tv House Task Force Explores Terrorism Financing in South America CSPAN June 8, 2016 8:01pm-9:40pm EDT
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the title of today's task force hearing is the enemy in our backyard, examining terror, funding streams from south america. without objection the chair is authorized to declare a recess at any time. and without objection all members will have five legislative days within which to submit extraneous materials for inclusion in the record. members of the full committee not members of the task force may participate for purposes of making an opening statement or questioning the witnesses.
chair now recognizes himself for two minutes for an opening statement. in previous -- well first thank you, everyone for joining us for the eighth hearing of the house financial services committee task force to investigate terrorism finance. and i would like to thank ranking member and my colleagues for unwavering support as we continue to investigate the threat of terror finance. in the previous task force hearings, latin america and the triborder region is sited as an area of concern for terror funding and finance. we've met with regional partners and personnel on the ground in south and central america working to identify and choke off funding to terrorist and organized criminal groups. while in country, including in armen tina and paraguay we engage being put forth by our
allies and the efforts made by the u.s. in the region and whether the u.s. lawmakers need to provide new tools oren gage the administration to more effectively use the authority and resources that they already have. today, with this expert panel of witnesses before us, we aim to continue our investigation. this hearing will examine how south american criminal enterprises and including those designated by the state department as foreign terrorist organizations, how they fund operations, including through the illicit using of the financial system. i would like to recognize the ranking member mr. lynch from massachusetts for an opening statement. >> thank you, mr. chairman. and thank you to the witnesses for the willingness to help the committee for the work and thank vice chairman pittinger was renominated in the republican primary yesterday so congratulations on that. i'm pleased we're holding today's hearing to further examine terrorist financing stream from south america. today i would like to put
particular focus on the revelations contained in the leaked financial documents known as the panama papers. this past april millions of leaked documents from the panama-based law firm exposed how some of the world's most powerful people used a web of complex financial transactions, including off shore bank accounts and shell companies to hide their wealth. according to the international consorty um of investigative journalists, icij, more than 214,000 off shore entities appear in the leak, connected to people in more than 200 countries and territories, including allege drug traffickers from south america. in addition, the files include 33 people and companies blacklisted by the u.s. government because of evidence that they've been involved in wrongdoing such as doing business with mexican drug lords or terrorist organizations like hezbollah and these revelations highlight the need to combat sec
resee and corruption in the global financial system. and in response, we on this committee have been working along with some of our colleagues on the larger committee and on this task force on legislation to combat corruption by foreign governments. our legislation would authorize the treasury to pay rewards that would help identify and cover stolen assets linked to foreign government corruption. this is necessary because no existing reward program provides monetary incentives for identifying and recovering stolen assets linked solely to foreign government corruption. individuals who come forward to expose this type of corruption do so at great risk to themselves and their families and monetary rewards could provide an insentive to expose corruption and provide financial means to provide for their well being after the fact. another common theme throughout this task force that is reinforced through the release of the panama papers is the need to collect information on the true ownership of these entities.
earlier this week "the new york times" did a terrific article written by eric lipton and julie cresswell and i want to compliment them, a well researched and well written article that demonstrates how u.s. citizens used the law firm to create shell companies to hide wealth overseas. according to the article, the law firm had at least 2400 u.s.-based clients over the past decade and set up at least 2800 companies on their behalf in jurisdictions that specialize in helping clients hide their assets. shell companies are susceptible to exploitation by terrorists as they are often used to mask the identities of the beneficial owners. it is critical that the united states collect information on beneficial ownership in order to prevent criminals and terrorists from exploiting their illicit activity. the constructs are used to avoid paying u.s. taxes. however they also facilitate terrorist financing. i'm proud to be an other cal
co-sponsor of the bipartisan cooperation and transparency and law enforcement assistance act of 2015 sponsored by my colleague miss malliny of new york. and this hinders investigation into terrorist financing by strengthening beneficial disclosure requirement this is legislation will tighten a weak link to follow the money that is funding terrorist organizations around the world. this is an urgent national security issue and i look forward to working with my colleagues on this task force and the house football services committee to close this loophole. i'm pleased to hear from the witnesses today to better understand terrorist funding streams in south america including the revelations of the release of the panama papers. i yield back the balance of my time. >> and chairman is recognized. >> thank you chairman fitzpatrick and ranking member lynch and for the distinguished panel before us today. i'm grateful for today's hearing
which will focus on the financial operations in south america. the allegations from this task force recently visited panama, para gray and to visit with governments to face firsthand the problems they face in south america. when i was in argentina i met with mr. federici. his role with the government gives me great hope and certainty of argentina serious intent on combatting these operations and mr. federici will participating in a conference in a few weeks where he will share his work before parliament from over 25 countries. thank you for your continued partnership with us on these issues and your willingness to participate in the forum. back in october i co-hosted a
similar forum here in washington and with another panelist, mr. brawn who also participated. mr. braun, it is great to see you back here again in washington. thank you for your continued work and dedication to these issues. mr. chairman, thank you and i yield back. >> we now welcome our witnesses. mr. mariano federici is the direct the anti-money laundering and counter terrorist financing efforts. previously he was a country lawyer regional adviser to the international monetary fund and worked for a law firm advisorying financial institutions and companies in a wide section of regulatory and at thetory interpretation. he worked as a clerk for the national criminal courts of the city of ben os aries and he was born there and holds a injure is doctor at and from the virginia
of -- the university of virginia school of law. he is a co-founder at sgi global. he has 33 years of experience in forward state and local law enforcement. he spent 24 of the years at the u.s. drug enforcement administration where he developed the dea successful counter narco terrorism programs including the formative development of the agency's foreign deployed advisory support and teams, the fast teams. and other programs addressing narco terrorism. he's already responsible for the agency's expensive expansion in afghanistan from 2004 to 2008. mr. braun retired from the dea as a assistant administrator and chief of operations in 2008 and when we were down in central america, ran into some is of his former colleagues who called mr. braun an icon in law enforcement and they talked about how his influence and his leadership and vision continue to define the dea even a decade after your
retirement so sir, we thank you for your service. dr. emanuele ottolenghi is from illicit finance for the foundation for the defense of democracies. the doctor's research focuses on islamic revolutionary guard corp and the middle east policy making, transatlantic relations and arab-israeli politics. prior to joining the fdd, the doctor headed the transatlantic institute and taught studies at oxford university. he obtained his ph.d in political theory at the hebrew university of jerusalem and political design at the university of bologna. the witnesses will be recognized for five minutes to give a oral presentation of their testimony. without objection the written statements will be made part of the record following the oral remarks. once the wes have finished presenting testimony, each member of the task force will
have five minutes within which to ask questions. for the witnesses on your table, there are three lights, green, yellow and red. yellow means you have one minute remaining and red means your time is up and the microphone is sensitive so i ask that you be certain you are speaking directly into it. with that, mr. federici, you are now recognized for five minutes. >> thank you mr. chairman, honorable representatives, members of the task force to investigate terrorism financing. would you like to start by sharing with you that in september of 2001 i was a young lawyer working for sullivan in new york. i was at the firm's wall start office when the attacks took place and saw the collapse of the second tower with my own eyes. i remember the frustration and the anger at the terrorists and the respect and admiration toward the people of this great nation and how fast they came together to bring it back on its feet. it is therefore a true and special honor for me to be sitting at this hearing today with representatives of the
people. only a few months away from the 15th anniversary of that tragic day, to discuss how we can suppress terrorism and present such attacks from happening again. i would like to talk about what we found in argentina upon taking office four months ago and how our vision on how to improve things -- we encountered a challenging situation in the area of financial integrity left by the people that preceded us in the government. it is clear to us by now there was a complete lack of political will to fight money laundering and terrorist financing in argentina during the last 12 years. there was a lack of strategic planning which preventing the government from prioritizing effort and making efficient use of public resources. this in turn led to a serious lack of effectiveness with a related impact on risk levels. throughout the last ten years the threats to financial integrity increased significantly as criminals exploited the sophisticated financial system with the vulnerabilities of an uncommitted government. one of the main structural
availabilities was corruption. corruption under the previous administration was the rule, not the exception. and corrupt officials were rewarded, rather than punished. at our financial intelligence unit in particular the situation was also critical. the strategy was to have no strategy. which allowed for discretionary use of anti-money laundering and counter-terrorism financial tools. we're working at full speed to repair the damages. there is a clear and strong political will to fight organized crime and terrorism. our objective is to protect the financial system and the broader economy from the threats of money laundering and terrorist financing and thereby strengthening to the safety and secure. our main focus will be placed on effectiveness as we believe argentina az the necessary legal instructions in place to begin producing results. to achieve this it is important to strengthen the role of agencies such as ours and the government has committed to a stronger financial intelligence unit. in particular, we will be very
focused on assessing terrorist financing risks which we believe have been underestimated by the previous administration. our plan is to begin using our cft regime to pursue international terrorism cases and with a prebts threat to the system and global peace and security. we're also embarking in a wide reporting with an approach to compliance. the reform will also contribute to remove existing barriers to financial inclusion and generate incentives to reduce the circulation of cash and the use of in formal mechanisms. over the last four years the fui had 70 regulations with obstacles to operating in the financial system and economy and contributed little to mitigating the money laundering and terrorist financing. we are of the view that many regulations prevented those from the lowest of the financial segment to expel others from the
informal economy. we are adopting a risk-based approach to the supervision and this is something we hope to be able to do with the support of the u.s. government. this will rationalize the use of our limited resources and allow us to place focus on what is really relevant to protect the integrity of our financial system and broader economy. on the intelligence side, we're working to regain confidence in our domestic and foreign partners. we are updating or mou with financial intelligence units of strategic importance to us. we are in the process of updating mou with vincent following an unauthorized leak of information during the prefecture yugs administration and also strengthening our strategic analysis capabilities. as we move forward in building a stronger farm work in argentina, the support from our international community and particularly our main partners such as the united states becomes critical. i would like to take this opportunity to express my deepest appreciation to vincent's leadership for the trust deposited in us to work
fast toward the re-establishment of the mou. we embrace this partnership and live up to our commitment to protect the information and use it only for authorized purposes and to our mutual benefit as nations. finally, i would like to close by saying that we're not just interested in a deal for international standers, we're interested in becoming leaders in our region. this is because we truly believe in the value of financial integrity to the soundness of our financial stability and safety and security which are necessary preconditions to economic growth and development. thank you very much. >> thank you. mr. braun, you are recognize ford five minutes. >> thank you. good morning, truman, fitzpatrick, ranking member lynch and vice chair pittinger and other distinguished members of the committee and the task force. i appreciate the opportunity to appear before you today and to make a few comments and to help you in any way that i can. as you move forward. >> mr. braun, is your microphone turned on?
>> yes, sir, it is. is that better? so our success in prosecuting the global war on terror has successfully degraded two very important funding streams to terrorist organizations. those very powerful private donors and state responseors. consequently, terror organizations have had to resort to alternate means to keep their movement as live and operations flowing and that is what we're here to talk about today. that is why we are here today. i'll use hezbollah as the best example of whatter up against today and make three important points in that process. first, hezbollah is not the same organization that they were 15 years ago. just 15 short years ago. in the early 2000s, they began moving small quantities of cocaine from the triborder area of latin america no fledge ling
markets at that time in europe and the middle east. flash forward to 15 years later they are moving multi tons of cocaine into europe to attempt to satisfy the ever -- ever increasing demand for cocaine in europe and the police chief and other emerging markets. they demonstrate the ability to move again hundreds of tons of cocaine over the 15-year period and move massive amounts of currency. hundreds of millions, perhaps billions of dollars in currency around the world in the most sophisticated money laundering scheme or schemes that we've ever witnessed. they have matt aftized into a hydra with international connection with the likes of isil and the groups like al qaeda could only hope to have. the transactions with with transnational organized crime groups and throughout the world.
we need to build organized crime and investigative judicial capacity to deal with the threats that we're up against. we are here to talk about illicit finance today. we need to develop very close partnerships and even closer partnerships with our -- with our partner nations around the world to help them build judicial capacity and organized crime and terror investigative capacity in their countries. but we also need to do some work at home. because i can assure that the most -- the vast majority of federal agents in our country. >> -- i don't care what agency they work for, are not experts in dealing with or investigating necessarily what we are up against today. so we talked about illicit finance and the importance of going after the money, following the money. but our obsession with following the money over the past many years for some unknown reason, we seem to have missed out on
one opportunity after another. we seem to have forgotten about the importance of disrupting the supply chain, about interdicting dru drugs and other contraband. it is important for the committee and the task force and the american people to understand quite honestly, the groups like hezbollah, the farc, and transnational criminal organizations use drugs and other contraband as an alternative form of currency. it is the oldest form of currency that they utilize and it is very precious to every one of them. they trade drugs for vehicles of all sorts. aircraft, boats, limousines, they trade currency for smuggling operations to pay for smuggling operations for counterfeit documents, the list goes on and on. and if we don't start focusing as much energy as disrupting the supply chain as we do attacking
illicit finance, we'll never get to where we need to be. in closing, i'm a career law enforcement professional. mr. chairman, as you said. i'm not here to tell this committee or to proclaim to this committee or anyone else for that matter that a judicial approach to atablging terrorism -- attacking terrorism is a panacea, it certainly is not. but i will tell you what it can deliver that no other tool in the counter-terrorism box can deliver, when real justice is meted out in a federal courthouse in the united states or some other competence jurisdiction around the world where we've brought a terror leader to justice, that message that we can deliver by identifying that terrorist for who he or she really is, an organized crime thug of international proportions that preys on the very weakest in our global society and someone who is not a freedom fighter as so many have been indoctrinated or
charmed into believing they are. thank you for allowing me to make my comments and for being here today. i look forward to meeting and working with all of you and your staff to help in any way i can. >> thank you. dr. ottolenghi, you are recognized for five minutes. >> chairman fitzpatrick and ranking member lynch and members of the task force, on behalf of the foundation for defense of democracy, i thank you for the opportunity to testify. in latin america, the combination of weak government and boards and widespread corruption and government institution and the lack of adequate legislative tools to combat terror environments created an ideal environment for organized crime. drug traveling and trade and terror finances can no longer be treated as a distant phenomenon. they help drug traffickers and move their markets and launder consumer goods and profits and
fund terrorist activities. in it latin america, hezbollah plays a role thanks to a vast network of support. they have loyalty among share communities with their religious structures and leverages business connections to its own advantage including critically to facilitate the interaction with organized crime. my written testimony explains how the group's religious, charitable and educational institutions and clerics an supporters illicit commercial activities and the finance network overlap. the area or tba illustrates this overlap. it also shows how the ab sense of proper local tools to combat terror finance has limited the impact of u.s. measures to counter it. the gallery of paraguay and [ inaudible ] which the treasury designated in 2006 to
[ inaudible ]. the owner continued his activities until his arrest in brazil in 2013. not for terror finance but for fraud. and [ inaudible ],s a hezbollah cleric the treasury designated in 2010 continues to operate openly in brazil. porous borders compound the problems. trade based money laundering and a tba and the narco trafficking relies on imported goods that are reexported through the tba and a por os border of a southern end of a lawless frons earin famous for drug trafficking. tax fraud in a local area which was dubbed a major organization brings this together. local accountants issued invoices on behalf of 200 companies for an estimated $270 million in tax evasion.
[ inaudible ]. authorities are focusing on a cluster of companies with links through hezbollah through two members. paraguay media have documented the close connections to politicians and custom officials suggesting the links to ensure custom inspections. merchandise deliveries from china arrive by air with cargo flights operated by emirates and the miami based century an air cargo. both fly regularly to [ inaudible ]. for example, a bill of lading that appears in my written testimony shows delivery to the tba business megastore from sparta electronics in hong kong. suede owns both companies as well as global logistic solutions, the hong kong registered shipping company. in short, suede controlled every company involved in the
transaction. giving the full invoicing it is highly plausible this is a trade-based money laundering scheme involving full shipments. this pattern is common to other kpz under investigation. some of which choose llcs incorporated in miami rather than hong kong as the transit point for merchandise and paperwork. success of u.s. administration have over the years repeatedly designated hezbollah sears and financial networks. the tba and other latin america offer a target rich environment for new designations. additional measures should be adopted to diminish hezbollah's ability to exploit structural weaknesses prevalent in the region that have made it possible for it to interact with local criminal syndicates. there should be more stringent controls and better monitoring of merchandise traveling to the pba. problematic shipments reach the tba from miami international airport and dubai via vicar. the u.s. should institute stricter controls of shipments
over miami and perform more stringent and timely due diligence for those shipping to the paraguay city. the same thing should be said for dubai. washington should ask and work with authorities in both countries to exercise greater scrutiny over merchandise and recipients before planes leave. stricter controls could reduce illicit shipments and raise the cost for hezbollah in the tb aa. these are some of my recommendations. i thank you for the opportunity to testify and look forward to your questions. >> we thank the witnesses for the opening statements and the chair recognized himself for five minutes. mr. federici, four months is a relative short period of time and so much has happened and we want to congratulate you on get argentina fiu back online. we want to thank you for the information sharing now occurring between your country, your intelligence unit and our
department and treasury. and it is so important to argentina and to the united states and to the region and the security. we're aware that a number of countries in latin america don't necessarily perceive the risk of terrorism financing as a relevant risk in the context of their domestic relations. in your opinion, are these percepti perceptions, are they duly justified? what can you tell us about the perceptions of terrorist finance and the domestic context of individual nations? >> thank you very much for your question, mr. chairman. indeed, having worked as a regional adviser for latin america and the caribbean and the imf for the past ten years, i've had the chance to listen to discussions related to perceptions of terrorist financing in the terms of the fatf group for latin america and
the cf -- which is the same body for the caribbean and many countries express publicly their perception that the terrorist financing risk is not a risk pertinent to the region and it is a problem of the united states, it is a problem of europe and other parts of the world. i have always emphasized from the ifm and i'm doing much more with strength from my public position in argentina that these type of opinions lightly thrown in international bodies like the ones i referred to are, to say the least, irresponsible. if they are done without having previously conducted thorough and professional terrorist finances risk assessment in the jurisdiction. there are very few countries that have completed the -- the
conduct of money laundering and terrorist financing risk assessment in their jurisdictions as the satf recommendation number one currently requires. however, many of these countries publicly express the opinion that terrorist financing is not a problem in their country. so i think there is -- this is related also with a confusion on what the risk of terrorist financing is. the fact that there may not be terrorist elements operating in the jurisdiction, does not mean that you are not exposed to the risk of terrorist financing. the mere fact that you have a financial system interconnected with the rest of the world, with the global financial system in and by itself exposes you to the risks of terrorist financing. and this is a subtleness that many public officials in our region do not yet fully understand. that is why it is very important
to continue to raise awareness on the risk of terrorist financing and that is why it is very important to continue to have the united states support in raising awareness on these risks in the region. >> thank you. >> mr. braun, in your written statement you mention that hezbollah is hiding behind criminality in latin america and other locations. could you further elaborate or further explain what you mean by that. >> thank you for the question, mr. chairman. listen, here is the way i look at the situation. organizations like hezbollah, isil is no different, hamas, you name them, their operatives, working in clandestine abroad, they don't carry i.d. cards or carry uniforms or pound their chest proclaiming to be terrorists for important reasons. they don't want to draw attention by the united states and they don't want to draw the attention of many of our partner
nations around the world that we work very, very closely with. so how do they -- how do they -- they've been dispatched, how do they operate really with impunity at the same time accomplishing so many of hezbollah's strategic global goals. and i think what it really comes down to in a large way, more and more these days, is their involvement in the global drug trade. their involved in criminality. but at the same time, they can reckonoiter at will and they can photograph and look at what may be a very strategically important targets for some future events. i believe firmly that hezbollah feels that prolonged asymmetric conflict in the western hemisphere and other places in the world, it is going to be
playing out some days. so they've got all of the time in the world to engage in international drug trafficking and at the same time establish the rat lines they need to establish to support that asymmetric conflict down the road. as i said, they could reckonoiter at will and make all of the nefarious contacts that they need to make with other terrorist organizations and insurgent groups and transnational criminal organizations around the world and they could generate revenue that ultimately go back to the cause and help the team. >> thank you. now recognize the ranking member mr. lynch for five minutes. >> thank you mr. chairman. mr. braun, let me stay right on that issue. we had a significant success operating against the lebanese canadian bank. i think they were -- i think at
their peak funding hezbollah at about $200 million a month through the same procedures drug trafficking and consumer products, they were selling -- they had a used car deal there in sin eggal or west africa and they are now defunct and we are able to take them out through a 311 action as a -- as a primary money laundering concern. are we missing something, though, in terms of that process? it seems as though we adapt, some is of these terrorist groups are readapting and re-engineering their organizations to sort of escape our measures of accountability. are there new and different approaches that we should be taking that address what with
this new iteration of terrorist financing is undertaking. >> thank you for that question. listen, terror organizations like hezbollah, that is really now a hybrid terror organization, they were one part designated terrorist organization and many other countries around the world, but they are also an enormously power transnational organizationed crime group that is distributing, as i said, hundreds of million -- or excuse me, hundreds of tons of cocaine and generating hundreds of millions of dollars in contraband revenue behind that effort every single year. it is important to understand, though, too, that, let's go back, you could talk about the cartels, look at what is playing out in mexico for many, many decades, what most folks in america don't realize is what is going on in mexico with respect
to drug trafficking is playing out for more than 70 years. all right. and with every action that we take, i don't care if it is law enforcement or military or intelligence services, with every aggressive action that you take against these -- what have evolved into ultimately very powerful threats, they are going to evolve and change their tactics and techniques and proceed ears and it will take law enforcement a little time to figure out what they are doing before they could hit them again. >> let me sharpen my question again. >> okay. >> we don't have that much time. our current protocol is to work through fat -- and the financial intelligence units and that -- that has been somewhat effective in terms of stopping the financing -- the wire transof resources from -- from one institution to another, to fund terrorist financing.
that system is fairly effective, i think. the problem now is that they are going off the grid. >> sure. >> they are going off the grid. so those measures, that world that we're operating in, it is not as effective as it once was. because of these new networks that, as i say, are off the grid and they are not subject to the formal regulatory process that we're adapting. they are sort of -- they are doing consumer products now as separate entities and they are deep into the drug trade. there is a lot of cross-border smuggling of assets and bulk cash transfers across the border. now maybe speak to the situation that the -- at the mexican board. you talked about mexico quite a bit. is the vulnerability at the mexican border a -- a factor or is it a large factor in our ability to combat some of what is going on in south and central america and in mexico? >> it's part of the problem.
but we've done -- thanks to you and many of your colleagues here in the house, we've done a phenomenal job of shoring up many of the gaps along the southwest border. we have over 20,000 border patrol agents now, most of which are down in that area interdicting drugs and money and et cetera. so we've done a good job there. where we are really lacking is defense and depth, if you will. but the department of defense detection in monitoring assets they had before 9/11, after 9/11 over 60% of those assets went away. they went to other parts of the world. where -- right where they needed to be but for the most part they've never come back and every four star commander that has commanded south com has talked about this troubling situation that they find themselves in where they are tracking load after load after load of suspected cocaine and probably loads of cash and they can't not do anything about it.
they literally sit by and watch these targets pass on the screen. the one thing that i believe that this committee can do that i believe very much needs to be done is we really need to tighten the noose on the beneficial ownership issue and lower the curtain once and for all and expose these people for who they are. because it is -- that is the linchpin, that is the choke-point for all of the money laundering that has been discussed and probably will be continued to be discussed that hezbollah has engaged in. and you are right, the lcb was moving over $200 million a month in hezbollah cocaine money through that institution and many of its affiliated institutions. so thanks. >> thank you, i yield back. >> vice chairman mr. pittinger is recognized for two minutes. >> thank you, mr. chairman. mr. federici, my objective is to assist you in any way possible
as you emerge as a major regional leader in our efforts to counter this finance. what else can be done that you would like to see for the united states? specifically related to an ota presence, that would be important, and just kind of give us your insights into what would help you be successful. >> thank you very much for your question. well, i think to begin with, i have to express my appreciation for the support that the united states has already provided to our new government in argentina. the presence of president obama, i think less than two months ago, with -- with the early arrival of the president was a strong political sign of support and the presence of jennifer shafski, the former director in
argentina a couple of days before at rival of president obama was a -- before the arrival of president obama was strong for my job. that type of international and political support is very important to not only to motivate us to continue the work in the right track, but also to show a sign to the rest of the region and the world that we can work as partners and allies. i also think your support is fundamental in helping us raise awareness, particularly on the importance of addressing terrorist financing risks in our country and in our region. i would like to see the presence of u.s. officials more often coming to argentina helping us convey the right message in ben os aries and the tri board and to team up with the brazilian and other counterparts as well.
we also need technical assistance and i think that is where ota support through the department of treasury ota support could be of great help. we had a first mission to conduct a diagnostic of the situation at dfiu and the border of the system and we are looking forward to receiving their support, particularly to strengthen our amlcfp supervisory capabilities. because apart from an intelligence agency, we are a regulator for the entire financial system and our main role is to protect financial integrity and that is where i think ota could really add value to our work. we also need technology. and unfortunately, over the past ten years there has been little investment in technology resources and this really affects our capacity to conduct sophisticated analysis. and i think that is where the united states can also help us come closer to providers and companies that can offer
solutions to our current challenges. thank you very much. >> thank you. i would like you to weigh in some more on the triborder area. and as we went to the tri-border area, it is very open and did not see any presence of any law enforcement there and it was just free flow of individuals and traffic and what do you say, mr. braun, and all of the panel can weigh in on this, we have about a minute and a half left in my time. what do you see the committee doing to specifically address the tri-border area. >> what it really comes down to is -- if not ungoverned space, under-governed space. and in the tri-border area and transnational crime and terrorist organizations are attracted to those areas because they could thrive and offer without impunity because of the
lack of law enforcement resources and other security forces. and really, a lack of any type of meaningful judicial process whatsoever. or the more raw side of power, almost a total lack of any kind of a military or other security presence. so they are attracted to those areas because they could operate with impunity in those areas. what i was trying -- trying to touch on in my opening remarks is one thing that we can do is we can help our foreign counterparts, i believe, develop their capacity both criminal and investigation and think of it this way anti-organized crime capacity and judicial capacity to attack these threats. and i believe that things like task forces, international task forces can be brought to bear in places like the tri-border area
to help to -- if nothing else, to monitor and collect intelligence that is enormously important to efforts outside of that area. >> thank you. my time has expired. >> mr. allison is recognized for five minutes. >> let me thank the chairman and the ranking member. it is great to see you again mr. federici and thank you for the great work you do and all of the panelists. i want to remark that i thought your comments at our recent trip were particularly illuminating and i was grateful for you sharing your insight. so thank you. i won't go over what some of my colleagues already asked. but one of the things in front of the world and our hemisphere
right now is that two out of three foreign terrorist organizations operating in latin america farc and eln, are now in the process of negotiating peace with the government. i think this is a good thing. but how -- what is your opinion on how we're going to deal with some of these -- these money laundering issues in the aftermath? i think this is an important question that needs to be asked. are these organizations going to be de-mobilized and gotten their support for terrorism and their role in international money laundering, how is that going to be addressed in the course of this piece? because you -- could you offer any insights that you have? >> congressman, i would say one thing front and center that --
listen, i applaud columbia's efforts to bring the farc to the peace table and to bring peace to the country for the first time since the farc stood up in 1964. they've been around for over 50 years now. but the most important point is -- and the columbian government raeltized this, if -- realizes this, if anybody thinks the combatants are going to blend back into society and take jobs at the local factory or other places, the vast majority of them simply won't. they've gotten a taste for the excitement and they've gotten a taste for the money and enormous amounts of money, especially the leaderships of those organizations where ideology went out the window after they got a taste for the money and that is what absolutely
motivates them to this day. you know, so i -- i don't see -- personally i don't see a great deal -- i don't see a great deal of change. don't see personally a great deal of -- i don't see a great deal of change. >> any other ideas? >> sorry. mr. congressman, i would just like to add one point and try to bring the conversation back to sort of a broader level looking at the region because i think that what is happening in colombia with the peace process and the challenges that it poses are a reflection of a broader regional problem, namely that all of these illicit activities do occur to some extent because of the corruption, complacency, and complicity of sectors of public institutions and politicians in the region.
there is a vested interest among these categories of public servants not to prosecute and go after these networks. now, this is a challenge across the continent, across the region, and one of the things that i think can be done to improve the response of the international community and particularly of the united states is that if you cannot persuade the political classes and fark will join the political process in colombia. if you cannot persuade the political classes to abide by the law financial integrity and prosecute criminals what you need to do is institute mechanisms of enforcement outside of their jurisdictions. one example that i would make here is when i was recently myself in the tri-border region two months ago, paraguayan officials showed me about cash flows out of the country. more than --% of the funds wired
out of paraguay end up transit through the united states financial similar. here you have a perfect tool of going after the money flows without the need for the corporation of those who do not wish to help. >> thank you. doctor? >> yes. i'd like to go back to your question because i think it's a very interesting question. we -- as part of the international community as well we have begun to think about this because colombia is coming up for an assessment against the international standard pretty soon. it's going to be be conducted by the international monetary fund and this question is going to be raised. how is the money that the farc has been harboring in colombia and out of colombia going to be treated because there may be differences in treatment on what the colombians decide to do with that money and what other countries decide to do with that
money. and how compliant is an amnesty of the type that clam ba is contemplating with the international standard? i don't have the final answer to the question yet. i think it deserves some thought from the international community as a whole. but i do have my reflection on this topic, which is that the money that has been flowing from the farc and other terrorist organizations is money that has contaminated the integrity of financial systems outside of colombia as well. so i think we have an interest in protecting the integrity of our financial system, and these flows have been a real threat to that objective. so i have in my country had to deal with flows related with these organizations and to the moment our policy has been to treat them as terrorist funds
and apply the necessary measures to suppress them. so we need to be very thoughtful of how we're going to treat this after the final amnesty agreements are signed, and it very much will depend on the letter of those agreements on one side and on the consensus that we manage to reach internationally as to how to treat these money flows. i do want to say that regardless of that i also share and applaud colombia's efforts to come to peace within their country. >> mr. chairman, may i just say i know i'm way over time, but i would just like to say i absolutely look at this as a positive thing. the peace effort. but if these terrorist groups turn their attention away from fighting the government and turn it on to just criminal behavior around the world, that's not
necessarily a good thing. so i'm glad all of you are thinking about it, and i appreciate your comments. >> gentleman from texas mr. williams is recognized for five minutes. >> thank you, chairman fitzpatrick and tlk thanks to all the witnesses for being here today. for your testimony. here in the united states, much of our immigration debate and i'm particularly sensitive to that issue because i represent texas is on border security. we often argue on how much to spend on border parole agents, equipment, new technologies. yet in your testimony you talked about argentina's border and how it was completely unprotected. you go on to say that those working at the financial intelligence unit were not qualified and had no understanding of money laundering, terror financing risk and strategy. think that probably makes some of us in this room like myself a little worried, especially since we know that our enemies will exploit our southern border if given the opportunity. one of the major themes at these task force hearings have uncovered is the importance of working with a willing and equal
partner when it comes to kbo combating terrorist financing. i know you talked about some of this in your testimony, but can you expand on what steps argentina is taking within its borders to fight money laundering and how will they work with the united states to achieve their goals? >> yes, thank you very much. and this is an excellent question and in fact it is part of the air defense system.
we found that the airplanes that were supposed to protect our borders were not flying. the ships that were supposed to protect our seas and our rivers were not working. and the military forces were -- the armed forces were very badly equipped to conduct their preventive job. steps are being taken. there was an increase in salaries for all the armed forces very recent.
i don't have the exact figures because this is an area that is not under my competence, but i can provide you with the figures upon my return to buenos aires. this decision was made by the ministry of defense and the ministry of security last week. so a recognition of first of all the importance that our armed forces have and that our border protection forces also have in protecting our national security and protecting our country and a recognition and a commitment expressed in tangible actions like an increase in salary was the first step to do. now we need to train them again. we need to equip them with the necessary resources. we need to provide the technology that they need to conduct the job. and we need to do this at the same time while thinking strategically how to use the resources in the most efficient
way. i think with regards to border protection in particular, we need to bring to our table our neighboring countries, in particular, bolivia, paraguay and brazil, which is where most of our threats related with drug trafficking and terrorist financing are coming from. we need to sit together and start working as a team again and i think in particular related with the tri-border problem and terror financing as i sid, that is an opportunity to reengage also with the support of the united states. >> okay. the state department released your port last year that found there was a significant amount of money in argentina which was outside of government supervision an estimated 25% to 40% of an informal economy. in other words, this money isn't being taxed and argentina isn't sure where the money is from. so what steps in argentina are you taking to change or rein
this in? >> this is also an excellent question. i think that is correct, our estimates are even greater than that. we think an amount close to the same amount of our gdp is held outside of argentina or basically outside of the radar of our tax authorities. and this is related to many reasons. i mean, economic instability, inflation, devaluation, political and institutional instability has led many argenti argentines, many argentines who have legitimately earned their income to protect their wealth in safer currencies and safer jurisdictions. the most important measure that we are taking these days to overcome the situation is to launch a voluntary tax compliance program. we have drafted a bill that is currently in the house of representatives in argentina for
discussion to basically create an incentive for argentines holding assets abroad undeclared to come clean. and we think this will reduce the amount of cash undeclared cash in the economy and will also reduce the amount of informality. but i would also like to say that part of this problem has been the excess regulatory framework, the excess of regulatory pressure. to give you an example, in the area of amlcft, in the last five years argentina issued more than five laws, more than four decrees and more than our fiu issued more than 70 regulations which in a way obstructed the functioning of the the financial system and the economy, in many cases prevented financial inclusion and in some cases even led some people to be expelled from the formal financial system. there was a proliferation of informal and underground channels to move that money in and out of argentina.
and while most of these funds were really related with argentines that have legitimately earned their income and were seeking protection, these are also channels that i have no doubt could have been used and most likely were used by criminals and particularly by drug traffickers and terrorist financeorers. so i think this is a problem that needs to be addressed. our voluntary tax compliance measure will tackle part of this problem. but we also need to have more efficient regulations with a risk based approach that don't obstruct the functioning of the financial system and the economy and really focus on what's important. >> thank you for your testimony. i yield back. >> gentleman from illinois, mr. foster, is recognized for five minutes. >> thank you, mr. chairman. and thank you to our witnesses for participation in this important hearing. as you're probably aware, there
have from time to time been legislative proposals in congress to eliminate anonymous shell corporations in the united states. and as i understand they have been eliminated in many advanced economies. so i was wondering if, mr. brown or any of you, could comment on the importance of anonymous shell corporations in the u.s. and drug money laundering, terrorist financing, international corruption, and other activities and what the essential features of some legislative reforms in this area would be to really help us fight these. >> thank you for the question, congressman. as i said earlier, the single most important piece of hezbollah's money laundering operation or their apparatus extremely sophisticated, and this holds true certainly for
host of the transnational drug trafficking organizations that are spanning the globe today as well as many or terrorist organizations, is the importance of those shell -- the anonymity related to those shell corporations and those accounts. and anything that this committee and task force can do, again, to raise the veil, drop the curtain, whatever, to expose the beneficial owners of those corporations, i believe, would have a significant impact on the way today's very nefarious, sophisticated money launderers are doing business. one thing for sure, it would cause them to change their tactics, techniques and procedures, what law enforcement needs in our country, i believe, needs to get better at is some real coordination with folks like you. because when those changes take place, those changes, you know,
result in opportunities for law enforcement to take action, to really knock these folks off their heels and then the important thing is to stay on top of them after that. >> and are there countries that you think really do this right in terms of transparency of ownership? you know -- >> if i may step in, mr. congressman, thank you for your questions. i think there are two things that countries can do better. one is, of course, disclosure, namely the obligation to make the identity of beneficial owners publicly available. and the second is transparency, to make it easy for those trd in finding out to be able to disclose that information. the problem is that beyond these formal conditions and requirements, you do have to
confront very informal well-established systems of concealing that information. and again, i go back to the investigation i mentioned that is ongoing in paraguay of the -- at the center of this investigation involved people who had issued invoices for up to a million dollar who were in one case a street vendor of ice cream in -- that were unskilled workers, one of them was actually constrained to his bed for an illness for months and hadn't been earning. they didn't even know that they themselves were declared as the official owners of the companies that were issuing the invoices. so you here you had a situation where from a formal point of view you knew who the owners of the businesses were, but you cannot go beyond that formality if there is an informal system of criminal complicity where
both officials, accountants, attorneys, customs law enforcement are allowing this mechanism to go on. so again, i think that what is important to complement this gap, to fill this gap, is that we have to identify those areas where we can intervene, operating in a system that is more structured and more law abiding. again, these networks rely on the structural weaknesses of these countries and border regions. you but they're global networks. and the examples i brought, you have false invoicing and shipments going from hong kong through miami dubai, west africa into the border regions and back out into the international financial system. if we cannot improve standards of transparency in those countries, we can at least intervene in those points further away in the supply chain
where there is the rule of law, there are governments that are allies and friendly and willing to cooperate in order to mitigate the consequences of the -- >> now, in the example that you just gave where it wept through miami, would there typically be be anonymous u.s. shell corporation involved in that kind of situation? >> thank you for the follow-up question. that is precisely the point. in the cases that i have seen be, actually, you can find out who the officers are in the companies. you can identify enough names, for example, in the case of miami, there is one individual who is a certified public accountant and who is incorporating companies, all of these companies that are involved somehow in this investigation, and he has been involved in the past at least twice in cases where there were convictions for fraud and terror finance against hezbollah operatives here in the united states. so clearly this is an individual
to which hezbollah operatives go to in order to incorporate companies. the information is there. the difficulty is to connect the dots. >> thank you. >> gentleman from maine, mr. pal o'quinn, is recognized. >> thank you, mr. chairman. appreciate it very much. and thank you gentlemen for being here. mr. braun, if i may, hezbollah is an entrenched international terrorist organization predominantly operating in the mitd east, at least that's been the understanding of many of us who are wrestling with this whole international security issue. now we learn from you folks and others that their tentacles are reaching into our had hemisphere and operating now in south america in the drug trafficking trade. i'm sure you folks are all well aware of the fact that we have a heroin epidemic in this country, and it doesn't spare any location. i represent the great state of maine, in particular northern
maine, and other parts of our state. and we have a real problem up there. now, we learned, mr. braun, that about 95% of the heroin entering this country goes through our southwest border. goes through our southwestern border. do you have any evidence that hezbollah and their drug trafficking operations in south america have any kind of impact or influence on the heroin entering this country that's now reaching all the way to northern maine coming through our southwest border? >> thank you, congressman. listen, i've been out of government now for about 7 1/2 2 years so i don't have access to information like i used to in my old job. but what i can tell you is this. hezbollah has become so proficient at not only engineering the wiring diagram, if you will, for what's needed to conduct their very effective
money laundering operations, but they are now providing those same services to both colombian and mexican drug trafficking cartels. so by doing so, if nothing else, they're certainly facilitating, you know, what's sadly happening in maine and all across our country. and i thank you for bringing that up because one thing we've got to remember, folks, is we experienced over 47,000 drug-related overdose deaths last year. that's 129 americans dying every day of the week. and folks aren't talking about drugs these days. they've just absolutely turned their heads. they don't want to hear about it. but if we don't get this problem in check, if we don't get back to what we used to do, we're going to have an even worse situation in the decades ahead. >> doctor thank you, mr. braun. doctor, we have a terrific neighbor to our north, of course, the canadians and
they're a major trading partner with our country. we have a 3,000-mile border. in the state of maine alone the land border with canada is about 311 miles. you can be on a snowmobile in the middle of a field, doctor, and step off your machine, one foot you're in canada one foot you're in maine. do you worry at all and do we have any evidence whatsoever that as we put more and more pressure on our southwest border that we may be at risk for additional activities that are unlawful and beyond on our northern border? >> thank you for your question. aga again, like my colleague on the panel, i do not have access to intelligence and to classified information. i only rely on open sources. so my ability to answer is somewhat constrained and limited by what i know and by what i don't know. having said that, i can tell you that the building blocks of
hezbollah's money laundering terror financing operations in latin america, so the social infrastructure, the networks of support and their interconnectivity which enables them to leverage the businesses and the so-called licit commerce for nefarious purposes do exist also across the northern u.s. border with canada. they do xist exist in the unite states, to be fair, as well, although perhaps not to the same extent. so while not being able to conclusively tell you that this is happening, i do see the sign of this there. the difference i think there is the strength of the financial system, the transparency of corporate laws, the fact that you do have the rule of law functioning, that you have
strong institutions which are all elements lacking in the regions of south america where hezbollah is most successful. >> thank you, doctor. if i may, chairman, mr. fed reachy, could you shed any light open your experience in your part of the world where there's been pressure put on one border, one international border, and it causes problems on another border? have you -- you can shed any light on that to help us on this committee? >> yes. thank you very much, congressman. absolutely. we are actually experiencing this as we speak today. in the recent years, argentina has become a very important transit country for the export of illegal drugs out from our borders towards mainly europe and west africa. and i'm talking mostly about
cocaine flowing south from bolivia and also from peru and leaving our ports towards the ocean. and what we are seeing is that in the last six months that the new government has been in office, due to all the pressure that we have been putting in controllinging our borders and controllinging the drug route that's we have identified, there have already been changes, slight changes for the most but changes, in the routes that drug traffickers take. and we have been receiving signals from our neighboring countries as well that some of these changes are starting to affect them, particularly south brazil and uruguay are seeing an increase in movements and suspicious and unusual movements that they hadn't seen before due
to the pressure that we're placing. this is something that is very subtle for the moment because we have only been in office for less than six months, but we believe it will increase significantly as we continue to put pressure against these organizations. the routes and their flows. >> thank you very much. thank you, mr. chairman. appreciate it. >> gentleman from pennsylvania mr. roth is is recognized for five minutes. >> thank you, mr. chairman. doctor, there seems to be some dispute about the influence of iran in south america. some including the obama administration claim that iran's influence in the region is waning. however, there are other -- claim iran's influence is still present and potentially growing particularly through both hezbollah and so-called cultural centers that are being ruled by the islamic revolutionary guard
corps. where do you fall on this issue? >> thank you very much, sir, for your question. a very important point. and i'd like to answer by making -- by addressing two themes. the first is iran and its latin america policy and the second is the connection between iran and hezbollah. of his government have put the same emphasis. however, the important of iran latin america policies that this is not a file that is mainly handled by the elected
actually reach out not just to the local shia communities which are mainly syrian and lebanese but it is actually reaching out to convert nonmuslims to shia islam. >> so you have the supreme leader surrogates there and in tandem with that you have hezbollah. >> correct. and what i see is that the hezbollah clerics are mainly focusing on the shia communities of arab immigrants of lebanese and syrian descent. the iranians are focusing on the outreach missionary effort. but they are combined most of the time they are overlapping in the same mosques, in the same centers. they're interacting. there is a stream of very senior clerics coming from both iran and lebanon to visit on a constant basis. and the hezbollah representatives together with iranian ones are constantly cooperating on this effort. and this effort to a large extent is geared toward building support, galvanizing so to speak
the troops, indoctrinating and radic radicalizing and it is also designed as a facade for the financial activities which are managed in chord nais. i just want to give you one example that to me is very revealing. we have spoken a lot about the tri-border, but the tri-border is just one reality of many. and just along the brazili brazilian/paraguay frontier which is mostly lawless and severely underguarded and underpatrolled, you have several other city that's have the same characteristics of the tri-border area, namely cities that are on both sides of the frontier with significant shia lebanese communities involved in trade. one of the cities is called pont ta -- on the brazilian border and one on the paraguay border. there is a very big shee he area community. >> how many people would you say? the population?
>> the two cities combined have a little over 200,000. >> how many the shia community? >> a few thousand, sir. but in that city -- has a personal representative. social media information from his own personal facebook page show that this individual was about six, eight weeks ago in -- celebrating his marriage with -- officiating. now, this is akin to having a very senior member of the clergy of iran, a personal representative of the supreme leader, celebrating the marriage of a muslim convert to islam in a very remote region of south america. it tells us how important that connection is, and it shows the link in this religious social infrastructure in a critical place that is considered to be one of the highest in crime in latin america currently, even worse than some of the colombian cities during the height of the drug crisis. the importance that the city has
come to have in the design of iranian policy and interaction between hezbollah and iran in latin america. >> thank you. mr. chairman, i wish i could take more time. i diplom i didn't get to any other issues. the iranian connection, though, i would just recommend we might want to take another look at this and continue to shine that light. this is fascinating testimony that we're hearing told. so thank you. >> agreed. and we may have a second round of questioning if we have time before the joint session of congress. with that, we'll recognize the gentleman from arizona, mr. sh wiker, for five minutes. >> thank you, mr. chairman. mr. fed reachy, having been in argentina just a couple of months ago, i know members of congress and i think much of the world is enthusiastic to see a country that could be such a powerful player on the world stage sort of back as a player on the world stage.
you know, we wish you and the new government the very best. we truly want to know how we can share information and actually be a good partner because i think there's a level of trust of the new administration that has not existed in, what, 17-some years. and that's really important. i have a whole bunch of things here, but first off, do we fixate too much on the tri-border region? >> i think -- first of all, thank you very much for your comments and for having visited our country. an we really do need the support of our partners, with the united states in particular. i think we share values. we share a common vision of the world. and i think we need to team up
together to face the threats that affect us both as nations. so i really do thank you for those words and we are counting on your support. i have to say that, from the perspective of our countries, we think we fixate too little on the tri-border area. and as i said in my testimony, i think we need to quickly and professionally assess the risks of money laundering and terrorist financing coming out of that area and start developing a joint strategy among the countries that are affected by this problem in that part of the world. and ideally with the support of those that have information about -- better information about what's going on in that part of the world. i think personally that my country has irresponsibly
unattended the risks stemming out from that area. and that's why we think we need to get back into the game. we need to reengage our neighbors in that -- in that assessment and start developing a joint strategy together. >> it's actually not where i wanted to go. but to that point, is your counterpart in brazil reaching out and also working with you? >> okay, i don't want to say something inappropriate speaking about another country given that i'm a public official of argentina. >> you can just say you're working on it. >> but i do want to say that brazil's role in helping us assess the risks in this part of the world and in developing a strategy is fundamental. this cannot be done without their engagement. that is why we need brazil at that table and we need to start working together with them. they are currently attending i
think priorities that may be somewhat different. but in my view are also related to this problem because, as we have heard, much of this problem is related with the lack of institutional quality corruption that has ayllowed for these threats to grow and to develop in that part of the world. so we need to work together. we're hopeful that with the new focus that argentina will put into assessing risk in that area and with the support that we may receive from international partners like the united states, we will be able to bring all of our neighbors to the table and start tackling this problem seriously. >> can i pitch a sort of theory and i would love your comments from all three of you on this. and that is, whether it be from the shia communities, whether it
be from money laundering for drug trades or human smuggling or political corruption, that there is almost a very complex sort of semiformal backbone actually around the world but particularly coming out of central and south america to move assets, move money around. and today that network's client could be drug money. tomorrow it could be the cash for weapon sales. the day after that it could be something else. and that maybe be a constant misunderstanding we have of we think of it as terrorism financing. or drug money financing. that money laundering network is often the same. am i being fair?
>> i believe, yeah, you're being fair and you're very accurate. as i said earlier, transnational organized crime, groups as well as terror and insurgent groups around the world, rely on the same shadow facilitators to move their agendas forward. in the private sector that i've been in now for 7 1/s2 years, w call that outsourcing. they use many of the same money laundering organizations. they use many of the same arms traffickers. they rely heavily on many of the same human smuggling groups. you know, those that provide fictitious or counterfeit travel document that's are much needed. they also do thing that's are very unique like corrupting the private sector, strategically, corrupting the private sector. transportation industry, communications industry and the like. >> to that point, and mr
mrmr. trae mr. chairman this is something i beg of you even your staff to consider. our committee is structured to look at terrorism financing and money laundering. but as we've heard testimony after testimony over the year or so you've been doing this, which is incredibly appreciated, if you connect the dots, the very networks that are washing money for terrorism are the very networks that are political corrupt or are washing and moving money for drug trafficking who are washing money for human trafficking. how do we bring these different law enforcement mechanisms and our international partners? because my fear is we have too many silos together. how do you bring them together and combine the intelligence that's there and focus? because if the backbone that's being used to launder and move money is for hot lots of prettyl
cause, maybe we can get some focus here. with that, mr. chairman, i'll yield back. >> gentleman yields back. the gentleman from florida mr. ross is recognized for five minutes. >> thank you, mr. chairman. you know, ever since this committee has continued this investigation and discovery, we've learned a great deal of tulles that have been utilized for intelligence purposes, data sharing and otherwise identifying money laund iring and terrorism finance networks. what has concerned me and continues to concern me has been the lack of enforcement. so what do we do with this information? what have we done with this information? mr. braun, i'm particularly impressed with your comments and your testimony when you state that to successfully disrupt or defeat the threat, the information collected analyzed and reported must be actioned. could you go into a little bit of detail about that? because i think that's the fulcrum to where we need to go. all for show is great, but if we don't have some element of success and actually preventing
what we're setting out to do, then what good is all this intelligence and surveillance that we're doing? >> thank you, congressman. i don't want to diminish in any way the important work that our -- >> and you won't. my only concern would be, i'm interpreting that to mean there are things we could do better. this task force needs your recommendations as to what we can do to increase enforcement. we've seen an administration that exercises prosecutorial discretion in this country on federal laws that are being broken and yet that are being just turned a blind eye to. and no matter how many laws or even if brazil does what we want them to do, if there's no enforcement, then what good is it that we do and how can we accomplish that own forenforcem? >> well, there has to be a greater deal of sharing. our intel community to a lesser degree our military now that they've become heavily interested in counter threat finance are collecting enormous amounts of data.
but the problem is that if you're outside of a declared area of war, that's pretty tough to action other than with the use of a judicial model. and that's why i keep going back to this is the responsibility of federal law enforcement to action this work. but they -- you know -- >> and limited jurisdiction. but would there not be an opportunity because you talk about having financial incentives in providing assis assistance whether it be technical or financial to foreign governments, is there not a way that we can impose incentives to our partners that would require that in order to have this assistance in order to have this technical or financial support there has to be enforcement? because jurisdictionally there's only so far that the long arm of the united states can do go. we have to rely on our partners. and while our partners are of course welcome to accept our
asichtance, if they're not using it for enforcement purposes, then what redocourse do we have? >> with our counterparts abroad, i mean, one thing that could be done legislatively is if they're not willing to share the information that we're working with them to build capacity to collect, then we turn off the tap. >> and i appreciate that. >> that's what it comes down to. >> i think that's what it comes down to. i don't want to see it come down to that because i think the source could be be in their country and even if they share the intelligence with us to where it gets to our country we can exercise our enforcement jurisdiction. i would like to see it stopped at the source. mr. fed reachy, i'm very grateful for you to be there, i'm impressed with what argentina is doing. how have we been as a partner? do you see us in an opportunity to provide these incentives? because there has to be a good quid pro quo there for nation building to defeat money laundering and terrorism
financing. your comments about eep forcement? >> well, i think we're just starting to rebuild our trust i think as nations with this new government. >> yes. >> and there's been a paralysis in the relationship over the last few years. and i assume and i am very sure this is mostly the responsibility of our previous administration that has been unwilling to cooperate. you now, i think we need to start building this new trust fast because the threats are there. >> they're growing exponentially almost. >> exactly. what we mostly need at the moment to be able to operate and to be able to enforce these actions is intelligence right now. we need high-quality intelligence on our hands to be able to use the tools that the law grants us to seize the assets of criminals, to
interrupt the flows of potential terrorists. >> and you would do that if you had the intelligence. >> i have the absolute determination to do that. you can count on that for sure. we have information that there have been flows of terrorist money coming out from argentina to the hands of foreign terrorist fighters that have enlisted with isil, and we need more of that type of information in order to be able to put our hands on those flows and to be able to share it internationally as well. and to take the enforcement action. >> i'm hopeful if that happens that we exercise our rules of engagement and stop that. i see my time's up and i'll yield back. >> gentleman yields back. we have additional questions but we also have a joint session of congress we need to get in our seats for. without objection, we'll give
all of the members of the task force five additional days within which to submit additional written questions. they could be submitted to the chair. we'll forward those questions to the witnesses and we ask if you could the witnesses to respond as promptly as you may be be able. without objection, this hearing is adjourned.
hillary clinton who clinched the party's presidential nomination this week will start raising money for the democratic national convention and for her general election campaign. democratic party officials are meeting in washington this week to work on their platform ahead of the party's convention in philadelphia in july. we'll have live coverage of the platform hearings starting at 9:00 a.m. eastern here on c-s n c-spa c-span3. president obama will meet with senator bernie sanders at the white house and later the vermont senator will hold a campaign rally at the d.c. armory in washington. watch live coverage starting at 7:00 eastern also here on c-span3.
>> ma >> madam, secretary, we proudly give 72 of our delegate votes to the next president of the united states. next leaders from a number of private weather forecasting and modeling firms testify about the future of their industry. this house science space and technology subcommittee hearing is 70 minutes.