of Asa Hutchinson, Administrator, Drug Enforcement Administration (DEA),
April 24, 2002
Drug Enforcement Administration
House Committee on
April 24, 2002
As the tragic events that occurred on September 11, 2001, and the daily
terrorist acts carried out by groups in Colombia demonstrate, some terrorist
organizations dependence on and relation to international drug trafficking
poses a threat to the national security of the United States and every
democratic nation. These groups do not hesitate to use violence and terror
to advance their interests, all to the detriment of law-abiding citizens.
continue to plague Colombia. On April 12, 2002 the Revolutionary Armed
Forces of Colombia (FARC) fired an explosive rocket in an attempt to destroy
either an RCN television broadcasting facility or a nearby ETB electrical
facility in western Bogota. On April 14, 2002 FARC urban militias exploded
a bomb in Barranquilla in a failed attempt to kill front running Colombian
presidential candidate Alvaro Uribe. The bomb killed three civilians,
and 13 people were injured in the attack.
Because of DEAs
unique position of maintaining offices around the world, our resources
will continue to focus on significant drug trafficking organizations,
including those who engage in terrorist acts. The current worldwide drug
and terrorism situation demands a comprehensive and strategic approach.
One of DEAs priorities is the implementation of a Global Heroin
Strategy to target, investigate, disrupt and ultimately destroy heroin
trafficking organizations having the most impact on the United States.
This program has developed strategies for the four source zones in the
world: South America, Mexico, Southeast Asia, and Southwest Asia.
Chairman Hyde, Ranking
Member Lantos, and distinguished members of the committee, it is a pleasure
for me to appear before you for the first time in my capacity as the Administrator
of the Drug Enforcement Administration (DEA). International drug trafficking,
terrorism, and money used to finance terrorist acts are subjects of deep
concern to DEA, all Americans, and every democratic nation in the world.
The committees leadership and support in our fight against these
narco-trafficking organizations is deeply appreciated. I look forward
to a successful, productive, and cooperative relationship with this committee
on this most important issue.
I appear before you
today to testify on the nexus between international drug trafficking,
terrorism, and the money that finances narco-terrorist groups. DEA has
directed enforcement and intelligence assets to identify, investigate,
and dismantle all organizations, including terrorist groups, engaged in
the drug trafficking trade.
DEA defines narco-terrorism
as a subset of terrorism, in which terrorist groups, or associated individuals,
participate directly or indirectly in the cultivation, manufacture, transportation,
or distribution of controlled substances and the monies derived from these
activities. Further, narco-terrorism may be characterized by the participation
of groups or associated individuals in taxing, providing security for,
or otherwise aiding or abetting drug trafficking endeavors in an effort
to further, or fund, terrorist activities.
DEA targets the powerful
international drug trafficking organizations that operate around the world,
which employ thousands of individuals to transport and distribute drugs
to American communities. Some of these groups have never hesitated to
use violence and terror to advance their interests. While DEA does not
specifically target terrorists, we will target and track down drug traffickers
and drug trafficking organizations involved in terrorist acts.
My testimony will
focus on the narco-terrorist organizations and the illegal drug profits
used to support their activity.
The Colombian Narco-Terrorist Threat
Colombias three major terrorist groups are the FARC and the National
Liberation Army (ELN), and the United Self Defense Forces of Colombia
(AUC). The FARC membership is estimated to be 12,000 to 18,000 personnel
and the ELN maintains 3,000 to 6,000 personnel. The FARC, which is the
best-trained and equipped terrorist group in Colombia, asserts influence
and varying degrees of control on large areas of Colombias eastern
lowlands and rain forest, which are the primary coca cultivation and cocaine
processing regions in the country. The ELN operates primarily along Colombias
northeastern border with Venezuela and in central and northwestern Colombia,
including Colombias cannabis and opium poppy growing areas.
Right wing self-defense groups emerged in Colombia during
the 1980s in response to insurgent violence. Hundreds of illegal self-defense
groupsfinanced by wealthy cattle ranchers, emerald miners, coffee
plantation owners, drug traffickers, etc.conduct paramilitary operations
throughout Colombia. The loose coalition known as the AUC (Autodefensas
Unidas de Colombia) is the best known of these self-defense groups and
has an estimated strength of 10,500 personnel.
DEA has established
that these terrorist groups are involved in various aspects of drug trafficking
activity including but not limited to: raising funds through extortion
or protection of laboratory operations and clandestine airstrips; encouraging
coca planting and discouraging alternative development; purchasing, transporting,
and reselling cocaine within Colombia; and the distribution of cocaine
to international drug trafficking organizations.
In late February
2002, peace negotiations between the Government of Colombia and the FARC
broke down after the hijacking of an Avianca flight and the subsequent
kidnapping of a Colombian Senator and others who were on board the aircraft.
After three years of failed peace negotiations between the Colombian Government
and the FARC, President Andres Pastrana ordered the Colombian Armed Forces
to enter the FARC safe-haven and re-establish government control.
In March 2002, the
Colombian National Police (CNP), with the support and assistance of the
DEA Bogota Country Office, conducted seizures of several cocaine hydrochloride
and cocaine base laboratories located in the former FARC-controlled demilitarized
zone located along the Rio Guayabero in the Meta Department. In addition
to numerous items of documentary evidence, approximately seven tons of
cocaine hydrochloride and cocaine base and were seized by the CNP.
experts reviewed items seized from two of the laboratories and identified
documents related to several FARC Fronts. Documents seized included production
ledgers, records showing the purchase of chemicals, and receipts of cocaine
base purchases. The receipts seized from one of these laboratories bear
stamps from three FARC Fronts indicating that members from these Fronts
personally sold cocaine base to laboratory operators.
indicated one of the seized laboratories was producing an average of 100
kilograms of cocaine per day with a maximum production rate of over 500
kilograms per day.
On March 18, 2002
Attorney General John Ashcroft and I announced the unsealing of a Federal
indictment against seven defendants, three of whom are members of the
16th FARC Front. This case, conducted by DEAs Bogota and Brasilia,
Brazil Country Offices, the government of Colombia, with assistance from
the Department of Justice Criminal Division Attorneys, is the first time
that members of a known terrorist organization have been indicted in the
United States for their drug trafficking activity.
This indictment charges
that between 1994 and 2001, the commander of the 16th Front, Tomas Molina
Caracas and other members of the 16th Front engaged in drug trafficking
from the town of Barranco Minas, a remote village in Eastern Colombia
near the Venezuelan border. The indictment alleges that Molina collected
cocaine processed in laboratories along the Guaviare River and sold it
to international cocaine traffickers. Cocaine obtained from Molina was
ultimately transported to the United States, Brazil, Suriname, Paraguay,
Mexico, and Spain. In addition, the 1st, 7th, 10th, 39th, and 44th FARC
Fronts delivered cocaine to Molina and the 16th FARC Front for the cocaine
to be sold to international drug traffickers. According to the indictment,
cocaine was sold in exchange for currency, weapons, and equipment.
Violent actions continue
to be carried out by terrorist groups in Colombia, particularly the FARC
and ELN. Recent terrorist actions conducted in Colombia include:
¨ On April 11,
2002, FARC guerillas disguised as Colombian Army soldiers set off small
explosions in downtown Cali, Valle Del Cauca. In the ensuing confusion,
one CNP officer was killed and 12 members of the departmental assembly
(local legislators) were kidnapped.
¨ On April 12,
2002 a FARC Urban militia unit fired an explosive rocket in an attempt
to destroy either an RCN television broadcasting facility or a nearby
ETB electrical facility in western Bogota.
¨ On April 14,
2002, FARC urban militias exploded a bomb in Barranquilla in a failed
attempt to kill front running Colombian presidential candidate Alvaro
Uribe. Three people were killed and 15 people were injured in the attack.
¨ On April 15,
2002, the Colombian Army and Air Force reportedly destroyed a small private
aircraft bearing Venezuelan markings that was equipped to drop bombs.
Colombian military intelligence reported that it was part of an attempt
to attack the capital in the department of Arauca.
¨ On April 21,
2002, the FARC kidnapped the governor of Antioquia Department, the former
Colombia Minister of Defense, an American citizen and several priests
while the group was conducting a march protesting violence in Colombia.
The FARC continues to hold the governor and former Minister of Defense.
¨ According to
the Government of Colombia, the FARC and ELN committed 260 terrorist attacks
against the Covenas oil pipeline. The results of these terrorist attacks
are equivalent to 11 times the spillage of the Exxon Valdez. These acts
cost the Colombian government millions of dollars in revenue.
The violent activities
of the FARC and other groups have not been limited to the country of Colombia.
Information from the region indicates the FARC has become a destabilizing
force. The FARCs violence and coca processing activities have spread
to Panama. Venezuela, too, is experiencing increased violence, causing
some cattle ranchers to hire additional security personnel to counter
the FARCs efforts.
In addition, in 2001,
three members of the Irish Republican Army (IRA) were arrested in Colombia
for collaborating with the FARC. The Colombian government asserts that
the IRA members were training FARC members in urban terrorism. The three
men have been charged with travelling on false passports and providing
the FARC with weapons instruction.
In 2001, there has
been increased reporting of suspected FARC drug trafficking activity in
the Darien Province of Panama. Intelligence suggests that small-scale
coca cultivation has resumed in the Darien Province border region and
apparently is expanding. These reports of drug activity substantiate earlier
unconfirmed sightings of limited coca cultivation in the Darien Province
along the Colombian border in regions under the 57th FARC Front influence.
There have been reports
of the FARC 57th Front incursions into Panama's Darien Province near Jaqué,
the last sizeable village on the Pacific Coast north of the Colombian
border. There have also been reports of clandestine laboratory activity
in the Darien Province area; but as yet, there has not been ground verification.
The guerilla tactics employed by the FARC in these areas inhibits ground
action by law enforcement.
in the Triborder Area
Hezbollah and Hamas
The triborder area of Paraguay, Argentina, and Brazil continues to be
a haven for Islamic extremists. The two major terrorist organizations
in the triborder area are Hezbollah and the Islamic Resistance Movement
known as HAMAS.
It is suspected that
their illegal activities range from producing counterfeit U.S. currency
to smuggling illegal substances through the triborder area. The situation
in the triborder area highlights the ease with which terrorist organizations
can infiltrate and assimilate in other countries and go relatively undetected
for an extended period of time.
Luminoso: The Shining Path
(SL) is an extremely violent armed group that sought to overthrow the
Peruvian government and establish a communist agrarian state from the
1980s to the mid 1990s. SL has historically operated from
bases in remote regions of Peru that also held the main coca growing areas.
DEA reporting indicates that the group has probably extracted revolutionary
taxes from the cocaine base operators.
and Liberty (ETA)
The Basque Fatherland
and Liberty (ETA) organization was founded in 1959 with the goal of establishing
an independent homeland based on Marxist principles in several provinces
of northern Spain and southwestern France. In November 1999, ETA ended
a long period of cease-fire, resuming its campaign of bombings and assassinations,
killing 23 individuals and wounding many more by the end of 2000.
Given their common
language and culture, ETA is known to maintain contacts with similar organizations
in South America. Funding for ETAs activities is derived from a
variety of sources, including kidnapping for ransom, robbery, and extortion.
Drug profits may be among the funding sources.
Taliban, and Osama Bin Laden
The Islamic State
of Afghanistan is a major source country for the cultivation, processing
and trafficking of opiate and cannabis products. Afghanistan produced
over 70 percent of the worlds supply of illicit opium in 2000. Morphine
base, heroin and hashish produced in Afghanistan are trafficked worldwide.
Due to the warfare-induced decimation of the countrys economic infrastructure,
narcotics have been a major source of income in Afghanistan.
confirmed a connection between Afghanistans former ruling Taliban
and international terrorist Osama Bin Laden and the al-Qaida organization.
DEA has received multi-source information that Bin Laden has suspected
involvement in the financing and facilitation of heroin trafficking activities.
While the activities of the two entities do not always follow the same
course, we know that drugs and terror frequently share the common ground
of geography, money, and violence.
According to the
official U.S. Government estimates for 2001, Afghanistan produced an estimated
74 metric tons of opium. This is a significant decrease from the 3,656
metric tons of opium produced from 64,510 hectares of land under opium
poppy cultivation in 2000. Cultivation and production estimates for the
spring 2002 opium crop differ widely, but even under the most conservative
estimate, Afghanistan has the capability to return as one of the largest
opium producers in the world.
The head of Afghanistans
provisional government, Hamid Karzai, supports the eradication of opium
poppy cultivation. Interim president Karzai renewed the Talibans
ban on poppy cultivation and drug production in January 2002 and called
upon the international community to support his efforts.
Historic DEA information
indicates that the PKK members are involved in the taxation of drug shipments
and the protection of drug traffickers throughout the Southeastern Region
of Turkey and other areas of operation.
The United Wa State
heroin trafficking finances the efforts of the 20,000 strong United Wa
State Army (UWSA). 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 UWSA is characterized as a narco-trafficking organization
but is not deemed to be a terrorist organization at this time.
The Financing of
Terrorist Networks with Drug Money
in Colombia, Afghanistan, and other areas of the world generate millions
of dollars in narcotics-related revenues to facilitate their terrorist
activities. Tracking and intercepting the unlawful flow of drug money
is an important tool in identifying and dismantling international drug
trafficking organizations with ties to terrorism. The attacks carried
out on our nation on September 11, 2001 graphically illustrated the need
to starve the financial base of every terrorist organization and deprive
them of drug revenue that is used to fund acts of terror.
FARC 1ST Front Guillermo
70 kilograms (Coca
$28,832.95 U.S. Currency
January 8, 2001
In order to dismantle
narco-terrorist organizations, one must not only arrest and prosecute
the leaders of the organization, but also expose their supporting financial
infrastructure and seize and forfeit assets acquired by them. The cells
of terrorists are dispersed beyond the geographic boundaries of a specific
country, much like international drug syndicates. Accordingly, DEAs
approach to both the drug trade and the terror network must be equally
global in scope.
According to ONDCP,
Americans spend $64 billion on illegal narcotics annually, most of it
in cash. To avoid detection, these organizations have developed a number
of money laundering systems in attempts to avoid financial transaction
reporting requirements and manipulate facets of the economy unrelated
to the traditional financial services industry.
The Black Market
Peso Exchange System (BMPE) is a significant money-laundering system used
by Colombian narcotics traffickers. The BMPE is a trade-based money-laundering
scheme that handles billions of dollars in drug money annually. It is
among the primary means by which cartels convert U.S.-based drug dollars
into clean pesos in Colombia. The BMPE has a devastating impact
on Colombias economy by fostering a contraband trade that undercuts
legitimate businesses and deprives the Colombian government of hundreds
of millions in tax revenue. The exact size and structure of the BMPE system
cannot be determined with any degree of precision. However, based on intelligence
related information, it is believed that between $3 billion and $6 billion
is laundered annually.
The BMPE process
begins when a Colombian drug organization arranges the shipment of drugs
to the United States. The drugs are sold in the United States in exchange
for U.S. currency. This U.S. currency is then sold to a Colombian black
market peso brokers agent located in the United States. Once the
dollars are delivered to the agent of the Colombian peso broker in the
United States, the peso broker in Colombia deposits the agreed upon equivalent
in Colombian pesos into the organizations account in Colombia.
Country Office, in cooperation with the Colombian Department of Administrative
Security (DAS), have created a Special Investigative Unit (SIU) that focuses
their efforts on financial investigations and combating criminal organizations
involved in illegal money laundering schemes. The SIU is comprised of
elite law enforcement officers selected from within the ranks of the DAS.
Each SIU member undergoes a strict "vetting" process, designed
to ensure honesty and integrity and further, receives specialized investigative
training. This SIU is headquartered in Bogota, but has the ability to
respond to and investigate activities throughout Colombia.
· The DAS/DEA
SIU, working with the Special Operations Division, a multi-agency (DEA,
FBI, USCS, IRS Criminal Investigators, and DOJ/Criminal Division) coordination
and law enforcement intelligence analysis unit, was instrumental in the
successful conclusion of Operation Wirecutter. This operation
was a multi-agency investigation targeting peso brokers operating in Colombia
and represented the first time that U.S. authorities were able to combine
undercover pick-ups of drug proceeds in the United States with investigative
efforts by Colombian authorities to target money brokers. Thus far, the
undercover investigation resulted in the arrest of 37 individuals -- 29
in the United States and 8 senior money brokers in Colombia. It is believed
that the 8 Colombians arrested have a combined 50-years experience laundering
drug money for the Colombian cartels. U.S. authorities also seized approximately
8 million dollars, 400 kilograms of cocaine, 100 kilograms of marijuana,
and 6.5 kilograms of heroin.
· In April
2002, the Bogota Country Office DAS/SIU, concluded Operation Broker I,
II, and III. These operations resulted in the arrest of 53 Colombian nationals,
seizure of four airplanes utilized to smuggle U.S. currency to Panama,
as well as jewelry from Panama to Colombia, 36 kilograms of gold jewelry,
1067 kilograms of silver jewelry, $569,795 in U.S. currency, and 181,000,000
Colombian pesos. It is also estimated that approximately 10 million dollars
real property in Colombia will be seized for forfeiture from defendants
as a result of this investigation. The defendants were responsible for
laundering approximately 200 million dollars through accounts associated
with this investigation.
The Hawala system
is an underground, traditional, informal network that has been used for
centuries by businesses and families throughout Asia. This system provides
a confidential, convenient, efficient service at a low cost in areas that
are not served by traditional banking facilities. The hawala or hundi
system leaves no paper trail for investigators to follow.
In the United States, hawala brokers tend to own high-volume, primarily
cash businesses that cater to immigrants. In this process, an individual
gives a hawala broker a sum of money and asks that the same amount be
delivered to someone in another country. The broker contacts, often through
the Internet and e-mail, a hawala broker in the city where the money is
to be delivered, and instructs that broker to deliver the money to the
recipient. Consequently, funds are exchanged without physical movement
of the currency. The brokers make money by charging a fee for their services.
DEA has targeted
and will continue to target trafficking groups that are using the hawala
system to further their drug trafficking activity.
Role of DEA
DEA maintains offices
around the world; these offices are in a unique position to collect drug
intelligence from human sources and contribute to the formation of more
effective cooperative law enforcement relationships in their respective
areas. The existence of a trusted cadre of counterparts such as Colombias
SIU is an invaluable asset for DEA in any arena of operations.
With the support
of the Congress, DEA has implemented its SIU program in nine countries
to include Mexico, Colombia, Ecuador Peru, Bolivia, Brazil, Pakistan,
Thailand, and the Dominican Republic. The SIU program has effectively
enhanced international cooperation and institution building within the
host governments infrastructure.
DEA Program Initiatives:
DEA is requesting
in its FY 2003 Budget $4.1 million and 20 agents to strengthen resources
for drug related financial investigations to enhance assets of domestic
field offices, with emphasis on the financial hubs of New York, Miami,
and Los Angeles. DEA has been successful in investigating and dismantling
money laundering organizations, but we are limited in our resources. DEA
must improve its ability to monitor and track the financial holdings and
transactions of drug trafficking organizations, especially with the demonstrated
nexus between the profits from drug trafficking, terrorist activities,
In the course of
conducting daily investigations against international drug trafficking
organizations, the DEA often uncovers information of other related crimes,
including money laundering and the financing of terrorist activities.
The Presidents FY 2003 Budget Proposal also includes $35 million
and 73 positions (including 12 Special Agents and 33 Intelligence Analysts)
requested in the Attorney Generals Counter-Terrorism Fund to enhance
DEAs communications interception and intelligence capabilities in
support of agencies conducting counter-terrorism in America and overseas.
An additional $6.5 million and 45 positions is also included in the FY
2003 Federal Bureau of Investigations Budget to continue reimbursing
DEA for its counter-terrorism support. This reimbursement began with the
passage of the first counter-terrorism supplemental in FY 2002
The DEA Financial
Investigations Section has personnel assigned as DEA liaisons to both
the Financial Crimes Enforcement Network (FinCEN) and to the Federal Bureau
of Investigations Terrorist Financial Review Group, responsible
for tracing terrorist-related monies.
The DEA Intelligence
Division has temporarily created a six-person Intelligence Response Team
that can deploy worldwide to provide intelligence support related to narco-traffickers
and other trafficking groups. This intelligence support includes but is
not limited to, source debriefings, document exploitation, and region
The current worldwide
heroin situation demands that DEA respond globally and strategically.
DEA has developed a Global Heroin Strategy to target and investigate heroin
trafficking organizations having the most impact on the United States.
This program has developed strategies for the four source zones in the
world: South America, Mexico, Southeast Asia, and Southwest Asia. DEA
has recently proposed a reprogramming of prior year funds totaling $35.6
million to significantly enhance our enforcement efforts targeting heroin
in three of these regions: Southwest Asia, Southeast Asia and Colombia.
which focuses on Southwest Asia, is a proposed DEA initiative which includes
opening a DEA office in Kabul, Afghanistan and the expansion of existing
offices in Asian and European cities.
To address Southeast
Asian heroin, DEA is proposing the establishment of new offices in Kunming,
Peoples Republic of China, and Vancouver, Canada, as well as the expansion
of our offices in Beijing and Rangoon. The United Wa State Army is a highly
trained ethnic group responsible for approximately 80 percent of the heroin
produced in Southeast Asia. Most of Southeast Asias heroin is shipped
through Southern Chinas deep-water ports, and that which is destined
for the United States typically enters the country through the Vancouver
To address heroin
trafficking in South America, the program would establish a Bogota Heroin
Group to initiate additional investigations against the major Colombian
trafficking groups operating there.
This entire $39.6
million reprogramming proposal is currently before the House and Senate
Appropriations Subcommittees for review. The timely support of this Committee
for this reprogramming would be very helpful and greatly appreciated.
challenge the flexibility and resilience of all law enforcement agencies.
The Drug Enforcement Administration remains committed to identify, investigate,
and destroy criminal and terrorist groups involved in drug trafficking.
DEA will continue to work with our law enforcement partners around the
world to improve our cooperative enforcement efforts against international
Thank you for the
opportunity to testify before the Committee today. I will be happy to
respond to any questions you may have at the appropriate time.
As of April 24, 2002,
this document was also available online at http://www.house.gov/international_relations/hutc0424.htm