- By Emanuele OttolenghiEmanuele Ottolenghi is a senior fellow at the Foundation for Defense of Democracies. , John HannahJohn Hannah is a senior fellow at the Foundation for Defense of Democracies, focusing on U.S. strategy. During the presidency of George W. Bush, he served for eight years on the staff of Vice President Cheney, including as the vice president's national security advisor.
President-elect Donald Trump staked much of his successful campaign on stopping illegal immigration. Yet the flow of migrants is symptomatic of a much larger danger to U.S. security that is rapidly gathering on our southern doorstep. Across the region, violent drug cartels and Islamic terror networks increasingly cooperate, with the assistance of corrupt political elites. This toxic nexus is fueling both the rising threat of global jihadism and the collapse of law and order across Latin America that is helping drive drugs and people northward into the United States. Developing a strategy to combat this growing risk to the American homeland needs to be a priority of the Trump administration. And one of its primary targets should be Iran’s most deadly proxy, the Lebanese terrorist group Hezbollah.
Hezbollah’s involvement in Latin America’s drug trade is significant and expanding. The group — often referred to as the “A-Team” of international terrorism — has formed partnerships with several of the region’s most notorious crime syndicates, including Mexico’s Zetas, Columbia’s FARC, and Brazil’s Primeiro Comando de la Capital. Evidence indicates that Hezbollah has ties throughout the illicit narcotics supply chain. U.S. sanctions, as well as court cases in the United States and overseas, have targeted Hezbollah-linked operatives acting as logistics and financial service providers, traffickers, drug barons, distributors, and, most recently, suppliers of precursor chemicals used to refine cocaine. It seems only a matter of time before Hezbollah-run drug labs emerge, too — the kind that have long been at the center of the group’s operations in Lebanon’s Bekaa Valley.
Hezbollah’s connection to the drug trade in the Western Hemisphere has become a major source of income for the group. Some of the funds are used to buy off local law enforcement officials and politicians, contributing to rising corruption and criminality — breakdowns in the rule of law that help drive the immigration wave.
Through its well-documented money laundering activities, Hezbollah is also transferring significant revenues to the Middle East, to fund the military and terrorist operations throughout the region. That includes the group’s large-scale intervention in the Syrian conflict, where its war crimes have been a major contributor to Europe’s worst refugee crisis since World War II. Yet even more worrisome are the warning signs that Hezbollah is seeking to leverage its links to the cartels for nefarious purposes much closer to home — including terrorism in the United States.
Take the case of the Canadian-Lebanese Bank, a Hezbollah money laundering scheme on behalf of Latin American cocaine traffickers that extended to the United States and West Africa. The case revealed a complex web of money laundering operations, criminal activities, and proven links to Hezbollah’s senior leaders. The scheme’s kingpin, Ayman Joumaa, coordinated drug shipments for the Mexican Zetas and Colombia’s FARC. Money was laundered through U.S.-based car dealerships and Hezbollah-controlled businesses in West Africa, with Hezbollah taking a cut of the profits. Most ominously: Hezbollah’s contacts with the Zetas may have later assisted a plot by Iran’s Revolutionary Guards to assassinate the Saudi ambassador to the United States in 2011.
The most prominent members of Hezbollah’s Latin American network reside in Paraguay, where the group’s links appear to reach the highest levels of government. Tellingly, though many of these operatives have been targeted by U.S. sanctions, none have suffered significant consequences in Paraguay, either personally or to business interests. One prominent example: Mohammad Fayez Barakat is a Lebanese-Paraguayan dual national who was sanctioned by Washington in 2006 for his involvement in moving funds to Hezbollah from South America’s Tri-Border Area (TBA). Yet Barakat was an honored guest at a reception hosted by the Lebanese embassy in Asuncion on November 23, 2016, celebrating Lebanon’s Independence Day.
Hezbollah’s influence in Paraguay has also been reflected in the appointment of Hassan Khalil Dia as Paraguay’s ambassador to Lebanon. Dia is a Lebanese-born Shia merchant from the TBA. Paraguayan law had to be changed in 2010 to make his appointment possible.
As ambassador, Dia appears to have worked assiduously to deepen Hezbollah’s interests in Paraguay — including by hosting a high-profile visit to Lebanon in August 2015 by Hugo Velazquez, the speaker of Paraguay’s parliament. During the visit, Dia arranged for Velazquez to meet with Hezbollah clerics in South Lebanon.
Velazquez also spent time with prominent Hezbollah parliamentarians such as Nawaf Moussawi, the one-time head of Hezbollah’s department of international relations, the terrorist group’s propaganda office and a key participant in the Lebanese-Canadian Bank scheme. Velazquez’s delegation was dominated by Lebanese merchants from the TBA, including Walid Amine Sweid. According to recent press reports, Sweid is one of a number of people Paraguayan authorities suspect may be involved in a scheme to launder $1.2 billion, in part through the Paraguay-based Banco Amambay.
Whether Hezbollah’s powerful friends will let the investigation of Banco Amambay run its course is in serious doubt. In private conversations with one of the authors, sources inside Paraguay’s judiciary alleged that companies implicated in the scheme were tipped off to an impending search and seizure two days before investigators showed up at their offices. Other sources inside Paraguay’s attorney general’s office pointed an accusing finger at SEPRELAD, Paraguay’s government agency in charge of investigating money laundering. But no one appears eager to press the matter further, citing as an excuse the country’s limited capacity to track financial transactions outside Paraguay.
Banco Amambay belongs to Paraguay’s president, Horacio Cartes, through his family group. While there is no indication that Cartes is personally the target of any investigation, in the past U.S. law enforcement authorities suspected his bank of participating in a money laundering scheme that funneled illicit revenue from drug and contraband tobacco sales to the United States. The investigation’s premature exposure in a 2010 Wikileaks dump of U.S. diplomatic cables ended up crippling the case.
Given this bleak picture, the danger is high that Hezbollah-linked financiers will continue to buy their way to impunity, especially in parts of Latin America where local authorities are already engaged in their own brand of illicit traffic.
Which raises the question: What can America do?
First, it should start targeting Hezbollah’s enablers. If countries like Paraguay cannot (or will not) clean up their politics and banking system, the U.S. should press international forums like the Financial Action Task Force to blacklist them. Next, the U.S. Treasury can designate financial institutions used by Hezbollah as entities of primary money laundering concern under Section 311 of the U.S. Patriot Act. This is the same measure President Barack Obama used to target the Lebanese-Canadian Bank in 2011. The combined juggernaut of the 311 designation and a U.S. criminal prosecution were ultimately responsible for forcing the bank to clean up its act. Indeed, the Trump administration could target entire foreign jurisdictions in Latin America as zones of concern, much the same way that Washington previously punished Iran’s banking system for its role in financing terrorism and proliferation.
Here’s a fact that U.S. officials need to keep in mind: Latin American political and economic elites may consort with criminals, but they love the United States as a place to study, vacation, and shop. This provides Washington with enormous leverage that can be used, for example, to deny or revoke the visas of politicians that go out of their way to engage with Hezbollah, like Hugo Velazquez. Local U.S. embassies could refuse to meet with them. Sometimes, public humiliation goes much further than a judicial proceeding.
Second, the U.S. should reinforce the impact of its terror designations against Hezbollah financiers in Latin America by also going after their facilitators. Sanctioned individuals are still trading, transacting business and travelling with little problem. If the U.S. Treasury began regularly imposing fines and designations against local companies that facilitated such activities, the pressure on them to cut their ties to Hezbollah would increase significantly.
Third, the U.S. should make clear that it will leverage existing Hezbollah terror finance legislation and future legislation currently under review in Congress to prioritize the targeting of the group’s activities in Latin America.
Fourth, Attorney General-designate Jeff Sessions should make the prosecution of drug, money laundering, and terror cases originating from Latin America a major focus of the Justice Department. He should also direct federal law enforcement agencies such as the FBI and DEA to vigorously pursue the domestic aspects of these plots and go after U.S.-based accomplices.
Taking on the growing threat posed by the emerging alliance of Hezbollah, the drug cartels, and corrupt Latin American elites could bear significant benefits. In one fell swoop, the U.S. could address multiple important challenges to its national security. By weakening the criminal gangs that are dangerously undermining law and order in the region, we will be attacking a key cause of clandestine immigration. By disrupting and drying up important sources of funding for Hezbollah, we will be striking a significant blow against one of the world’s most deadly terrorist organizations and its Iranian sponsors. And by punishing corrupt politicians that are giving cover to the terror-crime nexus, Washington can send a critical signal of hope to the people of Latin America: Their societies can still be rescued from the kleptocrats that have made undertaking the perilous journey north all too often a better option for people than staying in their own countries.
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