March 23, 2017 | Foreign Policy
In Venezuela’s Toxic Brew, Failed Narco-State Meets Iran-Backed Terrorism
As if the political and economic chaos wracking Venezuela wasn’t worrying enough, a couple of recent stories underscore the potential national security threat brewing there. First, last month’s designation of Venezuela’s vice president, Tareck El Aissami, as a drug kingpin by the U.S. Department of Treasury. Second, a CNN investigative report revealing that Venezuela’s embassy in Iraq was allegedly selling Venezuelan passports and identity documents to Middle Eastern nationals — raising the disturbing prospect that Caracas is facilitating the entry of Islamist militants to Latin America. Indeed, the CNN report echoed revelations from 2013 that the Venezuelan embassy in Syria was issuing passports to terrorists under the direction of Ghazi Atef Nassereddine, a Treasury-sanctioned, FBI-wanted Venezuelan diplomat who happens to be a key Hezbollah operative. Put all this together and what do you get? A rabidly anti-American failed state that appears to be incubating the convergence of narco-trafficking and jihadism in America’s own backyard.
Venezuela’s links to the drug trade are deep and well documented. Collusion with the cartels reaches the highest levels of the state. Two nephews of President Nicolás Maduro were arrested in Haiti and convicted on drug trafficking charges by a federal jury in Manhattan last November. General Néstor Luis Reverol Torres — Venezuela’s current minister of interior and justice, and former head of its national anti-narcotics agency — was indicted in the United States last August on cocaine trafficking charges, along with a former captain in Venezuela’s National Guard. The list of officials implicated in narco-trafficking also includes a former minister of interior and justice, two senior intelligence officers who later became governors, and now Vice President El Aissami.
The implications for Washington are extremely damaging and not simply in terms of the drugs and violence flowing across the southern border. In El Aissami’s case, five of the 13 entities sanctioned were Miami-based LLC’s. Their illicit activity compromises the integrity of the U.S. financial system.
Of no less concern is Venezuela’s long history of collaboration with Iran, including sanctions evasion, terror finance, and ideological subversion. During the presidencies of Hugo Chávez and Mahmoud Ahmadinejad, Caracas was a key facilitator of Tehran’s sanctions-busting efforts. The two regimes established business ventures and financial institutions in Venezuela, which they used to launder Iranian money, procure technology, and bribe senior Venezuelan officials.
Cooperation did not stop at banking and business. Caracas also helped Tehran promote virulent anti-Americanism across Latin America. Indeed, Venezuela has increasingly become a center for Iran’s revolutionary agitation in the Western Hemisphere.
In 2004, Tehran established the Centro de Intercambio Cultural Iran LatinoAmerica, or CICIL, in Caracas. CICIL is run by Islam Oriente, a foundation based in the Iranian religious center of Qom and headed by Mohsen Rabbani — the Iranian cleric implicated in the 1994 bombing of the Jewish cultural center in Buenos Aires that killed 85 people. Rabbani’s emissaries use Venezuela as a forward operating base for their Latin American activities, which include exporting the Iranian revolution, radicalizing local Muslims, helping Hezbollah consolidate its foothold among Western Hemisphere Lebanese communities, and linking up to social and political movements that share Iran’s anti-American agenda.
Less understood is the Venezuelan nexus between organized crime and Iran’s radical Islamic network, especially its most dangerous terrorist proxy, Hezbollah. Hezbollah has used South America as a base for its terror-finance networks for decades, laundering money on behalf of criminal organizations and using the profits to finance its quest for power in Lebanon, military adventurism in Syria, and terrorism overseas. In turn, its criminal activities benefit the Venezuelan regime well.
A case in point is the recent discovery, by Paraguayan law enforcement agencies, of 25 tons of Venezuelan currency hidden in cloth sacks and stashed in the home of a weapons merchant in the frontier town of Salto del Guaira. Two of the suspects in the case have criminal records for arms smuggling. The money, mostly in 100 Bolivar notes, has been rendered worthless by hyperinflation. Venezuela suddenly announced it was withdrawing the bills from circulation last December, causing a run on the banks (their cutoff date has since been extended). Even before they cease being legal tender, the bills are only worth a few U.S. cents apiece, but have one redeeming feature: they are made with the same quality paper produced by the supplier to the U.S. Bureau of Engraving and Printing and are therefore a favored choice for counterfeiting U.S. currency. If turned into $100 bills, the useless Bolivars would suddenly be worth $2 billion.
Early reports indicated that the money was destined to be traded on the black market in Ciudad Del Este, a Paraguayan frontier town in the Tri-Border Area (TBA) of Argentina, Brazil, and Paraguay, and the home of U.S.-designated Hezbollah counterfeiters. It is also possible that the money would first go through Bolivia’s money houses, which still exchange Bolivars at Venezuela’s fictitious official rate. Even if that were the case, Bolivian money changers would seek to make a profit from the worthless currency. The easiest way to do that would be to sell the cash to local counterfeiters.
Suspicions of a narco-Hezbollah connection have been validated by local sources. In communications with one of the authors, intelligence officials on the ground confirm that Hezbollah operatives in the area have been seeking Bolivars for months. They also have evidence of a link between those arrested in the smuggling plot and a local Hezbollah operative.
It remains to be seen if these connections will be proven out. But it’s clear to see why Iran, Hezbollah, and Venezuela, would all benefit from such a scheme. Suffering from a self-inflicted economic disaster, Venezuela is running out of foreign currency reserves. Turning worthless currency into greenbacks helps address that problem. Hezbollah gets a hefty commission for the job and gains political leverage in Venezuela in exchange for its help. Iran, as the key facilitator of the Venezuela-Hezbollah connection, favors the injection of billions of counterfeit dollars into the global economy because such a step is damaging to the U.S. financial system.
The Bolivars seizure — one of many in the area since 2015 — illustrates the potential repercussions of paying insufficient attention to the roiling crisis in Venezuela. The country is a failed narco-state run by a clique of greedy anti-American ideologues in cahoots with Islamic radicals beholden to Iran, the world’s foremost state sponsor of terror. As long as the Maduro regime governs in Caracas, the crisis that is consuming Venezuela will further strengthen Washington’s enemies in the Western Hemisphere. Developing a coherent strategy to address this deadly convergence of threats should become a much higher priority for U.S. policymakers.
John Hannah is a senior counselor at the Foundation for Defense of Democracies, where Emanuele Ottolenghi is a senior fellow. Follow Emanuele on Twitter @eottolenghi.