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Opening Statement Chairman Connie Mack Western Hemisphere Subcommittee “Venezuela’s Sanctionable Activity” June 24, 2011

I asked you to appear before my subcommittee in March, and you refused to testify. I need you to know that as Chairman of the Western Hemisphere Subcommittee, I take my constitutional responsibility to provide oversight very seriously. Your refusal to appear is a disservice to the American People. And I will not hesitate to utilize my subpoena power in the future if that is the only way to ensure proper oversight.

Today, in light of the U.S. State Department’s recent action in sanctioning PDVSA and the Venezuela Military Industries Company (CAVIM), the purpose of this hearing is to review and better understand the role of the State Department and the Treasury Department in utilizing sanctions as an instrument of U.S. foreign policy.

Specifically, I would like to concentrate on the sanctions available under U.S. law and discuss their potential application in cases where Venezuelan individuals, businesses, and the government are demonstrably sanctionable.

Venezuela has become the “Wild West” under thugocrat Hugo Chavez’s rule. I believe this to be true for the following reasons:

There is rampant drug trafficking and corruption;

Terrorist organizations like Hezbollah and the FARC are officially linked to government officials; and Venezuela is supporting Iran.

Under Hugo Chavez Venezuela has become a hub in our region for money laundering and the transshipment of illicit goods. In recent years, the relationship between drug traffickers and terrorist organizations has become closely intertwined. It is widely acknowledged that terrorist groups have turned to drug trafficking as a source of revenue. And Chavez has provided Venezuela as a safe haven for these narco-terrorists. The FARC, a drug trafficking and terrorist organization, who largely operates in remote sections of Colombia, has long received assistance, relief, and material support from the Venezuelan authorities.

In one example, the Treasury Department designated the Venezuelan Military General-and-Chief, a Drug Kingpin for supporting the FARC. Additionally, Treasury has designated a Venezuelan diplomat a Specially Designated Global Terrorist for his relationship and material support of Hezbollah. In April of 2010, a DOD report- citing Iran’s overall military strength, influence, and operational capacity- highlighted the fact that the Iranian Revolutionary Guard has increased its presence in Latin America with a particular emphasis in Venezuela.

Further, weekly undocumented flights in and out of Caracas provide access for Hezbollah and the IRGC, and God knows who else, into Venezuela. These flights have been occurring since 2007. General Fraser of SOUTHCOM recently referenced the flights and highlighted the fact that we, the U.S., do not know who or what are on these flights. Meanwhile, the files of FARC commander Raul Reyes referenced the ease in which travel documents can be attained in Venezuela.

My point is that Venezuela has and continues to play a central role in facilitating, developing, and expanding Iran’s foreign relations in Latin America while drug traffickers, Hezbollah, the FARC and other terrorist organizations use Venezuela as the front door to operate and move freely within our Hemisphere.

Sanctions can be a valuable tool that, when used appropriately, can have considerable influence over a foreign country or entity. The U.S. Congress, the State Department, and the Treasury Department need to work together to promote and advocate U.S. interests through a carrot and stick approach, deepening our friendships in the Hemisphere, and defending our freedoms.

The U.S. sends approximately 117 million dollars a day to Venezuela’s state owned gas company, which uses every single dollar to undermine our security and prosperity. We cannot allow this to continue. We need to look at all available sanctions, including designating Venezuela as a State Sponsor of Terrorism. We need sanctions that restrict the ability of Chavez, and all of his corrupt ministers, from carrying out illegal activity.

We also need to do our diplomatic work to make sure allies know that we stand with them, and that we are not afraid to utilize sanctions for the benefit of the region.

It is imperative that President Obama and his Administration take this growing threat seriously. The most recent sanctions on Venezuelan state-owned companies are a step in the right direction but they are empty and do not enhance U.S. security. More must be done and we need true leadership in this region to accomplish it.

I look forward to discussing additional sanctions that are available under U.S. law that would send not only a clear message to Hugo Chavez in Venezuela but send a reaffirming message to our allies around the world that the United States will not allow such blatant support for illegal drugs, terrorism and Iran’s nuclear future.

 
 

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Chairman Chaffetz, Chairman Mack, Chairman Chabot, Ranking Member Tierney, Ranking Member Engel, Ranking Member Ackerman, distinguished

members of the committees, thank you for the opportunity to appear before you

 

We want to thank you for the opportunity to appear before you today with Adam Szubin, our colleague from the Department of the Treasury. Allow us to start by saying that the Administration is committed to its duty to protect and advance U.S. interests and nati onal security worldwide. The State Department is concerned its support for the FARC, its lackluster cooperation on counterterrorism, and its demonstrable failure to meet its international counternarcotics obligations, and we have taken a series of specific actions over time to address them in a serious wa y, using the tools provided by Congress, and will outline them in the following statement and in our testimony. These actions are substanti al, targeted, and iterative and are well understood in Venezuela and elsewhere.

 
 

 

efforts, we have taken into account reports that the Revolutionary Armed Forces of Colombia (FARC) and the National Liberation Army (ELN) have crossed into Venezuelan territory to rest and regroup, to conduct drug trafficking activities, as well as to extort protection money and kidnap Venezuelans to finance their operations. In addition, we have also considered reports that some weapons and ammunition from official Venezuelan stock s and facilities have been found in the hands of these groups. These are matters of significant concern to us and to our

 

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Colombian allies. We do note the recent cooperation between the Government of Colombia and the Government of Venezuela that has led to the arre st of mid-level FARC leaders in Venezuela.

The Administration has significant concerns about connections between members of the Venezuelan government and U.S. -designated terrorist organizations such as the FARC, ELN, and ETA (Basque Fatherland and Liberty), all of which have been reported on in the press. As we have reported in the past, Hizballah has a presence in Venezuela, and the Department of the Treasury has done much to highlight these connections. I do, however, want to emphasize that the information available to us indicates that Hizballah activity in Venezuela is confined to fundraising. We remain alert to indications of other activities, particularly operational activity, but there is no information to support any su ch contention at this point.

Since coming to power in 1999, Hugo Chavez has chosen to develop close

relations with Iran and Syria .

Western Hemisphere and President Chavez continues to define Iran as a "strategic ally." This close and highly publicized bond has led to public declarations to establish broad economic, military, and political cooperation, although the extent of and accomplishments associated with such cooperation appear much less substantive.

Venezuela is required to fulfill its obligations under UN Security Council Resolutions 1373 and 1540, which form part of the legal basis o f international counterterrorism efforts. These resolutions, adopted under Chapter VII of the UN Charter, require all states, including Venezuela, to take a series of measures to combat terrorism and prevent WMD and their means of delivery from getting into the hands of terrorists. It is our view that Venezuela has not done enough in this regard.

We would like to outline the significant and effective steps that th e U.S. government has already taken to confront specific actions and activities by Venezuela and by Venezuelan officials. For the last five years, since May 2006, pursuant to section 40A of the Arms Export Control Act, Venezuela has been listed Not Fully Cooperating With U.S. Antiterrorism Efforts country, because of its inadequate response to our counterterrorism efforts. The effect of this listing is a prohibition against the sale or licensing for export to Venezuela of defense articles or services. The United States has al so imposed an arms embargo on Venezuela since 2006, which ended all U.S. commercial arms sales and re -

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transfers to Venezuela. This sanction is a useful tool in signaling we are not in situations where a state may not meet the high threshold for designation as an SST.

The Department of the Treasury has designated two high level Venezuelan government officials and one former official under the Foreign Narcotics Kingpin Designation Act for materially assisting the narcotics trafficking activities of the FARC, and have sanctioned Venezuelan companies when appropriate.

There are signs that the Venezuelan government is beginning to comprehend

respect to the FARC. Venezuela has increased its counterterrorism cooperation with Colombia. Since Colombian President Santos took office a year ago , the Venezuelan and Colombian presidents have met three times, most recently on April 9, and have signed numerous agreements on counternarcotics, border development, and security cooperation. In addition, Colombian Defense Minister

visit to Venezuela in November 2010. Rivera also signed a counternarcotics agreement with Venezuelan Interior Minister Tarek El-Aissami in January.

Colombian-Venezuelan cooperation on terrorism and security matters is clearly increasing and being systematized, yielding notable results. We see as the FARC and the ELN to Colombia over the past several months. Some are key operatives wanted for specific acts of terrorism; others are high -profile political actors, like Sweden- based FARC International Commission Representative Joaquin Perez Becerra, who served as the FARC public relations coordinator for Europe. Similarly, Venezuela also recently arrested a member of the FARC general staff, Julián Conrado, based on a Colombian arrest warrant. His removal to Colombia is pending. Finally, Chavez has also called on the FARC to join a political reconciliation process and has claimed that any discussions between Venezuelan government officials and the FARC about establishing bases in Venezuela took place without his authorization.

Despite this recent and welcome cooperation with Colombia, we remain commitment to fighting terrorism, and we continue to consider all options in applying appropriate sanctions. One option available to us is the State Sponsor of Terrorism designation. The Department of State has a rigorous legal threshold in exercising its authority to make State Sponsor of Terrorism designations. Since 1979, the following countries have been plac ed on the SST list: Cuba, Libya, Iran, Iraq, North Korea , South Yemen, Sudan, and

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Syria. Of these, Cuba, Iran, Sudan, and Syria remain on the list today. The last time the Secretary of State used this authority was in 1 993 when Sudan was added to the list.

Before designating a country as a State Sponsor of Terrorism, the Secretary

must determine that the government of the country has repeatedly provided support for acts of international terrorism. Before making such a determination,

carefully reviewed to ensure that there is both credible and corroborated evidence eve this is a necessary step before we utilize one of the U.S. g sanction tools. If we make decisions to designate states based on anything less, we would be setting the bar too low for future additions to the list. A lower threshold could possibly lead to additions to the list but some of these changes would be inimical to our foreign policy, economic, and counterterrorism interests.

When there has been evidence of direct support for Iran, we have acted. Under the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (CISADA),the State Department is the agency primarily responsible for implementing the provisions which relate to the energy, shipping, and transportation sectors, the export of sensitive telecommun ications technology, and non-proliferation. The Department of the Treasury has primary responsibility for implementing the financial sanctions contained in CISADA, and the Department of the Treasury and the State Department work together to implement the human rights provisions of CISADA. In 2008, the Banco Internacional de Desarrollo was put on the Department of the and Blocked Persons pursuant to Executive Order 13382, Blocking Property of Weapons of Mass Destruction Proliferators and their Supporters as a subsidiary of the Export Development Bank of Iran. The Export Development Bank of Iran was itself designated pursuant to Executive Order 13382 for providing or at tempting to provide financial services to Iran's Ministry of Defense and Armed Forces Logistics. Just last month, on May 24, the Secretary imposed sanctions on Petroleos de Venezuela (PDVSA), based on energy sector. On at least two occasions, PDVSA provided cargoes of reformate, an additive used in gasoline, to the National Iranian Oil Company. These shipments were valued at over $50 million, well above the sanctionable thresholds established in the Iran Sanctions Act (ISA).

Under the ISA, the Secretary has the authority to calibrate sanctions on a case by case basis. Sanctions can range from prohibitions on certain types of

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government assistance, to a complete blocking of all property transactions subject to U.S. jurisdiction. In the case of PDVSA, the Secretary chose three sanctions its subsidiaries or the export of crude oil from Venezuela.

It is important to note that this calibrated approach was chosen because it is our goal to persuade PDVSA to make the right choice and stop shipments of refined petroleum to Iran. If PDVSA does not stop, and we have made this very clear in our conversations with PDVSA and with the Venezuelan government, the Secretary of State reserves her authority to impose additional, more severe sanctions.

These sanctions were only recently imposed. While we do not know what the ultimate result of these important actions will be, we are confident that they got the attention of Venezuelan government officials, based on subsequent comments from such officials and from PDVSA. They understand the sanction s and our justification for it. The Department of State has a very good record of convincing companies to sto formal withdrawal of five large multinational energy companies Royal Dutch Shell, ENI, INPEX, Statoil, and Total from projects in Iran. These firms have been joined by scores of other compan ies working in a variety of sectors that have recognized that the risks of doing business with Iran are just too high. We will continue our dialogue with Venezuela directly and through our other allies.

In addition, on May 23, we imposed sanctions purs uant to the Iran, North Korea, and Syria Nonproliferation Act (INKSNA), against the Venezuela Military Industries Company (CAVIM). INKSNA provides for penalties on entities that engage in the transfer to or acquisition from Iran, Syria, or North Korea of equipment or technology controlled by one of the four multilateral regimes (e.g. the Australia Group, the Missile Technology Control Regime, the Nuclear Suppliers Group, and the Wassenaar Arrangement) that regulate the export of advanced conventional weapons, weapons of mass destruction (WMD), and cruise and ballistic missile systems.

Much more work remains to be done , and we will continue to closely

against Venezuela should serve as an indicator that we are stepping up the pressure as it is warranted.

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cooperation and responsibility rather than seeking close ties to Iran , supporting illegal armed groups, and risking further isolation. We continue to monitor Venezuela, as well as other countries, for activities that would indicate a pattern of support for acts of international terrorism. No option is ever off the table, and the Department will continue to assess what additional actions might be warranted in the future.

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Written Testimony by the U.S. Department of the Treasury’s Director of the Office of Foreign Assets Control Adam J. Szubin Before the Oversight and Government Reform Subcommittee on National Security, Homeland Defense, and Foreign Operations, the Foreign Affairs Subcommittee on the Western Hemisphere, and the Foreign Affairs Subcommittee on the Middle East and South Asia

June 24, 2011

Venezuela’s Sanctionable Activity

Chairman Chaffetz, Chairman Mack, Chairman Chabot, Ranking Member Tierney,

Ranking Member Engel, Ranking Member Ackerman, distinguished members of the committees,

thank you for the opportunity to appear before you today to discuss Venezuela’s sanctionable

activities. I am pleased to be here with my State Department colleagues, Ambassador Benjamin,

Tom Delare, and Kevin Whitaker. Our Departments collaborate closely on the development and

implementation of economic sanctions throughout the world. As part of this mission, we have

worked diligently with one another to apply sanctions to a range of actors in Venezuela and

elsewhere in Latin America – including narcotics traffickers, terrorists and their supporters, and

entities aiding Iran’s pursuit of nuclear weapons and promotion of international terror.

I would like to use this opportunity to provide the committees a brief overview of the

Office of Foreign Assets Control’s (OFAC) sanctions related activities regarding Venezuela.

Narcotics

The Treasury Department has taken strong action against Latin American narcotics

traffickers, including key actions involving Venezuela, Colombia, Mexico, Ecuador, Guatemala,

Peru, Panama and Bolivia. Through these efforts, we have targeted some of the largest drug

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cartels operating in South America and Mexico, including the Cali, Medellin, Sinaloa, Beltran-

Leyva and Juarez cartels. Over the past several years, the United States has sanctioned nearly

3000 entities in Latin America involved in narcotics trafficking – almost 1800 entities have been

designated under Executive Order 12978, and nearly 1,000 entities have been sanctioned

pursuant to the Foreign Narcotics Kingpin Designation Act (the “Kingpin Act”).

These figures include sanctions on two individuals who were high-level Venezuelan

officials at the time of designation and one individual who was a former official at the time of

designation: Hugo Armando Carvajal Barrios, the former director of Venezuelan military

intelligence; Henry de Jesus Rangel Silva, the former director of Venezuelan state security and

intelligence; and Ramon Emilio Rodriguez Chacin, Venezuela’s former Minister of Interior

Justice. All three officials were designated in September 2008 under the Kingpin Act for

materially assisting the narcotics trafficking activities of the Revolutionary Armed Forces of

Colombia, the narco-terrorist organization better known by its acronym, the “FARC.”

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FARC has been identified by the President as a significant foreign narcotics trafficker, or drug

kingpin, and designated by the State Department as both a specially designated global terrorist

and a foreign terrorist organization. The sanctionable activities of the Venezuelan officials

included protecting drug shipments from seizure by Venezuelan anti-narcotics authorities,

providing weapons to the FARC, providing FARC members with official Venezuelan

government identification documents, and pushing for greater cooperation between the

Venezuelan government and the FARC, including an attempt to facilitate a loan from the

Venezuelan government to the FARC.

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Additionally, in September 2008, OFAC designated eight members of the FARC’s

International Commission for providing support to the organization outside of Colombia; among

the persons designated was Orlay Jurado Palomino, the FARC International Commission

representative in Venezuela. Further, the United States has had some success in extraditing from

Venezuela traffickers designated by the Treasury Department. For example, in July and

September 2010, two OFAC-designated traffickers who were arrested in Venezuela – Beto

Renteria and Beto Marin – were successfully extradited to the United States to face criminal

charges. Renteria and Marin were leaders of the Norte del Valle Cartel, and were involved in

substantial drugs shipments into the United States, bribery and assassinations. Marin is

incarcerated in Miami awaiting the start of his September trial and faces the potential of a life

sentence if convicted. Renteria is the subject of two criminal indictments, one on narcotics

trafficking charges and the other on RICO; he too faces the potential of life imprisonment if

convicted.

The use of economic sanctions against narcotics traffickers is an important piece of the

war the United States is waging on narcotics cartels and those that support them. OFAC will

continue our ongoing efforts to target and apply financial measures against narcotics traffickers

and their organizations, wherever they are located.

Terrorism

My office is also concerned about Venezuelan ties to terrorist groups. Specifically, we

have found limited connections between Venezuela and Lebanese Hezbollah with Hezbollah

facilitators and fundraisers operating in Venezuela. In this regard, just as in the narco-trafficking

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context, OFAC has reacted swiftly when we have come upon actionable information linking

Venezuela to terrorism.

For instance, in June 2008 OFAC designated two key Venezuelan supporters of

Hezbollah, pursuant to Executive Order 13224, which targets terrorists, those owned or

controlled by or acting for or on behalf of terrorists, and those providing financial, material, or

technological support to terrorists or acts of terrorism. One of these individuals, Ghazi Nasr al

Din, had utilized his position as a senior Venezuelan diplomat and the president of a Caracas-

based Shi’a Islamic Center to provide financial support to Hezbollah. Nasr al Din served as

Chargé d’Affaires at the Venezuelan Embassy in Damascus, Syria, and was subsequently a

principal official at the Venezuelan Embassy in Lebanon. He had counseled Hezbollah donors

on fundraising efforts and provided donors with specific information on bank accounts where the

donors’ deposits would go directly to Hezbollah. Additionally, he met with senior Hezbollah

officials to discuss operational matters and even facilitated the travel of Hezbollah members to

and from Venezuela, and to attend training courses in Iran.

The second designee was Fawzi Kan’an, also a Venezuela-based Hezbollah supporter and

a significant provider of financial support to Hezbollah.

Kan’an facilitated travel for Hezbollah

members and sent money raised in Venezuela to Hezbollah officials in Lebanon. Further, he had

met with senior Hezbollah officials in Lebanon to discuss operational issues, including possible

kidnappings and terrorist attacks, and traveled with other Hezbollah members to Iran for training.

In light of his role in facilitating transport, we also designated two travel agencies owned and

controlled by Kan’an.

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Iran

The Treasury Department is concerned about the growing ties between Venezuela and

Iran, including burgeoning business and trade connections – which, at a time when the private

sector around the world is increasingly shunning business with Iran, are especially noteworthy

and concerning. We have, and will continue to, follow this situation vigilantly. Even more

alarming is a report from the Department of Defense concerning the increasing presence of the

Islamic Revolutionary Guard Corps-Quds Force (IRGC-QF) in Latin America, particularly

Venezuela. As Treasury officials have noted with regular frequency before Congress, the IRGC-

QF, which we sanctioned in October 2007, and the broader IRGC, which was sanctioned by the

State Department at the same time, are at the vanguard of promoting the Iranian regime’s goals

both at home and abroad.

To this end, they are active throughout Iranian society and across the

full range of the regime’s efforts, from working on promoting terrorism and procuring weapons,

to controlling key pillars of the Iranian economy.

As former Under Secretary Levey testified last December, Treasury has consistently used

its authorities to target the full range of Iran’s illicit and deceptive conduct by imposing sanctions

on individuals and entities facilitating Iran’s illicit behavior, encouraging robust international

implementation of UN Security Council resolutions concerning Iran’s nuclear program, and

educating foreign governments and the private sector about the impact of U.S. measures and the

risks of engaging with Iran. Indeed, since the beginning of the year, Treasury has further

increased the pressure on Iran, with numerous actions taken against Iranian human rights

abusers; entities affiliated with the Islamic Republic of Iran Shipping Lines (IRISL); a multi-

million dollar procurement network supporting Iran’s missile programs; and Iran’s Bank Refah

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and Bank of Industry and Mine, the 20th and 21st Iranian-linked financial institutions designated

by the United States under proliferation and terrorism authorities, for providing financial services

to designated entities.

As a part of this intensive effort, we have already acted against one Venezuelan bank. In

January 2008, the Iranian government established the International Development Bank in

Caracas (Banco Internacional de Desarrollo C.A.), a subsidiary of the Tehran-based Export

Development Bank of Iran (EDBI). Shortly after Banco Desarrollo’s opening, we sanctioned the

bank under our WMD authorities in E.O. 13382 due to its relationship with EDBI. EDBI had

been designated for providing or attempting to provide financial services to Iran’s Ministry of

Defense for Armed Forces Logistics (MODAFL), itself designated by the State Department in

2007. We also found that since the United States and United Nations desi gnated Bank Sepah in

early 2007, EDBI had served as one of the leading intermediaries handling Bank Sepah’s

financing, including WMD-related payments. In addition to handling business for Bank Sepah,

EDBI facilitated financing for other proliferation-related entities sanctioned under U.S. and UN

authorities. Given this dossier of troubling activities, we acted quickly against Banco Desarrollo

in order to prevent EDBI from being able to leverage any outpost in the Americas to circumvent

sanctions and continue these activities in the region.

As you know, the Treasury Department also has authorities under subsection 104(c) of

the Comprehensive Iran Sanctions, Accountability, and Divestment Act of 2010 (“CISADA”),

which requires Treasury to issue regulations (published on August 16, 2010) to prohibit or

impose strict conditions on the opening or maintaining in the United States of correspondent

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accounts or payable-through accounts for foreign financial institutions found to knowingly

facilitate significant transactions or provide significant financial services for the Islamic

Revolutionary Guard Corps (IRGC), for any of the IRGC’s designated agents or affiliates, or for

a financial institution designated in connection with Iran’s proliferation of WMD or delivery

systems for WMD or Iran’s support for international terrorism.

Since CISADA’s enactment, Treasury has been engaged in an aggressive outreach

campaign, briefing dozens of foreign countries, including those in Latin America, and scores of

financial institutions throughout the world, about the statute and the risks to foreign financial

institutions of continued engagement in transactions that could result in the Treasury

Department’s ordering the closing of such foreign institutions’ correspondent or payable-through

accounts in the United States. The response to Treasury’s outreach has been exceptional; the

great majority of financial institutions with which we have engaged have closed their

correspondent accounts with U.S.-designated, Iranian-linked financial institutions, thus closing

off avenues that Iran’s designated banks had relied upon to engage in financial activities.

CISADA, in short, has proved to be a very powerful tool to further isolate and pressure Iran.

Concerning Venezuela in particular, we have been looking very carefully at banking ties

between Iran and Venezuela. As is clear by our action against Banco Desarrollo, when we have

identified sanctionable activity in Venezuela, we have taken action.

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Whole of Government Approach

The national security threats posed by Iran, terrorism and narcotics trafficking are

complex and no single tool or agency in the U.S. Government is sufficient to address the full

scope of the threats we face. To that end, my office, and the wider Treasury Department, has

worked very closely and consistently with colleagues at the State Department, the Justice

Department, in the intelligence community and other agencies across the full spectrum of our

sanctions work, including when it involves Venezuela or Latin America more broadly.

Conclusion

Our work has had a significant impact. The Venezuelan government’s erratic policies,

combined with the U.S. Government’s work to consistently and publicly expose Venezuelan

officials working with terrorists, sanctioned Iranian entities, and narcotics traffickers have made

the country a high risk jurisdiction. Our efforts continue, and we shall persist in investigating

activities implicating Venezuela. And, as we have done numerous times in the past, when

information is found, we will not hesitate to take actions against such individuals and entities,

fully leveraging the powerful authorities the Congress and the President have provided to us.

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Written Testimony of

Ambassador Roger F. Noriega

Visiting Fellow, American Enterprise Institute for Public Policy Research

Before a Hearing of the Subcommittee on Counterterrorism and Intelligence Committee on Homeland Security U.S. House of Representatives Thursday, July 7, 2011

“Hezbollah in Latin America: Implications for U.S. Homeland Security”

Mr. Chairman, members of the subcommittee, I very much appreciate this opportunity to testify before you today. I would also like to thank you and the Committee for your leadership on this very important issue that, quite frankly, does not get the attention it deserves among the many competing foreign threats and policy priorities.

It is well known that Hezbollah acts as a proxy for Iran — specifically, of the Qods Force of the Iranian Revolutionary Guard Corps. These determined and deadly enemies of the United States have made substantial progress in the last six years to expand their influence and operations in Latin America. Their expanding activities are the result of a conscious, offensive strategy to carry their fight to our doorstep, which receives indispensable support from the regime of Venezuelan leader Hugo Chávez.

Our research — from open sources, subject-matter experts, and sensitive sources within various governments — has identified at least two parallel terrorist networks growing at an alarming rate in Latin America. One is operated by Hezbollah, aided by its collaborators, and another is managed by a cadre of notorious Qods operatives. These networks cooperate to carry out fundraising, money-laundering schemes, narcotics smuggling, proselytization, recruitment, and training. We can identify more than 80 operatives in at least 12 countries throughout the region (with the greatest areas of concern being Brazil, Venezuela, and the Southern Cone).

Of particular interest to this Subcommittee, no doubt, are the several published reports, citing U.S. law enforcement and intelligence sources, that Hezbollah operatives have provided weapons and explosives training to drug trafficking organizations that operate along the U.S. border with Mexico and have sought to radicalize Muslim populations in several Mexican cities. The U.S. and Mexican governments have declined to share information publicly on these cases. (Our inquiries to at least one Mexican official about a specific arrest of a suspected Hezbollah operative in Mexico in June 2010 were met with the response, “Don’t ask about that.”) It is clear that this is a potential threat that has captured the attention of authorities on both sides of the border. This Congress and the American people have the right to know how our government is working with Mexico to meet this challenge to our common security.

Hezbollah has a very clear modus operandi that it is applying in the Americas. By infiltrating or establishing mosques or “Islamic centers” throughout the region, Hezbollah is spreading its influence, legitimizing its cause, and advancing its violent jihad on our doorstep. It also is raising funds through various criminal and commercial operations, recruiting converts from among disaffected youth and others, and developing its operational capabilities in our own Hemisphere.

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Unfortunately, the Hezbollah threat in the Americas is not new: it is implicated in the deadly terrorist bombings in Buenos Aires, Argentina, in 1992 (of the Israeli Embassy) and 1994 (of a Jewish Community Center). However, today, Hezbollah’s presence in Latin America is growing significantly with the support of the Chávez regime in Venezuela. Chávez, who has a track record of supporting Colombian narcoterrorists, has cooperated with Iran to provide political support, financing, or arms to Hezbollah, Hamas, or Palestinian Islamic Jihad in this Hemisphere and elsewhere. For example, Venezuela’s Margarita Island has eclipsed the infamous “Tri-Border Area” – the region where Brazil, Argentina, and Paraguay come together in South America – as a principal safe haven and center of Hezbollah operations in the Americas.

A key operative in the Hezbollah network in Latin America is Ghazi Atef Salameh Nassereddine Abu Ali, a man who was born in Lebanon, became a Venezuelan citizen about 10 years ago, and now is Venezuela’s No. 2 diplomat in Syria. Along with at least two of his brothers, he manages a network that raises and launders money and recruits and trains operatives to expand Hezbollah’s influence in Venezuela and throughout Latin America. Nassereddine was black-listed by the U.S. Department of the Treasury in June 2008 for his fundraising and logistical support on behalf of Hezbollah. However, testimony before the House Committee on Foreign Affairs last month by State Department officials suggests that they are unaware of the very important role he now is playing to expand that terrorist group’s reach beyond Venezuela.

Using his diplomatic status, Nassereddine has built and consolidated relationships with Hezbollah officials in the Middle East, first in Lebanon and now in Syria. Meanwhile, his brother Abdallah Nassereddine, maintains relationships in the broader Islamic community via a multi-national organization known as the Federation of Arab and American Associations. (FEARAB has affiliates throughout South America and the Caribbean with most regional meetings held in Sao Paulo or Buenos Aires.) All the while, their younger brother, Oday Nassereddine, has established a powerbase in Venezuela by setting up training operations on Margarita Island, and is now recruiting adherents via the Circulos Bolivarianos in Barquisimeto, 170 miles southwest of Caracas. (The Circulos Bolivarianos are ubiquitous neighborhood monitoring committees made up of the most radical followers of Hugo Chávez.)

The individual who oversees the parallel Hezbollah network on behalf of the Qods Force is Mohsen Rabbani, a high-ranking Iranian wanted by prosecutors in Argentina for his role in the 1992 and 1994 Buenos Aires attacks. At that time, Rabbani was credentialed as a cultural attaché at the Iranian embassy in the Argentine capital. Today, he relies on a network of Argentine converts that he cultivated during that period to recruit operatives throughout the region who are selected for radicalization and terrorist training in Venezuela and in Iran (specifically, Qom).

Although Rabbani is wanted by Argentina and is the object of an Interpol “red notice,” he travels periodically to the region. For example, Rabbani was in Venezuela in March 2011, and in Brazil last September, where he and his brother (who lives in Brazil) have recruited dozens of followers to their radical cause. According to sources in Brazilian intelligence, who were cited by an investigative article in the important Brazilian magazine VEJA, at least 20 operatives from Hezbollah, Al Qaeda, and the Islamic Jihad are using Brazil as a hub for terrorist activity.

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Two of Rabbani’s favored Argentinean disciples are now operating in Chile. Sheik Karim Abdul Paz, who studied under Rabbani in Qom, is the Imam of a cultural center in Santiago, and Sheik Suhail Assad is a Professor at the University of Santiago. Both have publicly stated that they are sympathetic to Hezbollah. Suhail travels frequently throughout Central and South America, meeting with local Muslim communities.

As recently as two weeks ago, a U.S. State De partment official told this Congress that Hezbollah activity in the Western Hemisphere was confined to “fundraising” – as if that were comforting. The fact is, that assertion grossly understates the growing Hezbollah threat in our Hemisphere, as my foregoing testimony indicates.

Please allow me to provide some additional anecdotes to illustrate my contention that Hezbollah is on the move in the Americas, and its activities represent a grave and growing threat to the U.S. homeland:

At least one member of the terrorist network plotting to detonate fuel tanks and pipelines at New York’s JFK International Airport met with Mohsen Rabbani in Iran; he was subsequently arrested en route to Venezuela where he planned to board a flight to Teheran. One of Rabbani’s principal collaborators in the Americas is the Sheik Khaled Razek Tak el-Din, a Sunni radical from the Sao Paulo Guarulhos mosque, which is linked to members of the Treasury Department-designated Tri-Border network that provides significant financial and logistical support to Hezbollah in Lebanon. As far back as 1995, Tak el-Din hosted Al Qaeda leader Osama Bin Laden and 9/11 mastermind Khalid Sheik Mohammed. Last spring, two Iranian Hezbollah operatives were conducting terror training on Venezuela’s Margarita Island for persons brought there from other countries in the region. Colombian authorities have reported to me that Hezbollah operates in areas of their country where the narcoterrorist group FARC (Fuerzas Armadas Revolucionarios de Colombia) has a presence. The cocaine kingpin Walid Makled, several of whose companies did business with the Hezbollah operative and Venezuelan diplomat Ghazi Nassereddine, confirmed in a televised interview on April 3 that Hezbollah conducts fundraising and operates cocaine labs in Venezuela with the protection of that government. On November 4, 2009, Israeli commandos intercepted a shipment of grenades, Katyusha rockets, 500,000 rounds of ammunition, and other Russian and Iranian arms aboard the cargo vessel, Francop, which was carrying these weapons from the Venezuelan port of Guanta to Syria, where the intended recipient was Hezbollah. Hugo Chávez hosted a terror summit of senior leaders of Hamas (“supreme leader” Khaled Meshal), Hezbollah (unnamed “chief of operations”), and Palestinian Islamic Jihad (Secretary General Ramadan Abdullah Mohammad Shallah) in Caracas on August 22, 2010. That extraordinary meeting was organized at the suggestion of Iran, and the logistical arrangements were made by Nassereddine. In addition to the summit, operatives from other countries gathered in Caracas to meet with these terrorist chieftains.

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The Venezuelan airline, Conviasa, conducts regular flights between Caracas and Damascus and Teheran. The Hezbollah networks use these flights and others to ferry operatives, recruits, and cargo in and out of the region.

In summary, Mr. Chairman, due to the “official” support from some governments in Latin America (Venezuela, Bolivia, Ecuador, Nicaragua and others), and the unwillingness of others to recognize the threat, we can expect to see the Hezbollah presence in Latin America become more active and deadly in the coming years. The apparent terminal illness of the Venezuelan dictator Hugo Chávez might reduce that country’s risky support for Hezbollah; unfortunately, that terror network has metastasized in the Americas, and our research indicates that the most tempting target for Hezbollah in the region is Brazil, one of the world’s ten largest economies with an estimated population of one million Muslims.

As it stands today, I believe the Hezbollah/Iranian presence in Latin America constitutes a clear threat to the security of the U.S. homeland. They have the motivation, and they have been steadily increasing their capacity to act. In addition to operational terrorist activity, Hezbollah also is immersed in criminal activity throughout the region – from trafficking in weapons, drugs, and persons — all of which threaten our security.

The more broad implication for U.S. homeland security is that Hezbollah – via Iran and Venezuela – has engaged the United States in an offensive strategy of asymmetric warfare on our doorstep. It is aiming to win the mental battle of attrition and the moral battle of legitimacy – particularly with the youth in Latin America. Unless our government recognizes and responds to their efforts, our ability to protect our interests and our homeland will be gradually and dangerously diminished.

U.S. and other government authorities have identified and sanctioned some of the leaders of these networks. However, recent public statements suggest that U.S. diplomats are unaware of the increasing operations and reach of the Hezbollah network. By contrast, U.S. law enforcement agencies – led by the Drug Enforcement Administration – have made great efforts to assess and confront this threat by building cases against foreign officials and sanctioning commercial entities that provide support to this criminal terror organization. However, this dangerous network requires a whole-of-government strategy, beginning with an inter-agency review to understand and assess the transnational, multi-faceted nature of the problem, to educate friendly governments on what is happening, and to implement effective measures unilaterally and with willing partners to disrupt and dismantle their operations.

If our government and responsible partners in Latin America fail to act, I believe there will be an attack on U.S. personnel, installations or interests in the Americas as soon as Hezbollah operatives believe that they are capable of such an operation without implicating their Iranian sponsors in the crime.

Thank you, Mr. Chairman.

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"#!

Hezbollah in Latin America – Implications for U.S. Homeland Security

Melani Cammett

Associate Professor

Dept. of Political Science

Brown University

Testimony before the Subcommittee on Counterterrorism and Intelligence

Committee on Homeland Security

U.S. House of Representatives

Thursday, July 7, 2011

______________________________________________________________________________

Mr. Chairman and members of the subcommittee, I want to thank you for asking me to testify

today.

Since the early 1980s and with renewed vigor since 9/11, the U.S. has been concerned about the

goals and actions of Hezbollah, the Shia Muslim party in Lebanon. In the context of the Global

War on Terror, the organization’s activities in Latin America have received increased scrutiny.

In particular, the Tri-Border Area (TBA), or the relatively ungoverned region where Argentina,

Brazil and Paraguay meet, is alleged to be a key node in Hezbollah’s global fundraising network

and may even provide a launching pad for terrorist operations. Hezbollah reportedly engages in

money-laundering, counterfeiting, piracy, and narcotics trafficking in this region, and uses the

area as a base for recruitment. 1

To contextualize Hezbollah’s purported activities in Latin America and to assess the likelihood

that the organization will use the region as a base for targeting U.S. interests, it is critical to

understand the origins and evolution of the party. My testimony therefore provides background

on the origins of Hezbollah during the Lebanese civil war (1975-1990) and its evolution in post-

war Lebanon.

The Wartime Origins of Hezbollah

Hezbollah arose out of specific domestic and regional factors, including the historical

disenfranchisement of the Shia population in Lebanon, the Iranian Revolution, and the Israeli

invasion of Lebanon in 1982.

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1 See, inter alia: Lt. Col. Philip K. Abbott. “Terrorist Threat in the Tri-Border Area: Myth or Reality?” In Military

Review (Sept.-Oct. 2004): 51; John L. Lombardi and David J. Sanchez, “Terrorist Financing and the Tri-Border

Area of South America.” In Jeanne K. Giraldo and Harold A. Trinkunas, eds. Terrorist Financing and State

Responses: A Comparative Perspective (Stanford: Stanford University Press, 2007), pp. 231 -246; Gregory F.

Treverton, et al. Film Piracy, Organized Crime, and Terrorism. (Santa Monica, CA: Rand, 200 9), pp. 75-81.

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Shia Mobilization and the Historical Roots of Hezbollah

Hezbollah is a by-product of Lebanese Shia political movements that originated in the 1960s in

response to the longstanding marginalization of the Shia community in domestic politics and

society. Historically, the Shia had the highest poverty rates and lived in the most

underdeveloped rural regions in Lebanon, notably in South Lebanon and the Bekaa. Shia

marginalization was also institutionalized in Lebanon’s confessional political system, which

favored Maronite Christian as well as Sunni Muslim elites. Based on an unwritten agreement of

1943 and modified at the end of the civil war in 1990, the system distributes political posts by

sect. The arrangement reserves the more powerful positions of President and Prime Minister for

a Maronite and Sunni, respectively, while allocating the relatively weak post of Speaker of the

Parliament to a Shia. Since 1990, all government posts are split evenly between Christians and

Muslims, despite the fact that Christians constitute at most about 40 percent of the population

and have lower birth rates and higher emigration rates than Sunnis and, especially, the Shia.

Although a census has not been held since 1932, it is well know that the Shia became the single

largest confessional group in Lebanon in the 1980s and remain so today. As a result of these

political and economic realities, the Shia have not had influence in domestic politics

commensurate to their size.

Until the 1970s, a wealthy elite dominated political representation of the Shia and generally

neglected the interests of the majority of the community. The Imam Musa Al-Sadr, a

charismatic Shia leader dedicated to the advancement of the community, established numerous

institutions to promote the socioeconomic development of the Shia as part of his “Movement of

the Deprived,” which was initiated in 1974. The following year, al-Sadr’s organization

established a military wing, Amal, headed by Nabih Berri. 2 By the late 1970s and early 1980s,

the Amal Movement began to factionalize. The more militant members broke off in 1981 under

the leadership of the Sayyid Husayn Al-Musawi, who founded the Islamic Amal, which was later

folded into Hezbollah.

The Iranian Revolution and the Creation of Hezbollah

The Iranian Revolution was a second impetus for the rise of Hezbollah. Many future leaders of

Hezbollah and other Shia movements in Lebanon carried out their religious training in the same

Circles of Learning (Hawzat al-‘Ilmiyyah) in Najaf, Iraq and later in Qom, Iran. Shia clerics

from Lebanon, Iran and Iraq studied, met and formed networks there. Their experiences in Iran

likely influenced them to mobilize the Lebanese Shia community and to pursue an Islamic state.

In the early 1980s, during the civil war, various Shia clerics were jockeying for power in

Lebanon and Khomeini encouraged them to start a movement. Iran therefore sent members of its

Revolutionary Guards to help with military training and began to send aid to the Lebanese Shia

community, assisting in the formation of Hezbollah.

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2 Berri remains the head of the Shia Amal Movement, which became a political party in post -war Lebanon, and has

held the post of Speaker of the Parliament continuously since 1992.

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The Israeli Invasion as a Catalyst for the Emergence of Hezbollah

The Israeli invasion of Lebanon, first in 1978 and extended in 1982, was another key factor in

motivating the formation of Hezbollah – and this is a point on which both Israeli and Hezbollah

officials agree. From the beginning, Hezbollah presented itself as the leader of the Resistance

against Israel. The Lebanese civil war, which disproportionately affected the population of

South Lebanon, exacerbated the poor living conditions of the Shia. The Israeli invasion, which

was concentrated in the South, provided an environment that increased the appeal of Hezbollah

and especially its military operations. Hezbollah claimed credit for the Israeli withdrawal in

2000, deriving popular support from its role as the vanguard of the Resistance.

The precise origins of Hezbollah are difficult to pinpoint. Various individuals and groups,

including those linked to the bombings of the U.S. Embassy and marine barracks in Lebanon in

1983 and the kidnappings of Westerners during the 1980s, are said to be precursors to Hezbollah,

which did not formally exist at the time. In 1985, Hezbollah officially announced its

establishment with the publication of its Open Letter. The document outlined its philosophy of

“oppression,” called for the established of an Islamic state in Lebanon modeled after Iran’s

Islamic Republic, declared its opposition to the state of Israel, and detailed other aspects of its

ideological orientation.

Throughout the civil war, Hezbollah focused its activities outside of formal state structures. Its

main priority was the military struggle against Israel. In the domestic arena, Hezbollah largely

stayed out of sectarian battles, engaging only in armed clashes with competitors in the South and

southern suburbs of Beirut, notably the Shia Amal Movement and various Leftist groups. During

the war, Hezbollah also ran some social programs, especially health programs, which catered

largely although not exclusively to the families of fighters “martyred” or wounded in fighting

against Israel.

The Evolution of Hezbollah in the Post-War Period (1990-Present)

From 1989 to 1992, Hezbollah initiated its transition from a predominantly militant movement to

greater participation in the formal institutions of the state. Three different wings of the

organization were established or further consolidated in the post-war period, including the

institutions of it military wing as well as those of its political party and social welfare programs.

Hezbollah as a Militant Group

Hezbollah is best known in the West as a militant organization. In the post-war period, it has

retained and honed its military capabilities at the same time that it increased its participation in

mainstream, non-violent politics in Lebanon.

In its capacity as an armed movement, Hezbollah concentrates its violent acts and rhetoric on

Israel. It continues to present itself as the vanguard of the Resistance in Lebanon as well as a

defender of the Palestinians against Israeli occupation. Hezbollah maintains a perpetual state of

war against Israel and engages in periodic cross-border skirmishes with Israeli forces, most

famously in recent years with the capture of two Israeli soldiers and killing of several others on

July 12, 2006, which sparked the 2006 Israeli-Lebanese conflict.

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Hezbollah has largely avoided the use of violence within Lebanon. An important exception

occurred in May 2008, when street clashes erupted between Hezbollah and its allies, on the one

hand, and groups associated with the predominantly Sunni and pro-West Future Movement and

its allies, on the other hand. The decision of Hezbollah to turn its weapons “inward” hurt the

credibility of the organization among many Lebanese.

Hezbollah is especially keen to differentiate itself from Sunni terrorist groups such as al-Qaeda.

Major differences, both doctrinal and strategic, separate the two groups. Al-Qaeda and other

Sunni extremist organizations view Shia Muslims as traitors to Islam. Furthermore, while

Hezbollah has become a mainstream political party in the domestic arena, al-Qaeda is a global

organization primarily aimed at perpetrating terrorist acts rather than developing ties with local

populations. Notwithstanding Hezbollah’s militant wing, it would therefore be a mistake to put

it in the same category as al-Qaeda and related groups.

Hezbollah as a Political Party

With the end of the civil war, the Hezbollah leadership made the strategic decision to participate

in the formal political system. In the early 1990s, the organization denounced its stated goal of

pursuing the establishment of an Islamic state in Lebanon and opted to field candidates in all

post-war elections, including the parliamentary elections of 1992, 1996, 2000, 2005 and 2009 as

well as municipal elections held in 1998, 2004 and 2010. Since 1992, Hezbollah has held seats

in parliament and in 2000 its national representation exceeded that of the Amal Movement for

the first time. In 2005, Hezbollah finally agreed to accept cabinet-level positions, despite the fact

that its prior electoral successes had qualified it to hold ministerial posts in the past. By

participating in the executive branch of government, the party could no longer depict itself as an

opposition faction within the parliament.

Participation in formal political institutions provides incentives for parties to woo supporters

from beyond their own religious communities and hard core supporters. The Lebanese electoral

system reserves seats for representatives from different sectarian communities at the district

level, but voters from all religious backgrounds vote for all candidates, irrespective of religious

affiliation. This arrangement also encourages parties to forge cross-sectarian alliances in order to

sweep the ballot. Thus, Hezbollah – and other parties – have formed alliances, often but not

always of convenience. A 2006 accord with Michel Aoun, head of the Christian Free Patriotic

Movement (FPM), established an alliance between Hezbollah and the FPM that endures to this

day. Since 2000, Hezbollah has also run joint lists with the Amal Movement, thereby

undercutting real competition between the two parties in national elections.

Hezbollah has had a strong showing in elections both at the local and national levels, although its

coalition – the March 8 th Alliance – did not win the majority of seats in the 2009 parliamentary

elections. A variety of factors likely contribute to its success. First, Hezbollah derived

substantial credibility from its role in compelling the Israeli withdrawal in 2000, although as time

passes this source of support is declining. Second, the party has proved exceptionally adept at

grassroots outreach, enabling it to forge strong linkages between its cadres and citizens. Its

extensive and well-managed networks of social programs partially explain its popular appeal

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Hezbollah’s social welfare activities both enable the party to establish direct ties with the

population in the areas where they operate and to bolster its reputation for good governance and

relative lack of corruption. Even Hezbollah’s harshest critics concede that the organization runs

well-managed and high quality programs in the spheres of health, education, and other social

sectors.

In the post-war period, and especially since the assassination of former Prime Minister Rafiq al-

Hariri, Hezbollah has expanded its repertoire of political mobilization strategies to include

classic non-violent forms of participation such as demonstrations and sit-ins. In December 2006,

Hezbollah and its allies in the March 8 th coalition withdrew their representatives from the

national government and initiated a sit-in by their supporters, who camped out for seventeen-

months in downtown Beirut. Officially, the March 8 th leadership launched these protested to call

for more posts in the government – specifically, one-third of cabinet positions, which would give

the coalition veto power. Hezbollah’s opposition to the Special Tribunal for Lebanon (STL),

which was established to investigate the assassination of Hariri, was a key factor behind the

opposition’s withdrawal from the government. The Doha Agreement, brokered by the Qatari

government, ended the standoff after violent clashes erupted in May 2008 between the March

14 th and March 8 th coalitions.

The STL continues to destabilize Lebanese politics, with Hezbollah declaring its firm opposition

to the proceedings and attempting to undermine the investigation’s credibility, particularly after

prosecutors announced the indictments of four Hezbollah members. The issue of the STL was an

important motivation for the decision by Hezbollah and its allies to force the breakdown of the

government of Saad al-Hariri, the son of Rafic Hariri, in January 2011. The decision of the

Druze political leader, Walid Jumblatt, to defect from the March 14 th coalition enabled

Hezbollah and its allies to orchestrate the breakdown of the Hariri government, thereby enabling

the March 8 th coalition to become the majority in parliament. In January 2011, Najib al-Miqati

was nominated as the new Prime Minister and, after a delay of almost six months, he constituted

a government.

Political developments since 2005 demonstrate that Hezbollah remains heavily invested in

formal state institutions and resorts to a wide range of political to pursue its interests in domestic

politics. The adoption of extra-electoral forms of political participation such as mass

demonstrations and sit-ins is by no means unique to Hezbollah. Observers of Lebanese politics,

however, are increasingly concerned about Hezbollah’s stance on the STL and its implications

for stability in the country. To block cooperation with the STL, Hezbollah has tried to question

its legality, overturned sitting governments, and issue veiled threats to block the proceedings of

the court at all costs.

Hezbollah as Social Welfare Provider

The Social Unit of Hezbollah is charged with providing social services and technical help to

members, supporters, families of “martyrs” and others. The social wing of the organization

incorporates multiple welfare programs. These include its construction wing (Jihad al-Bina’)

which helps people construct and rehabilitate homes, supplies water and electricity to parts of

Lebanon, and runs schools, shops, hospitals, clinics, mosques, cultural and social centers, and

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agricultural cooperatives. The Islamic Health Organizations runs a network of hospitals, clinics

and dispensaries throughout the South, Bekaa and southern suburbs of Beirut. Hezbollah also

runs several networks of schools, a microcredit agency, and a program to assist the poor and

orphans, the Imam Khomeini Support Committee (Lajnat Imdad al-Khomeini), which is modeled

after an institution in Iran.

Hezbollah’s social programs largely benefit Shia Muslims, mainly because it locates its social

welfare activities in predominantly Shia neighborhoods and villages. Furthermore, its most

generous programs are reserved for its core members and particularly the families of militia

fighters and those who have been wounded in clashes with Israel. Nonetheless, basic Hezbollah

services are accessible to all who seek them, Shia and non-Shia alike.

The provision of social welfare is not unique to Hezbollah. All major sectarian political parties

in Lebanon provide welfare, either directly through their own facilities or by brokering access to

services supplied by the government or private providers. What appears to distinguish Hezbollah

from many other parties who offer social services is the professionalism and quality of its

welfare programs.

Hezbollah’s Funding Sources

Hezbollah’s militant and non-militant operations undoubtedly require a large budget. Obtaining

reliable information on the organization’s finances and funding sources is notoriously difficult, if

not impossible.

Hezbollah officials emphasize the importance of charitable donations and taxes, including the

obligatory Shia religious taxes of zakat and khums, which allegedly account for one-half of the

operating budget of the organization’s welfare programs. 3 They also point to donations from

wealthy businesspeople and investments in private ventures. Hezbollah representatives are more

reticent about the role of Iranian funds. Estimates of Iran’s contributions range from $25-50

million 4 to $100-200 million, 5 although some claim that Iranian financial support has steadily

declined. 6 Reduced support from Iran suggests a possible motive for seeking alternative,

sometimes illicit sources of financing such as the activities that Hezbollah allegedly carries out in

the TBA. A 2004 estimate alleged that Hezbollah’s operations in the TBA generate about $10

million annually for the organization. 7 The Anti-Defamation League claims that Hezbollah’s

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  • 3 Mona Harb. Le Hezbollah à Beirut (1985-2005): De la Banlieue à la Ville (Paris: IFPO-Karthala, 2010), p. 94.

  • 4 Anthony Cordesman, “Iran’s Support of the Hezbollah in Lebanon.” (Washington, D.C.: Center for Strategic and

International Studies, July 15, 2006), p. 3.

  • 5 Matthew Levitt. “Hezbollah Finances: Funding the Party of God.” In Jeanne K. Giraldo and Harold A. Trinkunas,

eds. Terrorist Financing and State Responses: A Comparative Perspective (Stanford: Stanford University Press,

2007), pp. 131-151.

  • 6 See Abbott, op. cit. and Ahmed Nizar Hamzeh. In the Path of Hizbullah (Syracuse, NY: Syracuse University Press,

2004), p. 63.

  • 7 Julio A. Cirnio, Silvana L. Elizondo, & Geoffrey Wawro. “Latin American Security Challenges: A Collaborative

Inquiry from North and South.” In Paul D. Taylor, ed., Latin America’s Lawless Areas and Failed States: An

Analysis of the New Threats (Newport, RI: Naval War College Press, 2004), p. 24.

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total operating budget ranges from $200-500 million. 8 Given the speculative nature of these

estimates and their obscure sources, these figures are impossible to verify.

Is Hezbollah Likely to Target the U.S.?

Hezbollah is a militant organization because it employs violence, but its acts of violence are

almost exclusively directed at Israel in what the organization and many Lebanese view as a

protracted war. At present, however, there is no indication that Hezbollah aims to target the U.S.

militarily. Although Hezbollah condemns the U.S. for its alliance with Israel and Middle East

policy, it has not targeted the U.S. or U.S. interests with violence since the 1980s.

The reaction of Hezbollah to strong U.S. support for Israel during the 2006 Israeli-Lebanese

conflict provides insight into Hezbollah’s stance vis-à-vis the U.S. in the current period. During

the war, the U.S. unequivocally backed Israel’s right to defend itself from Hezbollah attacks and

even provided military support to Israel while the conflict played out. The U.S. also rejected

calls for a ceasefire in the first part of the war, claiming that a ceasefire agreement should not be

brokered until certain conditions were met. In addition, the U.S. unilaterally opposed a UN

Security Council proposal for an immediate ceasefire between Israel and Lebanon while the U.S.

Congress passed resolutions that condemned Hezbollah and its state sponsors for provoking the

war and underscored Israel’s right to self-defense. 9

During the 2006 war, many Lebanese citizens – including those who do not support Hezbollah –

interpreted these official U.S. statements as favoritism of Israel at the expense of Lebanese lives

and infrastructure. Hezbollah condemned the U.S. position during the war and Hassan

Nasrallah, the leader of Hezbollah, stepped up the anti-American rhetoric in his speeches. In

addition, during and after the war, Hezbollah and its supporters spray painted “Made in the

U.S.A.” on the debris of Israeli bombs as a symbolic means of highlighting what they viewed as

U.S. complicity in Israeli attacks on Lebanon. Despite this strong anti-American stance and

propaganda, however, Hezbollah did not promote the targeting of U.S. interests whether within

the region or elsewhere. Since 2006, the organization has remained strongly critical of American

policy towards the Middle East but has not indicated its desire to target U.S. interests with

military operations.

Hezbollah’s disinterest in targeting the U.S. militarily stems from its political evolution in the

post-war period as well as tactical calculations. As detailed above, Hezbollah is increasingly

vested in Lebanese politics and has become a major party in the domestic political scene. This

strategic orientation requires compromise and pragmatism, limiting the organization’s propensity

to deploy violence to pursue its goals. Furthermore, Hezbollah is now a far more complex

organization than it was in the 1980s. It encompasses multiple interests, both within its separate

organizational bodies and within its domestic constituencies. It would be a mistake to view its

military, political and social wings as one seamless operation geared exclusively towards violent

struggle. Indeed, credible sources claim that Hezbollah has experienced internal debates about

the relative weights of its political and social programs versus its militant activities, particularly

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8 Anti-Defamation League. “Hezbollah’s International Reach” (December 7, 2004). Available at

http://www.adl.org/terror/hezbollah_print.asp.

9 U.S. Senate Resolution 534 (July 18, 2006) and U.S House of Representatives Resolution 921 (July 20, 2006).

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since the 2006 war with Israel. Hezbollah is a highly disciplined organization that does not

expose internal dissension, but such factional differences are entirely plausible and, indeed, are

common in any political organization, whether violent or non-violent.

Tactically, a full-scale military conflict with the U.S. would inevitably lead to big losses and

would shift Hezbollah’s priorities beyond its main military focus, notably its struggle against

Israel. Furthermore, there is no evidence that Hezbollah aims to launch global terrorist

operations, as carried out by Sunni extremist groups such as al-Qaeda. To the contrary, the

organization has explicitly and repeatedly condemned the indiscriminate, large-scale acts of

violence perpetrated by Sunni extremists.

With respect the TBA, the proposition that Hezbollah intends to launch terrorist acts against the

U.S. from the region are not based on conclusive evidence. Latin America is home to many

Lebanese Shia migrants, but they have diverse religious and political orientations. Sympathy for

Hezbollah as the leader of Resistance as well as the paying of religious taxes to Shia clerics, even

those linked to Hezbollah, are not commensurate to support for or participation in terrorist acts.

As detailed above, Hezbollah is a multi-faceted organization that garners popular support for

diverse reasons. Many Lebanese – including opponents of Hezbollah and non-Shia Lebanese –

view the organization’s ongoing conflict with Israel as justified in the context of a protracted

war.

Conclusion

Analysts have made two main overarching claims about the security implications of Hezbollah’s

activities in Latin America and, specifically, in the TBA: First, the region provides a space where

Hezbollah (and other groups) conduct illicit activities that are central to their fundraising

operations. Second, the region offers a geographic platform in the Americas from which

Hezbollah and other groups can launch terrorist operations against the U.S., among other

Western targets.

Regarding the first claim, I do not have sufficient independent information to confirm or deny

the nature or extent of Hezbollah’s activities in the TBA. The information cited in published

sources on Hezbollah’s budget structure, including the funds it allegedly derives from illicit