June 7, 2016 | House Committee on Financial Services
The Enemy in our Backyard: Examining Terror Funding Streams from South America
Chairman Fitzpatrick, Vice Chairman Pittenger, ranking member Lynch, members of the Task Force to Investigate Terrorism Financing, on behalf of the Foundation for Defense of Democracies and its Center on Sanctions and Illicit Finance, I thank you for the opportunity to testify.
In Latin America, the combination of weak central governments, porous borders, and widespread corruption in public institutions creates an ideal environment for Transnational Organized Crime (TOC). According to the U.S. administration, “Not only are criminal networks expanding, but they also are diversifying their activities, resulting in the convergence of threats that were once distinct and today have explosive and destabilizing effects.”
Drug trafficking, trade-based money laundering, and terror financing in Latin America have merged as a single threat to the national security of the United States: drug cartels, smugglers, counterfeiters, insurgent groups, and terror organizations have coalesced, sometimes against local authorities and sometimes with their active complicity and support, for their mutual benefit. The result is a toxic mix in which drug traffickers rely on terror organizations to move their merchandise to their final destinations in North America and Europe. For their part, terror organizations offer the traffickers services that generate profits to fund their own terrorist activities.
Hezbollah plays a central role in this new landscape, as in Latin America. The group’s religious institutions and clerics, charitable and educational activities, its supporters’ licit commercial activities, and its illicit finance network and organized crime are not distinct endeavors involving different people but overlap.
In my testimony, I will illustrate how Hezbollah, thanks to its reliance on local Shi’a communities, is becoming a key player in the complex regional dynamics of Transnational Organized Crime.