“Examining the Effectiveness of the Kingpin Designation Act in the Western Hemisphere.”
Chairman Cook, allow me first to congratulate you on your recent appointment as the new chairman of this subcommittee.
In 2011, the
Increasing quantities of Schedule 2 drugs like cocaine invade the
This makes Hezbollah, its senior leadership, and its numerous operatives involved in running illicit drug-trafficking and money-laundering operations on a global scale the perfect candidates for
The
In pursuit of this goal, America needs to better coordinate the application and enforcement of all instruments available from the formidable toolbox created over the past two decades by legislation and executive orders, including leveraging Executive Orders 13581 and 13773 on combating transnational organized crime, Executive Order 13224 on combating sources of terror finance, the 1999 Foreign Narcotics Kingpin Designation Act, the 2015 Hezbollah International Financing Prevention Act (HIFPA), the Global Magnitsky Human Rights Accountability Act of 2016, and soon the Hezbollah International Financing Prevention Act Amendment of 2017, which is now awaiting reconciliation between its
In doing so, it should focus significantly on the Western Hemisphere, where
In the remainder of my testimony, I will discuss evidence demonstrating the magnitude of the threat posed by
First, Peruvian authorities arrested a suspected Hezbollah member, Muhammad Amadar, in
On
Hezbollah has not only been involved in plotting terror attacks and facilitating drug traffic. It has also fueled the type of rampant corruption that the Global Magnitsky Act was designed to counter. To ensure its operations' success in the region, Hezbollah operatives in
Still, important questions, as far as policymaking is concerned, are: How much does Hezbollah earn? Does Hezbollah still mainly rely on
At the time, it was estimated that revenue generated through trade-based money laundering and other illicit activities in the TBA yielded roughly
After the 2006 war with
In 2016, the
This global network, referred to by law enforcement as the Lebanese Hizballah External Security Organization Business Affairs Component (BAC), was founded by deceased Hizballah Senior Leader
Cases implicating the BAC give a sense of the global footprint of
In the first case,
In 2011,
On
In
All these cases involved a sanctions and a law enforcement component. They also relied on unprecedented intelligence sharing and interagency coordination, cooperation with foreign law enforcement and intelligence agencies from allied countries, and the reliance on a panoply of tools drawn from the sanctions arsenal and the
Other suspected cases, if links to Hezbollah are confirmed, indicate how large the drug trafficking networks are in
In
In
Chamas' arrest eventually led to the detention, by Paraguayan authorities, of three of his associates. On
Hezbollah may also have been linked to Latin American drug baron
Toumani was considered the heir to
Chamas was in charge of shipping hundreds of kilos of cocaine a month. His associates were also handling significant quantities of cocaine. Toumani was also handling billions worth of cocaine transactions. Assuming links to Hezbollah can be confirmed in all these cases, this is another piece of the puzzle that is
An exact figure is hard to come by without access to classified information and knowledge of ongoing investigations. Regardless, it is fair to conclude that proceeds from criminal activities have become a vital source of income for Hezbollah, especially when one looks at available evidence. The cases the
America needs to recognize the magnitude and scale of this problem and dedicate its best resources to fighting it. This is a direct threat to the homeland and all tools need to be leveraged in a combined fashion to yield the desired results.
Actions taken by the
Starting in 2004, the
If anything, the area remains an important center of
Based on public records of his dual citizenship, we assess that Atoui spent at least five years in the TBA during the early 1990s. Based on evidence available on social media, including the fact that the Imam Khomeini mosque in Foz do Iguazu, on the Brazilian side of the TBA, commemorated him four days after his death, n62 we also assess that he had close family ties in
These ties suggest that the TBA remains a high priority for
As a result of
Lack of enforcement is not because the TBA is no longer important to
The Tri-Border Area continued to be attractive to individuals seeking to engage in terrorist financing, as the minimal police and military presence along these borders allowed for a largely unregulated flow of people, licit and illicit goods, and money. Paraguay's efforts to provide more effective law enforcement and border security were hampered by a lack of interagency cooperation and information sharing, as well as pervasive corruption within security, border control, and judicial institutions. n64
The
As the
Paraguay is a drug transit country and money laundering center. The Tri-Border Area ... is home to a multi-billion dollar contraband trade that facilitates much of the money laundering in
The counterterrorism Country Report on Paraguay for 2016 also highlights inadequate enforcement. In the Paraguay section, the report states that "Paraguay has counterterrorist financing legislation and the ability to freeze without delay and confiscate terrorist assets, although there were no terrorist financing convictions or actions to freeze in 2016." n66
All sanctioned Hezbollah operatives to date operate from the TBA, run Paraguay-registered businesses, and hold Paraguayan citizenship. Many reside in
Despite
In a
He returned to
Fayad appears to be traveling on a valid Paraguayan passport, which he posted on his Facebook account n74 to show a visa to
These details are important because
II.
III.
IV.
Sanctioned in 2006 with the Barakat brothers,
Business card of
VI.
In 2014, Barakat was interviewed as a witness of the brutal beating of an individual in the Galeria Page, where his store "Big Boss" is located. n99 Big Boss International Import Export stands accused of suspicious activity, including in 2008, when
VII. Galeria Page aka Galeria Uniamerica
The Ciudad Del Este shopping mall, Galeria Page was sanctioned in 2006 as a source of funding for Hezbollah-linked activities. Renamed as Shopping Uniamerica, the mall, which is still under
Through research conducted jointly with Sayari Analytics, FDD was able to identify 66 businesses and shops inside Galeria Page. Of these 66, we could only find official records proving their presence in or association with the Galeria for nine of them. Some of the records, however, are old and while they prove these companies were located in the Galeria after it was sanctioned, they do not always constitute conclusive evidence that they are still located there.
We also found six companies which, on their websites or Facebook pages, listed Galeria Page as their address.
There is a significant discrepancy between the numbers of actual businesses advertised inside the Galeria on commercial platforms, through their
Screenshot of cancelled entry for
According to a Paraguayan official speaking to us on the condition of anonymity, the absence of businesses from the public registry of Paraguay's ministry of industry is deliberately made inaccessible through bribes. n103 It is impossible to independently verify this allegation.
This obfuscation attempt, if true, violates
The evidence shown indicates that unless
CONCLUSION AND RECOMMENDATIONS
1. Hit Hezbollah with the full arsenal of
2. Sanction Hezbollah and its senior leadership with TCO and Kingpin designations.
Hezbollah is a terror organization. But it also runs a global criminal enterprise that trades illicit drugs. On this ground, I strongly recommend that the
3. Couple Hezbollah terror finance designations with TCO and Kingpin designations.
My next recommendation is to couple terror finance designations, such as the ones used in 2004 and 2006 against Hezbollah TBA operatives, with Kingpin designations. It is important to emphasize the fact that designated terror-finance operatives for Hezbollah are involved in criminal activities on behalf of a global criminal franchise. They should carry this multiple stigma.
Such designations have other practical implications, especially in countries where Hezbollah is not considered a terrorist organization, which is the case with all countries in
4. Target enablers with Global Magnitsky and HIFPAA.
The new Hezbollah bill, currently being reconciled, would also enable the administration to punish this official, and others engaged in similarly corrupt practices, with additional measures. Indeed, corruption and complicity through the provision of services can now be punished with a variety of measures, including the denial or revocation of visas to
HIFPAA also would reduce the threshold for designations to extend to those who, while not conclusively proven to be members of Hezbollah, are clearly facilitators and enablers of its activities. This measure would permit
5. Impose a 311 designation on financial institutions known to be assisting Hezbollah in
6. Empower law enforcement to go after
They have nudged
Law enforcement has demonstrated how it can complement sanctions. The cases I mentioned in my written statement all involve a balance of sanctions and prosecution. The combination of tools always works as a force multiplier with coordination among agencies, and a shared goal of disrupting
Step one, then, must surely be to appoint a new
As understanding the full scope of this complicated global network is difficult for even the most seasoned investigators, step two should be to empower the new
7. Give more resources to
Finally,
Hezbollah,
Hezbollah has ... broadened its sources of financial support in recent years. Hezbollah is now heavily involved in a wide range of criminal activity, including the drug trade and smuggling. It also receives funds from both legitimate and illicit businesses that its members operate, from NGOs under its control, and from donations from its supporters throughout the world. n106
The
Thank you for the opportunity to testify. I look forward to the committee's questions.
n1
n2
n3
n4
n5
n6
n7 "Interagency Cooperation on
n8 Opinion,
n9
n10 "Libanes cae con 500 kilos de cocaina en aeropuerto Guarani (Lebanese caught with 500 kilos of cocaine in
n11
n12
n13 "Presunto miembro de Hezbollah fue detenido en Surquillo (Alleged member of Hezbollah was detained in Surquillo)," RPP Noticias (
n14 "Absuelven a Libanes acusado de terrorismo detenido en Surquillo (Lebanese accused of terrorism detained in Surquillo is acquitted),"
n15
n16
n17
n18 A 2016 report published by
n19 "US Consumers Buying Millions of Dollars-Worth of Luxury Timber Linked to Hezbollah Financiers, Global Witness Reveals," Global Witness,
n20
n21
n22
n23
n24
n25
n26
n27
n28
n29 Marco Vernaschi, "
n30 Verified Amended Complaint,
n31 Conversation with the author,
n32
n33
n34
n35 Indictment,
n36
n37 Indictment,
n38
n39 Information obtained from a former
n40
n41
n42 A detailed description of Project Cassandra and its achievement can be found in:
n43 "Policia prende dois libaneses com 42 quilos de cocaina (Police apprehend two Lebanese with 42 kilos of Cocaine)," Folha de
n44 "Denarc appreende cocaina de mafia libanesa (Denarc apprehend cocaine of Lebanese mafia)," Agencia Estado (
n45
n46
n47 "Senad detiene a dos turcos con cocaina liquida en CDE" (Senad arrests two Turkish nationls with liquid cocaine in Ciudad Del Este)," Ultima Hora (Paraguay),
n48 "Caen dos narcotraficantes turcos (Turkish narcotraffickers arrested)," ABC Color (Paraguay),
n49 For more details, see my
n50
n51 "A pesar de pocas ventas, grupo empresarial construye moderno shopping center en
n52 "Confiscan 847 kilos de cocaina del capomafioso fronterizo
n53
n54 "Interagency Cooperation on
n55
n56
n57
n58
n59 Conversation with the author,
n60
n61 Qalaat Al Mudiq, Twitter,
n62 Mohamad Moha Ali,
n63
n64
n65
n66
n67
n68 According to [Sec.]566.601 of the
n69
n70
n71
n72
n73
n74
n75
n76 U.
n77
n78 U.
n79 Lecture at the
n80
n81 Arresala - Centro Islamico do
n82
n83
n84 Infornet Princesa,
n85
n86
n87 "Habhab & Barakat Ltda," Sales Spider, accessed
n88 "
n89 "H.H. Yassine & Cia Ltda," Diretorio da Empresas Econodata, accessed
n90 "
n91
n92 Paraguay Gabinete Civil de la Presidencia, "Gaceta Oficial de la
n93 "Cars Estacionamento |
n94
n95 Image was received from confidential source.
n96
n97 Paraguay official records.
n98 Photo obtained from a local source.
n99 "Fiscalia pedira peritaje de filmacion de brutal golpiza en Ciudad Del Este (Prosecutor's Office will request expert assessment of the video showing brutal beating in Ciudad Del Este)," ABC Color (Paraguay),
n100 "Seprelad confirma 'operaciones sospechosas' de empresario libanes (Seprelad confirms 'suspicious operations' of Lebanese businessman)," ABC Color (Paraguay),
n101 "
n102 Paraguay official records.
n103 Conversation with the author,
n104
n105
n106 "Assessing the Strength of Hezbollah," Hearing before the Subcommittee on Near Eastern and South and Central Asian Affairs of the
Read this original document at: http://docs.house.gov/meetings/FA/FA07/20171108/106606/HHRG-115-FA07-Wstate-OttolenghiE-20171108.pdf
“MACRA (Medicare Access and CHIP Reauthorization Act) and Alternative Payment Models: Developing Options for Value-based Care.”
“I should not have to give this speech almost two months after the storm. We should have accomplished much more. The people of Puerto Rico pretty much understand that President Trump doesn’t want to help them.”
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