Homeland Security

20 May 2003

International Law Enforcement Cooperation Fights Narcoterror

(DEA official testifies before Senate committee) (7540)
U.S. efforts to increase regional law enforcement cooperation have led
to significant arrests and drug seizures in various parts of the world
where drug traffickers and terror groups have made common cause.
In testimony before the Senate Judiciary committee May 20, Drug
Enforcement Administration (DEA) intelligence chief Steven W. Casteel
described cases in the Americas and Central Asia that have resulted in
arrests and the seizure of contraband.
U.S. Mexican and Canadian authorities worked together to crack down on
the illegal trafficking of pseudoephedrine, an ingredient used in the
manufacture of methamphetamine, Casteel said, resulting in almost 300
arrests and the seizure of more than 26 tons of pseudoephedrine.
Another coordinated effort, Operation Containment, involved
representatives of 25 countries to develop "a coordinated post-Taliban
heroin counter-drug strategy to deprive international terrorist groups
of the financial basis for their activities," Casteel said. The
operation began in February 2002 and involved a coordinated strategy
to seize drugs at specific land, air and sea border checks with
assistance from law enforcement and customs officials in Central Asia,
the Caucuses, Europe and Russia.
"Operation Containment was one of the most successful drug
interdiction initiatives to be undertaken on a multi-regional basis,
and it has become a benchmark for future cooperative international
programs," Casteel said.
In his testimony, Casteel offered a global census of groups involved
in organized criminal activity, drug trafficking and terror.
Further information about the hearing is available at
http://judiciary.senate.gov/hearing.cfm?id=764
Following is the text of Casteel's prepared testimony:
(begin text)
DEA Congressional Testimony 
May 20, 2003 
Statement of Steven W. Casteel 
Assistant Administrator for Intelligence 
Before the Senate Committee on the Judiciary 
Narco-Terrorism: International Drug Trafficking and Terrorism -- A
Dangerous Mix"
Executive Summary 
Prior to September 11, 2001, the law enforcement community typically
addressed drug trafficking and terrorist activities as separate
issues. In the wake of the terrorist attacks in New York City,
Washington, DC, and Pennsylvania, these two criminal activities are
visibly intertwined. For the Drug Enforcement Administration (DEA),
investigating the link between drugs and terrorism has taken on
renewed importance. More importantly, it has heightened the visibility
of DEA's mission - one that was present even before September 11th.
Throughout history, a broad spectrum of the criminal element - from
drug traffickers to arms smugglers to terrorists - have used their
respective power and profits in order to instill the fear and
corruption required to shield them from the law. Perhaps the most
recognizable illustration of this linkage is the expansion of
Traditional Organized Crime in the United States during the early 20th
century. Whether a group is committing terrorist acts, trafficking
drugs or laundering money, the one constant to remember is that they
are all forms of organized crime. The links between various aspects of
the criminal world are evident because those who use illicit
activities to further or fund their lifestyle, cause, or fortune often
interact with others involved in related illicit activities. For
example, organizations that launder money for drug traffickers often
utilize their existing infrastructure to launder money for arms
traffickers, terrorists, etc. The link between drugs and terrorism is
not a new phenomenon.
Globalization has dramatically changed the face of both legitimate and
illegitimate enterprise. Criminals, by exploiting advances in
technology, finance, communications, and transportation in pursuit of
their illegal endeavors, have become criminal entrepreneurs. Perhaps
the most alarming aspect of this "entrepreneurial" style of crime is
the intricate manner in which drugs and terrorism may be intermingled.
Not only is the proliferation of illegal drugs perceived as a danger,
but the proceeds from the sale of drugs provides a ready source of
funding for other criminal activities, including terrorism.
Chairman Hatch, Ranking Member Leahy and distinguished members of the
committee, it is my distinct pleasure to appear before you in my
capacity as the Assistant Administrator for Intelligence of the DEA.
Before I begin, Mr. Chairman, I would like to recognize you and the
members of the committee for your outstanding support of DEA's mission
and the men and women who serve it.
The DEA does not specifically target terrorists or terrorist
organizations. It is DEA's mission to investigate and prosecute drug
traffickers and drug trafficking organizations. However, some of the
individuals and/or organizations targeted by the DEA may be involved
in terrorist activities. In fact, fourteen (or 39 percent) of the
State Department's current list of 36 designated foreign terrorist
organizations have some degree of connection with drug activities. Due
to DEA's global presence and the strong relationship with local law
enforcement through the DEA Task Force Program, it is only natural,
that in the course of drug investigations and intelligence collection,
DEA would develop intelligence and information concerning terrorist
organizations.
Defining Narco-Terrorism 
According to 22 U.S.C. § 2656f(d)(2)), terrorism is the premeditated,
politically motivated violence against noncombatant targets by
sub-national groups or clandestine agents. International terrorism
involves citizens, or territory, of more than one country. A terrorist
group is any group practicing, or that has significant sub-groups that
practice, international terrorism.
Historically, DEA has defined narco-terrorism in terms of Pablo
Escobar, the classic cocaine trafficker who used terrorist tactics
against noncombatants to further his political agenda and to protect
his drug trade. Today, however, governments find themselves faced with
classic terrorist groups that participate in, or otherwise receive
funds from, drug trafficking to further their agenda. Consequently,
law enforcement may seek to distinguish whether narco-terrorists are
actual drug traffickers who use terrorism against civilians to advance
their agenda, or principally terrorists who out of convenience or
necessity, use drug money to further their cause. Our analysis
suggests that the label of narco-terrorist may be equally applicable
to both groups.
DEA defines a narco-terrorist organization as "an organized group that
is complicit in the activities of drug trafficking in order to
further, or fund, premeditated, politically motivated violence
perpetrated against noncombatant targets with the intention to
influence (that is, influence a government or group of people)."
The Pablo Escobar Example  
One of the most infamous "narco-terrorists" was Pablo Escobar. As
leader of the Medellin cocaine cartel in Colombia, he became one of
the wealthiest and most feared men in the world. At the height of his
success, Escobar was listed in Forbes Magazine as being among the
world's wealthiest men. While on the surface, he was nothing more than
a street thug who became successful by trafficking in cocaine, Escobar
had political aspirations and strove to project the appearance of
legitimacy, claiming his wealth was the result of real estate
investments. Escobar had a penchant for violence. He wreaked havoc on
Colombia while attempting to persuade the government to change its
extradition policy. Due to the numerous assassinations of politicians,
presidential candidates, Supreme Court justices, police officers, and
civilians, as well as a number of bombings culminating in the bombing
of an Avianca commercial airliner in 1989, Escobar enraged both
Colombia and the world. These actions resulted in a massive manhunt
and his death in 1993. Escobar was a drug trafficker who used
drug-related violence and terrorism to further his own political,
personal, and financial goals. He was the classic narco-terrorist; his
cause was simply himself.
South America 
One does not have to go to the Middle East to find active terrorist
groups - they exist right in our hemisphere. The U.S. State Department
has officially designated the National Liberation Army (ELN), the
Revolutionary Armed Forces of Colombia (FARC), and the United
Self-Defense Groups of Colombia (AUC) as Foreign Terrorist
Organizations. These organizations, all based in Colombia, were
responsible for some 3,500 murders in 2002. As in years past, Colombia
endured more kidnappings last year than any other country in the
world, roughly 3,000. Overall, the AUC, ELN, and FARC all benefit and
derive some organizational proceeds from the drug trade, as well as
other illegal activities such as kidnapping, extortion, and robbery.
DEA is actively building cases on members of these groups who have
been identified as engaging in drug-trafficking related activities,
which are summarized below:
--March 7, 2002, FARC 16th Front Commander Tomas Molina-Caracas and
several of his Colombian and Brazilian criminal associates were
indicted in the District of Columbia for conspiring to manufacture and
distribute cocaine with the intent and knowledge that it would be
illegally imported into the United States. In June 2002, Surinamese
authorities detained DEA fugitive Carlos Bolas; a Colombian national
and FARC member who was named in the March 2002 indictment. Shortly
thereafter, DEA agents transported Bolas from Suriname to the
Washington D.C. area for arraignment in U.S. District Court. This
marked the first time that the U.S. indicted and arrested a member of
a terrorist organization involved in drug trafficking.
--On September 24, 2002, the U.S. Government announced an indictment
charging leaders of the AUC with trafficking over seventeen tons of
cocaine into the United States and Europe beginning in early 1997.
Charged in the indictment are AUC leader Carlos Castaño-Gil, AUC
military commander Salvatore Mancuso, and AUC member Juan Carlos
Sierra-Ramirez. According to the indictment, Carlos Castaño-Gil
directed cocaine production and distribution activities in
AUC-controlled regions of Colombia.
--In November 2002, U.S. Attorney General John Ashcroft announced the
takedown of Operation White Terror with the arrests of Fernando
Blanco-Puerta, Elkin Arroyave-Ruiz, Uwe Jensen, and Carlos Ali
Romero-Varela for their involvement in a multi-million dollar
cocaine-for-arms deal. Fernando Blanco-Puerta and Elkin Arroyave-Ruiz
were allegedly AUC commanders. All four defendants are charged with
conspiracy to distribute cocaine and conspiracy to provide material
support and resources to a foreign terrorist organization. This
Operation was an Organized Crime Drug Enforcement Task Force (OCDETF)
investigation conducted by the Houston offices of the Federal Bureau
of Investigation and DEA.
--On November 13, 2002, the U.S. Government announced that Jorge
Briceño-Suarez was named in a superseding indictment for his narcotics
trafficking activities. Jorge Briceño-Suarez commands the Eastern Bloc
of the FARC and is a member of the FARC Secretariat. As Eastern Bloc
Commander, Briceño-Suarez (direct superior of Tomas Molina-Caracas) is
responsible for the activities of four FARC Mini-Blocs that operate in
the vast eastern plains of Colombia.
Revolutionary Armed Forces of Colombia 
The FARC, the largest of Colombia's terrorist organizations, uses its
relationships with international smuggling organizations to purchase
weapons and other equipment on the international black market to be
used in the FARC's war against the Colombian government. In some
cases, the FARC directly trades cocaine for weapons and in other
instances funds weapons purchased with cash derived from cocaine
sales.
The FARC are by far the most visibly violent of Colombia's terrorist
organizations and have repeatedly demonstrated their willingness to
utilize violence to further their agenda. The FARC intensified its
terrorist offensive throughout 2002 and 2003 and steadily moved its
attacks from the countryside to the cities.
--On August 7, 2002, Colombian President Alvaro Uribe was inaugurated
amid a FARC mortar attack on the Presidential Palace in the heart of
Bogota. One errant mortar killed 21 residents of an impoverished
Bogota neighborhood.
--On February 7, 2003, a car bomb exploded at Club El Nogal, a popular
social club on the north side of Bogota near many residences of U.S.
Embassy personnel. Thirty-five persons were killed including several
children. The investigation by Colombian authorities revealed that the
FARC was responsible for this terrorist act.
--On May 5, 2003, Antioquia Governor Guillermo Gaviria and Gilberto
Echeverri, former defense minister and peace adviser, were
assassinated by the FARC near Urrao Municipality, Antioquia
Department. The two officials were murdered along with eight
non-commissioned officers and soldiers.
--On May 8, 2003, twenty-eight occupants of a Satena Airline aircraft
were terrorized, but otherwise unharmed, when FARC members shot at the
aircraft as it was getting ready to land on the runway in La Macarena,
Meta (formerly part of the demilitarized zone).
United Self Defense Forces of Colombia and the National Liberation
Army
The AUC, commonly referred to as autodefensas or paramilitaries, is an
umbrella organization of approximately 13 self-defense groups. The AUC
is supported by economic elites (cattle ranchers, emerald miners,
coffee plantation owners), drug traffickers, and local communities
lacking effective government security, and claims as its primary
objective the protection of sponsors from insurgent attacks. The AUC
now asserts itself as a regional and national counter-insurgent force.
It is adequately equipped and armed, and reportedly pays its members a
monthly salary. In 2000, AUC leader Carlos Castano claimed 70 percent
of the AUC's operational costs were financed with drug-related
earnings, with the balance coming from sponsor donations.
AUC operations vary from assassinating suspected insurgent supporters
to engaging guerrilla combat units. Colombian National Police reported
the AUC conducted 804 assassinations, 203 kidnappings, and 75
massacres with 507 victims during the first 10 months of 2000. The AUC
claims the victims were guerrillas or sympathizers. Combat tactics
consist of conventional and guerrilla operations against main force
insurgent units. AUC clashes with military and police units are
increasing, although the group has traditionally avoided confrontation
with government security forces. The paramilitaries have not yet taken
action against US personnel.
The ELN -- like the FARC -- continues to pursue its favored terrorist
methods of kidnapping and infrastructure bombing. There are currently
no formal or informal peace talks between the ELN and the Colombian
government. On March 5, 2003, a car bomb exploded in a shopping center
in the northeastern city of Cucuta, killing seven people and injuring
more than 50. Military and police sources attributed the Cucuta attack
to ELN guerrillas operating in the city.
Spill-Over Into Central America 
DEA reporting indicates that persons affiliated with the AUC, and to a
lesser extent the FARC, are working with Mexican and Central American
trafficking organizations to facilitate cocaine transshipments through
the region. Consistent with these reports, a Government of Mexico
official recently stated that members of the AUC and the FARC are
carrying out drug-trafficking activities in Mexico. There have been
numerous instances of drugs-for-weapons exchanges occurring in the
region, particularly in Central America, that are exemplified by the
November 2002 takedown of Operation White Terror which resulted in the
dismantling of an international arms and drug trafficking network
linked to the AUC. DEA continues to work with Host Nation Counterparts
in Latin America to pursue and disrupt the drug trafficking activities
of these vast traditional criminal networks providing financial
support to the AUC and the FARC.
Panama 
--July 22, 2002 - After arrests involving the seizure of 10 kilograms
of heroin, intelligence revealed that additional drugs were to be
located at the beach house of one of the arrested. The police returned
to the beach house to find an additional 6 kilograms of heroin, 300
kilograms of cocaine, and 260 kilograms of marijuana. Also discovered
were 139 AK-47s, 11 Dragonov sniper rifles, 1 Fal 7.62 rifle, 2 .45
caliber submachine guns, 247 AK-47 ammunition clips and 598 rounds of
7.62 bullets.
--November 6, 2002 - After establishing surveillance at a location
where a number of seizures had recently been made, local authorities
observed several men carrying large burlap bags. A fire fight occurred
after the police approached the men. The police captured one suspect
while several others escaped. Subsequently, six additional suspects
were apprehended by means of road blocks. The abandoned bags contained
316 kilograms of cocaine, 57 packets of heroin, 410 heroin pellets,
and 1,134 small cylinders containing heroin. The next day the police
found a cache of AK-47 rifles and other assorted small arms and
ammunition in an abandoned pick-up truck that one of the suspects had
rented. This seizure like several others in Panama suggest that
significant drug transaction orchestrated by Colombian paramilitary
groups are often simultaneously accompanied by a significant arms
shipment.
DEA intelligence indicates that due to the political and economic
crisis in Venezuela, the FARC and AUC are increasingly utilizing
Venezuela as a transit zone to smuggle drugs, arms, chemicals and
monies to and from Colombia. The declining economy and inability by
the Government of Venezuelan (GOV) to effectively control the VZ/CB
border has resulted in increased drug trafficking, kidnapping and
corruption within in the region as a whole. Reporting indicates that
some of this activity is directly attributed to the FARC and AUC, as
well as other criminal organizations based within the region.
Ecuadorian security forces have worked to reduce the smuggling of arms
destined for Colombian terrorist groups and have limited travel at a
key border crossing to daytime hours. Nevertheless, armed violence on
the Colombian side of the border has contributed to increased
lawlessness in Ecuador's northern provinces.
HAMAS & Hizballah in the Tri-Border Area 
The two major terrorist organizations that exist in the Tri-Border
Area of Paraguay, Argentina, and Brazil are Hizballah and the Islamic
Resistance Movement known as HAMAS. The members of these organizations
often assimilate into the local culture and typically become merchants
in shopping centers to conceal their illegal activities. Intelligence
indicates that Islamic fundamentalist terrorist cells operate out of
strongholds in the Tri-Border Area of Paraguay, Brazil and Argentina.
They generate significant income by controlling the sale of various
types of contraband in these areas, including drugs, liquor,
cigarettes, weapons, and forged documents. Intelligence suggests that
a large sum of the earnings from these illegal activities goes in
support of the operatives' respective organizations in Lebanon.
Ties to Drug Trafficking in Tri-Border Area 
Subsequent to the events of September 11, 2001, the DEA increased its
monitoring of individuals and groups with links to terrorist
organizations based in Ciudad del Este, Paraguay. Ciudad del Este is
home to thousands of individuals of Arabic descent who have taken
advantage of Paraguay's relaxed immigration laws and sought asylum in
remote areas of the country. DEA intelligence has revealed that some
of these individuals are utilizing the proceeds from cocaine
trafficking to provide economic assistance to terrorist movements in
the Middle East. Many of these individuals own profitable businesses
(mostly contraband related) and have gained a great deal of political
influence over the years. These individuals utilize corrupt officials
and judges to operate freely in Ciudad del Este, Paraguay and Foz do
Iguaçu, Brazil.
The Sendero Luminoso ("Shining Path") in Peru 
The Sendero Luminoso ("Shining Path" or SL) is a violent insurgent
group operating in Peru that advocates the overthrow of the government
in order to achieve their self-described form of "agrarian communism."
The political and military power and influence of the SL have
decreased dramatically in recent years. The overlap of Peru's coca
cultivation regions and the traditional SL strongholds suggest SL
involvement in aspects of local drug trade. DEA, however, does not
possess evidence to corroborate assertions that the SL has transcended
beyond "taxing" local drug traffickers who wish to transport cocaine
base through areas where the SL is active. Further, there is no DEA
intelligence indicating that SL elements are involved in the
cultivation, processing, or sale of drugs.
Southwest Asia 
Afghanistan and the Taliban 
In January of 2003, DEA officially re-opened the Kabul Country Office,
which is staffed by two full-time special agents. With a presence
north and south of the Afghanistan border through offices in
Uzbekistan and Pakistan, the DEA continues to work closely with its
counterparts to collect intelligence pertaining to clandestine
laboratories, drug stockpiles, trafficking routes, and major regional
drug targets.
Afghanistan is a major source country for the cultivation, processing,
and trafficking of opiates, producing 59 percent of the world's supply
of illicit opium in 2002. Because of the country's decimation by
decades of warfare, illicit drugs had become a major source of income.
Through the taxation of illicit opium production, the Taliban were
able to fund an infrastructure capable of supporting and protecting
Usama bin Laden and the Al-Qaida organization. Accordingly, drugs and
terrorism frequently share a common ground of geography, money, and
violence.
Illicit opium production increased each year in Afghanistan during the
1990's, surpassing Burma as the world's leading producer of illicit
opium in 1998. By 2000, Afghanistan produced more than 70 % of the
world's supply of illicit opium, with more than 3,656 metric tons
produced. This equaled a potential heroin production of 365 metric
tons. An estimate conducted by INTERPOL suggested that ninety percent
of the heroin consumed in Europe originates in Southwest Asia,
particularly Afghanistan.
Afghanistan's neighbors in the Central Asian States may also be
candidates for exploitation by traffickers. Drug trafficking groups
could potentially utilize their existing smuggling networks within the
region to move product to markets and precursor chemicals to the
clandestine laboratories. Presently, the situation is fluid and
constantly changing. Until the situation in Afghanistan stabilizes,
the future of drug cultivation and production within that country or
within the region itself will remain uncertain. However, the ingenuity
and tenacity of drug traffickers in Southwest Asia will continue to
present substantial challenges to western law enforcement.
Kurdistan Worker's Party 
Abdullah Ocalan founded the Kurdistan Workers Party, commonly referred
to as the PKK, while a student at Ankara University in 1974. The group
developed as a revolutionary socialist organization composed primarily
of Turkish Kurds, with the stated goal of establishing the independent
nation of Kurdistan. The Government of Turkey has long followed a
policy of forced assimilation for Kurds, and viewed the possibility of
a separate Kurdish state as a threat.
In 1984, the PKK began to use violence against Turkish security
forces, and the level of violence escalated to include civilians. In
the early 1990s, the PKK added urban terrorism to their arsenal of
violent activities. The death toll for this conflict exceeds 30,000,
with the Turkish Government spending an estimated seven million
dollars each year combating Kurdish separatists.
The PKK, considered a terrorist organization by most Western
Governments, is represented in Kurdish immigrant communities
throughout the world and is particularly prevalent in Europe.
According to the U.S. Department of State, the PKK has received
safe-haven and modest aid from states in region. The Government of
Turkey consistently reports that the PKK, as an organization, is
responsible for much of the illicit drug processing and trafficking in
Turkey. Turkish press reports state that the PKK produces 60 tons of
heroin per year and receives an estimated income of forty million
dollars each year from drug trafficking proceeds.
According to historic DEA reporting, the PKK may receive its funding
from a number of illicit means, including kidnapping and drugs.
Government and press reporting indicates that the PKK may be involved
with merely taxing traffickers passing through their controlled
territories. Other reports indicate that the PKK may be more directly
involved with drug trafficking and possibly controlling a significant
portion of the heroin market in Europe.
Russian Organized Crime 
Analysis conducted by the DEA Moscow Country Office indicates that
Russian Organized Crime (ROC) groups are expanding their scope of
criminal operations worldwide, to include drug trafficking and money
laundering activities. These groups are forming alliances with other
criminal entities such as the Italian Mafia, Mexican and Colombian
drug trafficking organizations, Japanese yakuza, Chinese triads, and
Nigerian smuggling groups. Through global connections, ROC groups
increasingly facilitate drug shipments in Latin America and Asia to
the United States and Europe, and are involved in weapons-for-drugs
exchanges. In addition, they have been attracted to the profitable
business of heroin smuggling from Afghanistan. ROC groups are also
expanding illicit operations to include "club drug" trafficking and
production, and trafficking of precursor chemicals used to manufacture
heroin and synthetic drugs.
Islamic Movement of Uzbekistan 
The Islamic Movement of Uzbekistan (IMU) is a radical Islamic movement
which has been in existence since 1996, maintaining close ties with
Al-Qaida and the Taliban. It has received funding from both groups and
its members have participated in Al-Qaida training camps in
Afghanistan. The Russian and Uzbek governments openly state that the
IMU is not only involved in Central Asian heroin traffic, but that it
effectively controls it as well.
Southeast Asia 
Liberation Tigers of Tamil Eelam 
The Liberation Tigers of Tamil Eelam (LTTE) commonly referred to as
the Tamil Tigers was founded in 1976 after splintering off of another
separatist group in conflict with the Government of Sri Lanka.
The LTTE's hostility with the Sri Lankan government began in 1983. The
Tigers are most notorious for their cadre of suicide bombers, the
Black Tigers. Political assassinations and bombings are commonplace,
however, the LTTE has refrained from targeting foreign diplomatic and
commercial establishments.
Sri Lanka's preoccupation with the LTTE depletes the resources needed
to adequately address the nation's drug problem. The conflict with the
LTTE absorbs the attention of the country's naval forces, preventing
the adequate patrol of Sri Lanka's 1,100 miles of coastline. DEA
intelligence suggests the LTTE finance their insurgency through drug
trafficking. Information obtained since the mid-1980's indicates that
some Tamil Tiger communities in Europe are also involved in narcotics
smuggling, having historically served as drug couriers moving
narcotics into Europe.
United Wa State Army  
The United Wa State Army (UWSA) is the single largest heroin and
methamphetamine producing organization in Southeast Asia, according to
DEA and foreign law enforcement entities. While not a designated
foreign terrorist organization, the UWSA cultivates, manufactures,
transports and distributes massive quantities of heroin and
methamphetamine from its base of operations in the northeastern Shan
State of Burma to international markets including Thailand, Hong Kong,
China, Australia, Canada and the United States. In the early 1990's,
the UWSA signed a cease-fire agreement with the Government of Burma
(Myanmar) and was given virtual autonomy over the region under their
control. Essentially, the UWSA is a government within a government,
primarily funded by drug trafficking activities.
In 2001, Burma was the world's leading producer of illicit opium,
cultivating an estimated 865 metric tons of opium, with the potential
to produce 86 metric tons of heroin. In addition, an estimated 800
million methamphetamine tablets are produced annually in Burma. The
overwhelming majority of both heroin and methamphetamine refineries
currently located in Burma are operated/controlled directly by the
UWSA or indirectly by independent traffickers paying protection fees
to the UWSA.
New People's Army, the Moro National Liberation Front 
And the Moro Islamic Liberation Front 
The New People's Army (NPA) is the action arm of the Communist Party
of the Philippines. The NPA was formed in 1969, as a Maoist group with
the goal of overthrowing the government through protracted guerrilla
warfare.
DEA intelligence indicates that the NPA is potentially involved in the
cultivation, trafficking and distribution of marijuana to support
their insurgent activities. The DEA Manila Country Office reports that
the NPA is a communist insurgency group located on a broader scale
throughout the Philippines, and is growing in number. This group has
greater potential in assisting drug trafficking in the Philippines
because of its larger numbers and diffuse distribution throughout the
country. It has been confirmed that this group has previously provided
physical security for trafficker marijuana fields. Equally important,
past and recent intelligence reporting, as well as large multi-hundred
kilogram seizures of crystal methamphetamine, demonstrate that many
coastlines are significant drug transit zones.
The Moro National Liberation Front (MNLF) and the Moro Islamic
Liberation Front (MILF) are Islamic separatists operating in the
southern Philippines, primarily in the Mindanao region. In 1991, the
splintering of the MNLF resulted in the creation of Abu Sayyaf, which
will be discussed independently from these groups.
The MNLF and MILF receive funding from a number of criminal
activities, including, kidnap for ransom, petty crimes, and drug
trafficking. DEA's information suggests that the MNLF and the MILF are
involved in drug trafficking activities to finance their terrorist
activities. Primarily, the MNLF is involved in production and security
for marijuana and possibly crystal methamphetamine.
Abu Sayyaf Group 
The Abu Sayyaf Group (ASG) is an acknowledged terrorist group based in
the Philippines, and is officially recognized by the Unites States
Government as a designated terrorist group. In the mid 1980's, the ASG
emerged as an Afghan guerrilla group and moved its operations to the
Philippines in 1989, ostensibly to support violent efforts to
establish a separate Islamic state in the southern Philippines. To
achieve this goal, the ASG has been involved in a variety of criminal
enterprises, including kidnappings, drug and arms smuggling,
extortion, and virtually any other criminal activity that is
profitable. The ASG kidnapping of Martin and Gracias Burnham, and the
rescue mission that resulted in the death of Mr. Burnham, is a recent
high profile example of ASG criminal activity. Both the ASG and the
MILF are believed to have links to Al-Qaida through the Jemaah
Islamiya (JI), members of which are known to have been involved in
violent terrorist actions which include the recent bombing in Bali,
Indonesia.
Financing of Terrorist Networks with Drug Money 
The attacks carried out on our nation on September 11, 2001
graphically illustrated the need to starve the financial base of every
terrorist organization and deprive them of drug revenue that is used
to fund acts of terror. Narco-terrorist organizations in Colombia and
other areas of the world generate millions of dollars in
narcotics-related revenues to facilitate their terrorist activities.
Tracking and intercepting the unlawful flow of drug money is an
important tool in identifying and dismantling international drug
trafficking organizations with ties to terrorism.
In order to dismantle narco-terrorist organizations, law enforcement
authorities must not only arrest and prosecute the leaders of the
organization, but also expose their supporting financial
infrastructure and seize and forfeit assets acquired by them. The
cells of terrorists are dispersed beyond the geographic boundaries of
a specific country, much like international drug syndicates.
Accordingly, DEA's approach to both the drug trade and the terror
network must be equally global in scope.
According to ONDCP, Americans spend $64 billion on illegal narcotics
annually, most of it in cash. To avoid detection, these organizations
have developed a number of money laundering systems in attempts to
avoid financial transaction reporting requirements and manipulate
facets of the economy unrelated to the traditional financial services
industry.
Black Market 
The Black Market Peso Exchange System (BMPE) is a significant
money-laundering system used by Colombian narcotics traffickers. The
BMPE is a trade-based money-laundering scheme that handles billions of
dollars in drug money annually. It is among the primary means by which
cartels convert U.S.-based drug dollars into "clean" pesos in
Colombia. The BMPE has a devastating impact on Colombia's economy by
fostering a contraband trade that undercuts legitimate businesses and
deprives the Colombian government of hundreds of millions of dollars
in tax revenue. The exact size and structure of the BMPE system cannot
be determined with any degree of precision. However, based on
intelligence related information, it is believed that between $3
billion and $6 billion is laundered annually. The BMPE process begins
when a Colombian drug organization arranges the shipment of drugs to
the United States. The drugs are sold in the United States in exchange
for U.S. currency. This U.S. currency is then sold to a Colombian
black market peso broker's agent located in the United States. Once
the dollars are delivered to the agent of the Colombian peso broker in
the United States, the peso broker in Colombia deposits the agreed
upon equivalent in Colombian pesos into the person's account in
Colombia.
DEA is currently part of a joint task force aimed at targeting the
BMPE in South America. The "Financial Action Committee" task force is
chaired by the Office of National Drug Control Policy. A sub-group,
"Revenue Denial Sub-Working Group," has been established to create a
Geographic Targeting Order (GTO) on businesses that export goods to
South America and fuel the BMPE.
Hawala/Hundi System 
The Hawala system is an underground, traditional, informal network
that has been used for centuries by businesses and families throughout
Asia. This system provides a confidential, convenient, efficient
service at a low cost in areas that are not served by traditional
banking facilities. The hawala or hundi system leaves no "paper trail"
for investigators to follow. In the United States, hawala brokers tend
to own high-volume, primarily cash businesses that cater to
immigrants. In this process, an individual gives a hawala broker a sum
of money and asks that the same amount be delivered to someone in
another country. The broker contacts, often through the Internet and
e-mail, a hawala broker in the city where the money is to be
delivered, and instructs that broker to deliver the money to the
recipient. Consequently, funds are exchanged without physical movement
of the currency. The brokers make money by charging a fee for their
services.
DEA's Efforts to Disrupt and Dismantle Financial Networks 
Operation Caribe - Caribbean Division 
An Attorney General Exempted Money Laundering Operation (AGEO)
consists of undercover operations which are given approval by the
Attorney General to launder drug proceeds to continue a narcotics
investigation. In Operation Caribe, an AGEO targeted a Colombian
Narcotics Trafficking Organization and Colombian BMPE brokers based in
Colombia. The BMPE brokers were actively involved in laundering the
proceeds of multi-thousand kilogram quantities of cocaine imported
into the United States and Europe and the exporting of the proceeds
from the sale of these controlled substances. The DEA Caribbean
Division made numerous money pick-ups as an investigative tool to
identify the infrastructure of this criminal organization. The
investigation had 29 Title III intercepts. In total, this
investigation led to numerous seizures of cash totaling $1,043,676.36.
The investigation also led to the seizures of 347 kilograms cocaine,
3.8 kilograms heroin and the arrests of 15 targets.
This investigation also provided significant contributions to
Operation Wirecutter, a joint United States Customs Service and DEA
money laundering operation supported by DEA's Bogota Country Office.
Operation Wirecutter targeted both drug traffickers and BMPE brokers
in Bogota, and resulted in the arrest of ten individuals and the
seizure of approximately 400 kilograms of cocaine, 5.5 kilograms of
heroin and approximately $2,304,843. The main target along with eight
other Colombian money brokers were indicted in the United States. In
addition, numerous arrests were made on subjects identified through
domestic pick-ups of currency.
Operation Juno - Atlanta Division 
Operation Juno was an AGEO, also targeting Colombian Narcotics
Trafficking Organizations and Colombian BMPE brokers based in
Colombia. Operation Juno represented a new level of U.S./Colombian
cooperation. This was the first time Colombian authorities had seized
this volume of trafficker accounts based on information derived from a
joint investigation by U.S. law enforcement agencies.
The Operation Juno indictment targeted five major traffickers and $26
million worth of laundered drug proceeds. Operation Juno culminated
with five indictments of Colombian-base BMPE brokers. The indictments
charged the defendants with conspiracy to launder money, conspiracy to
traffic in drugs, and multiple money laundering counts.
Besides the five named defendants above, 55 arrests were made in the
United States during the course of the investigation. Civil seizure
warrants were also brought against 59 domestic bank accounts
worldwide. Approximately $26 million in drug proceeds were targeted
for seizure. In addition, $10 million was seized during the
investigation, and the balance was seized in 59 accounts at 34 United
States banks, and at 282 accounts at 52 foreign banks.
International Role of DEA 
The DEA's Office of International Operations maintains 79 offices in
58 countries. These offices support DEA domestic investigations
through foreign liaison, training for host country officials,
bilateral investigations and intelligence gathering. The DEA's
international presence is an invaluable asset in the pursuit of drug
traffickers in all areas of the world. Foreign operations enable the
DEA to share intelligence and coordinate and develop a worldwide drug
strategy, in cooperation with our host countries.
The heart of DEA's international operations may lie in the Sensitive
Investigative Unit (SIU), a program that began as a result of
collaboration with Colombia and has since been used as a model for the
formation of such units in other countries. This group of specifically
trained and vetted police officers, which carry out highly sensitive
investigations directly impacting upon the United States, have been
directed to target the command and control centers of the world's most
significant drug trafficking organizations. There are currently 29
distinct SIU's operating in nine different countries around the world
(Mexico, Colombia, Ecuador Peru, Bolivia, Brazil, Pakistan, Thailand,
Dominican Republic and Uzbekistan). They are organized based on their
investigative responsibilities, which include high level
investigations of major drug trafficking organizations, chemical
investigations, and money laundering.
SIU operational success stories are common, but carry special
significance because in every case, the host nation has exercised a
capability that the DEA has helped them to build. While we give them
the capability to address what is for them a domestic problem, it
actually extends all the way to the streets of the United States. In
each case, the SIU's have tackled complex multinational narcotics
investigations that resulted in the disruption of trafficking
organizations far from our shores.
--In FY 01 and FY 02, the SIU groups in Colombia were instrumental in
the successful completion of Operation Nueva Generacion and Operation
Broker. Operation Nueva Generacion resulted in the seizure of over of
9,000 kilograms of cocaine and 41 arrests. Operation Broker, a money
laundering investigation conducted jointly with several DEA offices
and the DEA Special Operations Division (SOD), resulted in the seizure
of 34 kilograms of gold, 1067 kilograms of silver and 50 arrests.
--The Brazilian SIU conducted Operation Diamante, which resulted in
the seizure of 2,295 kilograms of cocaine, 20 aircraft and over $2.3
million in assets. The Brazilian SIU has conducted investigations that
led to the arrest of Luis Fernando da Costa, one of the largest
traffickers in Brazil. This investigation was concluded in December
2002.
--The SIU in Thailand completed a multi-national investigation
involving the DEA and law enforcement agencies in Thailand, China and
Hong Kong that culminated in April 2002 with the seizure of 354
kilograms of heroin and the arrest of 13 traffickers with ties to
United Wa State Army.
Task Force Collaboration 
DEA's Ad Hoc Counterterrorism Task Force 
On October 2, 2002, in order to meet DEA's obligation to better
coordinate terrorist information, DEA's Chief of Operations
established an Ad Hoc Counterterrorism Task Force within DEA
Headquarters. The Task Force is made up of personnel from the Office
of Domestic Operations, the Office of International Operations, the
Intelligence Division and the Office of Diversion Control.
The Ad Hoc Counterterrorism Task Force is assigned to review and
categorize the investigative and general intelligence files that are
identified by DEA field offices as having a nexus to terrorism or
intelligence relative to terrorist activity. In addition, the Task
Force compiles and regularly updates a list of the terrorist
organizations that are referenced in the identified investigative and
general files. DEA has established and implemented a tracking
mechanism for the sharing of information and intelligence with other
government agencies, and functions as the single point of contact
within DEA for field elements and for external entities relative to
terrorist information. The Task Force continues to ensure that DEA
Headquarters and field elements share all terrorist related
information with the respective agencies responsible for conducting
and correlating terrorist investigations and intelligence.
Investigations and Operations 
Operation White Terror 
In November 2002, a joint DEA and FBI OCDETF investigation resulted in
four members of the AUC being indicted for their role in
drugs-for-weapons exchanges. The defendants are charged with
violations of Title 21 of the United States Code and with providing
material assistance to a terrorist organization. The defendants were
attempting to exchange cocaine to purchase Russian-made weapons,
including automatic rifles, ammunition, grenades and rocket-propelled
grenades.
Operation Mountain Express III 
On January 10, 2002, Phase III of Operation Mountain Express
culminated with the arrest of over 100 individuals in 12 cities
throughout Canada and the United States for the illegal trafficking of
pseudoephedrine.
Middle Eastern criminal organizations comprised of individuals of
Palestinian, Syrian, Jordanian, Israeli, and Yemeni descent play an
integral part in the Mexican methamphetamine trade as suppliers of
pseudoephedrine. These criminal groups are known to supply
pseudoephedrine tablets to Mexican national organizations in the
United States, usually through the ownership of convenience stores,
wholesale grocery supply companies, and distribution outlets for
medical supplies. Middle Eastern pseudoephedrine tablet dealers can
purchase a case of pseudoephedrine for between $600 and $800, and then
sell it to methamphetamine manufacturers for between $3,000 and
$4,000. Thus tremendous profit margin serves as a substantial
incentive for the diversion of pseudoephedrine products.
Operation Mountain Express targeted Middle Eastern brokers
facilitating the smuggling and distribution of Canadian
pseudoephedrine to Mexican methamphetamine organizations operating
throughout the United States. Operation Mountain Express enforcement
actions have resulted in the arrests of 282 defendants and the seizure
of over 26 tons of pseudoephedrine (an amount capable of producing
approximately 50,000 pounds of methamphetamine) and $15.8 million in
United States currency. The pseudoephedrine traffickers targeted in
this investigation did not process or otherwise alter the
pseudoephedrine. They merely diverted it and sold it to the Mexican
methamphetamine traffickers, who then processed it for use in the
manufacturing process.
Additional reporting indicates that the proceeds from illegal
activities of the Yemeni and other Middle Eastern organizations are
usually structured in order to evade financial reporting requirements,
and directed to accounts in the trafficker's country of origin.
Operation Containment 
Operation Containment was conceived in February 2002 when the DEA
brought members of 25 countries together in Ankara, Turkey to develop
a coordinated post-Taliban heroin counter-drug strategy to deprive
international terrorist groups of the financial basis for their
activities. In addition to drugs, this operation also targeted other
illicit commodities that could be used by terrorist organizations to
finance their operations. Some of the other targeted goods included
precursor chemicals, weapons, ammunitions, and currency.
Before the operation began, participating countries agreed to
participate in regional initiatives, and developed local plans to
diminish the availability of heroin and morphine base along the Balkan
and Silk trafficking routes. This action focused on interdiction at
specific land, air, and sea border checkpoints by the joint
coordinated efforts of the law enforcement and customs authorities in
Central Asia, the Caucuses, Europe, and Russia. The operation was
coordinated at two regional intelligence sharing centers: the
Southeast European Cooperative Initiative (SECI Center) Regional
Center for Combating Transborder Crime in Bucharest, Romania and the
Bishkek Command Center (BCC) in Bishkek, Kyrgyzstan.
The primary purpose of Operation Containment was to seize as much
Southwest Asia heroin as possible before it reached the lucrative
markets of Western Europe and the United States. Based on reporting
from all participating countries, there were 1,705.715 kilograms of
heroin seized during this operation with an estimated value between
$28 and $51 million.
The largest Bishkek Command Center heroin seizure (actually 2 separate
seizures of 48 kilograms and 139 kilograms) took place on July 4,
2002, in Tajikistan by the Russian Border Guards during an armed
confrontation with traffickers attempting to cross into Tajikistan
from Afghanistan via the Pyanj River.
Upon its completion, Operation Containment was one of the most
successful drug interdiction initiatives to be undertaken on a
multi-regional basis, and it has become a benchmark for future
cooperative international programs. Although the drug seizures that
occurred during this operation can be considered a success by any
standard, the real achievement of the operation was the mutual
participation of nearly 20 countries in a common operational and
intelligence sharing action, which until quite recently was almost
impossible to be implemented.
Conclusion 
The events of September 11th have brought new focus to an old problem,
narco-terrorism. These events have forever changed the world and
demonstrate even the most powerful nation is vulnerable to acts of
terrorism. In attempting to combat this threat, the link between drugs
and terrorism came to the fore. Whether it is a state, such as
formerly Taliban-controlled Afghanistan, or a narco-terrorist
organization, such as the FARC, the nexus between drugs and terrorism
is perilously evident.
Nations throughout the world are aligning to combat this scourge on
international society. The War on Terror and the War on Drugs are
linked, with agencies throughout the United States and internationally
working together as a force-multiplier in an effort to dismantle
narco-terrorist organizations. Efforts to stop the funding of these
groups have focused on drugs and the drug money used to perpetuate
violence throughout the world. International cooperative efforts
between law enforcement authorities and intelligence organizations are
critical to eliminating terrorist funding, reducing the drug flow, and
preventing future terrorist attacks.
The DEA is proud to contribute to our national security through a
myriad of cooperative international enforcement initiatives and
programs. Once again, I would like to thank the committee for the
opportunity to share some insights relative to the DEA's role in this
critically important issue.
I will be happy to respond to any questions the committee may have.
(end text)
(Distributed by the Bureau of International Information Programs, U.S.
Department of State. Web site: http://usinfo.state.gov)