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Last Updated:11/4/03
Transcript, hearing of the Senate Foreign Relations Committee: "Challenges for U.S. Policy Toward Colombia:Is Plan Colombia Working?" October 29, 2003
U.S. SENATE FOREIGN RELATIONS COMMITTEE: SUBCOMMITTEE ON WESTERN HEMISPHERE, PEACE CORPS AND NARCOTICS AFFAIRS HOLDS HEARING ON U.S. POLICY TOWARD COLOMBIA

OCTOBER 29, 2003

SPEAKERS:

U.S. SENATOR NORMAN COLEMAN (R-MN) CHAIRMAN

U.S. SENATOR LINCOLN CHAFEE (R-RI)

U.S. SENATOR GEORGE ALLEN (R-VA)

U.S. SENATOR MICHAEL B. ENZI (R-WY)

U.S. SENATOR JOHN E. SUNUNU (R-NH)

U.S. SENATOR CHRISTOPHER J. DODD (D-CT) RANKING MEMBER

U.S. SENATOR BARBARA BOXER (D-CA)

U.S. SENATOR BILL NELSON (D-FL)

U.S. SENATOR JOSEPH R. BIDEN, JR. (D-DE)

U.S. SENATOR JOHN F. KERRY (D-MA)

*

COLEMAN: This hearing of the Senate Foreign Relations Committee will come to order.

First, I would like to thank the full committee chairman for his attention to Colombia and for asking me to chair this full committee hearing on Plan Colombia. As chairman of the Subcommittee on the Western Hemisphere, I have a strong interest in Colombia. I had the opportunity to visit in Bogota back in June. I've met a number of times with President Uribe and members of his cabinet.

For many Americans, when we think about the war on terrorism, we think about countries like Afghanistan, Iraq, and other countries in the Middle East, but there is a battle going on in this hemisphere, a battle in Colombia, between an elected government and three narco- terrorist organizations: the FARC, the ELN and the AUC, all three, are terrorist organizations. They use violence against civilians and against an elected government. Their tactics of extortion, kidnapping and intimidation with few, if any, legitimate political objectives show just how criminal these groups are.

And their top fund-raising enterprise, drug trafficking, is a violent and self-serving endeavor associated with money laundering, weapons trade and a whole range of dangerous and criminal behaviors. I believe that 90 percent of the cocaine that enters this country may come from Colombia.

Plan Colombia is a Colombian strategy to retake the country from the grips of narco-terrorists. U.S. support for Plan Colombia is predicated on a mutual understanding of what is at stake in Colombia and belief that the United States and Colombians can work together to address crisis.

Drug eradication and interdiction remain a central part of our support for Plan Colombia. Not only is it in the interest of the United States to keep drugs from flooding our communities, but is also essential to cut off this critical source of funding for all three terrorist groups.

The U.S. is doing much more in support of Plan Colombia. We are training police and soldiers to reassert state presence throughout Colombia. We are supporting programs for internally-displaced people. We are encouraging alternative crops, and human rights is an essential part of this strategy. The Colombian people must be able to trust their government to be on their side.

Three years into Plan Colombia there are indications of great progress. The U.N. estimates that at current rates of spraying, we could see a 50-percent drop in coca production in 2003 alone. Kidnappings are down, highway assaults have fallen, murders in Bogota and Medellin have been reduced by two-thirds since 1994. Desertions from terrorist groups increased 80 percent this year with the demobilization of more than 2,400 illegal combatants. And with U.S. support, the Colombian attorney general's office is moving ahead in more than 100 investigations of human rights abuses.

This progress, I believe, is a direct result of the leadership of President Uribe. In a very difficult and complex situation and fully aware of the personal risk to him and his family, President Uribe is addressing Colombia's problems head on. In President Uribe, I would submit the U.S. has a trustworthy partner in the war on terrorism.

The purpose of this hearing is to assess the achievements of the first three years of Plan Colombia. We will consider Colombia's current challenges and discuss ongoing U.S. assistance programs that help Colombia meet these challenges. We also look ahead to the next three years of Plan Colombia and explore ways to make U.S. assistance to Colombia even more effective.

We have with us, this afternoon, two distinguished panels of witnesses whose breadth of experience illustrates the scope of the U.S. involvement in Colombia.

First we will hear from Assistant Secretary of State for International Narcotics Affairs, Robert Charles, who will discuss INL's activities in Colombia.

The second witness will be General James Hill, who will give SOUTHCOM's assessment of the situation of Colombia and the work with the Colombian military.

Third, we will hear from Assistant Administrator, Adolfo Franco, who will discuss the contributions of USAID to Plan Colombia.

In the second panel, we will hear from Mark Schneider of the International Crisis Group, Ms. Julia Sweig of the Council on Foreign Relations, and Phillip McLean from the Center for Strategic and International Studies.

I would like, at this time, to introduce the ranking member of our subcommittee, Senator Dodd, for any comments he may have.

DODD: Well, thank you very much, Mr. Chairman. Let me welcome all of our witnesses here today to the hearing. And thank you, Mr. Chairman, for holding this hearing on a very, very critical subject matter: the efforts in Colombia and the U.S. support for those efforts.

We're convened, obviously, to talk about that. The witnesses we're going to hear from this afternoon should give us a very thoughtful analysis of the progress made, thus far, in dealing with the twin challenges of narcotrafficking and the civil conflict in the nation, and the challenges that lay ahead, obviously.

I'd be remiss, Mr. Chairman, if I didn't also take this opportunity to mention my deep concern -- and I know you share this along with many others -- for the fate of three Americans who are currently being held captive in Colombia; Mark Gonsalves, and Keith Stansell and Tom Howes were captured by the FARC when their plane went down over Colombia, February 13th of this year. And I don't believe there's any higher priority than finding a way to bring these three Americans home safely, and I know that the prayers of all Americans remain with them and their families during these very, very difficult times.

On each occasion, over the last eight months, when I've met with President Uribe or other Colombian officials, I've urged Colombian authorities to make every effort to gain their release. And the recent airing of a videotape showing them in captivity only further highlights the importance of ensuring their safe return. I might point out, as well, that President Uribe and others have indicated to me that they are doing everything they can to help secure their release.

I also hope that Ingrid Betancourt, a former presidential candidate, and other Colombian citizens that are being held by the guerrilla organizations will also gain their freedom. I've spoken with her husband. I know how painful it has been for him and for Ingrid's two children over these past many months; the separation.

The plight of these individuals are painful reminders, of course, of the violence and unrest that really have been the core of Colombian society for 40 years. Despite Colombia's rich cultural heritage and magnificent scenery, the Colombian people have lived under constant threat.

However, they've also heroically managed to continue to live active and productive lives. And Colombia remains one of the most vibrant cultural centers in all of Latin America. I believe that is truly a testament to the strength of the Colombian culture and the fortitude of her people.

Over the past 15 years, the United States has provided Colombia with over $ 3.6 billion in assistance. More than $2.5 billion of this has been allocated since fiscal year 2000, when President Pastrana developed Plan Colombia strategy to end the conflict, eliminate drug trafficking and promote economic and social progress in Colombia.

I have continued to support providing assistance for Plan Colombia, however, I strongly believe that the problems we see in Colombia are not solely Colombia's problems, but part of a regional crisis that requires both a military and economic strategy by all of the countries in the region. To President Pastrana's credit, he attempted to fashion Plan Colombia as an integrated plan aimed at renewing many different sectors of Colombian society to include, not only strength in the Colombian armed forces and going after narcotrafficking guerrilla organizations, but also improving the judiciary and respect for the rule of law, providing economic alternatives for coca growers and undertaking meaningful land reform.

I continue to believe that President Pastrana was on the right path to addressing the serious problems confronting Colombian society. Clearly, the job was far from complete when he left office last year. His successor, President Uribe, now faces many of the same challenges: popular resistance to aerial eradication of coca crops, human rights abuses by irregular forces, internally displaced people, unemployment, poverty and civil conflict.

We're all aware Plan Colombia's undergoing changes in its name. Now we talk about the Andean Counter-drug Initiative and the Andean Regional Initiative. It remains to be seen whether the new name reflects a shift in focus from Colombia, specific to a more comprehensive regional strategy. I certainly hope it does.

As I mentioned before, I strongly believe the United States assistance to Colombia and other Andean countries must support a regional game plan to include countries such as Venezuela, Ecuador and Peru as full partners in destroying the drug cartels and the scourge of this hemisphere. I welcome, certainly, comments from our witnesses on this point because my impression is that there remains a lack of regional focus in our current policies.

President Bush has requested $990 million for fiscal year 2004, for the Andean Regional Initiative, which includes $730 million for the Andean Counter-drug Initiative; a mix of military and economic assistance. Some of our colleagues and outside experts have argued for a more balanced distribution of military and economic aid to Colombia. However, the 4:1 ratio in military to civic aid in Colombia, if we include Department of Defense programs, is not even close to being balanced.

Clearly, we can't ignore the significant unrest in the nation and the needs and problems faced by the Colombian government. But neither can we ignore other needs of the Colombian people, both in cities and in the rural areas. One possible path for non-military initiatives includes negotiations and voluntary disarmament of rebel groups.

Last July, President Uribe, in an umbrella paramilitary organization, the United Self Defense Forces of Colombia, reached an agreement under which the AUC would demobilize its force of approximately 13,000 fighters by December, 2005. These negotiations were an important step.

Having said that, I'm concerned about the president's legislative proposals to grant amnesties to paramilitary leaders as part of the deal with the AUC. Certainly, negotiations will require concessions. However, paramilitary leaders involved in massacres, assassinations and large-scale drug trafficking must be held accountable for their actions.

The Bush administration should be doing more to strengthen respect for human rights in Colombia. Secretary Powell's recent meeting with President Uribe, in which he stressed the importance of protecting human rights, is a good start. But given President Uribe's statements in early September about Colombian human rights organizations, I think it's imperative that the administration continue to impress on him the importance of democratic values, such as the respect for human rights and free speech.

I raised these issues with him, by the way, during his recent visit here, and President Uribe admitted that maybe some of those statements could have been -- better words could have been chosen, to put it mildly, in terms of how he characterized some of these human rights organizations. Colombia's problems are complex and have a long and painful history. They're not going to be solved overnight.

Today's hearing provides an important opportunity to assess whether we're, at least, on the right track and to making Colombia and the entire region more secure and stable or whether other initiatives should be considered to make that possible.

Let me say in conclusion, if I can, Mr. Chairman, as I've said on numerous occasions in addressing the issue of Colombia, my respect for the Colombian people and what they've been through over these past number of years is unlimited. It's been remarkable, to me, what they have withstood, what they are withstanding, on an hourly, daily basis. Still the numbers of kidnappings could go on; the constant fear the people have to live with is something that very few people anywhere in the world are even remotely familiar with.

So, I admire them immensely, to those who are hanging in there and making the good fight to get their country back.

DODD: And I want them to know whatever questions I have, and concerns and criticisms I may raise, are done so in the spirit of trying to be cooperative and helpful on achieving what every single Colombian, that I believe the decent-minded ones want, and that is, of course, to return to the peace and stability in their country.

So, I want the record to reflect what I'm sure is the sentiments, as well, of many others here. But I do admire immensely, the Colombian people.

COLEMAN: Thank you, Senator Dodd.

Senator, I just want to thank you for your commitment to this area of the world and your focus and your efforts here. So when you speak about what you admire, you're speaking from a long-term perspective and a deep commitment to make sure that we do the right thing, so it's an honor for me to serve with you.

I also appreciate mentioning the issue of the three Americans who are being held hostage. Two individuals were executed; one being an American. That issue does hit particularly close to home for me, and I will ask General Hill about that after the testimony. One of the cousins of Randy Howes is a Minnesotan, and has been in correspondence and contact with me, and I know this is an extraordinarily difficult issue, certainly for the families of those involved, but for all of us.

So, I appreciate raising that and do look forward to addressing that issue during this hearing.

With that, we will start with Secretary Charles. Please note, for all the witnesses, that your full statements will be part of the record.

Secretary Charles?

CHARLES: Thank you, Mr. Chairman. And thank you, Senator Dodd. And I'd just like to say at the outset that I share the concerns that you both raised in your openings very sincerely

It's a pleasure for me to be here, and I want to thank you for my first chance to speak about the real progress that is being made in Colombia and in the Andean Region toward a hemisphere not only fighting, but winning, against the twin scourges of heroin and cocaine.

I would like to share with you my views on the efforts to date, the threats that are afoot, and the administration's sense of optimism, but also the tempering realities that we face in Colombia and the region.

As time allows, I'd like to share with you also a sense of the conceptual battle that, I believe, is going to call forth ever greater leadership in this area; one that is significant, I think, in historical context. The future is likely to stand in sharp contrast to the recent past.

And it's appropriate that at the first hearing that I have the opportunity to speak at here as an assistant secretary for INL, I should sit before some of the nation's strongest supporters of counternarcotics efforts in the Andes. The administration's policies are bearing fruit thanks to a bipartisan effort made real by your commitment to the future, to our kids, to our national and community stability and to our hemispheric neighbors.

Looking south, I can assure you that the top levels of the Colombian government are extremely grateful for the strong, sustained, and equally-determined support of you, Mr. Chairman, and Senator Dodd, and the members of the committee, dedicated to Plan Colombia and the Andean Counter-drug Initiative, or ACI.

President Uribe has broadened the aerial eradication program, enhanced the capabilities of all Colombian counternarcotics forces, increased the effectiveness and coverage of drug interdiction programs, and enhanced refugee and alternative development programs.

In turn, thanks to U.S. congressional support, we have exercised expanded legislative authority to selectively support high value Colombian counterterrorism efforts without sacrificing our core counternarcotics mission.

Under Plan Colombia, we have assisted the Colombian National Police in reestablishing a police presence in 140 municipalities, out of a total of 158 that had no rule of law 10 months ago. This effort has a direct and important long-term impact on U.S. counternarcotics policy, bringing the rule of law to more remote areas where drug crops are cultivated and where we have the greatest stake in keeping hitherto isolated populations from falling into the hands of drug and terrorist organizations for lack of alternatives.

After three years, I'm pleased to report that the government of Colombia's implementation of Plan Colombia is beginning to reverse 30 years of large-scale coca and opium production in Colombia. Incredibly, this bureau, the INL Bureau's Air Wing, and the Colombians have virtually eliminated the coca crop in the Putamayo region, once home to the world's largest nucleus of illicit cultivation.

The coca crop in Putamayo reached 47,400 hectares in 2002, incidentally, viewable in part here on the left. In March, 2003 that same area was estimated to have only 1,500 hectares of coca, a 97 percent decline.

More broadly, coca cultivation in Colombia nationally declined by 15 percent, with an overall decline of 8 percent in the Andean Region during 2002. So far, in 2003, you and INL have supported the Colombia National Police in spraying 118,000 hectares of coca, and we will probably achieve at least 140,000 hectares sprayed by the end of the 2003. We have done it while adhering to strict and completely appropriate environmental guidelines.

One of Colombia's goals was to reduce coca cultivation by 50 percent by 2005. President Uribe's aggressive support for spraying and the professionalism and efficiency of the State Department contractors may well have put us ahead of the mark. If that trend line holds and we apply the right combination of management accountability and measurable results on the ground, we may get to a point in which we have reduced cultivation of coca and heroin poppy to levels not seen in two decades.

On opium poppy, I am, and I know you are, deeply concerned. South American heroin has made its way in ever greater quantities, in recent years, to U.S. cities and suburbs; places like Minnesota, Connecticut, Indiana, Delaware, even Maine. To combat this growing threat, we have initiated and maintained an aggressive spray program that has already covered 2,527 hectares in 2003 with an identifiable estimate of 4,900 hectares of poppy total. These poppies are identified through a range of means and virtually all cultivation lies in remote, difficult-to-navigate mountainous areas.

As we move into a new phase of spray aircraft deliveries, I'm pressing for a three-tiered approach that will accelerate success. The three tiers are: greater safety, more direct and measurable accountability, and higher and more measurable results on the ground as a result of methodical aerial eradication.

While guarantees are not possible, we, nevertheless, expect a significant fall in total hectarage of poppy cultivated, as repeated spraying of small fields in outlying areas discourages poppy cultivation for poppy farmers. We will be attacking the heroin poppy cultivation through a number of means, including a new rewards program and an existing program.

Also, a pivotal point for the committee, our combined effort, Congress' and ours at INL, to make permanent strides in Colombia goes well beyond crop reduction. For three years, a sizable portion of INL's funding has gone to Colombia National Police interdiction efforts and to training and deployment of Colombian army counternarcotics; the mobile brigade. This effort has been animated by a need to press forward with counternarcotics missions in terrorist-held areas of a beautiful, but terrorist-ravaged country.

Specifically, our funding, your funding, implemented by INL, has trained over 10,000 municipal and rural police and provided hardened police stations in key municipalities to prevent terrorist forces from overrunning them. Countless redeeming effects flow from that. The determination has effectively allowed the Colombian forces to strike deep into trafficker areas and FARC-held areas, and AUC and ELN areas.

And, as many of you know, that has called for a substantial commitment in helicopter airlift resources, but Congress has been there, again. For Plan Colombia, the combination of congressional and INL leadership has created a Colombian army helicopter airlift capacity of 72 helicopters to support the brigade and an increased capacity of 66 helicopters to the Colombian National Police.

Unless cynics try to bend your ear, so far in 2003, this counternarcotics brigade has destroyed 15 cocaine hydrochloride and 278 base labs, seized over four tons of cocaine, and dismantled five FARC base camps. In other sign of progress, the Colombia National Police has destroyed 71 cocaine hydrochloride and 239 base labs, further, on the strength of your commitment, they have seized 41 tons of drugs, mostly refined cocaine.

I would also like to note that we are not alone in supporting these successes. Today, in 2003, the Colombian government is spending 3.8 percent of GDP on security, with plans to spend 5.8 percent by 2006. This measurable progress also shows up in other areas.

Already, we have had the ability to -- with the Airbridge Denial Program Agreement, we have been able to show, again, the Colombians' significant progress. The program has resulted in the destruction or capture of five aircraft, the seizure of one go-fast boat, the seizure of approximately 5.6 metric tons of cocaine.

There's more to this comprehensive effort, however, than that. We have made significant progress in a range of areas which, again, are across the board; programs to establish and maintain special human rights units to reform the country's criminal code, to improve money laundering and asset forfeiture regimes, and to provide for witness protection in key cases. There has been a 25-percent increase in money laundering prosecutions and a 42-percent increase in asset forfeiture cases.

In essence, what President Uribe is ushering in and what you and we, as implementers of your programming, have been able to do is to establish a paradigm shift. We are in the midst, right now, of what I would -- and I will roll this out further if you ask me about it -- I think, is a tipping point in the history of the international drug war.

It absolutely depends upon respect for human rights, it depends upon respect for an effective alternative development, but it also, if I may briefly roll through these charts ever so quickly, it shows that we are making significant results. And I believe we really are at a tipping point in what we're doing in the country.

The first one is just the 2002 high point in coca; the second one -- and you have these, I believe, senators, in front of you -- the second one is the Colombian coca estimates, which you will see, directly reflect progress based on our eradication. In the years that we have eradicated with approximately a one-year lag -- it just took time for the Plan Colombia assets to kick in -- you have seen a dramatic decrease in the coca hectarage and an increase in coca eradication.

In the third instance, you finally see potential cocaine production dropping; direct result of Plan Colombia. In the fourth one, you see the poppy growing areas which were at a high point in 2002.

I want to quickly, without overtaxing the folks that are helping me here, Colombia poppy estimates, on the next one, you will see a direct correlation, again, between the money that you have invested in poppy eradication and the drop in hectarage for poppies in 2001-2002, just as those resources have kicked in. Again, that's illustrated in the following chart showing that the opium gum production is dramatically down between 2001 and 2002.

And finally, a chart, that you have only in your handouts, illustrates -- you have one for coca eradication and you have one for poppy eradication -- and what they illustrate, I think, is one of the most powerful facts supporting Plan Colombia. Based on coca eradication, there has been a drop in the wholesale street value cocaine getting into this country that was roughly 25 percent between 2001 and 2002.

In other words, there has been a drop of roughly $5 billion worth of cocaine on our streets, and while we still have a long way to go and we will get there, that is a significant and, I think, measurable result of your efforts.

And finally, you see the same thing in heroin. Between 2001 and 2002, there has been a roughly $200 million drop in the heroin getting to our streets; the overall value of it.

So, I just thank you for your support, I welcome your questions and, again, it's a pleasure to be able to be here in front of you.

COLEMAN: Thank you, Secretary Charles.

With that, General Hill.

HILL: Thank you, Mr. Chairman, Senator Biden, Senator Feingold. I'm honored to have this opportunity to appear before you today to provide my assessments of Plan Colombia.

I greatly appreciate the support of the committee for the United States Southern Command; for our soldiers, sailors, airmen, Marines, coast guardsmen and civilian personnel, whom I am privileged to command.

As I mentioned in my written statement, Colombia and, as Charles just pointed out, is at its five year point. Although there's much work to be done, our country's significant investment in Plan Colombia and the Andean Regional Initiative are beginning to show substantial results.

The trends are generally positive: the Colombian economy is growing, major categories of criminal activity are down, narcotics production is down, terrorist attacks have been cut almost in half, desertions and demobilizations by the narco-terrorist organizations are increasing, the military has grown into a professional competent force that respects human rights and the rule of law and has gained the strategic initiative.

I am, therefore, guardedly optimistic that President Uribe can bring security and stability to Colombia.

Over the past year I have traveled to Colombia 17 times and will go again next week. I have worked closely with President Uribe, Minister of Defense Ramirez, and General Mora, the chief of the armed forces. I have seen these strong and determined leaders in action.

I have visited all parts of Colombia and witnessed the tremendous cooperation between our armed forces. I have seen the professionalism and increased capabilities of the Colombian military. I have also been inspired by the dedication of the Colombian soldiers and their daily fight to defend Colombian democracy against vicious narco- terrorists.

I have observed Colombia's leaders inculcate the government and the armed forces with an aggressive spirit. The Colombian people believe they can win the war against narco-terrorists and end the violence. They have built and are executing a campaign plan to systematically break the will to fight of Colombia's narco-terrorists.

Fully understanding that the problems of Colombia do not have a simple military solution, President Uribe and his administration are building the political, social and economic systems that will eventually return Colombia to the ranks of peaceful and prosperous nations. However, President Uribe has only three more years in office which, coincidentally, will mark the end of Plan Colombia.

Consequently, it is important that we sustain the progress that has been made under Plan Colombia and that he gets our steady support to set his long-term initiatives firmly into place. As one of the oldest democracies in its hemisphere, a key trading partner and supplier of oil, a staunch ally only three hours from Miami, a stable Colombia is important to our national security interests.

Thank you, again, for this opportunity to appear before you, and I look forward to your questions.

COLEMAN: Thank you, General.

Secretary Franco?

FRANCO: Thank you, Mr. Chairman and thank you, Senators Dodd and Feingold, for this opportunity to testify before the Senate Foreign Relations Committee.

Mr. Chairman, the United States Agency for International Development, USAID, is proud of its contributions and participation in U.S. government efforts to promote democracy in Colombia; a country which President Bush has rightfully said urgently needs our help.

As the distinguished members of the committee know only too well, Colombia continues to struggle for its territory and future against three terrorist organizations, known respectively by their Spanish acronyms as the FARC, ELN and AUC.

FRANCO: These terrorist groups threaten not only Colombia, as you noted Mr. Chairman, but also the stability of the Andean region as a whole and represent a direct threat to U.S. security and economic interests.

Conducting development programs in conflicted countries such as Colombia is difficult and dangerous, however. Not surprisingly, USAID has encountered numerous obstacles during the implementation of its development programs. Nevertheless, I am pleased to report to you today that, with the strong support of our administrator, Andrew Natsios, USAID has already met some targets originally planned for completion by 2005, while others remain on track.

Mr. Chairman, please permit me to outline USAID strategy under Plan Colombia. USAID provides the social and economic development backing for the government of Colombia's counternarcotics efforts. With $123.5 million provided under Plan Colombia and supplemental funding in Fiscal Year 2000 and $230.7 million through the Andean Counternarcotics Initiative -- these funds were provided in Fiscal Years 2002 and 2003 --USAID is working to the achievement of three broad and mutually supporting objectives.

First, USAID alternative development programs support the sustained reduction of drug crops and enhance economic prosperity by providing poor farmers and communities with profitable and licit productive activities; second, USAID works to strengthen democracy and human rights through support for programs that promote judicial reform and the rule of law; and third, USAID addresses the needs of people displaced by violence by providing emergency relief and employment opportunities for these victims of Colombia's civil strife.

Despite the bold efforts of President Bush's friend and counterpart, Colombian President Alvaro Uribe, to combat narcotrafficking, still 125,000 to 150,000 families are involved in illicit drug production. In response, USAID's alternative development programs seek to provide opportunities for licit incomes for small scale producers of coca and opium poppy.

Since 2001, alternative development programs have benefited approximately 33,000 families and supported the cultivation of over 30,000 hectares of licit crops, such as rubber, casaba, specialty coffee and cocoa. In addition to the introduction of new crops, alternative development programs include the construction of infrastructure such as bridges to provide short-term employment and improve long-term access to markets. As of June, 2003, USAID has helped complete 410 such infrastructure projects, and this greatly exceeds our original target of 26 projects by the end of 2005.

Mr. Chairman, carrying out alternative development in an insecure and remote region is difficult, dangerous and takes time. Delays can result from many factors which include changes in the security situation, the need to identify tests and development useful farmer assistance packages adapted to conditions in the region and, lastly, the need to identify, design, contract and build appropriate infrastructure projects. Simple changes in weather patterns also limit some agricultural and construction activities in months of the year when the rainfall is heavy, as an example.

As you know, Mr. Chairman, the FARC recently conducted a resign or die campaign against all the country's mayors and local officials. As a result, 1,500 city council members and 300 mayors have stood down. This sort of intimidation obviously makes life very insecure for the general population in these areas and undermines democracy at the grassroots level.

Therefore, in addition to alternative development, USAID programs also seek to improve the administration of justice and protect human rights workers at the local level. To combat the pervasive sense of impunity before the law, USAID, in collaboration with the Colombia Ministry of Justice, has established 34 justice houses to increase access to judicial and dispute resolution services for low income and marginalized Colombians. Almost two million cases have been resolved since the first justice house opened in 1995.

USAID is expanding this highly-successful program and plans to establish an additional six justice houses by the end of fiscal year 2005, and one of these is included in the Putamayo region where coca production has been extremely high.

In addition, USAID is assisting Colombia's transition to a modern accusatorial court system based on oral trials rather than written procedures, and have, so far, trained 6,160 judges, lawyers and public defenders.

Mr. Chairman, USAID's work also directly benefits the human rights community in Colombia. Working through the Ministry of Interiors Protection Program, USAID assistance in the past year helped approximately 3,000 human rights workers, labor activists, journalists, mayors, and others threatened with violence by providing them help to relocate, protection for government and NGO offices and, in some cases, with the protective equipment needed for armored vehicles.

A USAID-supported early warning system provides the Colombian military and national police with early warnings of situations that can result in massacres or force displacements. To date, a total of 220 warnings have been issued which resulted in 170 responses or interventions by Colombian government authorities. USAID believes that the early warning system has saved lives and that, in the process, has strengthened the link between communities and the government.

COLEMAN: Mr. Franco, if you could summarize your testimony and the full testimony will be entered in the record.

FRANCO: Thank you, Mr. Chairman.

Mr. Chairman, in answer to the salient question that you posed in organizing this hearing, we believe that Plan Colombia is working, but let me be frank. We still have very much more to do.

Lessons from Bolivia, Peru and Ecuador demonstrate that good governance is the key factor that determines whether or not the illicit coca narcotrafficking industry will establish itself, grow, or decline.

Let me conclude, Mr. Chairman, by restating our commitment at USAID. As part of the larger U.S. government response to continuing our work in Colombia -- as General Hill has stated -- the Uribe administration is the ideal partner with which to work, and I know we can continue to count on the support of this committee and the Congress in overcoming the scourge of narcotics and counterterrorism.

I'd be pleased to answer any questions that you might have, Mr. Chairman, or the members of the committee.

COLEMAN: Thank you very much, Administrator Franco.

Pleased to be joined by the distinguished ranking member of the Foreign Relations Committee and, at this time, Senator Biden, before I give my questions, I'd certainly let you give a statement...

BIDEN: I don't have to, go right ahead.

COLEMAN: ... if you have any statement.

BIDEN: Thank you.

COLEMAN: Thank you very much, Joe.

General Hill, let me follow up on the comments made by Senator Dodd concerning the three Americans. As I indicated, one of them, Randy Howes' (ph) cousin, is a Minnesotan, has been in contact with my office and obviously deeply concerned about his fate, his status.

Can you give us an update on where things are at with these hostages and what are the prospects of their release?

HILL: Yes, sir. Like you, Senator, and all the other senators, I am also very concerned and worry about these three Americans held hostage by the FARC.

We believe that we kept them in a pretty small box for a long period of time; anywhere from 45 to 75 days. We had some good intel on that but eventually they made their way out of that area where we thought we had them contained and, since that time, the intelligence picture has, candidly, just dried up.

We get very little intelligence on them; we do not know exactly where they are, we have a belief of a generalized area; they remain a focus of our intelligence effort, and we will continue to search for them until we can attain their safe return to the United States.

COLEMAN: Thank you, General.

I think it's a shared belief -- perhaps all of us, everyone on this panel -- that in order to deal with the issues facing Colombia, it can't be done in the abstract or just in isolation but rather with the regional perspective.

And, in particular, I'm trying to understand -- recently we had, in Bolivia, a situation where it appeared that the coca growers -- well organized, well represented -- were effective in ousting an elected president. I'm wondering if -- and I say this to all the panel members -- talk to me about how we work in a regional manner when we look at the problems we have with the U.S.-Venezuelan relations, we have the turmoil in Bolivia -- from each of you, can you talk a little bit about the opportunities and the challenges to approach these issues and from a regional perspective?

Secretary Charles?

CHARLES: Yes. Thank you.

Well, I share, to begin with, both the concern and the forward- leaning statements in the openings, including the outreach to countries that we haven't reach out to, yet, in depth. I am an optimist. I know the balloon argument; I know all the other arguments that are often thrown out as defeatists. I am of the view that regional self-interest and, perhaps, hemispheric self-interest are coming into their own and, in fact, are probably one of the three or four top factors that will decide the future of that region and, ultimately, our ability to win in the drug war internationally.

Bolivia presents a special case. I have watched, very carefully, every day leading up to and after the reports that are coming out, closed and open, and I remain of the view that, while we have to be watching very closely, I have not seen any explicit back-sliding yet, although I think we have to make it very clear that we have expectations; those expectations are high, they are mutually self- supporting, and I think that we have seen, recently, success up to that point.

I think it's important not to overdraw conclusions from the cocaleros' involvement. My understanding is that that was really a much more broad-based event; not that the cocaleros weren't deeply involved but that there was, in fact, a combination of a pipeline, which was quite controversial, there are issues that actually brought out miners, teachers, just about everybody, and I think that we need to be attentive to reinforcing our expectations which are that the Bolivians will stay the course and, if anything, continue to recognize self-interest in the area.

I won't elaborate too much more now, but I believe very strongly in the regional approach, and I think that there are other factors that will push us in that direction and that our success will, ultimately, be measured by whether or not we can get regional actors all to participate.

COLEMAN: General Hill?

HILL: Yes, Senator, I share your concerns and that Senator Dodd and I discussed earlier this afternoon.

The problem that is in Colombia is not Colombia's problem alone. It is, in fact, the region's problem, and the region must address it. As I began my travels throughout the region, last year, after assuming command and in my discussions, both with military and political leaders, I constantly asked that question, "What are you doing about control of your border with Colombia?"

I have seen, over the course of a year, a growing understanding, as Mr. Charles just said, of a regional self-interest. There is an understanding that they must, in fact, begin working more closely with the Colombians in a military and political sense. It takes on varying degrees but, in point of fact, I think that they're moving ahead in this area.

COLEMAN: Thank you very, very much, General.

Mr. Franco?

FRANCO: Well, I certainly share the statements of both Secretary Charles and General Hill.

My first trip, Mr. Chairman, to Colombia -- I think I was on the job 24 hours with Secretary Grossman, and he said exactly what General Hill said, in Colombia. "Colombia's problems are the region's problems." At AID, before my tenure, so I can't play into it, we've been approaching this as a regional development problem, and we continue to do so.

What that translates into is taking the lessons that we've learned, and we've actually made a great deal of progress. I share Secretary Charles' assessment about Bolivia, that the factors were multiple that caused the difficulties this year, in February, and then that led to President Sanchez de Lozada's departure. But we've actually greatly moved to reduce coca production in both Bolivia and Peru. We've had a lot of successes.

COLEMAN: Can I ask you, this, Mr. Franco? Do you doubt that there is a strong, powerful movement in Bolivia that seeks to reverse coca eradication, a movement that clearly has that political impact?

FRANCO: Well, I don't doubt that that's one of many factors. I also think the economic downturn, the budget deficits in the country; certainly the gas production issue and whether to be exported through Chile and the United States, caused all of this to come together.

As you know, Mr. Chairman, in February it was a problem with police salaries. So, there are underlying, very serious development problems in Bolivia. It's the poorest country in South America. The cocalero movement, and so forth, is one component of it. I don't doubt that but I also know, and we can share with you the great successes that we've had in alternative development there and in Peru, and we've applied some of these in Colombia.

So, the approach, the narcotraffickers, certainly approach the region regionally, and I think we need to and the host government needs to as well. Certainly in the Ecuador-Colombia borders is another example where we're enhancing that cooperation.

COLEMAN: I just hope that -- and my time's up, but I do hope that we take a look at what we're doing with alternative crop programs; that we do those things to make sure we're satisfied with what we're doing and that those who are serving have a sense of satisfaction, or the consequences could be very devastating.

FRANCO: Could I just add one point to that because I understand we often focus in on crop production because we're talking, usually, about small-scale, poor farmers?

We like to approach this, we believe the right way is integrated development that addresses community leads, infrastructures, state presence, in addition to income alternatives. And we do approach it that way in a comprehensive manner, and have that ownership.

COLEMAN: Thank you, Mr. Franco.

Senator Dodd?

Thank you again, Mr. Chairman. Let me thank our witnesses for their statements, and General Hill, let me thank you as well for spending a few minutes, prior to the hearing, I had a chance to catch up on some of these questions.

One question I didn't get a chance to ask you in our conversation, but it's been a source of concern to me over the years, and that is the issue of conscription and who's serving in the Colombia military? And an indication of cover, there's been some stories written, as well, about the so-called elites in a society where a lot of their resources leave the country; their vacations, family education, and so forth.

On one hand it's hard not to blame them given the violence that occurs in the country and the targets of kidnappings and the like, but it's also a reflection, to some degree, of whether or not the commitment is hang in there. And I mentioned earlier, in my admiration for the Colombian people and I don't modify that statement in any way but, obviously, when you read about a lot of capital flight and people moving out, you leave only those who can't afford to leave to stay and make the battle, if you will.

And the issue of who serves in the Colombia military has been a source of some discussion, here, in the past. Is it still the law of the land in Colombia that if you have a high school diploma or more you don't serve in the military?

HILL: Sir, you're talking about the bachelero (ph) program.

DODD: Yes.

HILL: That law exists but, in point of fact, it is all but gone away inside the Colombian military as they have attrited those numbers down and there is, in fact, a law in front of the Colombian congress to do away with that provision in its entirety. That law...

DODD: That's been there for some time, though. There's been a proposal for many years...

HILL: For many years. You're exactly right.

DODD: It never passes.

HILL: I was about to say that. It's been there for many years; it has not passed. I believe that there is, in fact, the determination upon the Uribe government to get it passed this year. I hope that it does get passed. It is a sore point.

DODD: It does raise the questions, obviously, when we're committing resources and obviously, doing what we can here and, if you've got people who can exclude from having to face the challenges of sustaining your country, it raises a lot of serious...

HILL: Yes, sir. It does indeed.

Could I add two points to that, Senator?

DODD: Certainly you may, certainly.

HILL: Two points, I think, that should be made. One is that right after I flew into Colombia the day after the El Nogal bombing, the bombing that took down the very expensive social club in downtown Bogota, the cynical approach, and I heard it said by several people as well, "Now we'll see if the lights will hang around." What will happen with the Colombian people?

When I drove into the airport, the main road in from the airport into downtown Bogota -- they close off on Sunday and it happened to be a Sunday -- and there were signs over all the overpasses that if it would have been a United States sign, "We're going to see this through. This is not going to deter us. Victory." And there were thousands of people demonstrating their right and their lack of fear to walk on that street.

I think if you also had Ambassador Wood sitting here, he would tell you -- and we're still trying to put some -- from Colombia -- we're still trying to put some numbers to this, but anecdotally, we're beginning to see income coming back into Colombia and people and visas coming back from the United States into Colombia and those numbers are up.

I think that that phenomenon is changing.

DODD: I'm glad to hear that. I'll be interested in following those numbers if that's the case.

HILL: Yes.

DODD: Mr. Charles, I'm sure you're probably aware that a group of my colleagues and I sent a letter to Secretary Powell concerning the Colombia draft amnesty law that I mentioned in my opening comments. And I want to raise with you, a portion of the response received from the department.

Specifically, in that letter, Mr. Fox states, and I quote, "No U.S. government official assisted in drafting this legislation and, indeed, no U.S. government official was consulted on it," end of quote.

I wonder if I should conclude from that statement that the U.S. Embassy knew nothing about the draft law, no one had any opportunity to review it. It would have raised concerns about it. Is that the case?

CHARLES: The truth is, I don't know, sir. I will find out for you.

DODD: Thank you.

CHARLES: And I can tell you that I certainly had no connection with it, and I have strong opinions about that that are probably concurrent with your own. But I will find out.

DODD: I appreciate that and that's very, very good.

I mention we talked about the hostages being held, and I should have pointed out that the mother of Mark Gonsalves is a resident of mine in Connecticut, and I'd be concerned anyway, but obviously the Chairman and I, having family members of these people, heightens the concerns when we hear from them quite frequently. So I appreciate your comments, and I mentioned Ingrid Betancourt, as well.

One of the things I'm interested in, General, maybe you can comment on this, is the Cessna 208, this aircraft, I gather it's being used rather wisely in the area by these contractors.

Can you give me some assessment of the wisdom of that? People have raised the issue with me that this isn't necessarily the wisest type of aircraft to be using in that area, and I certainly don't claim any expertise at all in answering that question but I wonder if you might address it.

HILL: The Cessna aircraft that you're referring to is a widely- used airframe in the United States and throughout the world, and it's a very dependable aircraft. When it was selected under contract several years ago by the Navy, in support of the operations in Colombia -- in support of the United States Southern Command -- it was selected because of its ability to do short take-offs and landings and because of its dependability. It is, in fact, a single-engine airplane and that usually raises the issue, "Why a single-engine airplane?"

But it was and, is, a very dependable aircraft. We had experienced almost no problems with it up until the crash, and we had no reason to doubt its reliability.

DODD: So, we'll stick with it as if...

HILL: No, sir. We have, in fact -- those two aircraft; there were two of them -- they have both now been destroyed and we have replaced them with dual-engine aircraft. But I would also point out to you the F-16 is a single-engine aircraft. There are lots of single-engine aircraft running around the world.

DODD: Now I wasn't, as I said, I wasn't claiming any expertise. It was just the issue was raised, and why are we not replacing with a single-engine aircraft, though?

HILL: We replaced it with a better aircraft. The other issue is that we've determined as the program went along, that we didn't need the ability -- in the original scheme, as I understand it, was that the aircraft was going to be stationed at smaller airfields throughout Colombia. As the program evolved, it was not that way. We kept it in Bogota and we flew it out of Bogota into other areas, not into the smaller airfields. It's not required, at this point.

DODD: OK. One last question, with a yellow light on here, and then make sure my other colleagues -- no, no. We got to make sure you all get involved in it.

We talked earlier, and you expressed, as you did in your opening comments, your confidence in how things are moving in the right direction without using lights at the end of the tunnel comments, and so forth, that invariably come back to haunt people, but clearly the trend lines, as you see them, are positive and constructive, midway through the Plan Colombia, as we're proceeding with it.

And I wonder if you might give us briefly here, obviously, how you characterize, in your view today, a candid assessment of the capabilities of the Colombian armed forces? And, specifically, the question as to whether or not it is your assessment that the Colombian military, as it is constructed today with its training background, and so forth, whether or not they are capable of defeating the FARC and ELN militarily?

HILL: Yes, sir. The Colombian military, in the 14 months that I've watched it, have grown exponentially in professionalism and their capabilities. They have grown, also; success breeds success; and they have grown a great deal in confidence. Much of that has to do with the aggressive spirit of President Uribe who has, in fact, urged on the Colombian military leadership, and that has taken almost a life of its own down in that organization.

The second thing is we've spent a lot of time and effort in training up units and in working with them in order to ensure that they can sustain themselves in combat operations. When the SRS aircraft crashed and the three American citizens were taken hostage, the Colombian military put about 7,000 people into an area of Colombia they hadn't been in in 10 years. They did it very rapidly. With our planning assistance and operational assistance, they found that they could sustain operationally and logistically, a large-scale operation in heavy enemy territory.

In my mind, that gave them a great deal of confidence. We have also trained up a special operations command; worked with them to train up and form up a special operations command. That gives them the capability that they've never had before in terms of realistically undertaking a military operation against the high-value targets, i.e., the FARC, ELN and AUC leadership.

DODD: And have FARC and ELN, just lastly, have their tactics changed as the capabilities of the Colombian military increased?

HILL: Oh, it has indeed. It has indeed. What they've done is they've broken down into smaller elements, and they no longer are prepared to confront the Colombian military in large numbers. That is both an advantage and a disadvantage. When the Colombian military finds them, it's easier to fight them; it's also harder to find them. But it has to make them more aggressive and it's that aggressive spirit of the Colombian military that, in fact, has prompted me to come in here and say, "I believe that they are, in fact, have turned the corner." Not very far, but they've turned it.

DODD: Thank you. Thank you, Mr. Chairman.

COLEMAN: Senator Biden?

BIDEN: Chairman, I ask unanimous consent that my opening statement be placed in the record.

COLEMAN: Without objection, it will be entered.

BIDEN: General, you indicated that the -- my words, not yours -- that the net exodus of educated Colombians and Colombian money may have begun to reverse. Do you attribute a reason to that?

HILL: The reason is Senator, in my opinion, is that there is growing confidence in the security and stability of Colombia and in the fact that the market is reemerging. Let me give you one anecdote on that issue.

I was with President Uribe about three weeks ago in Cartagena, at his Camp David.

BIDEN: Nice place.

HILL: He'd asked me to come down to meet with him in the high command. We'd had about a four-hour discussion and he says to me, "I have to go give a speech. Would you come with me?" And I said, "Certainly."

And we went into the city of Cartagena to a convention of builders. Last year, this same convention drew about 20 firms; 20 people. This year it drew about 500. That said a lot to me in terms of their confidence in their own economy and the security of being able to hold that convention and in their desire to move ahead. That's what I'm seeing.

BIDEN: Are any of you prepared to comment or try to shed some light on the comments by President Uribe relating to human rights workers?

CHARLES: You're referring, Senator, to the speech that he gave.

BIDEN: Yes, yes.

CHARLES: I mean, I think we might all find ourselves on about the same page. I think that those comments, as Senator Dodd said, we're probably poorly chosen, at best. But I also think that his record does belie them at the front end. There's been a 16-percent reduction in murders, a dramatic decrease in kidnappings, labor- related incidents. There appears to be a strong emphasis, in fact, upon human rights.

I am personally, deeply committed to making sure that that is constantly raised and that we see genuine results ahead.

BIDEN: What was he talking about? He obviously wasn't talking about -- I shouldn't say anything; I shouldn't say obviously. Was he talking about all human rights workers? Was he talking about, was he focusing on particular individuals or incidences that he didn't elaborate on?

CHARLES: I have to confess to you that having been here three weeks and two days on this job, I haven't met with him directly on this and I don't know.

I do know that objectively, I was concerned, I looked at it, and I believe that there is a strong commitment by the Colombian government and by him, to human rights, and I think he now knows, if he didn't before, how strongly-held the views are by many.

BIDEN: He heard from a lot of us on it. We know him well. He heard from a lot of us.

General, what do you think he was talking about?

HILL: Sir, he was not talking about all groups and, in point of fact, he said, as I recall the discussion and his statement; he narrowed it down to three points. And the last point he said was there are some who are, in fact, collaborating and doing the work of the illegal armed groups.

I believe, having discussed it with him, that he regrets having said those words. As Mr. Charles said, I believe that they have a very good record to put forward in terms of improving human rights inside Colombia, and I urged him to simply lay that record out there for all to see and then to move on.

BIDEN: Mr. Charles, have we made any formal recommendation -- this may have been asked, and if it has, I'll read the record or check with staff. Have we made, or you made, any specific recommendations as to what a conditional amnesty program should look like?

CHARLES: As far as I know, we have not made any.

BIDEN: Do we have an intention of making it clear what we -- I mean, this notion, we spent so many years dealing with the prospect of making sure extradition was a reality. Has the administration considered how this program might affect extradition?

BIDEN: We've indicted several military leaders, I need not educate you in this, you know, including AUC leaders, for drug trafficking. As we understand the legislation, do we know whether it encompasses those folks?

CHARLES: A couple of things. First, we have demarche them immediately on the topic, and I think we've made it very clear what our position is, which is that we want no extradition changes. We want to be able to extradite and have extradited. There has been some good news prior to this point and we hope that that would continue.

I think that we have also made it clear that we hope that the end result will be something that doesn't allow people either to benefit from ill-gotten gains or to escape extradition. My understanding and, again, I'm limited in my understanding as yet, but my understanding is that there are different drafts of what might be done under consideration.

And, I think, our hope is that they will reach one that will allow us to reach to the people that we know, in fact, have indicted, as you indicate, AUC and FARC, and not put us in a position where we can't have a successful extradition agreement.

BIDEN: Have we...

DODD: Joe, it's in that form.

BIDEN: Sure.

DODD: I asked a question whether or not we were in consultation with that law, and I think your answer was you were going to get back to me on that, to find out whether or not discussions between the U.S. Embassy and the Uribe government about his proposal. Your answer was you didn't know.

CHARLES: Correct.

DODD: You said you would find out. That seems to be a pivotal question, so, that's...

BIDEN: If I can make sure I understand that, to me there are two issues here: one, prior to the introduction of the law, was there any consultation and subsequent to the introduction of the law has there been any additional or first instance conversation? And have we made, in either instance, prior consultation, if it did take place or consultation, or were we demarche the government about our concerns about this?

Were we explicit about what the concerns were rather were rather than generic? And have we received any assurance that there would be an attempt to accommodate your concerns, or at least a clear explanation why it would not be accommodated?

So, I'm curious, for the record, not only was there consultation before, but has there been any discussion subsequent to its introduction?

My time is up. I yield to my friend from New Jersey.

COLEMAN: Thank you.

Senator Corzine?

CORZINE: Thank you, Mr. Chairman. Appreciate witnesses, and this is an area where I am trying to grow my background, so if some of my questions are somewhat amateurish, I'll plead guilty for being a newcomer.

Let me start, though, with a macro question, which may have actually already come up, but the recent mayoral election in Bogota and the change of the Bolivian presidency, the instability in Venezuela doesn't seem, in some ways, to overlay with what I heard some of the maybe optimistic interpretations of how things are revolving.

Some of those political Democratic moves, small they seem, may be working at counter-purposes to some of the policies and efforts. Would love to hear your comments on how you interpret these Democratic rumblings.

And, then, the second area that I'd love to hear some comment on, I'm clearly less familiar with all aspects of the human rights issue but just reading on the surface as my colleagues have mentioned, the comment of the president is disturbing and, particularly in the context of some of the human trafficking that has come to light in recent months, is a concern of a number of folks who have family ties back and forth.

And, then, an issue that may be old since everyone's going home; not exactly what the general said, but that there's a reflow, certainly the Colombian-American community challenges me regularly about temporary protective status, and I'd love to hear how you all respond to that and in the context of human rights abuses that are recorded and certainly this human trafficking; but one macro political question; one more related to the specifics of these human rights issues.

CHARLES: If I could take a quick stab at them and also give a quick footnote to Senator Biden's question, let me say, with respect to Bolivia, my comment a minute ago, I think, is how I would respond to that again which is that we are going to watch very closely, I think it was not exclusively a cocalero issue. I think that there has been progress made and what we really have to do is make the point directly that we expect, and we will hope for and we will work toward sustained progress there in all of the programming areas that have been discussed.

With respect to the mayoral election and the elections generally, including the referendum, I would just make a couple of quick points. One is that the beautiful thing about a working democracy is that it produces leaders from left, right, and center. And if anything, maybe this is silver lining, but my view is that having an elected mayor who is not from the same party and has a different frame of reference, is actually an indication that people could rejoin the political process in Colombia in a constructive way holding very different opinions.

The second thing I would say is that the referendum, as I understand it, had two components that did not -- you know, it's been discussed as a setback, or that the referendum was a defeat, and I think that's a little bit of an overdrawing or an overstatement of what happened. My view is that it came; you needed a 25-percent turnout in order to make these valid on two issues, in particular, the fact that there were two components. One was a reduction in the size or shrinking of their congress, and, second, was a freeze on federal salaries.

And I would suggest that maybe if those two came to a vote in this country, you might have a massive turnout. And I don't know what that would indicate but I think the point is those were not specifically undercutting his conviction that stability and all the things that the three people here have been working toward, with him, will be a success. And the other thing I would notice that his personal popularity is extremely high, relative to his mission that he's articulated.

On the human rights issue I would say, without particularly expanding beyond what's already been said, that sometimes there's a blessing in disguise. When an issue comes to the fore, through a speech, for example, that elevates the use of words and people will ask the question what do they really mean, it allows you to articulate back what your expectations are, and I think that is, in many ways, what we've done and I think it actually is a good thing at the end of the day. At the end of the day, he now has a clear understanding of how deeply important that is to many of us here, in both parties and across the board.

And I just wanted to suggest to Senator Biden, who I know is no longer here, that from what I just understood, asking back to folks who pre-dated me in this also were here, on this topic, that we were explicit in our demarche. We were very explicit and that this is a work in progress, and that we are going to continue to let be know our position, not least because that he has sought our inputs and we are going to try to give him our inputs as explicitly as we can.

CORZINE: You respond particularly to the human trafficking issue, which has gotten some recognition as a problem. Is it a growing one? Is it something that is different than the kidnapping issues that have been more of the limelight?

CHARLES: I know it is an issue, and it is one that we, at this bureau, have people who know more about it than I do on, and what I will do is I will look into it and see if there's been a change recently and see if I can get back with specifics to you on that.

CORZINE: And TPS?

CHARLES: The same.

COLEMAN: Thank you, Senator Corzine.

Senator Nelson?

NELSON: Thank you, Mr. Chairman. Mr. Charles, tell me about who, in your office, is having direct contact with the families of the three hostages?

CHARLES: Let me ask. At present I'm told that no one has had direct contact because these were DOD contractors, they were not State Department. However, I will tell you that, personally, I've already put inquiries out because, to my view, we're in a position, right now, where these are Americans, they're being held hostage and, frankly, anywhere in the world, it should matter, geographically, where they are, we should be 100 percent committed to getting them back here safely. And I will tell you -- you didn't ask this -- but I will tell you this; personally, I worry over this job. I don't go to sleep well at nights because I worry about pieces of it and this is one piece that troubles me greatly.

NELSON: You're exactly right. Nobody's been in contact with them. Two of them are from Florida, one of them is from Georgia. But the one, Stensell, from Georgia, grew up in Florida, went to high school in Florida and his parents are in Florida. And I just spoke with his parents today. We've talked to all the families. I can tell you that having been joined at the hip with Senator Roberts, of Kansas, on the question of Captain Scott Spiker, the first American flyer shot down in the Gulf War, that were it not for the Navy...

UNKNOWN: I apologize.

NELSON: That's OK.

In the case of Captain Scott Spiker, were it not for Senator Roberts and I raising Cain, and fortunately, the Navy has responded and they have given great comfort to that family. And, of course, you can imagine what that family is going through. In this case, 12 years ago, Spiker is shot down, he's declared dead, his widow remarries, and then the Pentagon changes the status to missing in action instead of killed in action, and just this past fall, a year ago, the Navy declared him missing, captured. And I want to commend the Navy because they've really reached out; they've tried to undergird (ph) that family.

And that's what we ought to do here. These are three Americans who were under contract to the Department of the Army and they are being held because they are Americans. And, fortunately, their being held and, fortunately, they look to be fairly healthy.

And so, I want to make a direct appeal to you, on behalf of these three families, that you direct a high-level person to keep these families in the loop and, if necessary, have them cleared, as the Spiker family is, for certain levels of classified information so that they don't have to worry 24 hours a day which they're going to do anyway but at least it'll ease a little bit of their worry.

CHARLES: Senator, you're speaking directly to my heart and I will do that, and I will tell you that you hit closer than you know. I'm a Navy officer, and a good friend that I grew up with years ago was very close to Scott Spiker. And so, I take this, independent of that, I will take this back, we will be in contact, and I believe Counselor Affairs has been but maybe -- no maybe's about it, we need to do more, and I will do more.

NELSON: Now, I've spoken with General Hill about this case and, of course, General Hill is one of the best officers we have representing our country and this is a very, very difficult situation. As Stensell made the plea on the videotape, if you come get him, they're going to kill him.

And so it's a very, very difficult situation. But it's one that we got to keep after because if people hadn't been keeping after the Navy, they would have forgotten about Scott Spiker. And so we're going to keep the attention on this issue, and I make a personal plea to you, on behalf of the three families, to keep pressing this issue; I know General Hill is.

Thank you, Mr. Chairman.

COLEMAN: Thank you, Senator Nelson.

Senator Feingold?

FEINGOLD: Thank you, Mr. Chairman. Mr. Franco, I remain concerned about the enormous gap between the areas subject to aerial fumigation and much smaller areas in which alternative development programs are taking place. The Colombian government claims that they eradicated 303,000 acres of coca and 7, 516 acres of poppy in 2002.

In that same time period USAID states that they supported the cultivation of approximately 25,000 acres. What measures are our government and the Colombian government taking to make sure aid is available to small farmers willing to eradicate? How many families, in total, have been affected by aerial fumigation? How many families have been helped by alternative development programs? And what happens to the families who are sprayed and given no alternative development assistance?

FRANCO: Well, first, Senator Feingold, I know of your continued interest in this area, and we share the same view which is to provide alternatives and assistance and build democracy in those areas where we're conducting fumigation and other counternarcotics activities.

Specifically, what we have done at AID are really two things in this area. We've tried to focus, Senator, in those areas where there's been the most aggressive fumigation taking place. And that's because that's where the greatest need has been.

And we have, to date, benefited approximately 33,000 families directly with alternatives that range from finding alternative markets and products that can be cultivated. In my testimony I gave examples of rubber, casaba, things in the area that our technical experts have identified as profitable and for which there are local and national markets.

Secondly, we've also engaged in what I believe a very successful voluntary eradication effort at the community level, particularly in the Putamayo area. And that has been an effort by our part to persuade communities, working in a community level not an individual farmer level that has been in the past, not as successful in the previous Colombian government to provide communities that buy-in as a whole, with a package of community and individual services. And we've successfully, as a consequence of that, had over 21,000 hectares voluntarily eradicated. And a host of packages of assistance provided to those affected families.

So our focus is on those areas, whether we have active fumigation, we try to persuade communities to voluntarily eradicate and then work with our colleagues at ILN and NAS in Colombia to ensure that those areas are not fumigated or sprayed and that alternatives are then available to those communities.

FEINGOLD: Did you say how many families in total have been affected?

CHARLES: We have provided assistance to 38,000 families.

FEINGOLD: How many have been affected by the fumigation?

CHARLES: In the entire -- I really don't know, we can try to get that information...

FEINGOLD: Get that to me.

CHARLES: ... about affected families.

FEINGOLD: See if you can get that to me.

CHARLES: Certainly, sir.

FEINGOLD: General, thank you for being here. I have a couple of questions concerning the private military contractors.

And before I ask that, I'd like to also express my grave concern for the three American civilian contractors who were kidnapped and are currently being held by the FARC.

General, U.S. laws specify the maximum number of military personnel and private military contractors working in Colombia. Recent media reports indicate that U.S. contractors are circumventing these limits and congressional intent by hiring non-national subcontractors. Is this the case?

HILL: Sir, I'm going to defer the contractor issue that you're talking about to Mr. Charles. The law says that we can have 400 military people and 400 contractors. As we count those contractors, we are under that 400 in both cases.

FEINGOLD: Mr. Charles, are these limits being circumvented by hiring non-national subcontractors?

CHARLES: There certainly is no -- that I know of -- no circumvention of the law. And I understand the military cap issue and I have to get into it more deeply. But, again, I will take this under consideration. I don't know of that occurring, but I will get back to you on that.

FEINGOLD: OK.

HILL: Can I jump back in before we go any further?

FEINGOLD: Yes, General, go ahead. I have another question for you as well.

HILL: And the reason I do that, is because we've been discussing this at great length over the last six or seven months. The law is very clear in terms of what it says. It says that military people and contractors in support of Plan Colombia.

We have, both within the military group in Bogota and out of the embassy, been very scrupulous in how we have counted those folks. In fact, we count more to meet the intent than are really there. We could, in fact, not count some of them. But we try to go above to ensure that we meet the intent of Congress on this. And we have not played fast and loose with this.

FEINGOLD: So, you know how many are there, how much they cost and what they're doing?

HILL: I do, sir.

FEINGOLD: Are they cost-effective?

HILL: I believe that they are cost-effective. Yes, sir.

FEINGOLD: Who's responsible for their safety and who is responsible for their actions?

HILL: I'm going to turn back, again, to the INL, because they work for INL.

FEINGOLD: Mr. Charles?

CHARLES: Let me just say that the safety issues are, again, a big -- I've been here three weeks; this has taken up a chunk of my time already here, because I'm concerned about it. I'm concerned about and have had to get full briefings and expect to be down there shortly to understand better exactly what we do.

Just so you know, I have ordered a top-to-bottom program review, probably in 90 to 120 days of every single program within INL, so that I understand where every dollar goes. And in that same vein, there have been, obviously, a lot of reporting on this. There's also been a lot of reporting up to Congress on this.

But I want to tell you that we are looking to maximize safety for every one of the contractors. I do think they are cost-effective. They are very brave people out there flying in a combat, more or less, combat environment, or certainly hostile fire environment. This year already there have been something like 339 shots against contractors who are doing the spraying. There were last year: 194 and the year before: 191.

I think part of that is a reflection of how well we're doing in the sense that the FARC, and others, that we're spraying against, know that their revenue's going away. And it's going away as the charts earlier showed in larger and larger numbers; the revenue that they're going to derive from this, and so, they're reacting to that.

The safety issue is a big one and one of the things I did, actually, as I went through and I asked -- I want to know exactly what we're doing with every plane. And this is, basically, what I have learned so far, and I think I take it on that we bear some significant responsibility for their safety. There are three types of aircraft that are flown by the contractors in this domain: the OV-10s, the T- 65s and the 802s.

The OV-10s are twin-engine planes by choice. They are flown by choice because twin-engine, as Senator Dodd pointed out earlier, in areas where you've got triple canopy jungle or you've got a very difficult environment or you may encounter hostile fire, this is the place you want to have the greatest safety.

In addition, there's Kevlar around the hull -- they're heavily Kevlar'd -- in addition to which, in some airframes down there, you've got a half-inch thick steel. On top of that, they all have bulletproof vests, they are each given bulletproof blankets to work with -- they can use them underneath them.

There are a range of safety provisions that go into training. They have equipment, including a weapon, they have strobe lights, they have signaling things in case they go down, they have air survival kits.

The bottom line on this is that we -- and I am very dedicated because of some of my past lives -- to this proposition that they have to be absolutely safe in this environment, to the greatest extent possible. You're talking about flying in an environment where there are shots being taken at them and there's risk involved, as there is risk involved in a lot of things.

One thing, I think, there's a misnomer out there that somehow you can create a gap-free airframe. A-10 Warthogs are not gap-free flying in their zones. There are places where you're going to get hit. The other thing is I have made sure that we have a significant package going in a SAR package and a protection package with them at every flight that goes in.

So, you have one SAR helicopter, you have two helicopter gunships going in with them and you have two transports. Each of the transports has between 10 and 15 fast reaction forces, including EMTs. So, I will tell you that I take the safety issue very seriously.

I have already ordered an additional review, just because of the Air Wing publicity that's occurred. I want to know exactly what we're doing down there. And I think you will continue to hear from me a significant concern on that. I'm also very respectful of the caps, and again, I will be coordinating with General Hill. But I have no reason to believe that we're not working closely within them.

FEINGOLD: I thank you for your answer, I thank the witnesses.

Thank you, Mr. Chairman.

DODD: Thank you, Senator Nelson.

We've got a vote on and the intention, I think, would be -- the chairman is taking an important call to try and wrap up here in the next few minutes. And so, why don't I turn you, see if you have any additional questions you'd like to ask of this panel.

If not, then we'll excuse them, adjourn, and come back with the second panel.

NELSON: Well, of course, I always like to give General Hill an opportunity -- and I'm sure you've already covered this in your comments, and if so, don't repeat it -- but to express, from your standpoint, your satisfaction with the progress, particularly under the new president of Colombia. And where you think all of this is going in getting a handle on all of this drug running that's going on down there.

HILL: Well, thank you, Senator, I did say that and I discussed it in private with Senator Dodd, also. And I had similar conversations with Senator Coleman. If you would allow me one moment, though, I'd like to go back on one of your statements because i feel personally embarrassed by it, because you and I have discussed it. And that has to do with who is talking with the families.

Last week, the leader of the FARC element that grabbed the three hostages was killed by Colombian forces. They knew where he was, they undertook an operation, they went out to arrest him, they got into a firefight and they killed him. I thought that would be useful for the families to know and I asked that the families be personally notified of that.

If they were not notified of that, which you indicated that they weren't, I am personally embarrassed by that. I will go back and find out what happened to that instruction and I will make that known to the families, because I felt like it was something that they would like to know, that the Colombian military has not forgotten, the U.S. military has not forgotten those American citizens.

And the two of us, the two organizations, are still trying to find them and will take whatever appropriate actions when we do that.

NELSON: And perhaps, you and Mr. Charles could designate a single point of contact for both of your organizations.

HILL: Yes, sir, and we have already written ourselves a note to that effect setting here at the table. We will take that on. You have my word on that.

CHARLES: And mine.

DODD: I thank you for your answers, though, especially since by the way, and I told my colleague we had raised the issues as well. I had the mother of one of the few being held hostage -- lives in Connecticut -- and I think the relative of one of the third (ph) is a relative of the chairman's, as well.

So, we all have a strong interest and I think your questions about we can keep these families informed will be tremendously helpful.

There are probably other questions to be asked of you. I mean, this is a complicated subject matter.

But, let me say to you, Mr. Charles, that I appreciate your candor and your willingness to give back and you are new on the post, but some of the questions that have been raised by Senator Biden and myself, regarding this amnesty law. It's going to seem a little odd to us if there wasn't some contact prior to this amnesty law being written.

And going right to the heart of Senator Biden's question, that is, of course, the issue of extradition, and so forth, of people. If we're going to be providing amnesty -- actually to some people within the AOC they would see that we had actually indicted. If we're finding out they're getting amnesty if they show up, it's going to create some real problems. And I suspect there was some contact, we're going to need to know about that.

So, getting back to us would be tremendously helpful.

General Hill, we appreciate your leadership and your willingness to keep us well informed as to how this is progressing.

HILL: Thank you very much, Senator.

DODD: So, I thank you.

And on the behalf of the chairman, the committee will stand at recess until we come back from the vote and the second panel can get ready to appear.

Thank you very much.

(RECESS)

COLEMAN: This hearing is called back to order.

COLEMAN: We will now proceed with the second panel: the Honorable Mark L. Schneider, senior vice president, International Crisis Group, Washington, D.C., Dr. Julia Sweig, senior fellow and deputy director, Latin America Program, Council on Foreign Relations, Washington, D.C., Mr. Philip McLean, senior fellow and deputy director, America's Program Center for Strategic and International Studies in Washington, D.C.

As I indicated to the earlier panel, your full statements will be entered into the record. And we will begin with Mr. Schneider.

SCHNEIDER: Thank you very much, Mr. Chairman.

First, let me express my appreciation to you for holding this hearing and for inviting me to testify again on Colombia. The hearing comes as has been alluded to, following an impressive electoral exercise by the Colombian people, in the face of FARC and AUC violence and intimidation. That truly shows their determination to maintain their democracy.

The International Crisis Group has been working in Colombia for just two years. Here, as we do in some 40 countries around the world, ICG's field analysts seek to identify the drivers of conflict, and based on that analysis, to identify policy responses that can help to prevent or to mitigate deadly violence.

I've been asked to speak about the humanitarian situation and the negotiations with the paramilitary, in relation to Plan Colombia. I think it's important to recognize that Plan Colombia has come to mean virtually all policies in Colombia and all policies by the United States that aid Colombia in coping with drugs and with the conflict.

ICG's concerns are that the government and the international community assign too little priority to the humanitarian crisis facing millions of Colombians. We're also concerned that government policies risk undermining the legitimacy of its security strategy, and diminish, therefore, its ability to create the political context that can assist in defeating the insurgents' military pursuit of power. As a result, the conflict is likely to continue far longer than current projections by, either Colombia, or the United States.

There's no question that Colombia is faced with a serious security threat, and you've described the three illegal and dangerous groups: the FARC, the ELN and the AUC. With respect to the AUC, their tactics often outstrip the guerrillas and brutality in the United States government rightfully added them to the terrorist list. However, too often, elements of the Colombian armed forces and police are not only willing to witness, but complicit in assisting expansion of the paramilitary.

With respect to the humanitarian crisis, perhaps the most persistent tragedy are nearly 3,000,000 civilians displaced from their homes in recent years. If one thinks about it, it's equal to five times the population of Washington, D.C. Last year alone, some 320,000 more were forced to flee from their homes as a result of the violence. And approximately half, according to the United Nations, received no assistance at all, neither from the Colombian government, private sources, or the international community.

Some 75 percent of the IDPs are women and children, and a significant percentage, far out of proportion to their representation in the population, are Afro-Colombians and Indigenous persons. The humanitarian crisis really does also include the 3,000 men and women and children who have been kidnapped virtually every year over the past several years, mostly by the FARC and the ELN and held as hostages in abysmal conditions in direct violation of international humanitarian law.

It should be noted that the AUC, while it depends on kidnapping far less for its financing, still was accused of kidnapping 180 people last year.

And while you've heard from some of the witnesses previously that there appears to have been a decline in the numbers of massacres and individual killings, the human rights groups and international organizations point to an increase in forced disappearances and extra judicial killings during that same timeframe last year. The main victims are human rights advocates, trade union leaders, members of indigenous and Afro-Colombian groups and peasants.

There are also 11,000 children, who essentially are forced into military bondage by the competing military forces. And throughout Colombia's rural area there are more than 100,000 personnel mines strewn throughout the country. A recent report on humanitarian crisis which you've provided to the committee calls for greater priority to be given to the plight of these victims.

And there are two specific recommendations that I'd like to raise with you, Mr. Chairman. The first is that the Colombian government needs to multiply its aids significantly beyond the $30 million going to the solidarity network. It's called the Social Solidarity Network, and the international community should follow suit: as a first step by meeting in full of the United Nations $63 million humanitarian action plan. Only about 10 percent has been donated.

Secondly -- and this perhaps deals with the broader issue of the political context as well -- not just in Colombia, but regionally. The government of Colombia, ideally with the support of the United States and the international community, needs to design a national rural development policy that is equal urgency to the military security policy. The conflict in Colombia is concentrated in more than a dozen rural departments.

The bulk of the displaced are from those areas. The lion's share of coca cultivation is from those departments. The poverty rate in those departments is more than 80 percent, and that's where the guerrillas have survived for 40 years.

It's also where 1 percent of the population own 53 percent of the arable land. It seems to me that it's time that we need to recognize, we have to go beyond simply alternative development in dealing with the problem of the coca cultivation and look at what needs to be done for rural development through Colombia, with respect to access off, rural of law, basic infrastructure, public services, police protection and economic opportunity.

And this reform, more than any other, would change the political dynamic in Colombia. And that should be the priority task of Colombia, and the international donors, as they prepare for a donors' conference early next year.

And as you've been talking about the region: Bolivia, Peru, Ecuador; that same concept seems to be applicable and it's the kind of concept that deals with the political instability that's occurred in those countries as well.

Now our second major concern and second issue you wanted me to address relates to the Uribe administration's actions and inaction, with respect to the paramilitary and its downplaying of civil liberties. We believe those two aspects continue to undermine the legitimacy of security policy internationally, and in effect, its ability to drive the conflict toward a negotiated solution.

We have a report on negotiating with the paramilitaries, which you have, and we don't challenge their goal, that is, the government's goal of a finding a way to remove the AUC from the field of combat, possibly through negotiations. But we've argued strongly that the Uribe government must remove the suspicion that the motors for the negotiation have as much to do with cleansing the paramilitaries and their supporters and legitimizing their power, as removing them from the conflict.

Demobilization, if it comes it has to be done in a way that does not undermine the rule of law, but does not impunity. And it has to be done in a way in which people are thinking about the impact on the ultimate goal, which is the negotiated, demobilization of all of the illegal groups in Colombia.

This is not just our concern. The United Nations commissioner for human rights this year, said that its concerns, quote, "Refer specifically to state agent's tolerance of support for and complicity with the paramilitary.

COLEMAN: Could I -- summarize your testimony, Secretary Schneider. Thank you.

SCHNEIDER: OK.

Let me just -- if you want, I'll comment on the alternative sentence or veiled amnesty proposal, which relates to this issue.

Our concern, at the moment, is that that proposal follows a series of other legislative proposals which would restrict habeas corpus, which would grant to the military the ability to detain without judicial order, engage in house searches without judicial older, hold detainees for 36 hours. In that context, the proposal to permit at the end of a judicial process full pardon for all paramilitaries, regardless whether they're followers of the leaders, regardless whether they're coerced or not, and possibly permit individuals who ordered crimes against humanity to absolutely free.

We believe that that is not neither in the interests of ending the conflict, nor in the interest of sustaining the institutions of the rule of law in Colombia.

Thank you.

COLEMAN: Thank you very, very much.

Dr. Sweig?

SWEIG: Thank you very much, Mr. Chairman and Senator Dodd. I apologize I wasn't able to be with you last week when the council came up to see you.

I'm happy to be here to address the regional dimensions of Plan Colombia and say, right at the offset, that I do so with a great deal of humility and respect for the complexity of Colombia and the region. I'm also concerned that the bipartisan policy of Plan Colombia and the Andean Regional Initiative may not be structured to bring peace and prosperity to the region as much as we succeed on the drug front.

That said, I commend the chairman and the committee, as well as the Bush administration, for the seriousness of their efforts.

Let me summarize at the outset my statement, in case I don't get to finish it. There are three critical ideas I'd like to convey. First, the disproportionate emphasis on our policy on drug eradication and interdiction at the supply end of the narcotics industry needs correction and balancing.

Second, we cannot do the guns without the butter, meaning, in Colombia especially, the United States needs to emphasize planning for post-war reconstruction. Security assistance is necessary, by all means, but should be offered simultaneously with, not instead of major initiatives to address the structural inequalities that make Colombia and the Andean region so vulnerable.

And third, the critical role of local elites. With local elite commitment to nation building and a social contract, the United States and the international community will, indeed, have a major opportunity to help bring peace and prosperity to the region. But without buy-in from local elites, we can only help at the margins.

I believe our policy really has come to a crossroad and I want to just point out a point in history and then get to those structural questions by way of context.

First, the history: in 1958, 45 years ago, President Eisenhower and CIA Director Alan Dulles sent a team to assess conditions in Colombia after the decade-long conflict la violencia had killed 200,000 people.

Forty-five years ago the Eisenhower administration concluded that because of Colombia's predilection for violence, the absence of state authority and rural areas, vastly inequitable land distribution, and widespread lawlessness and poverty, the country risked, and I quote, "Genocide or chaos."

Although the team doubted the local elite would agree to major reforms, the United States recommended a comprehensive nation-building package to Secretary of State Christian Herder and the new Colombian president. Washington offered to provide Bogota with help to strengthen its judiciary, implement a significant land reform and eliminate the rural guerrilla insurgency, which that at the time, was between 1,200 and 2,000 people.

Only the security recommendations were accepted and today, we face structural problems, but of a far greater magnitude, making Colombia and also the neighborhood, intensely vulnerable to drugs and thugs and all manner of social and humanitarian crisis. And really, frankly, placing, I think, the American commitment to democracy, security and the rule of law at risk.

We've heard already in earlier testimony and in comments from the senators on through the state of play of U.S. policy how much money we've spent the successes within Colombia of eradicating coca. What we didn't talk about was, of course, that as the coca eradication has gone down in Colombia, it's begun to come back in Bolivia and Peru.

We've addressed also the disproportionate funding matter -- I had it at 75 percent, 25 percent, Senator Dodd indicated it's a 4:1 ratio of military drug assistance versus social economics. So, however you run the numbers, clearly, I think, we're off balance. And because of not only the balloon effect, but the shared problems that the region faces, if we want to try to reduce coca and opium in the region, I suggest looking for answers not within, but outside of the counternarcotics box.

The regional dimension of the security crisis is striking as porous borders and weak neighboring governments, whether by sins of omission or commission permit Colombia's illegal armed groups to rest, refuel and reap profits in what is an environment close to the Wild West.

Of course, President Uribe and the U.S. Southern Command have begun to initiate a regional security dialogue, but Venezuela's absence from that process represents a major blind spot. Likewise, though Brazil has offered intelligence assistance through its satellite network, also greater leadership on the ground from the Lula administration would be most welcomed by local, regional actors.

The regional dimension we can come back to over the diplomatic side in the Q&A, I just wanted to reinforce that the striking inequality and poverty that really are the cause of the region's vulnerability to drugs, need a different kind of attention. If I could just give you a couple of examples of what I'm talking about.

For example, one matter, which is related to the question of local elites' commitment to the region and to nation-building and a sense of a social contract, tax revenue and collection as a percentage of gross domestic product in Colombia and throughout the region is woefully lacking. President Uribe has tried to address this and the elite is coming around -- I'll just give a couple of examples and then wrap it up.

As a percentage of GDP, tax collection is 13 percent in Colombia, up from 10 percent in 2000, but still very, very low.

SWEIG: Of 20 million economically active members of the Colombian population of 43 million, only 740,000 Colombians pay income taxes. Evasion is widespread because land taxes are administered by municipal authorities under the Colombian constitution and those laws are practically ignored by landowners as local governments are often too weak to exert coercive power over local elite interests, or are subject to subornation by illegal armed groups.

In Peru and Ecuador, the tax collections are very, very similarly bad and just by way of reference, the OECD reports that, by contrast, in the United States, it's about 29 percent of GDP. Poverty and incoming equality indicators are equally shocking 50 to 60 percent in urban areas, 60 to 80 percent in rural areas, and this has a direct effect on whether growth can actually help these countries.

The World Bank has released recently some numbers which lead to the conclusion that inequality has actually gotten worse over the last 30 years.

Anyway, I can go and I will be happy to also address the matter of Bolivia and the elections the other day in Colombia and what those suggest for U.S. policy.

COLEMAN: Thank you very much, Dr. Sweig.

Mr. McLean?

MCLEAN: Thank you, Mr. Chairman for inviting me here and for this opportunity to discuss the Colombian economy.

Colombia's economic performance is clearly crucial. Colombians need security, but they also need a growing economy. A major question is, "Can they afford both?" At the outset, let me make three assertions, points not always acknowledged and perhaps contrasting with my colleagues here.

While the country's institutions are failing to meet the needs of the citizens in many important respects, Colombia's not by any normal definition a failed state. It is capable, once again, of being one of the better performing countries in the region. While poverty, now affecting 60 percent of the population, requires urgent attention, it is not the primary cause of violence and disorder. In Colombia's case, it is the conflict and corruption fueled, most importantly, by the narcotics trafficking that best explain why a country previously headed for success now suffers such misery.

Colombia's leaders must find the resources to overcome the violence, while offering the hope for a better life to millions now stuck in poverty. Without law and order, the economy will not return to significant levels of growth. Without economic growth, the country's leaders will not have the public support for the tasks required.

For many decades, Colombia was known as a well-managed economy. In the 1960s, its performance was ranked with Chile as a country taking the right path to identity. In the 1970s, it was able to begin diversification away from the dependence on the coffee culture and showed signs of a vigorous manufacturing base. As late as in the mid- 1980s, the income gap between rich and poor in Colombia was narrowing, rather than widening, as it was then, and as it continues to be in most developing countries.

Throughout the 1980s, normally referred as the lost decade in the rest of Latin America, Colombia was able to maintain modest levels of per capital growth and avoid restructuring of its debt. For all of that success in the 1970s and 80s, in retrospect it's clear: Colombian leaders neglected several fundamental national challenges.

First, too little was done, as my colleagues have pointed out, in the good years to overcoming the daunting geography with highways and railroads to knit the country together. Second, not enough was done to improve the life in the countryside. Tragically, generations have been forced to move from rural subsistence to urban poverty. Third, as that last example suggests, even before the rise of the powerful narcotics barons, Colombia's judicial system was notably weak.

Only a fraction of the immense revenues of drug trafficking returns to Colombia, most drug money remains in the United States. Still, the impact of those ill-gotten gains flowing back to Colombia, totaling something $1.5 billion to $3 billion not more than one percent of the GDP of Colombia has been disastrous. The rise of narcotics trafficking is closely correlated to the rise of criminality and violence, and that, of course, has been deeply damaging to the Colombian economy.

The most specific damage was, of course, Colombia's ability to enforce law: the already weak justice system was nearly crushed by the Medellin cartel. The drug profits fed the growth of the violent groups and it ended the credibility of their political pretensions.

Colombia's in a maze with no easy way out. The low-cost answers, to its predicament, have been founding wanting. It has tried and it failed to negotiate peace first for the drug mafias and then with the guerrillas. Peace was some of the Potter Military groups may still be responsible, but if that were to happen, and I have my doubts, the government now recognizes it will not come cheap or cheaply.

The Colombian public has been tempted to believe, as many foreign observers are, that the country could overcome the violence by adopting more generous social policies in a more decentralized style of government. After experiencing disappointment with all these answers, Colombians last year seemed to accept the peace would be costly and elected a law and order president.

Social policies introduced in the early 1990s did help reduce poverty for a time, but eventually, fiscal policies spun out of control, debt rose, and the country suffered its first recession in seven decades. In 1999, the economy contracted by 4 percent, which probably wiped out the gains of the previous decade. Unemployment reached 20 percent and adding to the country's woes coffee prices plunged to historic lows, half of what they had been 10 years before.

When President Uribe came to office 14 months ago, he inherited a weak economy and a government struggling with a heavy debt load. He adopted an orthodox approach to government finance, even to the extent of broadening the application and unpopular value-added tax and sought to rein in expenditures.

Well, the Colombian president was trying to constrain spending; he was also determined to give more support to the armed forces and police. It is often remarked that in a nation supposedly at war, Colombia was spending hardly any more than other countries in the region on security. Uribe decided to finance, increase spending on security services, with a one-time tax on wealth.

Raising taxes and cutting expenditures is not the usual formula for stimulating the economy, but Uribe had little choice. The assumption of his policy was and is and it's not often expressed, by improving the security climate, he would improve the public confidence and the cost of increased consumption and investment.

To a degree, a raised approach is working, people are more secure by most measures, international markets did react favorably, there are signs that investors abroad, clearly many of them Colombians, are increasing both direct and portfolio investment. Exports are rising and employment is falling, but all of this is relative to a very serious situation.

In conclusion, I'd just say that exports, in fact, may play a large in part in Colombia's export from the current economic squeeze. Manufacturing exports are still less important than agriculture and extractive industries, but Colombia's manufacturing sector has long shown a potential for take off. Colombia is the most active trader in the Andean Pact and has taken more advantage of the Andean trade preferences, first described to the United States in 1992.

And exports are growing and particularly, those exports granted under the trade preferences have increased 20 fold in the last six months. Colombia, of course, will best reach its export potential when the global trade liberalizes. Those agreements promise to lower barriers for new markets for them. But Colombia's most important market is the United States, the destination of 40 percent of its exports.

Colombia and Colombian officials are skeptical that the World Trade Organization, the WTO and FTA negotiations will end by 2004 and may even linger over it beyond the expiration of the preferences, and are therefore, looking towards getting in line for a free trade agreement.

Columbia and the United States, in my view, are locked in a partnership. As time goes on, the United States security role is certainly is going to decline. But it seems to me, that the next transition, the better transition, a positive transition to a new relationship with that country so close to us, should join together in a mutually beneficial free trade agreement.

COLEMAN: Thank you very, very much Mr. McLean.

First, I want to say to Dr. Sweig, I'm glad that you mentioned the issue of focusing on, not just supply, but on demand. We've had a hearing today talking about drugs in Colombia and I think I've mentioned the fact that there's a great deal of consumption in this country. And if we don't somehow get that under control, I'm not sure how you fight a winning battle.

It's not the focus of this hearing, but clearly that issue in the same breath has to be raised and has to be recognized and we have to do the things that we have to do in this country to better address that issue.

When I visited Colombia, there were a couple things that impressed me. I mentioned, Mr. Schneider, the human rights issue just about in every conversation. I had concern at the time that I was there, there was concern regarding one of the generals, Air Force General Velasco.

It had to do more, I'm sure you're familiar with the incident, more with whether an incident was adequately investigated, not whether he did anything, but whether, in fact, looking at what happened in Santo Domingo, was the light shone on that and did we uncover what happened?

Not too long after that, there was wide agreement that General Velasco -- I believe my perspective needed to be removed -- and that's happened. Do you see that as a -- the reason I say that is I walked away with a very clear impression that Colombia is facing the struggle that we've all touched upon. Dr. McLean said it very clearly, "You can't economic security without national security." But we have to have the confidence of our people, we know that.

Do you see the Velasco case as a model? Did that bolster your sense, a little sense, a greater sense of optimism and Colombia's ability to deal with its human rights issues?

SCHNEIDER: Unfortunately, no. I think that right now the situation is one where much more needs to be done by Colombia, wish respect to investigating instances of violation of human rights, by state agents, the relationship between military and paramilitary. And then, those investigations, there used to be a transparent in some way. Discussion of what's been done so that then the message is sent within the different state agencies that this is no longer acceptable.

We've suggested three things that would give you greater confidence that the negotiations with the paramilitary is, in fact, possible to achieve the end result of their removal, then it's not a deal. And those things I would talk to Colombian government people, many of them would agree.

First, those paramilitary groups and leaders that are not engaging in the cease fire, they should be the highest priority to go after with law enforcement and military. That hasn't happened.

Second, that there needs to be a clear effort, because the government said it's done more than any other administration, and it may have. But no one has any credibility in their assertions. Do what other countries did: create a presidential ad hoc commission to document what's been done. Have credible, international journalists from that, perhaps with some Colombians? And then let them document what's been done and what needs to be done.

That's the second thing we've urged.

And the third is, right now there are no specific units of prosecutors that people have very great confidence in. (inaudible) has dropped a great many cases that were on the tracks in the past. There needs to be some evidence that the government is willing to take the steps to help create a corps of prosecutors to go after that.

So there are things that can be done that would give us greater confidence. At this point, it's pretty hard. Just in response to one of the other questions that came up about why did President Uribe go after some of the human rights organizations in that speech?

Just prior to the speech, a group of 80 human rights organizations, many of them very legitimate from the plataforma colombiana de derechos humanos democracia y desarrollo. Eighty with, I don't know all of them, but I know a lot of them. They came out with a very, very critical report on the government's treatment of human rights. And I think that he reacted very instinctively to that.

SWEIG: Can I add a small footnote to that?

COLEMAN: Dr. Sweig.

SWEIG: And also addressing the earlier question.

The speech was made at a ceremony in which the Air Force commander that you mention stepped down and the new Air Force commander took up his charge.

I read that to be, not only an indication of the president's discomfort with the group of 80, but also, it suggested to me that perhaps, the comfort level with the president within the armed forces there may be some degree of unease and that he's got some issues that he's working out within his own armed forces.

And that was the bit of red meat that he going to deal with that very touchy issue internally within the military; that stepping down of the Air Force general indicated.

COLEMAN: Thank you.

I have other questions, but I'm going to defer to my colleague Senator Dodd and then we'll have a second round of questions.

DODD: Well, thank you, Mr. Chairman, and I won't take much time.

DODD: I'm very grateful to all of you for your patience and being here and I thank the chairman for including you in today's hearing.

You addressed all my questions just in your opening comments and your remarks and I thank you for that. I wonder if you might, beyond, Mark, your comments about the cases that could be pursued -- stepping back for a minute. And I think your characterization of having talked to President Uribe and at least one meeting and apparently he's done it with others and admits his language was inappropriate.

And he strikes me as the kind of person, frankly, in the meeting, if he didn't think it was, he'd tell me that, too. That's one of these things where he's necessarily trying to satisfy a United States senator, I think he honestly feels that.

Now whether or not other actions reflect that and so forth, is another matter. But certainly being in public life, there are plenty of speeches I've given where I kind of wish I'd chosen other words, maybe in retrospect. The words don't bother me; the question is so much as, what the actions are. And what are the implications of those actions. And putting aside the legitimate legal questions and so forth associated with an amnesty program.

I'd like to ask you the question about what happens in effect -- let's assume one goes forward, and you, quote, "reintegrate these elements into Colombian society/" What are the effects of that, in a sense? And that may be your more significant question. When you start looking at the longer term picture of how Colombia gets back on its feet again.

And I wonder if you might address that issue.

SCHNEIDER: I think you have to think about that whole process of demobilization and reintegration as one that is probably going to have to take place in two really very finite stages. The first is the cease-fire really has to be complied with; they have to stop engaging in the kinds of actions that we all know.

And there has to be monitoring of that, to give people confidence that there is a change in attitude of these who have engaged in these kinds of actions in the past and at the next stage is one which they're going to integrate into society.

The other is that, there has to be chance to meet clearly. You have to think about how you protect them. You have to figure out some way that they don't get killed, because the next stage is if you do get to the point where you're going to demobilize the FARC and the ELN, this same problem exists.

DODD: And a problem persisted in the past...

SCHNEIDER: Of course.

DODD: ... was one of the examples where you had demilitarization and thousands were killed.

SCHNEIDER: And that's one of the reasons why it seems to me there needs to be a greater deal of thought given to regional demobilization as a mechanism where you're able to manage it, because that's also one of the ways, perhaps, to bring in let's say first, ELN, into a process in a regional way.

But going back to the question of reintegration and the amnesty law, I think that you have to establish certain bottom lines. One of them is that you can't have been the author of crimes against humanity and go scot-free. Constano: If you did all of the judicial processes for all the crimes that he's admitted to, he probably should go to jail for 600 years. It's not a question of that occurring, but there is a question of doing some jail time for some portion of those who are responsible, as authors, of crimes against humanity.

That doesn't mean that every single member of the paramilitary is going to go to jail, they're not. But it does mean that there's got to be some bottom line. The other is there's got to be a date, certain. Either you go into the cease-fire now and agree to then- accepted benefits down the road, or you're simply a criminal.

Because the problem is that if there is not a deadline, they can go out and let's say they want a certain amount of land. And say, "I can go out and kill those people, acquire that land, and then I'll apply for cease-fire and the benefits." So, there has to be some bottom lines in the legislation that aren't there right now.

DODD: Yes.

SCHNEIDER: One of the other things they might do is ask for the Inter-American Court of Human Rights to examine the legislation to see how it fits with Colombia's obligations under international human rights conventions.

DODD: Well, we're not even sure that we're going to find the answers to whether or not there was any consultation here. I suspect there might have been, at least, some awareness of it, but we'll see.

Julia, you and Mark have both expressed the need to focus on economic humanitarian side of the Colombian conflict and I certainly agree that we need to do far more in that area and the dollar ratios of where things are going. Mark pointed out that the strongholds of guerrilla organizations are in the areas of the highest poverty in the country. I think the poverty levels hover around 80 percent.

And it shouldn't be any great leap of understanding to appreciate the fact that the guerrilla organizations have been most successful in the areas of the highest to be in poverty, generally speaking. I know there may be some exceptions to that, but generally speaking, that seems to be the case.

And I'd like to know if you might address, in the limited time here, but how you go about tracking that problem. When in most security cases, the security situation doesn't lend itself. In fact, the irony is, in the sense if you trying to do it where the guerrillas, if they're either the strongest in these areas, how then, even if you had the dollars to get them in to make a difference? Because you don't have the security to be able to carry that out.

So, there's kind of a catch-22, I guess, is the overused expression here to describe trying to get the dollars, because if you could -- and I'm sympathetic to that -- and I'd like to have you address as well the issue of a free trade agreement. I've been supportive of some, I've had some difficulty with fast track authority, cases where I think the agreements were not going to involve certain things that should be included in free trade agreements.

But, there's a case to be made here, that if you really -- what these countries need is the ability to have economic growth. Certainly, when I would go in stores and I see, "Made in the People's Republic of China" then I know very well that that same product might be in Ecuador, it might be made in Colombia, I'd prefer it be made in the United States, but if it's going to be made somewhere, why not make it in the place that could really use some help today.

Not that the People's Republic of China doesn't, but if you had to make a case to me, I'd prefer, candidly, if I had to choose someplace outside of my own country, these countries that are struggling, faced with civil conflict, lack of jobs and opportunity, then that can have some value.

And I wonder if you might comment on it also, Mr. McLean, could you address the issue as well?

So, let me...

SCHNEIDER: Really quickly, on the first point, it seems to me that what needs to be done initially is you have to develop a strategy in program. There is no rural development strategy in Colombia right now. You can ask anybody.

You have to have it developed and you have to then say, "This is how we're going to deliver it, and this is where the funds are coming from." For example, that 1 percent add-on for security this last year of the wealth tax, what about doing another 1 percent for this? And target it, and say, "Whenever we are able to apply, as soon as we're able to apply, we have the program in place."

And the fact is, is that you have some rural areas today where you can apply it. I wouldn't be surprised as soon as some areas of Putamayo, where they've now, essentially, where the states re-entered, that you might be able to do something.

The point is, is that wherever you can, right now you don't have the means or the plan or the program to do it. That needs to be first. Because you also have to have something out there for the composino that says, "Hey, as soon as we get this area secure, it's not just going to be with law enforcement, it's going to be with schools, health, roads, and economic opportunity." That's one.

The second is that in the areas right now, in some places where they have the, what they call the laboratorios de pas. The E.U. supported these peace laboratories patre d'rue (ph). I think you can replicate that in some areas. Again, do it now.

And finally, with respect to Al's guys, say, "Yes, but." The but is, think about where we've been and what's happening and what's happening in Bolivia and Peru. It has to be done, I'm convinced now, with asking the question, not only what is the impact on domestic employment here, but what's the impact on rural poverty there?

At least somebody needs to be thinking that through, and I really don't think it's happened.

MCLEAN: If I could link really the two parts of your question. One was about the regions where there is narcotics being eradicated and obviously, guerrilla activity. And the other part, which is the larger: economy and the trade.

I think those are linked. You cannot, and you never should expect, that in the areas where there's been heavy narcotics growth. Let me give the example of Putamayo, or give the example of the Catatumbo, which is up by the Venezuela border, up in Norte de Santander.

Those are areas that are basically, just a few years ago, indigenous areas. What you have people who have come in as colonos, as colonists, and brought with them the coca culture with them.

Twenty years ago, 25 years ago, the Catatumbo was this wonderful forested area that had the Motilone Indians, they were beautiful, it was a place that people went to for ecotourism before the word existed. Today it is a desert; been wiped out by this slash and burn agriculture. And people there are at war with one another, trying for the drug gains.

The answer clearly, is that many of those people have got to leave. It is better for the land environmentally, for the indigenous people to allow those areas to return to a more tropical state and get people out of that economy and into a prospering, forward-looking economy that trade can bring.

Now, I don't know -- it would take a long time to get to a free trade agreement, but it seems to me that given that the WTO and the MFTA prospects are not looking good at this particular time, I would go for it. I would go for it -- it seems to me Colombia is as worthy of it as a Chile is. And the Chile one, I think, was a pretty good agreement.

DODD: Julia?

SWEIG: Thank you, Senator Dodd.

DODD: Dr. Julia Sweig.

SWEIG: Senator Dodd, thank you very much. My mother will appreciate that you threw in the doctor.

There are hundreds of very experienced individuals in all of the multilateral institutions who have lots of experience with how to do land reform in difficult role environments even. I think the technical question is critical, "How do you do security and serious real initiative simultaneously?"

Just drawing on Mark's comment that there is no world development strategy in Colombia, the United States can play a vital role and I think, setting the tone and establishing that we see that these are, in fact, priorities. Because right now, we fall, I think, into the realm of platitudes. We support democracy and we support free trade, but we don't get into the specifics of what in fact, might help get this region moving forward.

And so, I think we can set the tone, first. And second, I think we can then, for example -- well, Bobby Charles isn't here now, but I said this to him directly -- I&L is the elephant in the room: it's got all the money and it's got lots of programs that have administers in the alternative development sphere, convene, and do this with much more senior level attention of the administration. A meeting of the multi-laterals and the key international players from both the U.N. and OAF; those institutions that are putting money into the region: the Andean Finance Corporation. Get everybody in a room and sit around and say, "How do we do this together?"

And I think what you'll find is people are very, very anxious to speak to these issues and are looking for U.S. leadership on them to tie the issue of security and development together.

DODD: Our people have already thought about this and have clear ideas on how this can be done?

SWEIG: I think there are. I'm not an expert at all in world development, but I know that there are and that they're waiting to be called, there are waiting for the call in there. And I think that it really could yield to some productive discussions.

Can I answer on the trade front?

DODD: Yes.

SWEIG: When we negotiate a bilateral, or in my view, it would be better if we're going to bilateral with Colombia, go very quickly to establish that what we want is a region-wide Andean trade agreement.

DODD: It's got to be sold in Colombia, but clearly...

SWEIG: But regional, but then to specifically ask the Colombians and every other country in the region, "What products need to get in here and quickly, that will specifically replace the income from coca?" And to begin to sort of, open up those markets. Maybe, perhaps, they already are, but to begin to connect the dots a little bit more specifically.

DODD: Good idea.

It's been a very excellent panel. We had a vote called and we're kind of running at an odd time. I would have done another round of questions. I want to thank the panel.

If I can, two observations and that is in the past, I've always used the analysis that says guerrilla movements prosper in areas that are poorest. If there's one difference here, and I'd have to look at that, is that the drug trafficking has just changed the whole dynamic. There's no longer a guerrilla movement. It's about narcotics and I'm not sure that doesn't change, I think, the long term vision of what we have to do.

But it's not about guerrilla movements anymore. It's about drugs on all sides, whether it's AUC or ELN or the FARC. So I just want to make that observation.

And then the second observation about trade: there's been very, very good suggestions. I am an average free trader, but I worry that trade has not fulfilled the promise to those at the bottom of the economic ladder. And I think we've got to start reflecting on that a little bit more as we move forward.

And the great fear I have is that we have made this the panacea, it's going to solve our problems and people are not seeing that. And as a result, the reaction, the kickback is very, very strong.

Again, thank the panel. Julia, you started by say, Julia -- Dr. Sweig started by talking about you have a great deal of humility and respect for the challenges being faced by the folks who have to make these decisions. I share that and you have been very helpful in our deliberations.

Without objection, the record of today's hearings will remain open for two days to receive additional material and supplementary written responses from witnesses to any question posed by a member of the panel.

This hearing of the Senate Foreign Relations Committee is now adjourned.

END

NOTES:

[????] - Indicates Speaker Unknown

[--] - Indicates could not make out what was being said.[off mike] - Indicates could not make out what was being said.

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