International Narcotics and Law Enforcement (INL) could reflect this kind of operational shift.
Loss of tax revenue from organized criminal activity is a major global problem.
Perhaps even more important to many economies is the issue of tax evasion by groups engaged in large scale criminal activity. Throughout the world, governments are experiencing fiscal deficits. The demand for their services rises; meanwhile, their tax base is often dramatically eroding.
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CHALLENGES AND OPPORTUNITIES FOR POLICYMAKERS
Challenges. A major challenge facing policy makers is how to develop a less congenial and more costly operating environment for drug traffickers, terrorists, and other organized criminal groups. Such a response is complicated by the fact that although linkages among these groups and their activities are increasing, we are generally not dealing with monolithic groups. Instead, we are dealing with different organizations, structures, activities, operating modes, and agendas.
Analysts argue that the aggregate potential threat posed by such groups should not be underestimated. In countries like Russia, the rampant spread of such activity can result in increased popular support for old authoritarian methods, at the expense of weak democratic institutions.
Policy Options. Numerous approaches for responding to this challenge have been proposed.
1. Enhancing policy emphasis and public awareness concerning the major criminal/drug trafficking/ or terrorist organizations and the threats they pose. In effect, continued implementation of a prioritized ''crime kingpin strategy'': identifying involved organizations, and their strengths and vulnerabilities.
2. Instituting a requirement for an annual report to Congress, possibly integrating international crime, drug trafficking, and terrorist activity into one strategic document.
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3. Creating new mechanisms, or enhancing utilization of existing mechanisms, to facilitate law-enforcement cooperation. This includes increased cooperation between domestic police agencies as well as regional and international law enforcement alliances. Criminal activity knows no borders, but the law enforcement community frequently runs up against many types of jurisdictional boundaries. Increasingly, criminals are forming multilateral alliances and to be competitive, nations may have to do the same. Agendas on the nation state level could include: harmonization of laws, information exchange, customs cooperation, law enforcement cooperation, multilateral training programs, and exchange of personnel, passage and implementation of conventions such as the OAS arms control convention, and conventions to see that exports such as precursor chemicals or weapons go to the correct recipient.
4. Promoting endeavors to encourage international legal harmonization and interoperability of legal systems.
5. Promoting, in a way that respects civil liberties, international law-enforcement tools. Proponents have argued for:
Training programs to identify and flag non-random criminal activity;
Hiring of linguists;
Witness protection programs;
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Waiver of bank-secrecy arrangements;
Promoting criminal-conspiracy legislation abroad; and
Promoting asset seizure and forfeiture laws abroad
6. Enhancing linkages between crime-related law enforcement intelligence and crime-related national security intelligence on the strategic and operational levels.
7. Mobilizing the private sector. Much organized crime preys on the private sector, which in turn takes extraordinary measures to protect itself from loss. One proposal calls for more public/private partnership initiatives to combat organized crime.
8. Further restrictions on money laundering and tax havens. This could include barring them from access to international banking clearinghouses.
9. Promoting research to examine the feasibility of international or specialized national criminal courts to handle issues such as money-laundering.
10. Promoting transparency and openness in government and banking. Proponents assert that criminal activity hates openness, for openness could mean exposure. A free and secure press is also seen as playing an important role here. Proponents argue that the murder of journalists is common in countries where organized crime and corruption flourish. Strong money-laundering legislation is seen as central to such transparency.
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11. Promoting corruption safeguards worldwide. Instruments can include investigatory commissions, campaign finance reforms, financial disclosure requirements for public officials, special offices in the ministry of justice to deal with corruption, anti-bribery laws, and witness protection programs. Proponents argue it is not enough to have safeguards on the book. To be effective, they believe that such deterrents must be enforced with convictions and jail time.
In the coming decade, organized crime, drug trafficking, and terrorism are likely to receive increased attention in the law enforcement, foreign policy, and national defense communities. The challenges associated with realistically assessing threats, allocating resources, and insuring an effective congressional role in combating organized crime, terrorism and drug trafficking are complex. Addressing these problems, according to many observers, will require bringing together the diverse elements of the anti-crime, drug and terrorism communities to share information, experiences, ideas, and suggestions about how to deal more effectively with law enforcement, national security, and public policy concerns.
Mr. MCCOLLUM. I thank all of the members of the panel for being here this morning.
I am going to recognize myself first. I will try to target a few questions and then turn it over to my colleagues, and we may do two rounds of questions since there are just a few of us here.
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Mr. McCraw, there have been reliable reports to Congress in the last few months that indicate that Usama bin Laden has provided Islamic fighters to guard, for a fee, morphine base moving out of Afghanistan through places like Iran where there are often gunfights with the caravans. Isn't that a link between bin Laden and drug trafficking and is this something of which you have any knowledge?
Mr. MCCRAW. No, sir. If it is true, our problem is, that we like to, as Mr. Marshall pointed out, deal with evidence. You may get intelligence reports, allegations, second or third generation links or relationships, but clearly we deal with what we can prove; and, frankly, we have not been able to prove that.
Mr. MCCOLLUM. I hear you.
On a sort of related matter, because I am concerned with the link between terrorism and organized crime and drug trafficking here today, I am just trying to establish the degree to which there are links; and you are telling me there is not a provable one there in terms of going to court and proving it.
Mr. MCCRAW. With the exception of the FARC and ELN. Clearly, they are involved.
Mr. MCCOLLUM. Mr. Mutschke, in your written testimonyyou did a great job of summarizing. We gave you a very small amount of time. But your written testimony is very good, and it is very extensive, and I appreciate it.
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In that written testimony, you have told us about the Islamic Movement of Uzbekistan, IMU. In that process of talking about IMU and their political goals, on page 9 of this written testimony, you discuss the fact that they are very much involved in, apparently, in the profit taking from trafficking of drugs throughfrom Afghan to Russia and to other parts of Europe. And this fact, say approximately 60 percent of the narcotics coming out of Afghanistan are now transiting through Central Asia. The trafficking of such huge quantities implies the need to constantly find new routes, and it is also evident that an increase of efficiency of law enforcement in these countries resulting from a stable political climate would present a significant threat to the IMU's interest in drug trafficking.
The interest of the latter in this profitable sector is rather large, according to some estimates. IMU may be responsible for 70 percent of the total amount of heroin and opium transiting through the area. This is a pretty significant connection between a terrorist group and drug trafficking, as you have related it to us. Is this ahow recent has this phenomenais this going onis it growing? Is this organization the only one that has that kind of a strong tie in the European or Central Asia theater to drug trafficking among terrorist groups?
Mr. MUTSCHKE. Well, this is a trend over the last couple of years which comes to our knowledge. And the IMU, we would classify them as a hybrid terrorist organization where, you know, where the driving force for us seems to be more and more on the criminal side rather than on the political idealogy, what they are selling. To our knowledge, they are controlling more and more the drug market over there; and they are losing, if you would like, their terrorist identity.
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This is something we would consider to happen at the moment where we couldn't hardly distinguish between what are the driving forcewhat is the driving force to them. Is it a religious, political ideology or is more the profit, to make money in the organized crime business? But certainly, regarding your question, this is a recent development which we recognized; and this is struggling between the IMU and the drug business in the region.
Mr. MCCOLLUM. Is there any link between Usama bin Laden and IMU?
Mr. MUTSCHKE. Well, it is estimated that he is linked to it, but, as my colleague also stated, there is no proven case that we could state that there is a direct link to him personally.
Mr. MCCOLLUM. Mr. Cilluffohow do I pronounce your name?
Mr. CILLUFFO. Cilluffo.
Mr. MCCOLLUM. I thought I did it correctly.
Do you have a comments you could give us from your perspective? What I am attempting to do is to draw out what connections there are.
We know there is the FARC connectionMr. McCraw has made that very clearterrorist, organized crime, drug trafficking. There are obviously lots of organized crime and drug trafficking connections; and there are connections between, I guess, organized crime and terrorists but very modest. There is very little of that. And then there is maybe some terrorist connections with drug trafficking and not necessarily organized crime. So I am trying to see the three converged in Colombia. Do they converge anywhere else or can you give us other illustrations besides Colombia?
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Mr. CILLUFFO. Well, I think it might be helpful to look at the issues, those that directly impact U.S. national interests and have a region by the U.S., as opposed to what is going on in the rest of the world. The Tamil Tigers, the LTTE, have always been in the drug business in Sri Lanka. The IMU, the PKK has always been in the drug business. These are terrorist organizations. The IRA-Libyan connection from a number of years ago, Abu Sayyaf, KLA, the list goes on and on.
So to say there is no link in my eyes is inaccurate. But for those that directly impact the United States, that is where it gets a little more difficult to discern. I am not aware of any direct links between UBL and Usama bin Laden's organization or directly between him and any indirect drug trafficking. But, I mean, it is a toxic blend of what is legitimate, illegitimate. We often try to mirror image what we think is normal to other environments.
Mr. MCCOLLUM. If I would suggest to you that the IMU concerns are a national interest to ours in the sense that we have a strategic concern with oil, with the region, with what is going to go on over there in that whole area. To the degree that they and other Central Asians are engaged in criminal enterprises and drug trafficking that disrupt stability in the region, that is a very big interest of ours; and that is why I ask some of these questions.
Mr. CILLUFFO. I stand corrected. That really isthe reach into the United States was the connection I was trying to make.
Mr. MCCOLLUM. Mr. Perl, do you see any other areas where these three nexuses occur?
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Mr. PERL. No, butwell, in Burma, warlords do receive funding and operational assistance from trafficking. But I do think we also need to put a little bit of a caveat here.
Mr. MCCOLLUM. Yes.
Mr. PERL. It is very convenient if a government does not like another government or a government does not like a particular insurgency or terrorist group to label them as a drug trafficking organization. And I do feel that there is strong evidence the PKK derives a substantial amount of its income from drug trafficking, and it is well documented with the Tamil Tigers. But, again, governments providing this data do have a very strong motivation to cast negative images on their opponents.
Mr. MCCOLLUM. Well, I was thinking of the fact that if we could somehow link the terrorist groups and they have a real link, not just making it up, with organized criminal behavior, drug trafficking and this sort of thing, Mr. McCraw and the DEA and others relationships with Interpol and other governments might find it easier to break some of this up with prosecutions that are targeted not necessarily at terrorist acts but at acts of criminal behavior. That is one of the reasons why this hearing is presented, to see if there is something more that we can do or to focus on; and there may not be.
Mr. PERL. One of the problems here is that our government is not necessarily structured to make these cross-divisional links. Perhaps one could follow a common thread through all these organizations such as weapons. Tracking the weapons trade across these jurisdictional organizational boundaries might be an effective way of drawing links and also providing intelligence leads as to how else the organizations cooperate.
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Counterfeiting, taking counterfeiting and not just looking at it as a threat to our economic stability and our currency but looking at counterfeiting as a means of leading us to the operations and linkages between these organizations or among these organizationsthe same with forgery of documents, tracking forgery of documents and not necessarily looking at making specific prosecutions but taking more of a strategic viewpoint might be options that would warrant some attention.
Mr. MCCOLLUM. You are talking about counterfeiting. You mean U.S. hundred dollar bills?
Mr. PERL. Yes.
Mr. MCCOLLUM. There is a lot of that going on out there, too, as I recall.
Mr. PERL. There is no question. However, I am not an authority on counterfeiting, although I am familiar with North Korean counterfeiting activity.
Mr. CILLUFFO. Another area aside from the arms is the singleor a common denominator is the fund side, how they move their money. And we all know thatobviously, go after the money, follow the money, but I think if we look at that a little more wholistically you will find some common links. Because they move money through similar channels, and it surfaces in a particular way. And whether it is terrorism, whether you think of it as personalizing sanctions, lookingilluminating very specifically who these individuals are moving their money, through conventional means or unconventional means or whether it is organized crime, I think that looking at that more wholistically you will find some commonalities there. I don't have any answers to that or any direct insights. But in other indications where we have looked for specifics, we ended up finding a lot more unintentionally.
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Mr. MCCOLLUM. Mr. McCraw.
Mr. MCCRAW. I wanted to clarify something, if I may. You know my testimony is directed at, when we look at terrorism from an FBI perspective, what impacts negatively on U.S. interests. Overseas, we have had attacks and also in the U.S. Some of these organizations that have been involved and have, you know, a terrorist label within a country have been involved in drug trafficking over the years. We don't view thosethat they constitute at this particular point a threat to us. We don't look at it unless they have been labelled in that context as a threat. It is the first thing.
Also, I would like to point out, because there have been a number of comments in terms of how there are so many agencies, so few violations and that perhaps we are not getting the appropriate oversight or coverage or convergence of the big picture and therefore a strategic attack plan, in my 17 years with the FBI the closest that I have seen the Intelligence Community and DEA and the FBI working together has been in the last 4 or 5 years. There is tremendous cooperation. In fact, Steve Castile of DEA's drug intelligence, the overseer of that, is working with me on merging FBI and DEA drug intelligence. We continue to work the same way with the Central Intelligence Agency. They provide tremendous support in the counterterrorism arena and the drug trafficking arena and other areas that we work and have an overlap of our responsibilities.
So I don't want people to come away with the idea that there are unilateral agencies that are out there not cooperating. In fact, I think there is tremendous cooperation and some outstanding agencies working together.
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Mr. MCCOLLUM. By the way, I would comment that I recently received a good comment in a broad sector relative to the fact that what you are doing abroad in terms of the FBI's placement of offices and so forth and the cooperation has indeed been integrated well. Our Intelligence Community is very, very pleased with that relationship. So I think that is a good, positive sign; and you are highlighting it; and I thank you for doing that.
Mr. GEKAS. Thank you, Mr. Chairman.
Mr. Mutschke, in your written statement, in number 5 of the categorization you made of different elements, the Albanian organized crime groups, et cetera, in number 5 you say that one of the contributing factors were the embargoes, the international embargoes, I suppose, on Yugoslavia and Serbia; and then you say the one by Greece on FYROM. Is that Macedonia?
Mr. MUTSCHKE. Yes, the former Yugoslavian Republican of Macedonia.
Mr. GEKAS. What shocks me about that is that implies that Macedonia before the embargo was an active conduit for some of these activities. This is a first for me. So what is the situation today with that little area of the world? The embargo was lifted and there are no embargoes on Macedonia, as far as I know. Are they back in business now?
Mr. MUTSCHKE. Well, this is only one reason regarding the further development of the Albanian group in the region. It is an experience which they quickly adapted during the time when the embargo was in place, alternative solutions; and so it is stated that they started to trade in oil, arms and narcotics in the region during that time.
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Mr. GEKAS. The other thing that puzzles me or wonders me a little bit is that the KLA, which was directly or indirectly supported by United States policy, over the long run was itself agiven lifeblood by some of these activities. Did NATO know about all of this connection with the KLA or the Stateour own State Department?
Mr. MUTSCHKE. Well, I don't know regarding the knowledge of the State Department.
Mr. GEKAS. Did you keep all of those things secret?
Mr. MUTSCHKE. No, we are not working secretly.
Mr. GEKAS. I know that, but I am saying you are drawing these connections. Didn't you make them known to NATO and to
Mr. MUTSCHKE. Well, yes, we did in fact have meetings with the NATO in the late '90's. And we prepared them, we informed them about what we are thinking regarding the KLA and things like that. So I think they were aware of it.
Mr. GEKAS. I will have to draw some other conclusions later on why how all of that occurred, that we are so supportive of the KLA in view of all of this.
Just one other series of questions that apply to all of you. In different ways you seem, all four of you, to recognize the need for coordination. Because everyone says there is a measure of overlapping somehow. Mr. Cilluffo talks about the 50 organizations, agencies that are involved in all this. Mr. Perl in his final paragraph says will require bringing together the diverse elements of the anti-crime, et cetera. Mr. McCraw seems to give some evidence in his testimony that the FBI is trying coordination efforts. But you all seem to emphasize the need for more or different types of amalgamation of all these efforts.
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Mr. Perl, whatlet's talk with Mr. Cilluffo. Does your Center have any recommendation as to how to make the 50 tentacles work better?
Mr. CILLUFFO. That is a very difficult question. But I think that you have to marry up three or lash up three criteria, and that is marrying up authority with the accountability and resources. After all, the so-called Golden Rule here, she with the gold rules. And right now that has been a challenge, to be able to marshal those resources in my eyes, from a holistic standpoint.
Because this issues cuts across not just counternarcotics challenges but also what we aretraditionally pretty clear lines between what was a law enforcement issue, what was a national security issue, what was the demand of the Intelligence Community, what was the demand of the Treasury Department and a whole bunch of other organizations that I wonder if perhapsand I am not speaking for the Center. These are my own thoughts. Whether as we initially envisioned ONDCP, if perhaps that weren'tif perhaps we didn't give the drug czar of ONDCP some of the tools where he or she may actually have some influence over budgets to be able to line up toward a common strategy.
The reason I bring that up is not tois that you need someone that is above any particular parochial agency vision in my eyes to be able to marry this up.
Mr. GEKAS. Is it implicit therewhat you have stated theresome of the organizations don't know what is happening and the other organizations, the other agencies and that, therefore, there is nothere is a lack of focus or possible lack of focus?
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Mr. CILLUFFO. There is a lack of a single focus. I think that you do have very good working relationship certainly in the field with a whole host of agencies; and based on all that we have been hearing and bringing people in to brief our groups, the law enforcement intelligence cooperation has improved dramatically. But once you get to the policy-making side is where there is a bit of a breakdown. And in part, if I could be so boldand who am I to suggest that Congress reorganizebut in part these issues cut across so many subcommittees, and when you get down to the appropriations committee it is hard to look at it as a whole. So I think that to me it is lining up the stars between the sources with authority and accountability, and that is a tough job.
Mr. GEKAS. I recognize it as a congressional oversight problem and a policy change that might be in the offing. Could I be so bold as to ask you to ask your Center if it would not mind giving an overlay, kind of set of recommendations for amalgamating all these efforts?
Mr. CILLUFFO. I would be delighted. We are actually releasing a report on bioterrorism that does look to some of that in one lens of this, which is incredible in itself, having to bring in the public health and the biomedical communities and a whole host of others.
We are also releasing tomorrow a major cyber report where you need to marry up the wing-tip with the sandal. So you have got private sector issues that need to be lashed up and married up. I would be happy from our program to put something together along those lines.
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The Center as a whole, one of the greatest advantages of CSIS is that I don't have to stand where I sit; and there is really no single center. But from our program standpoint I would be happy to provide that.
Mr. GEKAS. I appreciate that, and the committee would appreciate that.
Mr. Perl, any further thoughts on how they have to be drawn together pursuant to your statement?
Mr. PERL. I have a number of thoughts, but you have to understand, I am not an advocate of policy, I merely am presenting policy options.
Mr. GEKAS. I am now anointing you for these purposes. Do you have any ideas?
Mr. PERL. One option that may warrant consideration would be the sharing of databases among agencies. There certainly are many problems with that also. But a practical way to get working-level coordination among groups is to require them to share databases.
Mr. GEKAS. Mr. Mutschke, do you find stone walls in any of your inquiries among the 50 agencies that have been referred to as dealing with these subjects in our country?
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Mr. MUTSCHKE. First of all, I have to say if it is going on the operational level with cases, a lot of police agencies are veryact very sensitive and are not openly cooperative in sharing information. I think we have to focus on the strategic level as well and direct the resources in the law enforcement field.
But coming back to Interpol regarding an international organization, we have focus points in each country, so we are not dealing with the U.S. agencies, we are dealing with the United States National Central Bureau of Interpol in obtaining information and then forwarding through the Interpol channel to the General Secretariat in Lyon, France.
Mr. GEKAS. Do you, Mr. McCraw, find that the FBI runs into any stone walls with Interpol in your efforts, particularly on international issues?
Mr. MCCRAW. No, Congressman. When we talk about the 50, if you include many of our outstanding professionals at the State and local agencies and the county law enforcement, there is a voluminous amount of overlap and a needas in no other profession, there has to be cooperation. There cannot be the merger of one unique database or 50 different organizations into one or one super czar. Leaders have an obligation. The law enforcement profession saves lives, and it is public safety. We have to cooperate and exchange information, and we do that.
You will always find instances, and they are sometimes a people problem, but leaders won't allow that within their organization. And clearly right now we have leaders such as Donnie Marshall and Louis Freeh, and in Treasury as well and across the broad spectrum of law enforcement agencies, that will not settle for we-don't-want-to-cooperate types of solutions.
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Mr. GEKAS. You are saying that we have it, but we need more?
Mr. MCCRAW. I am saying that there are always going to be problems, but they are individual personal problems. I believe the cooperation is outstanding today, and we can get done whatever we need to be done with the infrastructure we have in place.
Mr. GEKAS. Thank you.
Mr. MCCOLLUM. Mr. McCraw, please give my best regards to Louis Freeh. We admire him, and I have not had an opportunity to tell him in the absence of
Mr. MCCRAW. I do, too; and I will advise him.
Mr. MCCOLLUM. Thank you.
I want to ask you about Ecstasy for a minute even though that is not the subject of this hearing. It was brought up by Mr. Mutschke in connection with the activities of Russian organized crime and Israeli organized crime, and we heard Mr. Marshall and Mr. Sheehan talk about that. Mr. Mutschke is saying that Ecstasy is just growing phenomenally in the European theater, and I suppose here, too.
Mr. MCCRAW. Absolutely.
Mr. MCCOLLUM. Where do you rank it in the FBI in terms of organized crime and drug trafficking? Is it a high priority?
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Mr. MCCRAW. It is a substantial priority, not necessarily because of the drug, but because of the enterprise that is profiting from the drug. DEA has to look at it holistically. They have to look at it across drug lines. Our focus when we marry up with them is the Russian organized crime. They are the individuals that right now are bringing tonloads of Ecstasy into the United States. Plus they have those relationships as we talked about with the Colombian cartels. In fact, we have seen them in Miami developing markets from Peru to Colombia to Europe and beyond in the cocaine trade, while at the same time Russian organized crime is bringing Ecstasy and MDMA back into the country, and the same groups and enterprises are also involved in stock manipulation, motor vehicle theft, health care fraud. So when Russian organized crime hit our shores, it was a different element than La Cosa Nostra of past. They were more mature and constituted a more significant threat today than some of the other organized crime elements that we have seen in the past.
Mr. MCCOLLUM. Are there four or five principal criminal enterprises, or are they walking about 30 or one?
Mr. MCCRAW. We are probably talking, because of the loosely associated groups, it is probably 30 or more. The Ivankov organization which we were able to dismantle, the three thieves in New York some 5 years ago, was probably the largest at the time where they had an organized structure over these loosely knit cartels. But for the most part they are groups as opposed to overarching organizations.
Mr. MCCOLLUM. One last line of questioning, which will cross a couple of lines here. Mr. Mutschke, the issue of trafficking and immigration. The Russians are doing that. We see the Chinese and the Albanian groups. Is there an organized criminal enterprise activity, Mr. McCraw, involving smuggling?
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Mr. MCCRAW. In humans, yes. Asian organized crime are absolutely involved in that, even to the point of bringing immigrants through Mexico.
Mr. MCCOLLUM. And they are also involved in drug trafficking?
Mr. MCCRAW. Absolutely.
Mr. MCCOLLUM. But not necessarily in terrorist activity?
Mr. MCCRAW. That's correct.
Mr. MCCOLLUM. Mr. Mutschke, you have mentioned the Chinese and the Albanian groups and one combination of smuggling with humans. Mr. McCraw talked about the Asians. The Albanian organized Mafia is there as well, and they are engaged in smuggling people, too?
Mr. MUTSCHKE. Right.
Mr. MCCOLLUM. And smuggling drugs?
Mr. MUTSCHKE. Right.
Mr. MCCOLLUM. Are they engaged in any way with terrorist groups?
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Mr. MUTSCHKE. That is a difficult question, how you consider the KLA today. They are a part of the peace process now in the Kosovo region.
But the Interpol position regarding terrorism is that we don't have an international definition of terrorism or terrorist groups, so we are not quoting a terrorist group, we are assessing them regarding the criminal energy and what they are doing. So for us they are criminals, and we are targeting them because they are criminals and not terrorist groups. So this is from our perspective, and according to Article III of our Constitution, we are not able to do any activities if it is related to political, racial, religious or military criteria; therefore, we don't distinguish.
Mr. MCCOLLUM. I can appreciate that, and I did not fully examine that with you. I could go on with the questions. I am not going to. I want to thank this panel. You have given a lot of your time. Several of you were complimentary of me personally. I certainly enjoyed the working relationships with the agencies represented here today. It has been a great pleasure to have served as the Crime Subcommittee chairman for the past 6 years. We have made progress in the cooperation between the agencies, such as what Mr. McCraw is talking about, and to the degree that this subcommittee has improved that and fighting organized criminal behavior, I am very proud of that fact.
I know it is an ongoing fight. The American public's patience for these types of things ebbs and flows. At the same time we are very dependent upon you, Mr. McCraw, at the FBI and the Intelligence Community and the DEA to protect us even in moments when everyone is relaxed. The reality is your job goes on, and your job will go on, and the world will be safer for it.
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I want to thank you, all of you, for today, and thank all of you for the privilege and honor of having served in this capacity.
This subcommittee hearing is adjourned.
[Whereupon, at 12:07 p.m., the subcommittee was adjourned.]