AMERICAN ENTERPRISE INSTITUTE

KINGPINS AND CORRUPTION: TARGETING TRANSNATIONAL ORGANIZED CRIME IN THE AMERICAS

WITH OPENING REMARKS BY SEN. MARCO RUBIO (R-FL)

OPENING REMARKS: MARCO RUBIO, US SENATE (R-FL)

PANEL DISCUSSION

PARTICIPANTS: DOUGLAS FARAH, IBI CONSULTANTS; JOSEPH HUMIRE, CENTER FOR A SECURE FREE SOCIETY; ROGER F. NORIEGA, AEI; CELINA REALUYO, NATIONAL DEFENSE UNIVERSITY

MODERATOR: KIRSTEN D. MADISON, AEI

3:45–5:25 PM MONDAY, JUNE 26, 2017

EVENT PAGE: http://www.aei.org/events/kingpins-and-corruption-targeting- transnational-organized-crime-in-the-americas/

TRANSCRIPT PROVIDED BY DC TRANSCRIPTION – WWW.DCTMR.COM DANIELLE PLETKA: Good afternoon, everybody. If I could ask everybody who’s filing in to just be seated. Thank you so much. Good afternoon, everybody. And welcome to the American Enterprise Institute. I’m Danielle Pletka. I’m the senior vice president for foreign and defense policy studies here, and I am genuinely delighted that we have Senator Marco Rubio here with us today to help us roll out this new report.

I’ve got my props here. I feel like Vanna White. “Kingpins and Corruption.” It is the product of the AEI Working Group on Transnational Organized Crime in the Americas, run by our visiting scholar, Ambassador Roger Noriega.

I don’t think that Marco Rubio needs a lot of introduction to this audience, but I’m going to give you a word or two nonetheless. And then I’m going to hand things over and just do a little bit of housekeeping. Marco Rubio is the United States senator from Florida. He was elected in 2010 and reelected in 2016. He’s a member of the Committee on Appropriations and the Committee on Foreign Relations. And he has a résumé much, much longer that I’m not going to keep reading.

But, to us, he really has been a leader on international affairs, somebody who increasingly our country turns to to hear where we should be going on these issues. And for us at AEI, I know that we’re very proud that he’s been a leader on issues that are of extraordinary importance to us in maintaining support for US engagement globally.

The report is — you’re going to hear a lot more about it than you’re going to hear from me at this very moment, but this is a report that’s a little bit different than things that you usually see coming out of the American Enterprise Institute. It’s very practical. It’s very tactical. It’s very focused on what we can do in the here and the now. And the main reason for that is that, frankly, transnational organized crime is an issue, a scourge that we have not spent a great deal of time focusing on as a country. It is at the nexus of a whole series of national security threats to our country. It degrades democracy. It degrades our national security. It degrades our hemisphere, and it introduces threats to us that otherwise would not be here.

Just in the context of what this report talks about, earlier this month two Hezbollah operatives were arrested who had been scouting the Panama Canal. The report profiles MS-13, which the Trump administration has been going after, and which is an instrument for all of these disparate threats to our country to come together. So I know that Roger and the senator are going to spend a lot of time talking about these issues.

I have a housekeeping item, and I have to read it to you because I don’t understand it because I’m technologically inept. So we are going to be taking questions from the audience through an online system today. You can feel free to submit your questions now, which causes you all to be looking at your phone, so I’m not sure that’s a great thing, but feel free to submit your questions now following the senator’s remarks. To submit a question, you have to go to sli.do, just like it sounds, S-L-I-D-O, dot com, and enter the code AEIEvent. It’s very simple. Enter the code, type in your question, and then it may be chosen to be read on stage. I hope it works. Senator, if we can ask you to come up to the podium. The senator is going to give a few minutes’ address and then sit down with Roger Noriega to take some additional questions and then to take questions from the audience. (Applause.)

SENATOR MARCO RUBIO (R-FL): Thank you very much. Well, thank you, Danielle. Thank you all for your kind introduction. I want to thank you — I want to thank Ambassador Noriega and the other members of the working group for inviting me here today.

And your new report is timely, and your recommendations are important for policymakers in the administration and for lawmakers such as myself in Congress to weigh and to consider. Transnational organized crime isn’t a new threat to the United States and the Western Hemisphere, but it’s an increasingly dangerous one.

Transnational organized crime, as the new report warns, resides at the heart of nearly every major threat confronting the Americas today, whether it is the deadly opioid crisis hurting US communities, the catastrophic collapse of oil-rich Venezuela, or debilitating gang violence throughout Central America, which spills over into the streets of American cities. And AEI’s report continues, these crises can be traced to criminal networks that garner billions from the production of illicit drugs, human trafficking, and extortion.

While the US government has long acknowledged the threats posed by transnational organized crime, for too many years, it’s not done enough to deal with these threats. Such neglect has led to the death and suffering of far too many people, both in nations throughout our hemisphere and of course here at home.

We begin with Venezuela, where the Maduro regime has completely undermined that country’s democratic constitution. It’s imprisoned and tortured its opposition members. It’s killed protesters with impunity. It’s destroyed the nation’s economy.

One of the richest countries in the region — one of the richest countries in the world in terms of resources — Venezuela is an oil state that is also rich in farmland, by the way, yet its corrupt and dictatorial government is running out of money and can’t afford to feed its own people.

As that nation continues to melt down, the regime’s growing transnational criminal networks are getting exposed. We see the Maduro government is not just a dictatorship. It’s also a criminal enterprise.

For example, the Treasury Department imposed sanctions against Venezuelan Vice President El Aissami on the 13th of February of this year, naming him a Specially Designated Narcotics Trafficker under the Kingpin Act for playing a significant role in international narcotics trafficking. El Aissami’s main front man, Venezuelan national Samark José Lopez- Bello, was also sanctioned. Last November, a federal court here in the United States convicted two of President Maduro’s nephews — Efrain Antonio Campo Flores and his cousin Franqui Francisco Flores de Freitas — for conspiring to ship 800 kilos of cocaine into the United States.

Two years ago, the US Justice Department officials told The Wall Street Journal they believe that Diosdado Cabello, a Chavista and former president of the National Assembly, was a head of a drug cartel.

So think about that — in Venezuela, the vice president, the president’s nephews, the former president of the National Assembly, are involved or have been accused of being involved in transnational organized crime.

In Colombia, we are seeing growing concerns with the implementation of the peace agreement with the FARC. Many FARC weapons remain unaccounted for, and too many FARC members are joining remnant groups and continuing to profit on illegal narcotics trafficking.

America’s foreign assistance and military and law enforcement relationship with Colombia must continue. Between fiscal year 2000 and fiscal year 2016, the US Congress appropriated more than $10 billion in aid under Plan Colombia and successive strategies.

Peace in Colombia cannot come at any cost. FARC members who have committed atrocities must be held accountable by Colombia’s judicial system, and Colombia should extradite FARC members indicted in the United States. They should face justice here, too.

Yet beyond the FARC and in large part because of the FARC’s decision to come in from the jungle, the explosion of coca cultivation in Colombia is another major concern feeding skepticism about the peace deal. Colombia’s coca production numbers have consistently risen during the peace negotiations, increasing by more than 141 percent from 2012 to 2016, including a sharp rise beginning in 2015.

These developments are likely the direct result of the government’s 2015 decision to end the aerial eradication of coca plants. I personally believe it was a mistake, in part, as a concession to the FARC to achieve a peace deal in Colombia.

Now, the Gulf Clan, Colombia’s largest drug gang; the ELN, another FARC-like group that deals in Marxist terrorism and drug trafficking; and paramilitary groups known as bandas criminals, or BACRIM, have emerged as the main beneficiaries of Colombia’s renewed coca production. That Gulf Clan controls 70 percent of Colombia’s cocaine production, according to Colombia’s own police. And the ELN has an estimated 1,500 fighters, making it roughly one-fifth the size of the FARC’s pre-mobilization paramilitary force.

In Mexico, we have had a transnational organized crime as a problem on a staggering scale. Since 2006, when Mexico began its big push against those cartels, some estimate that 130,000 people have been killed. That is roughly equal to the population of Gainesville, Florida. The Mexican cartels are fighting to bring drugs into our country that poison and kill people. A record high number of Americans, nearly 60,000, died last year from drug- related deaths.

Of particular concern is the increase in Mexican heroin, methamphetamine production, and the trafficking of fentanyl that is manufactured in China. But unlike in Venezuela, we have a willing partner in the government of Mexico. Since 2008, the United States Congress has appropriated $2.8 billion towards efforts to combat the cartels.

The fight, however, cannot be won only with money and guns. We must also provide assistance to Mexican courts and law enforcement and public officials. The report released by AEI today notes that at least 12 former Mexican governors are accused of corruption, money laundering, or narcotics trafficking. And it also notes that an astounding seven of 10 crimes in Mexico are not even reported.

If the people do not trust their institutions, from the local police in their neighborhoods to the prosecutors and elected officials, the Mexican government is going to struggle to win this fight. Which is one of the reasons why I continue to work to ensure that we keep foreign assistance strong. These funds are not just going to the world’s poor — they are going to programs that work with other countries to bolster law enforcement and the rule of law and the promotion of stability and democracy. These funds have a direct impact on our safety and security, and they are essential this year.

So, what are some of the solutions? And I hope we’ll get into some today. But the first is continue the funding of development aid and security programs integral to countering transnational criminal organizations in the Western Hemisphere.

In Venezuela, the Chavistas and those in power are the root problem. And I hope that we can build international pressure in every possible forum, including the OAS and the UN, in addition to ratcheting up sanctions on anyone in Venezuela who is oppressing the people, and not just at the lower levels.

We also support the Venezuelan people in their struggle for freedom, which is why as a member of the Senate Appropriations Committee, I’m asking for funding for democracy promotion programs and hopefully for transitional funds so that when Maduro and his cronies are removed, there will be funds available to assist Venezuela in recovering from this long nightmare.

In Colombia, we need to reassure the Colombian people that the United States supports the implementation of all those elements of security but that it will come with conditions. The Colombian people will have democratic elections next year, and we will need to work with the new Colombian government to ensure that the crimes committed by the FARC don’t go unpunished and that the victims of the FARC are adequately compensated.

We need to encourage our allies in Colombia to resume aerial eradication of coca plants. The threat of heroin is also on the rise, with poppy cultivation now present in Colombia, in Guatemala, and increasingly in Mexico. We hope to work with them to aggressively target that as well. Bad actors in transnational criminal networks must be brought to justice by fully utilizing all legal tools to target narcotic traffickers and their assets, including the Kingpin Act.

In Mexico, as I said earlier, we continue to support the fight against the cartels while working with our partners in the Mexican government on improving its legal system, its law enforcement, and respect for human rights.

The tide will only begin to swing against the cartels when ordinary Mexicans feel like their government is there for them and has the ability to keep them safe. And here at home, we must confront directly the scourge of drug abuse and dependence and the demand pressure that it creates, which is a major contributor to all of these problems that I’ve just outlined.

In conclusion, let me just say that, as I said at the beginning, I feel that our hemisphere has for far too long received too little attention. Our security here at home relies, in part, on the countries in our region sharing our values and creating free, stable, and democratic societies that protect their people and reward their citizens with opportunities for their hard work and their entrepreneurship.

In Colombia, we’ve seen how our assistance dollars combined with the courage, the dignity, and the hard work and sacrifice of the Colombian people yielded a return on our foreign assistance investment. And an excellent starting point for ensuring that the Americas remains a priority I believe is found in this report today.

As the report makes clear in its strong recommendations, we have a lot of work to do. But these are all things that, given the proper motivation, we can do, we must do, and I believe we will do. And we must do so both for our neighbors and for ourselves.

And so I thank you for the chance to make these introductory remarks, and I look forward to this session of answering questions and hopefully learning more about the way forward from you. And hopefully I’ll have some insight to offer in that regard as well. Thank you. (Applause.)

ROGER NORIEGA: Let me just — as a reminder, to invite you to submit questions for consideration. Please go to sli.do.com, S-L-I-D-O.com, and enter the code aeievent, one word, where you’ll be prompted to enter a question.

Thank you very much for coming, Senator.

SEN. RUBIO: Thank you. Thank you.

AMB. NORIEGA: I must say, your remarks summarized this problem in a very efficient, effective way. And it really demonstrates your commitment on this issue. You are in the United States Senate, where I used to work as a staffer. You’re a member of the Senate Foreign Relations Committee and, point of fact, the subcommittee chairman for the Western Hemisphere, a member of the Intel Committee, and the member of the Appropriations Committee, which makes you my new best friend as we go after these important issues. (Laughter.)

SEN. RUBIO: I forgot to turn the mic on. Did I turn it off here?

AMB. NORIEGA: I think it was on.

SEN. RUBIO: That one was on. So how did that mic work even when I had it off?

AMB. NORIEGA: The report that we’ve presented here makes recommendations in a couple of areas, the use of this asymmetrical tool, OFAC sanctions, as a way of getting at kingpins. But also to identify where their assets are and freeze those assets. This is extraordinarily important in terms of the narco-kingpins who are heading Venezuela and tormenting and killing its people and the FARC kingpins who claim that they, as the — what the Justice Department called the biggest cocaine producer, organization in the world didn’t make a profit because they don’t have any money except a few ranches here and there and what they can carry in a knapsack. But there are others who postulate that they have anywhere from between $2 and $10 billion. How would you react to the idea of an initiative that really insists that the US executive branch go after these things, targets as priorities to seize those assets and maybe, if necessary, new legislation to give them authority to repatriate that money to Colombia or stolen assets to Venezuela?

SEN. RUBIO: And I think a lot of the framework for that already exists in the current law. I think it’s a matter of policy and directive, you know, ordering or instructing Treasury and all the elements of our international power to identify where these funds are being placed and to use our influence over the world banking system to gain access to these funds and not to keep them for ourselves but rather to send them to these countries to help fund their efforts. And, in the meantime, also kind of make clear to transnational groups that the world banking system is not their playground, that they will not be allowed to continue to use it to launder their funds or to, you know, hide away their ill-gotten gains at the expense of the people in these nations.

But I do think it’s an important tool that should be applied and that can be applied, but I just know from limited experience now up here for seven years, or six and a half years, that in many of these agencies, it isn’t going to happen unless they are specifically directed to do it as a policy initiative. And it’s one of the strongest recommendations of the AEI report that I hope can turn into a directive for policymakers.

AMB. NORIEGA: Regarding Colombia, it’s one of the most important issues that we’re confronting is the Colombians’ grapple with this 60-year-old insurgency, Marxist- Leninist group that hasn’t renounced the armed conflict but that has not renounced its Marxist- Leninist objectives. How can we best assist them in their process as we endeavor not to just save the peace process but, frankly, to save Colombia from this criminality?

SEN. RUBIO: Well, I mean, first and foremost, you recognize that Colombia’s a republic, a democracy. Its leaders are elected, and its leaders are responsive to the people of Colombia. As their partner, I think it’s our obligation to make them understand that we’re prepared to continue to contribute to these efforts, which, you know, took a nation that was on the verge of collapse, being a failed state, and brought it to a point of relative prosperity and security for a significant period of time. And I think we’re prepared and continue to endeavor to help in that regard.

What I don’t think we can allow — and this is an American senator or someone who needs to answer to the people of Florida and of the country about how their taxpayer money is being spent — is that any of those funds would be used to somehow unfairly benefit the FARC. For example, not saying — you know, we want to make sure that our funds are being used for things like ensuring that victims — that the systems are set up so victims are compensated, and not through American funds but through the FARC funds. We want to make sure that there isn’t a creation of these courts whereby the people who partnered with us to confront these groups are now being unfairly put on trial and treated like criminals themselves. And we certainly want to make sure that none of the funds of the American taxpayer winds up in the hands of a group that we still designate as a terrorist group. And many of those leaders are still wanted for extradition, I think upwards of 60 for crimes committed against the United States and against our citizens.

So I think as long we’re fair and frank and direct and to the point, we’ll have an opportunity to work with the Santos administration and with whatever succeeds this administration in Colombia. In the absence of that, I think, unfortunately, if in fact our dollars are not producing results, there could be real challenges to continuing our partnership in this regard.

So, to me, this is not just about preserving our relationship. It’s about ensuring that we’re getting results from it that we can justify the American taxpayer at a time when there is an effort to reduce US foreign engagement in the world both direct and indirect.

AMB. NORIEGA: The president just made some — took some steps regarding US policy toward Cuba and engagement with the Cuban regime. One of the things that the Obama administration was very proud was this so-called antidrug operation with the Castro government. And we were told by the administration in private briefings that that sort of thing would continue. How would you assess the value of that kind of cooperation? How do we ensure that it is used for our essential national security interests?

SEN. RUBIO: The cooperation — I’m sorry — with?

AMB. NORIEGA: With the Cuban regime.

SEN. RUBIO: OK.

MR. NORIEGA: Into the drug area because they’re clearly in the transit zone.

SEN. RUBIO: Well, I think, first of all, it benefits the Cuban government not to find itself in this situation, and they’ve had a history in the past of strong allegations about what they allowed to occur within its country. Our goal in Cuba is pretty straightforward, and that is we want a nation that has the same rights as people virtually everywhere in this hemisphere.

Over the last 20 years, every country in the Western Hemisphere has had at least one free and fair election, except for Cuba. And that may not be the case any longer in places like Nicaragua and certainly in places like Bolivia and Venezuela, but they’ve had some experience with democracy over the last two decades, except for Cuba. And we remain hopeful that that day is coming, understanding that it isn’t going to be from one day to the next.

There will be a process of transition, but we want to ensure that American policy towards Cuba is incentivizing that as opposed to providing funds for this status quo to become embedded and take even deeper roots as a new generation of leadership, which is the goal of the Castro regime is to have the world basically accept their system, their undemocratic system of government and the military’s control of the economy and how it’s the concrete dry on that and become a permanent fixture in the hemisphere. And that’s something that the US foreign policy should not be encouraging.

Within that realm, I think it behooves the Cuban government, even this repressive one, to cooperate with everyone when it comes to drug trafficking. The worst thing that could possibly happen for them is to once again be designated as a nation that cooperates with transnational criminal groups because I believe that it would further isolate them from the region and, ultimately, from the world.

AMB. NORIEGA: Do you think it’s possible — those of us who understand what’s going on in Venezuela, I certainly — I know you certainly do understand that Cuba is playing an extraordinarily intimate role in managing affairs there.

SEN. RUBIO: Well, Maduro would not have remained in power had it not been for Cuban interference, direct interference, and not just through advice, but by embedding personnel within the security agency and apparatus. You see today that many of the key functions in the Venezuelan government are operated by Cuban operatives who came over from the island for that purpose. And so it is a direct basically invasion of the institutions of Venezuela. Whether it’s the personal protect that surrounds Maduro, the Passports and Documentation Office, or even how the National Guard is confronting protesters in the streets. All of these things are being directed by Cubans and Cubans, in many ways, are directly participating in these acts.

So there is no doubt in the minds of any Venezuelan, and there should be no doubt in the minds of people in the hemisphere that the Cuban government is the single biggest reason why Maduro and his unconstitutional — because that’s the thing we need to point to all the time — a lot of my colleagues are not aware of this — that what protesters and the opposition in Venezuela are asking for is for them to follow the constitution, the Chavez Constitution, by the way, that calls for like elections every two years and for the National Assembly to be its chief legislative body. And all of these things have been canceled and ignored, all of it, through the assistance, the direct assistance of the Cuban regime.

AMB. NORIEGA: Fair enough, very clear. But we call Venezuela a narco-state. We say that Maduro’s family is directly involved, the former president of the National Assembly is involved, the vice president’s directly involved. If that’s the case and Cuba is managing Venezuela, is the Cuban government complacent, would you suggest?

SEN. RUBIO: Absolutely. Of course they are. The Cubans are well aware of how these people made their money and what they do. And, obviously, their conscience is not heavy in terms of being cooperative in that regard.

I imagine what you’ve probably seen in the last 15 years, although I would imagine there’s still slippage, is that the Cuban government has decided perhaps not to allow Cuba to be a direct transit point, but that doesn’t mean they’re not supporting these networks. And there’s a reason why the Cuban government was the host for many of these negotiations with the Colombians and the relationship with the FARC that they knew it was a narco- trafficking group. And they’ve also provided support for them, and in many cases, asylum and/or protection for some of its key leaders.

AMB. NORIEGA: Yeah. Well stated. Well stated. There are some who are skeptical about the so-called war on drugs, this overall coercive strategy. As someone here asks, what would you say to those who disagree with your views on that, whatever those views are?

SEN. RUBIO: Well, you see the impact that drug abuse has on this country, and it’s illegal. Imagine if it was legal and allowed, because in many ways, people take cues about — there’s an adage that if something’s not illegal, it can’t be that bad. So there’s no doubt this country is paying a tremendous price already for an abuse of drugs. And I said that in my statement.

One of the biggest things we can do to help with this is to deal with our consumption issue here in the United States, which is a major one. Without US consumption — that’s the single greatest market for these groups.

But I think it goes further than that. If you look at these transnational criminal groups, they are parasitic entities. They are a cancer. They undermine and directly — they directly undermine and threaten the rule of law in any one of these countries. They control territory, converting them into ungoverned spaces. They undermine the security. They corrupt institutions. They undermine the international community or the international business community’s confidence in the countries that they’re in. They’re an enormous security threat. In many parts of those countries, they directly rival the government in terms of their ability to provide money and even security or whatever they call security. All of these things are major threats.

If you look at the migratory pressures that we face in the United States, a lot of it is people fleeing MS-13 violence in Central America, you know, and other sorts of problems throughout the region.

So, in the end, if our hope is to have stable nation states where people are prosperous and come to the United States because they either come here legally or because they come here to invest or come here as tourists, if that is our goal, you can’t do that in nations in which a significant amount of its capital is being spent managing these or attacking these groups, taking these groups on. And you can’t do that in places in which these transnational criminal groups undermine the very legitimacy of the state.

AMB. NORIEGA: One of our — another one of our computer-literate friends asked, “You call the Mexican government, quote, ‘a willing partner.’ Is that partnership at risk with the upcoming Mexican elections?”

SEN. RUBIO: I hope not. Ultimately, that’s up for the people of Mexico to decide. It’s not Venezuela, and it’s not Cuba. They’re going to have a free and a fair election. And they’re going to decide a new leadership, and that will be debated. Our hope is that we’re prepared to work with whoever wins, and should be, because it’s an important relationship. And so, obviously, that’s a question that will be answered in the upcoming elections there, but my hope is that it remains steady irrespective. And I think it’s in the best interest of Mexico and the United States for that to be the case.

AMB. NORIEGA: One of the concerns about — going back to Colombia — is whether the Colombian government would have sufficient resources to take on the so-called dissidents or the BACRIM, these criminal organizations that have not taken advantage of the peace process but are going to continue in their criminality. Do we need to think about shifting US support over to the security side of things more than the economic and social side?

SEN. RUBIO: In Colombia?

AMB. NORIEGA: In Colombia, yes.

SEN. RUBIO: I think they’re interrelated. It’s very difficult to have economic growth and stability if you don’t have security first. Companies are not going to invest capital in places where they think they feel threatened and/or they think the rule of law doesn’t apply. Terrorism isn’t going to grow. People aren’t going to visit places that they think are inherently dangerous. You know, we had a bombing at a mall that killed three people in Colombia three weeks ago, as an example. If we were to return to those days, that would be problematic.

So they’re interrelated. And, obviously, a state cannot fund governmental services, unless it has an economy that generates the revenue necessary for those purposes. So they’re intricately related. Security has to exist before there can be economic growth there. You can’t have one without the other.

AMB. NORIEGA: And a related question here on NAFTA. Would you say that NAFTA has played a role in driving impoverished Mexicans and Central Americans into drug smuggling to make ends meet?

SEN. RUBIO: I wouldn’t say that that’s the case. I think NAFTA, like any trade deal, has benefits and costs. And that’s part of economic commerce. And if you’re an American farmer, NAFTA’s been really good. If you’re an American manufacturer or at least someone — manufacture sector worker, NAFTA’s been threatening to you in some respect. I think it has to be viewed in the context of holistically, what it’s meant overall.

By and large, I think that the relationship between not just Mexico, the United States, and Canada — the market has been a general positive. Like any trade deal that was created before the internet exploded, before Google and all these other Amazon existed, there’s a need to modernize it. And there’s an effort to do that now. And I think it’s moved in a way that’s been very positive at least up to this point.

But, ultimately, I think it behooves us. I think NAFTA, properly modernized, is an answer, not a problem.

AMB. NORIEGA: One final question. You’ve been very generous with your time.

SEN. RUBIO: Let me just — I have one more point. I apologize.

AMB. NORIEGA: Yes, please. Yeah.

SEN. RUBIO: You know, one of the things that you hear in lot of these countries is they want to get into crop replacement, right, where they want to go in and basically convince someone who’s in the drug economy to produce something else. And so — in Colombia, it’s been an effort to produce — cacao — or chocolate. Now, that’s going to have to be some really good chocolate to equate — you know, what the cost benefits are from being in drug production.

So you need to provide economic opportunities beyond simply agriculture for people not to be dependent on that sort of thing for their economic wherewithal. And so that’s a key component. Economic growth can contribute to security if it can provide an environment where people do not have to rely on those nefarious industries to provide for their families.

AMB. NORIEGA: Well, I have to admit, I have a bigger problem with chocolate than I do have with cocaine.

SEN. RUBIO: Yeah.

AMB. NORIEGA: One final question.

SEN. RUBIO: I’m not against them going the chocolate direction. I’m just saying that alone is not going to do it.

AMB. NORIEGA: It would certainly benefit, I suppose. One final question: How do you believe that sanctuary cities affect our ability to combat transnational organized crime?

SEN. RUBIO: Well, I imagine — I mean, to the extent that people believe that they can violate laws and their migratory status will not put them in danger of interacting with law enforcement, I think it’s problematic. I don’t believe that if you got rid of sanctuary cities, it’s going to solve your problem now. These are intricate networks of distribution that include Americans on this side of the border that are part of that network. I mean, if you look at the network of distribution, the cross-border operation may involve nationals of other countries. But once it gets to I-10 and comes east towards the southern states, then up north on 95, those are American organized crime groups that are helping with the distribution internally.

So this is a — it’s called transnational for a reason, and that is these are intricate networks and organizations that operate across borders using national on multiple countries, including distributors at the state and local level that are Americans, who are — the typical heroin dealer in the United States is not from some other country. It is someone who lives here. Now, the supply may have been trafficked in from multiple countries throughout the region, but ultimately, we have a distribution network within this own country too that needs to be confronted. And sanctuary cities are not going to deal with that.

AMB. NORIEGA: I lied. Let me ask one more question. And I think it’s a good provocative one, and it gives you an opportunity to get on the right side of the White House. I think the — you already are, I’m sure.

SEN. RUBIO: On some things, yeah.

AMB. NORIEGA: Yeah. Good luck with that. The president gets a lot of criticism he isn’t standing up his team quickly enough and the State Department — this is something that came up with Secretary of State Tillerson a while back. How do you think he’s doing so far in Latin America? And I have my own — I guess I have to admit I’m positively surprised by how he’s oriented, where his team is headed, in what direction they’re headed on a couple of different crises that we’re confronting. How would you rate that, and what do you think his biggest priority needs to be?

SEN. RUBIO: I think there’s a willingness to be more engaged in the Western Hemisphere. I obviously — it’s not like we’re going from an era of hyper-engagement to a dramatic drop-off. I think, by and large, the Western Hemisphere has been largely neglected since the end of the Cold War. And that remains the case. And you see that both in the professionals entering the field and also just in where our attention is. And for obvious reasons, right? After 9/11, a lot of the focus was on the Middle East. Now, with Russia in Crimea and Ukraine, that’s captured a lot of attention. And the history of the 21st century will largely be determined by the relationship between the US and China and the Asia-Pacific region in general.

But I think there’s a willingness to be more engaged in the region and an understanding that regional stability is one of the most important things we can do for economic prosperity and our own internal security here in the United States. So I think there’s a willingness to be more engaged in it, and hopefully, we can provide input as to what that means and how best to construct it.

AMB. NORIEGA: Well, we thank you very much, Senator, for your terrific discussion of this issue. Obviously, your serious attention that you’re giving to this problem that we’re confronting and identifying the opportunities for getting ahead of the crisis. Thank you very much. God bless.

SEN. RUBIO: Thank you. Thank you very much. Thank you. (Applause.)

AMB. NORIEGA: We’re going to ask our other panelists to join us.

KIRSTEN MADISON: So I think we’re going to go ahead and get started. I think we don’t have a lot of time, but we have a lot of knowledge assembled on this dais. Let me just start — I am going to dramatically reduce your bios. It is not to suggest that these are not amazing accomplished people, but I think we’d rather get to the questions.

So Celina is a professor of practice at the William J. Perry Center for Hemispheric Defense Studies at the National Defense University. She focuses on national security, illicit networks, transnational organized crime, counterterrorism, and threat finance. You must be busy. She’s taught at numerous institutions, including Joint Special Operations Universities, served as a Foreign Service officer and as a State Department director of counterterrorism finance programs.

Joseph is the executive director of the Center for a Secure, Free Society. As a global security expert specializing in asymmetric warfare, he’s produced leading research and investigations on topics such as Islamic extremism and Iran’s influence on the Western Hemisphere. He is also — I do want to enter this — an eight-year veteran of the US Marine Corps, having served combat tours in Iraq and Liberia.

Douglas is president of IBI consultants, a senior visiting fellow at the National Defense University’s Center for Complex Operations. He is an author and national security consultant and an analyst. He has been a foreign correspondent, an investigative reporter covering drug trafficking, cartel activity, civil wars, and organized crime in Latin America and West Africa for two decades.

And Roger Noriega, Ambassador Noriega, is a visiting fellow here at AEI and the founder and managing direction of Vision Americas, which advises US and foreign clients on international business issues. He also previously served as assistant secretary of state for the Western Hemisphere and US ambassador to the Organization of American States.

So thank you all. And I’m sorry to reduce your bios so dramatically. I think a lot of important things have already been said, frankly. This is — we’re sitting here, talking about this report today because I think there’s a lot of experience and knowledge on the Western Hemisphere here and on counterdrug and crime issues, as well as among our assembled members of our panel.

And the reality is those of us who’ve worked on the Western Hemisphere have been very focused on sort of march of positive things. I think we’ve seen a lot of wonderful things happen in the region, a lot of trade agreements, a lot of positive developments in sort of democratic strength in governance.

But, at the same time, something very pernicious has been happening, which is the dramatic rise in transnational organized crime, in pathways of criminality that carry arms and human beings and drugs and illegal funds and all sorts of things back and forth across the borders in this region and into our own cities. These are serious threats. There are network threats. They are way more complicated than us simply taking one person off the board. In many cases, they have very profound links into governments that should be our partners but maybe can’t be because they are themselves criminal.

And so this project — I think for a lot of people who are familiar with those issues, this project is really about getting practical about saying, here in the public view is this collection of information about different threats in the region, whether it’s what’s going on in El Salvador with certain individuals, in Venezuela, whether or not it’s gangs. What the group has done is assembled a collection, a dossier on a series of threats in the region and then gone about the business of saying, “This is what we know.” And the idea is to present to policymakers a body of knowledge, a set of recommendations on what to do about it, and some thoughts on what other tools might be needed to really get in and pull apart these networks.

So I think we should just get to questions because I think we have a huge depth of knowledge here on the dais. So I think for the first round, what we want to do is kind of give you each a moment, a couple of minutes to really articulate in a deeper way some of the challenges that are presented in the region. And I think we’ll start, Roger, on your end.

Since we’ve already talked a bit about Venezuela, I’d like to just kind of go back to it and ask you sort of to characterize for us what the core elements are of transnational crime that are playing in Venezuela. And is what’s going on in Venezuela sort of fundamentally different than what’s going on in other parts of the region where they’re also confronting these challenges?

AMB. NORIEGA: Well, thank you very much, Kirsten, and we haven’t read your bio but Kirsten —

MS. MADISON: No one needs it.

AMB. NORIEGA: Is deputy chief of staff at the Foreign Relations Committee and was director of international affairs at the Coast Guard. So you’ve been on the pointy end of this spear as well as looking at it from a policy standpoint — have an appreciation of the subject. And thank you very much for the question.

You know, I remember in the ’80s when Ernesto Samper was elected president of Colombia and people threw around the word — the name narco-state, the moniker narco- state. We were, you know, doing him a great disservice, as it turns out, because we have a real narco-state in Venezuela today. And it’s really more than a narco-regime.

It’s a continuing criminal enterprise, where at the very highest levels, from the ministers of government, actually the minister of interior, justice, the folks who were head of the units for drug trafficking control, Tareck El Aissami shown here, the vice president of Venezuela, the former president of the National Assembly, essentially the speaker of the House, who the Department of Justice told The Wall Street Journal is a kingpin. Members of the president’s own household directly involved in this trafficking. You have a situation where these security officials, because of the alliance that Hugo Chavez made with the FARC, had access to vast tons of cocaine. And then went about the task of moving this cocaine through their national territory and using the resources of the state and personnel of the state.

You have these ministers of government who were more preoccupied with these criminal activities than they were to doing their own jobs as ministers of government. And it was not accident. It was something where Hugo Chavez systematically destroyed the institutions of government, the checks and balance, any kind of oversight over his power, and even through his foreign policy developed these instruments that would be used to get cocaine, to launder the money from the sale and transit of this cocaine, to move the cocaine. So if you have the government, in point of fact, directly involved in criminality, that is really a game changer. And we’re now grappling with how you deal with that kind of a target.

MS. MADISON: Great. OK. Not great for Venezuela, but great description. OK, so, Doug, I think if you could — I think one of the more important parts of this report — it’s all important — one of the more important parts to me is the chapter on the criminalized state in the Americas because I think it’s actually a really critical phenomenon for policymakers to understand and to acknowledge the sort of connective tissues that exists between criminals and the state in many of these countries. Can you talk to us a bit about what that really means? You can use El Salvador. I know Roger’s talked about Venezuela. Maybe El Salvador or one of the other examples in the report to really kind of give us the sense of what you’re talking about when you talk about a criminalized state.

DOUGLAS FARAH: Well, I think we often get the question like what’s different of the fundamental differences is that you now have governments that use transnational criminal organizations as instruments of state policy and engage in an entirely separate type of reality of what they define as legal and illegal from what was the consensus in the hemisphere for many years.

So, for example, you have Venezuela, which, when drugs are transiting with the permission of the government through there, with government officials involved and where the state itself and individuals benefit from the profits of that, that’s an entirely different structure than having a few corrupt individuals here and there where you buy someone to move dope across the border and you buy a jet or whatever.

I think you see — you have the letter of this last week from the Congress bipartisan group of legislators requesting information on an El Salvadoran, very senior official, who is known to traffic extensively weapons with the FARC, then also his — the businesses that he’s associated with have generated huge amounts of money for which there’s no visible justification for them. It’s the state that’s doing that in those cases.

I think Nicaragua is very similar. I think Surinam is very similar, where you have a series of states where the government is viewing transnational organized crime as something that benefits not just them individually but the state as a project. And I think to understand the Bolivarian movement, of which Venezuela has been the leader, I think it’s not just Venezuela that’s an ongoing criminal enterprise. I think it is multiple states together that share this, an ideology, and view the engagement of transnational organized crime and the advancement of that ideology is completely legitimate.

And so then, when we start saying it’s illegal, it’s this and that — General Breedlove, when he was commander of European Command, said in talking about Russia — you know, we think that they’re committing a foul, like we’re playing basketball, and want the ref to call a foul. They’re not doing democracy. He said essentially they’re playing an entirely different game. And I think that that’s the way it is. We think, oh, Venezuela is not holding elections. El Salvador is not investigating José Louis Merino. They’re not playing the game we want them to play that we have traditionally played. They’re in an entirely different court doing something else completely.

So our — you know, what they say in Spanish, the yellow card, the red card is meaningless to them. And they’re operating in a completely different conceptualization of what the state is. So that’s what I’m trying to get in that part.

MS. MADISON: It’s I think a really critical point to understanding what we have to go after if we’re going to really tackle these issues in the region.

Joseph, so I want to focus on a piece of this report that it’s interesting to me because I know in my time in government, a number of times, the issue of Iran and Hezbollah in the region has come up. And it’s generally sort of, oh, well, it’s not that consequential. It’s not operational. It’s overstated. There is an entire section in this report on this issue, which I would encourage everyone to read, but more often than not it really is suggested that it’s overblown. And I wonder if you could tell us why you think that is and then — and also just tell us, you know, how wrong are they, the folks who take that perspective?

JOSEPH HUMIRE: Yeah, well, I think over time we’re seeing that more and more it’s being revealed. I mean, just the appointment of Tareck El Aissami itself was an individual that no one suspected would rise to that level and is someone that has alleged ties to Hezbollah and Iran.

But I’d say it’s kind of a dual challenge for US law enforcement and intelligence. On one end, we have to look at how security — national security — has been viewed in Latin America over the last couple of decades, maybe even more. And it has been viewed from the optic of counternarcotics, let’s be frank. That’s the number one threat that most of the US government has wrestled with in Latin America over time. That’s now evolved — transnational organized crime, I think, you know, SOUTHCOM has used the word counter- threat networks.

But we have to understand that with a counternarcotic-led strategy, there’s an opportunity cost to that. So what’s the opportunity cost to counternarcotics? It’s counterintelligence, and the Iranians know that. The Iranians are masters at deception. So why it is that in everywhere in the world we acknowledge that Hezbollah and Iran work hand in hand? You know, we’re seeing it full-on in Syria.

I just came back from Latvia at a forum with a bunch of parliamentarians, mostly members of the EU but also GCC countries in the Middle East. And when I talk about Iran and Hezbollah and America, they look at me like shock. We didn’t know that this even existed. Why is it everyone in the world understands that Iran and Hezbollah work together, but when you get to Latin America, we say, “No, they don’t.” Hezbollah runs drugs. Iran does political military operations, but they don’t cooperate.

I think fundamentally what happened is we lost our ability to do good counterintelligence in Latin America. And the Iranians know that, and they’ve been exploiting that for a long time. And I think when we look at the Latin America part, I think we also have a legal challenge that’s been misdirecting that lack of counterintelligence. And it’s really a point of communication.

You know, over time — I know Celina has been involved in a lot of this — over time, the concept of convergence has become more prevalent in the defense intelligence community, meaning that a bunch of threat networks are converging, criminal networks, terrorist networks. But how does that interpolate in the region with our partners and our friends in Latin America? They hear the criminal part before they hear the terrorist part.

And so, oftentimes, when we look at and we talk to folks in Latin America, they don’t have a proper designation or definition of terrorism the way we do here in the United States. Hezbollah does not exist as a terrorist organization in Latin America. Nobody designates it in Latin America as such. In Paraguay, it might be a counterfeiting organization, in Brazil a narco-trafficking organization, but they don’t acknowledge that Hezbollah is what they say they are and what we know them to be, which is an international terrorist organization.

So there’s legal challenges we need to fix. There’s intelligence challenges that we need to address. And I think that’s been the vacuum of which, you know, most of the US government has seen things and which is why they missed it.

MS. MADISON: Interesting. I mean, we’ve had to tackle those kinds of issues elsewhere. I remember when the first semi-submersibles were sort of found making their way north out of Colombia that what we discovered was it wasn’t illegal to operate a semi- submersible. We made it illegal here, and then we discovered that nobody else in the region had a law that made it illegal, right? And, at some point, you have to get the right legal framework to actually tackle these issues with our partners, where they’re willing and able.

So, Celina, we’re going to give you a giant issue to talk about because we know you can handle it. So I think, as you heard from Senator Rubio and some of the things that have already been said, that President Trump’s administration has actually kind of gone after some of these issues. They’ve used some sanctions. They have issued an executive order that kind of coalesces their strategic view I think of the transnational organized crime issue. And I’d like to get your sense of how you think they’re doing and whether — are they sort of maximizing the use of the tools that they have available?

And maybe this is unfair, but if you can’t speak to it, that’s fine. The other thing I’d love to understand is how this issue sort of looks from a budget perspective and kind of what they’ve put out there. Because, at the end of the day, this is about more in fact people being available to actually look at assets and all these other practical things that require resources. So that’s huge, I realize. But help us out because I know you’re wise.

CELINA REALUYO: When we take a look at — well, actually, let’s start with the good news. The United States actually has the tool kit in order to fight what is the scourge of transnational organized crime. And just to also expand on what Joseph mentioned, we’re now as the US government starting to look at what we call trans-regional and transnational threat networks, not looking at now the commodities that go through, many of our combatant commanders, starting from General Dunford to Admiral Tidd, we’re looking now at how all these different networks are interrelated but, more importantly, it’s about the pathways. We talk about pathways.

And, as we know, we are siloes of excellence here in Washington where I only do counternarcotics and I’m only looking at cocaine, not fentanyl, or heroine, everything else. Or I only do Hezbollah or Hamas or ISIS. What we’re trying to do is think about how it’s the failure of imagination, how these groups that we had assumed would never collaborate are now collaborating. And this is the concept of convergence that we’ve much documented through a lot of work at National Defense University.

So how does that actually influence, and more important, how is it reflected in the new administration? We’re thrilled to see the new executive order issued on February 9, reinforcing laws that are in place but also showed some political will. So it’s not that the laws were not there. It wasn’t that the sanctions regime was not available. It was the first act of Secretary Mnuchin to actually sanction El Aissami, which is pretty interesting, in the first couple of hours of his taking oath. And the package had been ready for quite a while.

So the bigger question is how do we move — let’s take that political will and, more importantly, export it, because, as you know, whether it’s the United States, or, more importantly, our partners throughout the hemisphere, it really comes to having these speeches and having the photo ops of the different vice presidents going down and meeting with Central American leaders. It’s really how you actually put pedal to the metal and then actually prosecute and then go after the funds, which is a really big piece.

If we think of all of the chapters that we look at here and all the groups and actors that we look at, they’re motivated by really one primary thing, and it’s all about the money, which is my favorite topic, as you know. So the bigger objective is how do you take away the money. And that’s where — the tools are there.

Now, the question about the budget piece. So, as you know, we’re trying to also think about rationalizing foreign assistance. And I have run these programs in the past in different administrations and in different roles. And we’re tending to train the same people.

You know, we’re also training — we’re using the same metrics. And since we’re the ones who have to go in front of people like Senator Rubio and defend it, it’s not about how many people you train. It’s what you’re training them for. And I think this is a big piece, what are the lessons learned of what impact did training that specialized DEA vetted unit in a certain country have in terms of interdictions and, even more importantly, the judicial system, which is wanting throughout Latin America, to bring — you can have the laws in place. You can have all these investigators doing the right thing, but if we still have corrupt prosecutors and judges, it’s not really — the impunity still rules, as you all know. Only 3 percent of crimes are actually prosecuted in states like Mexico. So until you actually have a holistic approach, it’s a bigger challenge.

MS. MADISON: Right. Which makes it seem overwhelming and impossible. Right?

MS. REALUYO: Yes.

MS. MADISON: I mean, that’s I think one of the challenges that we have. But in terms of the other pieces of the budget, like Treasury and other places, I mean, I assume that’s not just the assistance piece, right? It’s the law enforcement piece that we have to get at, I assume.

MS. REALUYO: Yes. And the other thing is in terms of — so, as you know, I’ve trained many generations in terms of terrorism money and money laundering. And there’s an inherent competition that we have, particularly in a new field, which we didn’t talk about, which is cyber. The talent pool is fixed, and offers from the private sector are so great. So we’re actually cannibalizing on our people, who are the experts. So some of the things we’re looking at is how do we also keep people abreast of the situation, so a lot of times, the most busy officials are the ones who don’t have time for training to keep up-to-date on what the latest ways of laundering money through virtual currency or Bitcoin are.

And then, we have to start thinking about more kind of innovative ways of people who go inside and outside. As you know, I was a banker on Wall Street that was brought in after 9/11, and they had to be much more open. People want to serve, and there’s a bigger question about how you engage the different sectors of society into what we call now the national security architecture, which maybe 10 years ago or 20 years ago, we wouldn’t even think about.

But now it’s all about PPP, public-private partnership, and trying to figure out how you make amends when you’re kind of having this very austere budget environment and also creating incentives for people to stay at places at OFAC or FinCEN, at Treasury, or at the FBI, where we have amazing talent in terms of investigators for these types of crimes.

MS. MADISON: So let’s kind of set our minds to the solutions piece of this, the what we do about it. You know, Roger, you talked about a very specific sort of pernicious problem in Venezuela, and you did as well, the idea that the state is not separable from the criminal activity. So in cases like this, I mean, I assume that we have to take these issues on if we ever want to see Venezuela, you know, beyond elections and other things. If we ever want to see a stable, prosperous, democratic Venezuela, this has to be part of what we take on. I’m just going to stipulate to that.

But how do you tackle this when the state itself is the problem? What are the tools that we have? And, you know, I know you — there’s a lot about this in the report, but what are the tools that we don’t have that we ought to be talking to people like Senator Rubio and other people on the Hill about acquiring for our folks who are tasked with taking this on?

AMB. NORIEGA: Well, the first and foremost, it requires political will, as Celina was saying. I mean, the package on Tareck El Aissami was sitting up there for a year and a half, and no action was taken because the administration at the time didn’t have a broader strategy on Venezuela where they wanted to confront the regime. But it’s always the right time to do the right thing. And it’s the right thing to stop criminals from shelling cocaine into the United States and for using our dollars and our financial system to launder the proceeds of that dangerous criminality. In the case of Venezuela, it’s a target-rich environment.

One of the names we mentioned here give insights on their assets in the United States is Diosdado Cabello. And what we’re recommending is that the administration should consider using those same sanctions against a guy like that who’s amassed billions of dollars from this criminality, which — you know, he — you know, he’s a very important political actor in terms of supporting Maduro. And so we don’t want to be perceived as intervening in their internal affairs.

But this is one way that the United States can signal that we intend to at least use the asymmetrical tools that we have available to confront this asymmetrical threat. We’re not intervening in their political affairs. We’re just saying, “Hey, the speaker of the house in Venezuela can’t use dollars to traffic in cocaine. We’re going to seize the assets.” And, by the way, we may need new authorities for the United States government to go after stolen assets that have been taken — some estimate $150 or $200 billion looted from Venezuelan enterprises by these criminals. To take those assets and rather than have them be a property of the US Treasury, repatriate them to the people from whom they were stolen as part of the reconstruction.

So this is a broader foreign policy initiative. So the rightful shot of sanctions against a guy like Diosdado Cabello or against José Luis Merino in El Salvador has to be in the broader diplomatic — with a broader diplomatic strategy, sending messages that the United States is going to stay engaged, it’s going to confront this criminality, sending messages to the military that you’re next in Venezuela as a matter of our policy. And also has to be included with international cooperation to eventually clean up the toxic waste of this criminality in Venezuela and build up institutions to confront criminality wherever it occurs.

MS. MADISON: I feel like some of the rest of you might have something to add here. Do you?

MR. FARAH: I would say what Celina said I think is fundamental, and that is going after the money, right? The thing that makes all of these people valuable and the structures that they’re in is their ability to amass and move large amounts of money.

So I think to me the first things that lack on the policy side is understanding. There’s not a really clear understanding of the amounts of money that these folks are actually moving into the billions of dollars, as Roger said. There’s not a clear understanding of the complexity of these networks and how the networks in Central America overlap with the networks in — with the FARC, which overlap with Venezuela, which overlap with Surinam, which overlap with illicit gold, which overlap with cocaine, which overlap with all kinds of illegal money. You’re talking about a very sort of complex and very large and almost separate universe in which legality — what we term legality — operates.

So I think the desire, the willingness to do things like take away visas from people that we don’t want visiting our country, even if they’re senior government officials, is incredibly important because it sends messages. And focusing and resourcing up the — especially Treasury and folks that have the authorities that can actually do the investigation. I deal with OFAC and others a fair amount, and they’re constantly overwhelmed. It sounds really great. We only have 15 other priorities to get to before we get there, and that may be 2020, you know. They simply don’t have the ability and the capability to do what needs to be done if you view this as a threat of the magnitude that some of us obviously do.

So I think those are the — and I think that if you take the money away from the essential nodes, that’s what makes them valuable, and the rest of the structure starts to crumble. So I think those are the main issues.

MR. HUMIRE: Yeah. You know, I agree with Doug and Celina and Roger. Money is instrumental. Sanctions are effective, but sanctions isn’t a strategy. I think we need to think a little bit broader. Celina was touching on this a little bit. You beat networks with networks. That’s how you fight networks. Until the United States builds a network that’s sufficiently capable enough, and a network that’s unified, we’re not going to win this asymmetric fight.

You read in my bio that I have taught classes on asymmetric war in Latin America over the years, probably about 10 years now. And for those that aren’t familiar with asymmetric warfare, with the term, even if I heard it a million times, what that essentially means is a non-kinetic conflict. It’s a war that’s not fought through conventional means.

And how do you fight a war that’s not fought through conventional means? By gaining legitimacy. That’s how you win an asymmetric war. You get legitimacy and delegitimize your adversary. We have to fully understand what we’re dealing with.

We’ve mentioned Tareck El Aissami. The senator’s mentioned him. I know Ambassador Noriega has mentioned him. Who is Tareck El Aissami? Do we really know who he is? I’ll give you a small anecdote. And most people I imagine don’t know this. Tareck El Aissami is the great uncle to a gentleman named Shibli al-Aysami. Shibli al-Aysami — (inaudible) — is one of the founders of the Baathist movement in Syria, the same movement that put Bashar al-Assad into power.

The networks that we’re dealing with are centuries old, if not at least a half-century old. These are well-established, well-funded, well-financed, and well-trained networks, and in order for us to deal with it, we’re going to have to build the same capability.

And let me just add one last point towards the end is I think we have an opportunity, a golden opportunity really. This didn’t exist five, six years ago. I mean, really the Bolivarian structure in the criminalized states took a lot away from us in building regional forums and alternative networks. And they played by completely different set of rules Doug was alluding to.

But now we have a new government in Argentina. We have a new government in Peru. We have the potential of a new government in Brazil and Guatemala. This makes a difference. The political world makes a difference. And if we can’t capitalize on that opportunity, we may never get it again. So I think this is time.

MS. MADISON: It is notable to me that we had a degree of momentum on the counternarcotics issue where everybody understood the issue, everybody — most in the region understood the issue, understood that we may need to cooperate, went after it. We went after it with a lot of different tools. But we don’t — my sense is we don’t have that sort of coalesced perspective on the transnational organized crime, although everybody is feeling the consequences.

And I know you just go back from Guatemala, and you’ve been involved in some of the efforts to kind of begin to bring the — rally the region to these issues, do some training. What are you picking up as you’re out in the region about the level of concern, the level of focus on these issues and on tackling them?

MS. REALUYO: Do you know, historically, for those of us who have been following this for several decades, we always talked about producer countries, right, of drugs, transit, and consumer? But now, the dawn of synthetics, everyone is a consumer, everyone is a producer, and everyone is in transit. And it’s really interesting now that we see a lot of the traffickers paying for the transit with actual drugs. They’re creating a health crisis. People have never really seen — and it’s not just the United States and in Latin America. We see in Africa they’re being paid with cocaine and doctors that have never really seen in West Africa what that looked like.

What we saw though I think is very important, also going back to one of the new initiatives. So on June 15 and 16 — unfortunately it wasn’t very covered except for by the Miami Herald — there was a very big summit, which was the Conference on Prosperity and Security in Central America, cohosted by the United States and Mexico. You had the presidents of the Northern Triangle countries, ministers from all of Central America really focusing on three things.

First, why there’s this the citizen security piece, which is driving people away, which is affecting the migration patterns throughout the region, and then, one point, the levels of violence, which are still quite high. They’re reducing, but there’s still a reason that you’re fleeing. Any migration is you’re fleeing away, right, from violence or lack of opportunity towards the opportunity. And the two the pieces that they were looking at is really reengaging, and, more importantly, reinforcing judicial institutions, this idea of anticorruption, which is quite a vogue around the world but particularly in Latin America, which has actually toppled several governments, including Guatemala, so I was just there. And then the third piece was really looking at what we call regional cooperation.

Joseph mentioned the thing that we look at, networks. So I work a lot with the military. So we talk about the red networks. Usually red on any graph is negative. So we think about the enemies or the adversaries as the red networks. And Admiral Tidd likes to talk about blue networks, which are US government, interagency, and then the green networks, who are partner nations.

And this is the idea of having now the other countries who are now also facing the scourge of drug trafficking, human trafficking, all types of contraband, which is having also health effects, and try to get them to own it. And I think that was very interesting to see at that conference, where they looked at socioeconomic pieces first, on the first day, and at security on the second day, which in the past, it’s always been the flip.

And the idea was to also make the private sector and look at how to encourage investment. So it’s a very holistic piece, looking at what we always call the DIME model that we teach, right, which is the diplomacy piece, which is political will, economic, investment, and then, more important, the law enforcement, intelligence, how do we better connect to go after these red networks.

MS. MADISON: So I did want to — so we’re going to run out of time. I did want to get to the issue of Colombia and the — it was mentioned earlier, the FARC dissidents, and this question of the FARC, its history, its connection to criminal states in the region, its connections to transnational organized crime organizations, and the question of how the — how in the peace process in Colombia and in the process of the FARC transforming itself into a political entity, how you sort of forestall that element of the FARC from being imported into the political process.

I know that the idea of the FARC dissidents is that they’re a separate sort of, you know, dissident entity and that we shouldn’t be concerned about it. But should we be concerned that those relationships and those activities will remain integral to the FARC and connected to the FARC through political presence as they move through the implementation of the peace process? And what’s to be done about it?

Do you, Doug, have a thought on that? I know it’s an area of specialty for you.

MR. FARAH: I think the FARC dissidence has fallen to multiple categories. I think there are real dissidents. I think there are folks that have been in combat for many years and simply don’t want to go to a different type of life, maybe go to the BACRIM. And I think that if you look at the Central American model that I think they’re following quite closely, there will be groups that simply don’t demobilize as part of the ideological struggle going forward, and to keep an armed resistance or capability in case things like the United Patriotic Movement, the UPA, massacres and stuff start again.

And so I think that there — you know, I think there are multiple baskets that you can’t just say FARC dissidents are one particular thing. But I think they either are specific groups that have from the 48th Front. The group that was just up on the board of the senior FARC officials, including one who had been in the Havana peace talks and others, they probably retain a much closer organic link to the FARC secretariat, and they happen to be the ones that control most of the — some of the fronts of the largest cocaine, coca production and the illegal mining, the gold mining structures as well.

And I think those — for the FARC to really let those go would be incredibly difficult and hard for them to do. I think they’ve taken a step back. The numbers I think are small in relative terms, but you see things like the FARC and the 48th Front moving brand new weapons from one camp, trying to go and bury them in another place outside the camp with new weapons, new factory made landmines, lots of stuff that gave no indication having been buried in the jungle before and every indication now that we’re seeing in Central America that a lot of the of weapon of the FARC are now flowing into Central America, and I think they kept a reserve of the goods weapons for themselves.

So I think it’s very complicated. How to keep them out of the process I think would be a matter of political will in Colombia and the Colombian government and how it deals with that. I don’t think from outside one can say you have to do this, you have to do that. But I do think they’re putting an enormous amount of the resources that they’ve kept, that they didn’t turn over as they were supposed to in the peace process into developing a political infrastructure in the areas particularly where they control but also broadening out from there in an effort to get into the political game at a very high level. Because what the FMLN and the Sandinistas told them during the peace talks were, look how long it took us to take power. It took the FMLN 27 years to take power. You need to harness your resources, and you can take power in a much shorter period of time. We couldn’t do it because we had no money was FMLN’s argument.

And I think the FARC took that to heart, and they’re harnessing a lot of the resources to put into a process that they think will accelerate their taking political power at the municipal state, an eventual national government in much quicker time than the FMLN was or the Sandinistas had their long lapse after 1990, 2007 arguing the same thing. MS. MADISON: So you really think they had a strategic plan.

MR. FARAH: I do.

AMB. NORIEGA: Yeah. Interesting. Kirsten, can I just jump in on this?

MS. MADISON: Yes. Of course.

AMB. NORIEGA: I must say that Doug is the one who took me to school on this a few years ago because, you know — and as I speak to different members of Congress and their staffs about the subject, I always admonish them, never assume that our enemies are as disorganized as we are because they’ve been — the FARC leadership have been cooking up this transmogrification from the insurgency to the political organization for decades. And there was a conscious effort to go into the cocaine.

And one of the persons that helped convince them of this strategy and convinced them to get involved in cocaine in a very big way, move away from that sort of supportive role, be directly involved in the trafficking to maximize their profits was José Luis Merino, who’s the head of — and the cupola, the triumvirate that runs El Salvador today, was, you know, coconspirator with Chavez in the development of these money laundering organizations masquerading as social organizations.

And if you — so if you want to test my proposition about whether they have $1 billion, $2 billion, $3 billion, the FARC has at their disposal, you might want to ask José Luis Merino where he came by his $1 billion. And my guess is if you start pulling on the strings out of his accounts, you’ll find a network of where a lot of this FARC money is. And Merino, incidentally, was in Havana, advising the FARC during the negotiations of the so-called peace plan. So, again, never assume that our enemies are as disorganized as we are.

MS. MADISON: Do you want to answer this?

MR. HUMIRE: Yeah. Colombia is a great concern. That was a success story for the region, for the US engagement, for US partnership. Plan Colombia did tremendous things in a very short amount of time, in 10 years. And I agree with Doug and Ambassador Noriega. I think the FARC had a plan. They had a direction. They knew what they were doing.

Anyone that studied military strategy called on Clausewitz, right? We’ve all read him or studied him. And he had a famous saying where he said that war is but politics by other means. I mean, there’s always a hybrid between politics and war.

But what did Lenin say? Lenin said the inverse. Lenin said that politics is but war by other means. And knowing that the FARC is but a Marxist-Leninist organization, they always do that. There’s a strong political element to what they need to do.

And I think, you know, the purpose of this paper and this conference in general, you know, the word of “transnational organized crime,” the operative word there is “organized,” because, you know, transnational just means across borders. Crime is crime, but “organized” is what separates them from everything else. And there’s nothing more organized than the FARC if you really dissect. You know, and the FARC followers had a lot of this dissector network. I mean, it would include NGOs as far as Europe, all the way through Latin America, and they had tremendous capability that we didn’t see until it was too late.

MR. FARAH: Can I add just one last two-second thing?

MS. MADISON: Yes.

MR. FARAH: I think it’s also easy to overestimate the ability of these groups to carry out their plans in ways that we sort of give them these qualities when they’re also very vulnerable humans. And I think it’s easy to overestimate what the FARC dissidents actually represent. And I think it’s equally damaging to underestimate them. But I don’t think that they’re this monolithic force on the move either. I think that they make a lot of mistakes and they’re not unified and they fight because they’re human beings and they don’t all agree and things fall apart sometimes.

MS. REALUYO: One thing on the FARC.

MS. MADISON: Yeah.

MS. REALUYO: The cocaine trafficking is higher than it’s been in decades. And it’s not about the FARC. Just as the FARC replaced the Medellin and Cali cartels, someone’s replacing the FARC. So there’s actually some of us who are quite provocative looking at what is in Mexico, the cartelization, cartelización, of the drug trade and the gold mining and the human trafficking of these different bandas criminales. They are criminal bands that are starting to gain much more traction because everyone’s distracted looking at the FARC and what that’s going to look like. Someone’s still running the business. So this is a bigger question.

So I had this theory, it’s like — so there are members of the FARC who will accede, and more importantly, we have to hold accountable, right, and the Colombians have to do that. There are others who will join existing bandas criminales, and others who are going to create their own, which is why I think Doug and I have taken a look at, because the illicit economy’s still there and it’s actually more lucrative and much more product than we’ve ever seen.

MS. MADISON: And highly adaptive and —

MS. REALUYO: Yes.

MS. MADISON: They have market diversity and all the other things that any illicit business is like sure to have, right? MS. REALUYO: And we did note it here, but it’s the first — this past year is the first year we’ve actually had an increase in domestic consumption of cocaine in eight years in the United States, which is disturbing.

MS. MADISON: Yeah. Notable. So let’s give our folks — and we have about 10 minutes so let’s take a few questions that the audience has sent, which hopefully I will be able to read.

So since we’ve mentioned Mexico, and we haven’t talked about it more broadly, and it is discussed in the report, one of our attendees has asked what the thoughts of the panel are on the Merida Initiative and whether or not the US should continue to pour so much money into that strategy. I think it’s a fair question. I also think if anyone — I don’t know if it’s you, Roger, wants to speak briefly and anyone else who wants to add to the Mexico question and also to specifically this question from the audience.

MR. NORIEGA: Sure. I should note that there are four of us here, but there are 16 people that drafted this paper and a good number of them are in the audience. In this case, Felipe Trigos helped very much on the Mexico thing. And Mexico is one that doesn’t — when we suggest these rifle shot sanctions, by the way, we’re not saying it’s a substitute for a strategy.

It has to be followed up — it has to be — in the case of Mexico, there really are no rifle shots either. You know, it has to be a holistic reappraisal of what we’re doing there. And I think there’s a great understanding and appreciation for the fact that since Fox took office and certainly since Calderon in the last 10 years, we’ve had a lot of cooperation with Mexico.

President George W. Bush put considerable resources to this Merida Initiative. It approached eventually, you know, $2.5 billion. And the strategy of the Mexicans particularly under Calderon was going after the kingpins. And this essentially it’s the same, you know, although it didn’t really have a strategy initially. Peña Nieto has pursued that.

What we say in the report is that as long as Mexico doesn’t get its arms around the corruption issue and the impunity problem and have a more effective judicial system to deal with in a systematic way, you’re not going to get traction against this problem, and you’re not going to have the kind of political will, sustained kind of political will that will deliver significant results.

So you have tens of thousands of people who have died in Mexico because of this confrontational strategy. We never really got our arms around it. We’re willing to talk in a serious way about the endemic corruption that undermines the cooperation among agencies or levels of government in Mexico and so that we need to have an appraisal of that. And that’s going to be something that clearly Mexicans have to do within the four corners of their country.

There are some things that the United States can do. First off, I do think we need to sustain this effort because it’s the consumption of drugs in the United States that’s fueling this problem. So we can’t just sort of walk away and say that’s a problem that they have. The opioid crisis that we want to deal with here is a direct result of a failure to control prescription drugs, which creates this — you know, debilitating addictions among tens of thousands, hundreds of thousands of people. If it doesn’t kill them, they eventually go on to drugs, illegal drugs that are produced, fentanyl and others that are produced and transited from Mexico. So we have to get our arms around that problem. And I think that’s a high priority for our government. They’re doing that now.

And then, on the guns parts, which these gun parts, people getting around US regulations and US law, I know we’re big believers in the Second Amendment. But this gun part loophole is a way that the narcos can literally outgun law enforcement. And I think we need to look at ways to address that problem, close that loophole.

MS. MADISON: Does anybody else have anything they want to add on the Mexico part?

MS. REALUYO: Just on Mexico. Tomorrow I go to Mexico to actually talk about the cost of crime.

MS. MADISON: You are always on the road.

MS. REALUYO: I am literally here just today. Just for those who haven’t seen it, I recommend the Inter-American Development Bank did a study in February. The cost of crime, transnational organized crime, globally is about 1.5 percent of GDP. For this region, in the Americas, it’s 3.5 percent. So think about the opportunity cost.

And, more importantly, in Mexico, it’s structural. It’s literally the levels of impunity. They train people to run away from the police, not actually to denounce that they’ve been a victim of crime. And they are making steps in terms of changing the way that crimes are tried and this idea of a generation that’s going to take.

But they’re also starting to deal with consumption, which is something that they never really had seen before, and then trying to deal with these precursors drugs, which are fentanyl, all the chemical precursors. So there are ways that, bilaterally, in spite of what you think about the rhetoric portrayed by the media, we have very strong operational relationship, particularly on counternarcotics, intelligence, border control, and actually even on counterterrorism issues — because we didn’t talk about during the panel today — the fear of what we call special interest aliens coming and using the same pathways to come through and, more importantly, cross into our country.

MS. MADISON: But it’s interesting, so if you were to go look at the attacks in Belgium, for example, you would see that what the terrorist networks did is they actually tapped into criminal networks to get their documents and to get their weapons, right? And, of course, in Colombia, we saw a convergence of terrorism and criminal activity. So one shouldn’t assume that it can’t happen again in some way in other pathways of criminality, right? I think it’s not that we need to be paranoid about it but that we need to understand the possibilities I think is —

MS. REALUYO: Well, thanks to US training and technical assistance, they actually caught a Somali who had had multiple identities who was on the no-fly list. He was crossing Panama into Costa Rica just about two months ago, and they used biometrics. So it’s a really interesting question about how you can get multiple passports. And this general we think got his fake passports from our favorite city, Ciudad del Este, Paraguay, and had come through and entered through on a plane from Brazil — came in the region. So it’s interesting to see. You’re going to a service provider, not necessarily an aficionado of your version of terrorist thought or ideology.

MS. MADISON: Right. True.

MR. HUMIRE: That’s actually a good way to look at Hezbollah. And I should acknowledge my coauthor in the section of the Iran-Hezbollah in the report is Emanuele Ottolenghi, who’s an Iran-Hezbollah expert. And, you know, the way he described it in the report, Hezbollah is as a service provider. So if you look at transnational organized crime as a pathway or maybe a super-highway, right, Hezbollah holds some of the tolls on that highway, especially the ones that go out to Europe through Africa and the Middle East.

And Hezbollah has a tremendous business-making network. I mean, they’ve gotten really good at using different type of trade-based money laundering systems, commodity- based money laundering systems. And just their own alternative, the remittances, the Hawala system they pretty much control.

So in that sense, Hezbollah, when you talk about crime-terror convergence, Hezbollah is a good definition of that because they do a tremendous amount of criminal activity from illicit mining to narco-trafficking, to money laundering, but they’re fundamentally a terrorist organization.

And that, you know, I think it was the senator who mentioned a couple of Hezbollah operatives that got arrested in Panama not too long ago. If you look into the history of one of them, one of the operatives, he himself admittedly said he had connections or family connections to the bombers from the Burgas attack in Bulgaria from a few years ago. So that’s fundamentally transnational. And he had — I think he was the one that was specifically casing the Panama Canal. That could have been bad.

MS. MADISON: So let me get through just a couple more questions from the audience because we don’t want to sort of not do that. So we have a few on Venezuela. One question, which I think is pretty easy to answer, which is Venezuela’s center of criminal activity. Do you agree that this and issues like human rights make it a good subject for bipartisan action in the US? And I would be surprised if anyone disagreed with that.

AMB. NORIEGA: I think that is an important part of this discussion. MS. MADISON: But it’s an important point, right?

AMB. NORIEGA: Is that there is a strong bipartisan consensus on this. The letter on José Luis Merino and saying that he should be investigated and sanctioned was initiated by Eliot Engel’s staff, cosigned by — no, Albio Sires’ staff — cosigned by Jeff Duncan, and it was seven Democrats, seven Republicans. The Venezuela legislation that talks about or the criminality in the regime on the Senate side was an initiative of Ben Cardin cosponsored by Marco Rubio.

So this is an area — I mean, think about Washington today. This is an area where you have people who — on Capitol Hill who’ve gotten smart about this issue, that got engaged in the issue, and that work across party lines without a second thought because — precisely because they know it’s a crisis. They know it’s something we’re confronting. So this is a great opportunity for the Trump administration to jump on this and to take yes for an answer.

MS. MADISON: Any dissenting views? I would doubt it. So it’s interesting. Let’s just get through — this is an interesting question. I don’t know if anyone would be prepared to speak to it, but what role do international banks play in policing illicit finance? And is there some redesign that’s needed on bank regulations that needs to be addressed if we’re going to actually get at these issues? It’s an interesting question. I am not a banking expert. Does anybody have views on this?

MR. FARAH: I think that there are — clearly, the US banking system is one of the biggest money laundering centers in the world. And we don’t do much of — we don’t — they’re not too bothered about doing due diligence on know your customers and things like that. And I think that’s an enormous problem. I think that coupled with the offshore havens that exist when you have an enormous amount of hundreds of billions of dollars parked offshore in ways that are completely invisible to the outside world, and you couple that, and they all have banking relationships with the United States.

The reason — the way they can move their money into their system is because they have correspondent relationships with banks in the United States. And we don’t on the US side care very much about cutting off the business that that would entail to do that. And you couple that, I think, with the other huge problem that we’re seeing now out of Latin America. This money is now moving to Russia and China in ways that we no longer have any visibility on.

MS. MADISON: So it’s out of our reach entirely.

MR. FARAH: It’s out of our reach. When they figure out how to do that, which they are now and which they’ve begun doing more and more, then it’s essentially gone. And so you have this creation of this very large universe of money that is not bound or resources that are not bound by any of the rules that we would like to think that we are bound by. And I think that’s becoming an enormous problem.

MS. MADISON: It’s another alternative universe. Yeah.

MR. FARAH: Yes. Yeah.

MS. MADISON: Yeah. Very challenging. And we probably couldn’t hire enough people at Treasury to get to that so that’s a huge challenge.

MR. FARAH: I mean, you can push banks, and there has been some success in getting banks to acknowledge some responsibility. But, usually, it’s the cost of doing business. You have Wells Fargo and others who have paid enormous fines, and they still made a profit on the illicit transactions. So I think it’s difficult to — it requires a lot of political will.

MS. MADISON: Any unfired rounds from any of you that you would — anything else you’d like to add, because I think we need to —

MS. REALUYO: Just on the banking piece, as a recovering investment banker myself. So there’s a very fundamental piece in the United States. Actually, when you as a bank accept responsibility for laundering, in the case of HSBC, $8 to $7 billion in the course of two years between the US and Mexico. The fine in Mexico is $29 million. It was $2 billion almost here in the United States. Not one banker — because it’s not like the bank did it, right? Someone actually did it. No one did what we call the perp walk, right? Everyone remembers the picture of Bernie Madoff, but there are no pictures of these people who have been laundering for the largest banks in the world, right?

So you actually take it as an institutional mea culpa as opposed to actually bringing people to trial. And that’s a — there’s a way — it’s all about how you apply the laws and then, more importantly, ask about accountability. It’s very difficult for us who do represent the US government used to ask other countries to do that when they actually say, well, actually your banks just take it as a write-off as opposed to actually applying the law to the people who are the ones who are complicit in the actual laundering.

MS. MADISON: Indeed. That makes it tempting.

MR. HUMIRE: I’m not a recovering investment banker, but I tell you, I think one of — in the areas of looking to alternative systems and just new players in the game of banking in Latin America, I think you have to look at China. China’s become a really relevant player in Latin America over the last decade really, just accelerated in the number one trade partner of certain countries, such as Brazil, they’re the second in many other countries.

And China has developed a development bank that, you know, rivals the World Bank, if not greater than the World Bank, and has developed all kind of alternative systems to make payments, systems that the US financial authorities aren’t going to have access to.

That forum I was at in Latvia was actually — it was done in partnership with the US Congress, Congressional Task Force on Terrorism and Unconventional War, but also with members of the Department of Treasury who are looking at things like crypto currencies and other new technologies that they look at some of the illicit actors using and that we haven’t really gotten into that game yet. I think China’s a big player in that.

MS. MADISON: More undone work. Yes. Roger.

AMB. NORIEGA: Let me just add to the rogues gallery here. You know, I think a lot of folks think that they understand Vladimir Putin, who he is and what he — you know, he wants to — he’s the new tsar, he wants to assure the greatness of the Soviet Union or Russian empire. And an expert explained to me that he is a gangster. He’s a criminal. And, you know, he’s a criminal boss. And he has no problem working with any others with a similar profile to advance his interests. And so he’s one of the principal supporters of Maduro.

Now, he’s dwindling on liberties. He certainly won. He’s holding in there. And he, I think, is probably going to be taking a good look at Mexico and playing in Mexico to sew unrest, which causes problems for the United States, but also tap into the criminal networks and intelligence networks that the criminals operate in that country, right here in our neighborhood.

MS. MADISON: So there’s no end to the intending criminality. I think that’s a depressing note to end on. So let me try to make it less depressing. I think it is the hope of the people who are involved in this, many of whom are also in the audience. I see Christy McCampbell, and I see José Cardenas, and there’s a whole series of — actually, everybody on this list, if everybody got the report, owes — we owe them a debt of gratitude for being involved in sharing their wisdom.

And I think it is the hope of the people that were involved in this process that policymakers will take a serious look at what’s been assembled here from public sources, from the knowledge of the people who are involved, and at the tools that are being recommended and think seriously about how they put them in motion and act on them, whether it’s Treasury or some other element of the US government.

We see this, I think, as an imperative not just for the Western Hemisphere; countries that live — you know, that we share this region with but also for ourselves and for what these criminals carry into our cities and across our border and what they deliver onto the — for those of you who have children, unto your children in terms of threats and criminality in our cities, drugs and other things. I think it’s an imperative. And this group of people sat down and really gave some thought to how we begin to get at it and deconstruct these networks. And for that, we thank them. (Applause.)

(END)