▶ 0:21:15Chair Risch: The united states senate foreign relations committee will come to order. We have as usual a little turmoil this morning as we have a business meeting to start with. We have on the agenda three nominees which we previously heard. Then we will go to a policy hearing on transnational criminal organizations in the americas.
▶ 0:21:43Chair Risch: Since we have a quorum to proceed with voting, we are going to take up the nomination of john arrigo, ambassador to the portuguese republic. Is there a motion? Moved and seconded. We send Mr. arrigo to the floor for recommendation. Is there debate? >> I would like a roll call vote.
▶ 0:22:11Chair Risch: Senator shaheen has asked for a roll call vote. The clerk will call the world. >> aye. >> aye. >> aye by proxy. Aye by proxy. >> aye. >> no.
▶ 0:22:41Chair Risch: >> murphy. >> no. >> merkley. >> no by proxy. No by proxy. I'm just reading from my list.
▶ 0:23:09Chair Risch: Aye. Clerk to report, the motion has passed. John arrigo will be sent to the floor. We now have christine toretti of pennsylvania to be ambassador to the kingdom of sweden. Is there a motion to send her to the floor? It has been moved, seconded. We send her to the floor. Is there debate? >> I would like a roll call.
▶ 0:23:42Chair Risch: The clerk will call the role. >> aye.
▶ 0:23:50Chair Risch: Aye by proxy. Aye by proxy. Aye by proxy. >> aye. >> no. >> no by proxy. No by proxy.
▶ 0:24:21Chair Risch: No by proxy. No by proxy. No by proxy.
▶ 0:24:32Chair Risch: Aye. Did you want to be recorded? Senator daines will be reported aye in person. The clerk will report. Devotion has passed. Ms. toretti be referred to the floor with a new paths recommendation. The last on the calendar is michael waltz.
▶ 0:24:58Chair Risch: I'm going to recess the business committee meeting until further notice as we consider Mr. waltz further. With that, we will move to the business meeting. I've been reminded we want to welcome everyone in the audience who is here to be with us today. Always glad to have you. As is well known in this committee there is zero tolerance for interruption.
▶ 0:25:29Chair Risch: That is anyone attempting to communicate, to protest in the community or communicate with any members of the committee or the witnesses will be immediately removed by law enforcement banned from the committee for a year.
▶ 0:25:55Chair Risch: With that we will proceed -- I will
▶ 0:26:26Chair Risch: Make an opening statement. Hopefully this important issue before our committee today and that issue is the tragic drug epidemic that is a scourge to the country today. Thousands of americans die from overdose every year. Overdoses continue to rise.
▶ 0:26:49Chair Risch: In 2023 there were 206 he forgets related to opioid -- 264 deaths related to and always in idaho -- elated to opioids. Tragically other synthetic opioids and cocaine also wreak havoc on communities across the country.
▶ 0:27:14Chair Risch: Although more can always be done to curb illicit drug use, these debts of the result of two america's foremost adversaries. China and the transnational criminal organizations uniting against us to pump drugs into our country and make a profit, take money out of america at the expense of american lives. We will examine the threat posed by these transnational criminal organizations to the security of our country and the stability of the western hemisphere.
▶ 0:27:43Chair Risch: Mexican cartels and colombian criminal organizations are the main source of synthetic opiates and cocaine driving U.S. overdose deaths. The cartels are only able to make these drugs with the help of china. China, america's greatest competitor, provides significant tax incentives to domestic producers of fentanyl precursors and allows those producers to export freely through the U.S. and mexico. You heard that right.
▶ 0:28:13Chair Risch: China is subsidizing the fentanyl that flows across our borders and kills americans. The chinese government endorsement of this massive drug trade is a huge issue and we will take substantial actions and more must be done. The biden administration touted chinese false progress on this and china is still unwilling to do what is needed to stop the flow of chemicals to our hemisphere. Neither of those are helpful.
▶ 0:28:40Chair Risch: In addition to rapid growth of chinese money launderers that funds not just mexican drug traffickers but also a growing cyber scam industry that steals billions from americans. All of this is interconnected. We must do more to hold chinese actors accountable.
▶ 0:28:58Chair Risch: I would be remiss if I did not announce the recently -- that recently mexico has taken positive messages such as extraditing cartel members to the U.S. and deployment of armed forces to secure its borders. But these are small depth -- small steps compared to what must need to be done and must be done to save american lives.
▶ 0:29:23Chair Risch: As one example the cartels might take as much as 500 billion dollars in annually but mexican authorities reported just $2.6 billion in fraudulent transactions between 2019 and 2020. It is simply unbelievable that the mexican government has not been able to track the other $497 billion that is tied up in this illegal industry. It is open knowledge that the cartels leverage their profits to acquire sophisticated weapons to commit horrible atrocities.
▶ 0:29:53Chair Risch: They murder, extort, kidnap and torture those who stand in their way and in some cases people who are just in the wrong place at the wrong time. As part of these operations the cartels challenge the mexican government and as of late have expanded their reach across our hemisphere even into europe. This situation is growing worse and it is not getting better and it is getting worse faster. This all needs to quit.
▶ 0:30:22Chair Risch: With that, I will turn it over to the ranking member senator shaheen.
▶ 0:30:27Sen. Shaheen: Thank you Mr. chairman to our witnesses today. The united states has had a long bipartisan tradition of combating drug cartels but despite decades of different approaches and billions in investments, criminal cartels are strong as ever today. They have expanded beyond drugs to operate illicit multibillion-dollar networks across international borders including our own.
▶ 0:30:52Sen. Shaheen: They smuggle migrants and illegally mined gold, they run scams and use violence to terrorize communities not only across latin america but across much of the world. He mentioned mexico. According to the council on foreign relations since 2018 cartels have killed more than 30,000 people a year there.
▶ 0:31:20Sen. Shaheen: The instability that cartels create has far-reaching consequences. It damages democratic and legal institutions, threatens human rights especially women, it puts pressure on people across latin america to migrate to safety, and it allows deadly drugs like fentanyl to flood american communities. As you heard from the chairman, we both take this threat seriously. We have worked to introduce legislation to curb fentanyl imports from china.
▶ 0:31:50Sen. Shaheen: Unfortunately recent administration policies have undermined our ability to pressure china to follow through on its commitment to stem the flow of precursor chemicals. Last week the foreign relations committee released a minority report detailing china's gains in the wake of the trump administration program cuts.
▶ 0:32:10Sen. Shaheen: One of the findings that I hope you all testifying this morning will address is that after the administration illuminated counter narcotics and law enforcement programs, china pledged to deepen its law enforcement trainings across the western hemisphere. That is concerning because china is not just trying to fight drug trafficking or combat transnational crime groups.
▶ 0:32:37Sen. Shaheen: It is also working to influence how these countries conduct police operations and write laws in a way that favors beijing. Things like relaxing anticorruption efforts. Cartels thrive in environments of weak financial oversight and off the books deals. Relaxing the U.S. foreign corrupt practices act or illuminating the anticorruption coordinator, those are wins for the cartels as well as china.
▶ 0:33:05Sen. Shaheen: Taking on transnational criminal organizations is no easy task as I'm sure you will speak to you today. Cutting successful U.S. programs does not help light the usaid program in columbia which steered young people away from joining these criminal groups, cutting off a key source of labor and support for cartels over the long-term.
▶ 0:33:31Sen. Shaheen: Another successful example was guatemala's program for incinerating fentanyl precursor chemicals, supported by the bureau of international narcotics and law enforcement at state department. If we are serious about fighting global criminal groups, we need to work with our allies. They share our concerns and they are stepping up. Canada has appointed a fentanyl czar and negotiations with president trump. And with the right policies of the U.S.
▶ 0:33:59Sen. Shaheen: Can confront the threat that is posed by transnational criminal organizations. I appreciate that we are holding this hearing today. Thank you both for being here. I look forward to hearing your thoughts and ideas.
▶ 0:34:10Chair Risch: Thank you senator shaheen. In march I authored a bill called the blessed -- bust fentanyl act cutting down on the flow of fentanyl across our borders and leverage the economic might against institutions that facilitate the export of these drugs that harm our communities. I want to thank the ranking member for co-authoring the bill with me.
▶ 0:34:39Chair Risch: Senator hagerty and senator coons are also co-authors. We sent it to the senate floor of this committee. Unfortunately, it has cleared the hotline on the republican side. I am hoping that the minority will clear it in the not-too-distant future and we can send it to the house of representatives. We have two distinguished witnesses with us today that will help us out.
▶ 0:35:05Chair Risch: I was just handed this morning the quarterly report that congress is supposed to put out on the issue before us. Have you seen this, either review? This is the most recent one. It just came out today. Not surprised that you have not seen it. I will put a copy of this into the record.
▶ 0:35:30Chair Risch: In the meantime, you are here with us today. I want to introduce chris urben, managing director at nardello, leading threat finance investigations of americas.
▶ 0:35:46Chair Risch: He served as special agent and senior official in the drug enforcement administration for over 25 years working on investigations in the transnational criminal organizations and international money laundering and the threat to our financial networks. We would like to hear from you. Please speak for five minutes. If you have a lengthy statement, we will put it in the record and when you are done, we will hear from Ms. vanda felbab-brown.
▶ 0:36:19Chair Risch: The floor is yours.
▶ 0:36:19Mr. Urben: Thank you. Chairman risch and ranking member shaheen, thank you for the opportunity to address you today on the important task of dismantling transnational criminal organizations in the americas.
▶ 0:36:36Mr. Urben: While we have made significant headway in the recent months, reducing the deadly flow of fentanyl and other dangerous drugs into the country from mexico, mexican cartels and other tco's represent a consistent threat to national security. Chinese money laundering organizations continue to play a dominant role in laundering cartel proceeds.
▶ 0:36:58Mr. Urben: New authorities granted by congress and the trump administration's vigorous use of existing authorities are making a difference. But these efforts would be further enhanced by additional international engagement with and cooperation by mexico, other countries in the americas affected by tco's and china.
▶ 0:37:23Mr. Urben: I saw firsthand the damage done by the international trade of fentanyl and other deadly drugs during my 25 year career as an agent and executive with the dea. Over the last five years of my career I lead a team at the special operations division that sought to understand him identify, target and dismantle cmlo's which are transforming narcotics trafficking by offering dramatically lower rates, lower risks and quicker
▶ 0:37:54Mr. Urben: Return of funds them in networks that have laundered money previously. My time let me to conclude that the U.S. law enforcement community and the U.S. financial system needed significant no authority, guidance and resources to understand and combat the threat posed by the tco's and cmlo's. My conclusions have been reinforced since joining the global investigation firm. The U.S.
▶ 0:38:20Mr. Urben: Department of treasury issued the first designations under the fend off act concluding that three mexican financial institutions were of a primary money laundering concern. While I am not familiar with the facts underlying those designations, I can report that the designations have had a significant effect on those institutions and on others that now have to come to terms with their potential exposure to designation under the fend off act.
▶ 0:38:51Mr. Urben: Similarly the trump administration's 2025 designation of several mexican cartels and other tco's operating in the americas as foreign terrorist organizations is forcing businesses to make further enhancements to their internal programs and to revisit their operations in mexico.
▶ 0:39:10Mr. Urben: While the private sector is responding to fend off act designations, further negations -- further engagements are required to eliminate the cartels. In 2025 mexico handed over to the united states 29 leaders and managers of the mexican cartels.
▶ 0:39:34Mr. Urben: As we learn from our successful fight against cartels in columbia, when cartel members understand that they will face justice for their crimes in the united states instead of their own countries judicial system, it has an effect where it drastically impacts their ability to operate.
▶ 0:39:52Mr. Urben: Mexico's handover of the 29 leaders and managers sends a strong message yet hundreds of other potentially extra viable -- extradite-able remain at liberty, free order incarcerated under conditions that allow them to continue committing those crimes. The U.S.
▶ 0:40:15Mr. Urben: Government cannot be successful in that fight without targeting entities with operations in china, including chinese money laundering organizations, chinese financial institutions, apps, wechat for example and manufacturers of fentanyl precursor chemicals.
▶ 0:40:37Mr. Urben: Cmlo's transfer huge amounts of funds with no money ever crossing borders by taking advantage of the existence of chinese capital controls, a global chinese diaspora and wec hat. Chinese financial institutions as well as U.S. and mexican financial institutions facilitate the movement of these funds. Chinese chemical manufacturers supply a large portion of precursor chemicals that are used by the cartels to manufacture fentanyl.
▶ 0:41:09Mr. Urben: Congress can play a vital role in providing resources, incentives and authority for the federal government to engage effectively with other nations while engaging in intensive enforcement operations to combat this threat. Thank you for the opportunity to engage on this topic today.
▶ 0:41:25Chair Risch: Thank you. It is enlightening in your experience of 25 years chasing this, it is certainly something that is respected. We appreciate your opinions on this. Vanda felbab-brown is the director of the initiative on nonstate actors, the codirector of the africa security initiative and a senior fellow at the center for security strategy and technology at the brookings institution.
▶ 0:41:57Chair Risch: She specializes in international and internal conflicts and nontraditional security threats including insurgency, organized crime, urban violence and illicit economies on a broad spectrum. Thank you for being with us today. We would like to hear your thoughts.
▶ 0:42:12Ms. Felbab-Brown: Thank you chair risch, ranking member shane, thank you for this opportunity to address you today. I am a senior fellow at the brookings institution but I'm speaking today solely on my behalf in my personal capacity as a scholar who has studied criminal groups for 25 years. I do not speak for brookings. As you have highlighted transnational criminal groups pose significant threats to the U.S. as well as governments and societies around the world.
▶ 0:42:44Ms. Felbab-Brown: The lethality of synthetic drugs, the violence of many criminal groups in latin america and the diversification on transnational criminal groups into many other illegal and legal economies beyond drug trafficking have pushed these threats to new heights. Several important trends characterize this. The international reach has greatly expanded around the group -- globe.
▶ 0:43:12Ms. Felbab-Brown: Economic activities are highly diversified and span logging, mining, fisheries, wildlife trade and trafficking, not just in a legal domains but also legal domains. Such diversification that only strengthens these groups economically and makes it difficult for law enforcement to target them and dismantle them but it also increases the ability to control powerful business interests in other countries.
▶ 0:43:42Ms. Felbab-Brown: Finally, global drug markets are undergoing a synthetic drugs revolution that is significantly changing criminal patterns and making it profoundly difficult for law enforcement and public health authorities to effectively address those changes.
▶ 0:43:56Ms. Felbab-Brown: In its most lethal and devastating manifestation, fentanyl in the united states is increasingly potent and a variety of synthetic drugs with high potency is spreading around the world. Mexican and chinese criminal groups are particularly significant as a threat to the united states in this domain.
▶ 0:44:23Ms. Felbab-Brown: One administration gave a carte blanche to the cartels. Since october 1, 2024 the sheinbaum administration in mexico significantly increased law enforcement activities. Chinese criminal networks are the suppliers of chemicals to mexican cartels and other criminal groups as our indian brokers.
▶ 0:44:48Ms. Felbab-Brown: After several years of no cooperation between china and the united states the biden administration in 2024 succeeded in starting cooperation with china. China cooperated in anti-laundering measures, shared intelligence with the united states and responded to interventions. The cooperation featured significant gaps that remain today and need to be part of the bilateral conversation with china.
▶ 0:45:20Ms. Felbab-Brown: Countering transnational criminal groups requires a comprehensive and multifaceted approach. Law enforcement actions need to be well-designed and strictly operated within the rule of law. But alone they are not sufficient. A broader system and cultural overhaul need to be fostered. What are some of the critical elements?
▶ 0:45:42Ms. Felbab-Brown: One is crucial law enforcement actions that cannot simply focus on the top heads of the cartels or the lowest operators, but need to crucially focus on the middle operational layer of criminal groups such as by going after the money laundering networks and the money laundering operators. It is important to recognize the limits and counterproductive effects of drug users and low-level the years -- dealers.
▶ 0:46:14Ms. Felbab-Brown: It is inefficient to simply go after the drug component of tco's operations. It is equally crucial to focus on their mining activities, their activities in logging, the takeover of legal economies will be going after the wildlife trafficking operations. This requires highly specialized and coordinated law enforcement units.
▶ 0:46:35Ms. Felbab-Brown: Going after these activities also provides expanded opportunities for intelligence gathering on the political overlords of criminal groups and their foreign connections including state entities. But law enforcement will be ineffective if it operates in a cultural and institutional setting of corruption and independent legal systems that make sure prosecutions are successfully sentencing and
▶ 0:47:10Ms. Felbab-Brown: Penalties. If judges are manipulated or intimidated by criminals, law enforcement will not be effective. Law enforcement will also strictly operated within -- operate within the rules of due process, civil liberties and human rights. It needs to be comp amended by other strategies -- complemented by other strategies to facilitate civil society, investigative journalism and oversight. Thank you.
▶ 0:47:39Chair Risch: Thank you very much for your comments. Both of you have a lot of knowledge in this area. We would like to ask some questions. I will start with you, Mr. urben . It was shocking to me that there is so much money into billions coming in every year, hundreds of billions into mexico.
▶ 0:48:07Chair Risch: At the mexican government is reporting just $2.5 billion recovered. How is that possible? The gap seems so wide.
▶ 0:48:21Mr. Urben: It is certainly a gap. It is a focus and capability that they have that we need to help stand up. There is an opportunity in terms of engaging with mexico.
▶ 0:48:35Mr. Urben: The amount of money the cartels make that flows into mexico from chinese money launderers is a very sophisticated operation that is dramatically shifted over the last five to seven years in terms of the way it is layered into the accounts, the fact that moneys do not cross borders. It is three different pots of money, one within the U.S., one in mexico and one in china that allows for these laundering of funds back to the mexican cartels.
▶ 0:49:07Mr. Urben: Going forward under this new opportunity to engage the cartels and when I say new opportunities, we have new authorities and new resources we will apply to them. Not only do we need to stand up those capabilities within mexico, but in the short term we could use these new authorities like the fend off act to sanction, pre-sanction whether it is a chinese financial institution, mexican financing
▶ 0:49:37Mr. Urben: Institution, a mexican company or individual, we can shorten the gap in terms of the enforcement or activities that negate their ability to launder money.
▶ 0:49:44Chair Risch: How much of it actually travels through the united states? It is easy to grab this stuff as it goes through the U.S. versus mexico and china.
▶ 0:49:55Mr. Urben: There are a variety of different chokepoints we can target. Within the united states it's important to understand that every dollar or every component of the fentanyl trade, there is a dollar on the streets in the united states. We have what I call home-field advantage.
▶ 0:50:15Mr. Urben: There is an opportunity to attack that cash that is the proceeds in the sales of fentanyl and other drugs of the mexican cartels that wind up initially on the streets of the united states for every dollar sold. Will those dollars -- when those dollars are laundered into our banking system, there is an asymmetrical vulnerability for the mexican cartels because that cash is right here before it is laundered into the system.
▶ 0:50:43Mr. Urben: We should be attacking that cash more as a priority by law enforcement.
▶ 0:50:48Chair Risch: Are we doing that well or not at all? How would you classify our efforts?
▶ 0:50:55Mr. Urben: I think we need to do it better. We have gotten a lot better at it. That threat has been transformed in terms of how the moneys are laundered. The old black-market peso exchange was easier to target. Let me give the comparison. When I was in an undercover money-laundering team, they targeted the black-market peso exchange.
▶ 0:51:26Mr. Urben: We conduct wiretaps to gather evidence and take that network down. It was much easier to track in terms of the financial system because there were wire transfers that happened within our banking system and you can track the money. Chinese money launderers are much more sophisticated in the sense that one, they conduct all their business on wechat, an encrypted communication system that is controlled from mainland china.
▶ 0:51:54Mr. Urben: We cannot wiretap it, we cannot acquire that data or those transaction records or communications. So it is a complete blind spot that allows chinese money launderers to move money whether it is in this country and there are chinese brokers in all three countries that control this process, U.S., mexico and mainland china. So we are not able to identify the network at scale and utilize our limited resources in law enforcement to attack that network and essentially prosecute them.
▶ 0:52:26Mr. Urben: The second part of this is as that threat has transformed, we were limited in terms of understanding it initially. 2018 I took over the money-laundering team and begin to understand this and gather intelligence. The intelligent has been much more enriched over the last two or three years.
▶ 0:52:46Mr. Urben: Whether it is the department of justice, treasury or other components of the executive branch can now go after chinese money launderers on a much more dramatic scale in terms of racketeering charges, continuing criminal enterprise and take down the networks and command and control leadership that exists in the united states.
▶ 0:53:06Chair Risch: I am assuming as encryption gets more sophisticated, it will make it tougher to get at this. Am I right or wrong?
▶ 0:53:16Mr. Urben: It absolutely has made it tougher.
▶ 0:53:20Chair Risch: It continues to mature too. The system by which they encrypt.
▶ 0:53:24Mr. Urben: You are right. It continues to mature. It continues to change. There are new apps and new technologies that from a legislative and enforcement component, law enforcement is blind or in the dark. They are almost fighting this engagement with transnational organized crime as if we are in the 1950's.
▶ 0:53:49Mr. Urben: What I mean by that is they cannot in a scaled approach wiretap networks that operate within the world on any encrypted app. It is encrypted apps. I will not identify them. The one I will identify is wechat.
▶ 0:54:12Mr. Urben: There is an opportunity to engage because it is a house of cards for chinese money launderers and chinese organized crime. If you can impact their ability to utilize wechat, whether it is a negotiated strategy with the chinese government or you have the ability to wiretap it, if money launderers globally cannot use wechat to communicate, it reduces their ability to launder funds in the ways I described
▶ 0:54:45Mr. Urben: Earlier.
▶ 0:54:45Chair Risch: Ms. felbab-brown, you mentioned the fact that the new administration in mexico head upped their game when it comes to fighting this problem. Can you quantify that for us? It is substantial? Is it cosmetic? How would you characterize that?
▶ 0:55:09Ms. Felbab-Brown: It is a substantial increase. However the baseline was very small. There is very much that remains to be done. We see significant expansions of efforts to dismantle live production, labs, the significant number of arrests, the mexican government has deployed a vast numbers of the national guard to the border with the united states both to deal with my mortgage -- migration but to check on the
▶ 0:55:41Ms. Felbab-Brown: Movement into the united states. We see a variety of other efforts. The most significant one is expanded role in authorities of U.S. law enforcement agencies in mexico such as homeland security investigations agents but also drug enforcement administration agents.
▶ 0:56:02Ms. Felbab-Brown: Certainly the government of mexico, the sheinbaum administration is very interested in expanding capacities in going after money-laundering. All of this is taking place in the context of a country where criminal groups have over the past six years immensely expanded the power and control of territories, people, institutions and local economies.
▶ 0:56:32Ms. Felbab-Brown: So the challenge is massive and the resources taken by the mexican government remains limited.
▶ 0:56:37Chair Risch: In your opinion, is what mexico is doing making a significant difference?
▶ 0:56:48Ms. Felbab-Brown: It is making a significant difference. I don't think it is insufficient.
▶ 0:56:53Chair Risch: I appreciate that. Senator shaheen.
▶ 0:56:57Sen. Shaheen: To follow up, why do you think the sheinbaum the sheinbaum administration has taken a different approach? Have they heard from the people in mexico that this is something that is not acceptable anymore?
▶ 0:57:13Ms. Felbab-Brown: -- the moment it took office on october 1. Clearly there was a realization from within the administration that the security situation was deteriorating dramatically and that the criminal groups, and parts of criminal groups were turning mexico into a criminal state.
▶ 0:57:38Ms. Felbab-Brown: I believe actions by the trump administration such as linking tariffs to fentanyl and certain impediments. Such as other criminal groups through the united states.
▶ 0:57:59Ms. Felbab-Brown: I am concerned that if terrorists continue to be linked to objectives, the effectiveness against fentanyl will be diluted if mexico feels other objectives can satisfy the U.S. over no matter what it does, it will still face tariffs.
▶ 0:58:16Sen. Shaheen: You mentioned the synthetic drug revolution. I assume you are talking mostly about fentanyl there. In new hampshire where we have had a huge issue with fentanyl, we are also seeing meth come back the way we solid in the 80's. Are there other drugs you would add to that category?
▶ 0:58:42Ms. Felbab-Brown: Absolutely. The meth we have seen in the U.S. market is far more important -- potent than the 1980's. The number of people who died of meth overdose was over 20,000 people. I would not be surprised if the money was higher.
▶ 0:59:07Ms. Felbab-Brown: Sent from china and india to mexican cartels, mostly nonscheduled drugs, very basic common chemicals used, a significant problem. Europe is starting to grapple with a class of synthetic opioids even more potent and deadly than fentanyl.
▶ 0:59:35Ms. Felbab-Brown: Some of those are starting to arrive into the united states, originating in china and india and other parts of the world are seeing meth as well as a variety of substances such as something called pink cocaine in latin america that has often no cocaine but is a mixture of a variety of synthetic drugs.
▶ 0:59:55Sen. Shaheen: One of the things we have seen in new hampshire is that as horrible as fentanyl is because we have anecdotes and there is treatment that people can at least get some help when they are misusing that substance, the same is not true for meth.
▶ 1:00:22Sen. Shaheen: One of the things that we have heard from nih is the research going on there to try to find some sort of treatment for meth. We also an inoculation that helps address the whole issue of substance misuse. How important do you think that is? I should ask both of you this question.
▶ 1:00:50Sen. Shaheen: How important do you think that is that we are able to find successful treatments in order to help people who are impacted?
▶ 1:00:59Ms. Felbab-Brown: Treatment is fundamental to saving lives and improving lives and enabling communities to function well and see a reduction in crime. Evidence-based treatment that in the case of opioid centers on medication such as buprenorphine is in my view the dominant reason why we have sent some 30,000 lives in united states saved last year.
▶ 1:01:27Sen. Shaheen: It is certainly the reason why we have seen overdose deaths in new hampshire go down because we have done a very good job of distributing nor can -- narcan so that people in law enforcement, educators, the medical professionals understand what to do when they see someone who has overdosed. Do you want to add to that Mr. urben?
▶ 1:01:49Mr. Urben: I will second it in terms of funding and resources, these narcotics that are being sent to our country are so deadly and impact in such a dramatic and negative way that the private sector solutions that you spoke about are needed to combat this without question.
▶ 1:02:09Sen. Shaheen: Talked about the financing -- you talked about the financing of cartels. How has cryptocurrency affected that? There is legislation that has passed the senate now. I don't think it has gone through the house yet. It would provide some regulations around how cryptocurrencies are used.
▶ 1:02:37Sen. Shaheen: Is that positive in terms of dealing with the drug crisis we have or is that going to make it worse? I have heard people on both sides comment on that.
▶ 1:02:46Mr. Urben: In terms of crypto being used to launder funds?
▶ 1:02:50Sen. Shaheen: Right.
▶ 1:02:52Mr. Urben: Within the last three years crypto has taken a substantial role in laundering funds. In the first component where you are laundry money from the united states back to mexico and back to the mexican cartels, from my intelligence network there has been a dramatic increase in terms of crypto being utilized to help complete the transaction.
▶ 1:03:14Mr. Urben: What I will call traditional controls, compliance, high-risk, red flag reporting is necessary within the crypto industry so that type of legislation is critical.
▶ 1:03:26Ms. Felbab-Brown: I second that. Cryptocurrencies have become a critical tool for criminal organizations, mexico cartels, but also chinese criminal groups that have a wide array of mechanisms to launder money but are very active in the cryptocurrency space. Any kind of tough regulations that bring law enforcement oversight that prevent misuse of these currencies for criminal purpose is fundamental.
▶ 1:03:56Sen. Shaheen: Thank you both.
▶ 1:03:58Chair Risch: Senator king.
▶ 1:04:01Sen. King: A couple of different topics. I was glad to hear you say that you believe the current administration has been doing improved job compared to the previous. That is heartening. What more as we are in dialogue, what are more steps we could be pressing them to take to continue this better direction?
▶ 1:04:29Ms. Felbab-Brown: -- corrupt government officials, corrupt officials in secluded forces. That requires a set of tools, one of which is criminal investigation such as in money-laundering but it also requires enabling the existing -- the existence of a broader healthy civil society where investigative journalism is not suppressed, where freedom of speech --
▶ 1:04:57Sen. Kaine: Mexico has the worst track record in the world in terms of the murder of journalists.
▶ 1:05:03Ms. Felbab-Brown: Absolutely. Oversight bodies such as anticorruption oversight bodies exist. And we see a significant reduction in dependence on the balance of checks -- a reduction in checks and balance the mexico.
▶ 1:05:25Ms. Felbab-Brown: It is concerning to me even as we have an executive that is for more willing to go to the cartels, the broader environment that enables going after criminality is eroding in mexico and continues to be eroding. The second is the one I mentioned, because of this pervasive culture of corruption, because of decades of complicity, it is essential that U.S.
▶ 1:05:51Ms. Felbab-Brown: Law enforcement agent are able to operate in mexico in cooperation with mexican government to be conducting investigations to prevent political minute relations and criminal relations.
▶ 1:06:08Sen. Kaine: Second question. Much of the discussion today has focused on tco's and narcotics trafficking. Tco's make an awful lot of money on human trafficking as well. Talk about the broad spectrum of legal and illegal activities. Some of my visits to the southern border, I've been told by U.S. officials that some of the cartels make more money on human trafficking than they do on narcotics trafficking.
▶ 1:06:35Sen. Kaine: I have concerns that the current reorganization at the state department is reducing both the international narcotics control function and also the human trafficking function. Deputy secretary regis was with us last week and saying we need to put more of these functions within the regional offices. Tco's for example, you have been using the example of mexican cartels with chinese money-laundering.
▶ 1:07:06Sen. Kaine: I am not sure -- I am worried that the regional offices cannot do the job of really tackling tco's that operate in more than one region. It seems like a lot of tco is more global. It that a fair concerning?
▶ 1:07:24Mr. Urben: Definitely a fair concern. These are global networks that operate throughout the world. That threat, obviously we are focused on the threat from mexico in the united states but the mexican cartels are in partnership with chinese organization, chinese money-laundering is. They work in concert together. We need to develop access points and the ability to leverage your resources to dismantle them. It is throughout our hemisphere.
▶ 1:07:56Mr. Urben: We can talk about panama, colombia, elsewhere around the globe. Africa, southeast asia, the threat is similar. The mexican cartel chinese organized playbook plays out throughout the world.
▶ 1:08:11Sen. Kaine: We need to monitor as a committee when the reorganization is done the thought that we can just take these areas of focus and put them into regional offices and they will be sufficient with a smaller footprint of staff, I deeply worry about it. Mr. urben, I will finish with you. Sometimes I like to ask something that is not even about the hearing. You have an expertise because you are in lawn service -- law enforcement with the dea.
▶ 1:08:42Sen. Kaine: There is a proposal that has been floated to consolidate the dea and the atf. In your professional opinion, good idea, bad idea? What should we be looking at in such a proposal?
▶ 1:08:54Mr. Urben: In terms of consolidating, I think you have to maintain the dea specifically at this point in time. The dea has demonstrated over decades the most significant intelligence source network and the ability to take down transnational organized crime. I could give you other examples. I'm not just defending dea because I'm a former agent. I am looking at what is the best government apparatus to take down the mexican cartels and chinese money launderers.
▶ 1:09:24Mr. Urben: In terms of the precision that you need, you need the dea at this point in time to do what we are talking about here today. They have done this against hezbollah and other foreign terrorist organizations. I don't think you should change dea in any way. Whether you were going to add etf, there are complements in terms of the way dea and atf operate in terms of how we gather evidence.
▶ 1:09:56Sen. Kaine: What we should be looking at in any such proposal is if a proposal dilutes the mission or effectiveness right now would not be a good time to do that?
▶ 1:10:06Mr. Urben: There is no learning curve or time to stand up to organizations. I agree with you.
▶ 1:10:12Sen. Kaine: Thank you. I yield back.
▶ 1:10:16Chair Risch: Thank you to both were witnesses for being here today.
▶ 1:10:23Sen. Ricketts: The port of balboa and cristobal are gateways to the panama canal. They have long been under the control of a hong kong-based operator with details to come to china. That could change of blackrock finalize the deal to acquire 90% of the panama port's company, a strategic win for U.S. interests. For years chinese state export operators have acted as front doors for transnational criminal activity.
▶ 1:10:56Sen. Ricketts: Controlled by china lacks transparency and a feature of authoritarian regimes which allows organized crime to thrive by bribing customs agents, falsifying bills and moving illicit cargoes. We know of the issues of corruption in communist china in general. We are seeing stolen medals from copper from chile, iron ore from mexico, shipped to china through these ports.
▶ 1:11:22Sen. Ricketts: This criminal trade feeds, as china's raw material demand and fuels organized crime across our hemisphere. The fentanyl precursors moving through these ports are added and the risk compounds. A recent report highlights how prc owned and operated ports can harp it -- inhibit the fight against organized crime. Do you agree?
▶ 1:11:50Mr. Urben: .
▶ 1:11:52I Do Sen. Ricketts: I will submit for the record this report, chinese reports in that america are preferred by organized crime. Do you believe the U.S. should do more to make sure these ports are held by trusted entities and not communist china?
▶ 1:12:17Mr. Urben: I do.
▶ 1:12:19Sen. Ricketts: What more can we do with regard to holding the port operators accountable for not allowing illegal materials to be shipped through?
▶ 1:12:30Mr. Urben: It is a key component ports around the world and during my time when I talked about chinese money laundering operations, it ties into a couple of different things. We noticed, we recognized through gathering of information on chinese money laundering networks that there was the chinese playbook in terms of chinese influence operations around the world. We saw a consistent pattern.
▶ 1:12:58Mr. Urben: Wherever you saw an infrastructure product whether it was a hilton road initiative or infrastructure project, there was a payroll effort by chinese organized crime in those same jurisdictions like panama, like columbia and elsewhere that that parallel effort was designed to corrupt local and regional components of that government.
▶ 1:13:26Mr. Urben: Obviously, I completely agree from the national security perspective a key aspect of the panama canal and panama itself and when we talk about transnational organized crime, the movement of money, the movement of human smuggling and the funds associated with that, that parallel effort by chinese organized crime in a jurisdiction like panama is designed to corrupt local and state government officials as well as poor operations themselves.
▶ 1:13:55Mr. Urben: For obvious reasons, I agree with my background at the dea that ports are a key component that we need to control and have rule of law throughout the world especially in national security interest countries like panama.
▶ 1:14:07Sen. Ricketts: Thank you. We are facing a security crisis that goes far beyond overdoses. Chinese money laundering networks have become the financial backbone of the western hemisphere's deadliest cartels. They are laundering hundreds of millions of dollars in drug proceeds, propping up fentanyl supplies that have killed americans just last year.
▶ 1:14:30Sen. Ricketts: The exploit loan abilities with precision using counterfeit passports, fake businesses and rapid-fire bank deposits across dozens of states and they do it faster, cheaper and more discreetly than transnational criminal networks. This is not just organized crime this is not just organized crim1 it's not happening in secret, it has chinese fingerprints all over it and it happens in broad daylight by a law enforcement please whack a mole to keep up. Ms.
▶ 1:14:59Sen. Ricketts: Felbab-brown, how are chinese money brokers working so well and which methods are released equipped to expunge -- respond to?
▶ 1:15:12Ms. Felbab-Brown: One of their biggest advantages is they can use trait-based money laundering to launder money. It is uniquely available to them because china does business around the world. A bolivian money laundering operation cannot justify so easily operations to mongolia.
▶ 1:15:37Ms. Felbab-Brown: Moreover, the ability of the chinese underground banking system to avoid international wires is another advantage. Money moving only within the united states, china, within the source country where the money is being laundered, such as mexico. U.S.
▶ 1:15:56Ms. Felbab-Brown: Law enforcement and law enforcement internationally is becoming more aware of the enormous speed with which chinese money laundering networks catapulted themselves to the top of money launderers in the asia-pacific region, but for the top 20 plus, 30 plus years and in the united states and canada and in europe.
▶ 1:16:20Ms. Felbab-Brown: Countering them must be a core objective as it is an important source of intelligence on other criminal groups and state sponsors.
▶ 1:16:27Sen. Ricketts: Great. Thank you very much. I got questions to submit for the record. Senator van hollen?
▶ 1:16:37Senator Van Hollen: Thank you both for your testimony on how to truck -- crackdown on transnational gang violence. Some of this has -- I've been at this issue for a long time. 20 years ago I formed a regional anti-gang task force with congressman frank wolf virginia, at the time, to crack down on central american gangs, primarily ems 13.
▶ 1:17:02Senator Van Hollen: It does make it more difficult for us to crackdown when leaders in their home countries are actually working against us. That includes president bouquet lee in el salvador. In 2020, the salvatori and news outlet alfaro reported that when his officials secured deals with them s 13 to reduce homicides it was in exchange for prison prison -- prison privileges and political support. Dr.
▶ 1:17:31Senator Van Hollen: Felbab-brown, is it true that in december of 2021 the department of treasury validated the report by imposing global sanctions on two senior kelly officials for their roles in making these deals?
▶ 1:17:46Dr. Felbab-Brown: I saw the indictment, yes.
▶ 1:17:50Sen. Van Hollen: Beyond that, additional evidence came to light in 20 23. There was a doj indictment that revealed that his government helped a gang leader from m s 13 avoid extradition to the united states. Officials even set him up in a luxury apartment and assisted in his escape out of el salvador. Do you remember those reports?
▶ 1:18:20Dr. Felbab-Brown: Yes, I do.
▶ 1:18:23Sen. Van Hollen: Would you agree, Dr., that blocking extraditions to the united states and aiding fugitives makes president bukelly an unreliable partner when it comes to fighting transnational crime?
▶ 1:18:41Dr. Felbab-Brown: Certainly. If negotiations with criminal groups leads to political advantages, enabling corruption outside of the rule of law or preventing the disclosure of compromising evidence, this is concerning as to the kind of partner that an individual, like the president of el salvador, could be in combating organized crime.
▶ 1:19:09Sen. Van Hollen: I want to pick up on what you just set about preventing the disclosure of important information in order to hold criminals accountable. When president trump came to office his second time around, he made a deal with president bukele, where president bukele agreed to imprison people who were taken from the united states in violation of their due process rights.
▶ 1:19:41Sen. Van Hollen: Less attention has been paid to what president bukele got in exchange, which was an order of federal prosecutors to drop charges that were pending against mst 13 people who were in U.S. custody, who had been charged with crimes and were in custody. They were awaiting trial in the U.S.
▶ 1:20:08Sen. Van Hollen: And instead of having them stand trial and have information come out of the trial about the collusion between ns 13 and president bukele, trump sent them back to el salvador. Isn't that right?
▶ 1:20:24Dr. Felbab-Brown: That is my understanding, that this is indeed what was a part of the deal. Certainly, the lack of disclosure that the charged individuals would provide in cooperating with U.S. law enforcement authorities for U.S. courts is in my view a significant blow to countering organized crime groups and the political collusion that enables it in a fundamental way.
▶ 1:20:55Sen. Van Hollen: I agree with you 100%, it's a dangerous message that when U.S. law enforcement is entering into a case rather than getting the testimony and evidence, they get sent back to el salvador, where they are effectively silenced. That testimony doesn't come to light.
▶ 1:21:14Sen. Van Hollen: We have seen the newspapers in el salvador that brought these things to light being heavily persecuted by bukele's government, all sorts of harassment. We just within the last few weeks saw a very important human rights organization leave el salvador because of their fear of retaliation for their anticorruption reporting.
▶ 1:21:41Sen. Van Hollen: If you could close where you began, really? Saying that when you have this corruption, it does undermine our efforts to combat gang violence and puts more americans at risk?
▶ 1:21:56Dr. Felbab-Brown: Absolutely. Anti-organized crime activities are fundamental to the health and well-being of society, but they need to take place within the rule of law. Too often anti-crime campaigns become mechanisms of political repression that targets opponents and for them to be effective, they need to be strictly consistent with human rights laws, civil rights, and they need to foster civil
▶ 1:22:27Dr. Felbab-Brown: Society, openness, investigative journalism, and oversight by's like ngo's.
▶ 1:22:33Chair Risch: Thank you. Senator?
▶ 1:22:40Senator Cornyn: Thank you all for being here. If there is one conclusion I have drawn from the general subject matter we are discussing here, it is that we are losing. We're losing. So, if the definition of insanity is doing the same thing over and over and over again and expecting a different outcome, what should we be doing differently? I would like both of you to comment on that.
▶ 1:23:11Senator Cornyn: But specifically, in my time here in the senate, I have observed that the most successful counter drug efforts that the united states has ever engaged in have been plan columbia. Although obviously columbia continues to have many problems. As do many of the countries we are talking about.
▶ 1:23:35Senator Cornyn: Whether it is corruption, obviously the money that is, then americans spend on illegal drugs is a huge magnet. But what should we be doing differently? Mr. urban, let's start with you.
▶ 1:23:52Mr. Urben: I certainly agree with your statement, sir. In the last six months we have had the opportunity to start to impact the cartels and achieve a semblance of success. Before I came in today they said -- what would success look like in 18 months? Specifically, we need to be specific with mexico. One of them is extraditions or expulsions, whatever they are going to call it.
▶ 1:24:20Mr. Urben: The 29 that they sent back to us earlier this year was a significant event that needs to be done monthly. If there are several hundred expeditions pending they need to be sent back in a timely manner. Anyone else, that's a mid-level cartel number or higher, they should be indicted and expelled or extradited from mexico in a timely manner. It would have a dramatic impact on the cartels.
▶ 1:24:43Sen. Cornyn: That was a big deal when mexico extradited those 29 individuals. My experience has been that this has been a huge obstacle to just getting through the mexican legal process with all the avenues for escape that people have. So, you think that more extraditions would be, would be significant?
▶ 1:25:08Mr. Urben: It played out with what you mentioned, they were successes once we started to extradite those individuals to the U.S. 20 years ago. If we did the 29 that we did over the next 18 months, you would have a dramatic impact on the cartel's ability to operate. The costs are limited and we can get these people back here and they will cooperate to expose that corruption that we are talking about today that is systemic within mexico.
▶ 1:25:39Sen. Cornyn: Doctor?
▶ 1:25:41Dr. Felbab-Brown: Let me reiterate the three points I made. One, focusing on the middle layer of criminal groups. It could well be done through enabling extradition. Extradition is particularly meaningful when it reveals political collusion and sponsors in government.
▶ 1:26:01Dr. Felbab-Brown: I hope that out of the extraditions, we will see revelations as a part of the deals and court proceedings as to the political cover that criminal groups in mexico enjoy. The second element that I would emphasize is going not just after drugs, but after the wide set of economic activities that criminal groups engage in.
▶ 1:26:26Dr. Felbab-Brown: Thank you for your sponsorship of the golden mining act, which starts to address one of the important ways that one of the components of the economies into which criminal groups around latin america and beyond latin america have become engaged. The third is enabling the entire structure of the rule of law, which is where plan columbia comes in again.
▶ 1:26:54Dr. Felbab-Brown: In my view the most successful element of it was helping to rebuild the absolutely shattered and intimidated justice system there to be far more independent and heftier, helping to rebuild police forces. Having mechanisms into agencies in the U.S.
▶ 1:27:12Dr. Felbab-Brown: That enabled this broad spectrum of infrastructure in the system to counter the rule of law and enable, to counter criminality, that's fundamental.
▶ 1:27:27Sen. Cornyn: Thank you. Mr. urben, as you know, there are vetted units within the mexican army and navy that work together with U.S. intelligence services to target some of these fentanyl labs, among other drug labs and the like. Do you think it would be helpful to have additional training opportunities here in the united states for those units?
▶ 1:27:54Mr. Urben: Absolutely. We need to dramatically increase that funding and agility to train their units here as much as possible before they go back and start to engage the cartels in the elements of corruption that have already been described .
▶ 1:28:11Mr. Urben: Compared to what we have done in the past and the opportunities we have seen now in terms of engagement, we need to go all in on the judicial components in mexico. Standing up those units over the next 18 months and using those vetted units together traditional evidence to prosecute these cartel leadership entities in the future.
▶ 1:28:37Sen. Cornyn: Thank you. My time is up.
▶ 1:28:39Chair Risch: Senator shaheen, I believe you wanted to ask another question?
▶ 1:28:44Sen. Shaheen: Thank you, I would like to do another round. To follow up on that question about law enforcement training, senator portman, when he was here, he and I passed legislation that was aimed at combating the flow of fentanyl and other synthetic drugs into the united states.
▶ 1:29:05Sen. Shaheen: What it did was to establish international exchange programs focused on demand reduction and strengthening the law enforcement capacity in other countries to address synthetic drugs. Sadly, it is one of the programs eliminated by the cuts at the state department. That me ask you, Dr. felbab-brown, and you may want to speak to this, Mr.
▶ 1:29:27Sen. Shaheen: Urben, where have we been successful in latin america and with anti-narcotics programming?
▶ 1:29:42Dr. Felbab-Brown: Thank you, senator shaheen. We started speaking about one. I would say the components of plan columbia were successful. In my view the most important was in rebuilding the colombian justice system and in rebuilding the national police and building internal structures and systems that enabled the revelation of collusion, such as the political scandal.
▶ 1:30:09Dr. Felbab-Brown: I do think that one of the most important successes was where there were interdiction units that were, however, limited in their effectiveness when the overall system remained corrupt and disabled once they started going after political sponsors of crime, which is the second success, at least temporarily in my view, was the counter corruption commission that existed in guatemala and was
▶ 1:30:39Dr. Felbab-Brown: Sponsored and funded by usaid and hosted by the international community. When it was operational, it was precisely helping to bring down the infrastructure of political collusion and political protection. It became effective, but was tragically dismantled by the government of columbia.
▶ 1:31:01Dr. Felbab-Brown: I would also say that one of the really important issues is not just having a special interdiction unit, but the broad capacity and a minimum cooperation of law enforcement agencies. In mexico one of the big problems has been that municipal police forces are often under the thumb of criminal groups.
▶ 1:31:21Dr. Felbab-Brown: Usaid programs were some of the most successful efforts at reducing the corruption and increasing that capacity of local law enforcement units. Unfortunately, those programs have gone away. Finally, just outside, it's really important to emphasize the multilateral component. We spoke a lot about the role of china.
▶ 1:31:51Dr. Felbab-Brown: I would also emphasize the role of india as a source of chemicals and synthetic drugs. They are the global coalition against the threat of synthetic drugs that the biden administration erected was having very significant roles in group bringing together global awareness and global pressures on actors like china and india.
▶ 1:32:15Dr. Felbab-Brown: If it is going to wither, it would significantly reduce the ability to shape both the global environment and specifically the actions of countries that we need to shape, like china.
▶ 1:32:28Sen. Cornyn: Thank you -- Sen.
▶ 1:32:32Shaheen: Mr. urben thank you. , I know the dva has worked with international law enforcement in the past. How important do you think that kind of cooperation is as we look at trying to address transnational criminal organizations and cartels?
▶ 1:32:52Mr. Urben: So, the need to work jointly with diane l to stand up units around the world when we can judicially acquire information has been one of the cornerstones of the success of dea. You have to have this. It is a critical element in terms of building capacity within the countries and then the joint relationship, prosecuted in our home countries or brought back to the united states, it has been a critical component over many, many years.
▶ 1:33:22Mr. Urben: There is a real need for that that we have already established in this hemisphere. I spent 10 of my 25 years overseas. There has always been an important component of funding for doing that.
▶ 1:33:34Sen. Shaheen: So, the budget proposed by the administration for the upcoming year would cut in l by 83%. Do you think that that will impact the ability to cooperate?
▶ 1:33:46Mr. Urben: Yes. Unless it's funded through some other mechanism, those funds need to be there.
▶ 1:33:53Sen. Shaheen: Thank you. Thank you, Mr. chairman.
▶ 1:33:57Chair Risch: All right, thank you to all of our witnesses. Appreciate you both taking the time today to attend our hearing. For the information of the members, the record will remain open to the close of business tomorrow, july 24. We asked witnesses to respond as soon as possible. With the thanks of the committee , this hearing is now adjourned.