>> yeah. absolutely. it's far from it. and we all collectively laid out some details to support that. >> do you see any way to defeat isil in syria without a substantial arab army involved? >> i don't know how you get there. i mean obviously, if we deployed tens of thousands of troops ourselves we could defeat isis in syria. i don't think anybody here would recommend such an event. i think the people who have vested interest there should be involved and i think they would get involved. i mean, you know that they said as much, but we have to do something to change the momentum of the assad regime. >> dr. kagan? is it fair to say that no arab army is going into syria unless part of the -- one of the objectives is to take assad down? >> absolutely senator, that's going to be a precondition for -- >> because they're not going to just fight isil and leave assad in power therefore giving the place to syria, is that correct? >> on the contrary -- >> i mean to iran. >> on the contrary. what we're seeing is increasing levels of support of various varieties to nusra as an alternative to the -- >> i want people to understand that our strategy is to empower radical islamic sunni group to fight assad rather than having an army on the ground that made up of allies, is that fairly accurate? we're choosing to work with terrorists or -- the arabs are choosing to work with terrorists because there is a vacuum created by us? >> i think some people are choosing to work with terrorists because of the vacuum that we have created. i don't think that's the intent of our policy. >> but that's the effect of the policy? >> i believe it is, yes. >> we find ourselves, our allies in the region supporting a terrorist group as a last resort proposition because america is awol. colonel harvey, at the end of the day do you see a scenario of dislodging isil, taking assad out that doesn't require sustained commitment by the world to put syria back together? >> no, i do not see. >> we're talking years and billions of dollars. >> i believe so, sir, yes. >> all right. sir, i don't want to butcher your last name if this war keeps going on the way it is a year from now, do you worry about jordan and lebanon being affected. >> i do especially jordan a country i lived in and studied as a fulbright scholar. we're doing important things to help strengthen that government, but it is feeling the force of not only -- >> if we lost the king of jordan, we would be losing one of the most trustworthy allies in the region is that correct? >> correct. >> i was told yesterday there are more syrian children in elementary school in lebanon than lebanese children. does that surprise anybody? >> doesn't surprise me, but it should shock all of us. >> it should shock everybody. i just made a statement there are more kids in elementary school in lebanon from syria than lebanese kids. so if this war continues in its current fashion, it will create unending chaos in the middle east that will change the map for generations to come. do you all agree with that? >> yes. >> yes. >> and there is no way to get iraq right until you deal with syria in a response manner. is that correct? >> that's correct. >> correct. >> and iran is all in when it comes to syria. assad wouldn't last 15 minutes without iran's help. do you agree? >> it has been critical to sustaining the assad regime. >> do you agree if we gave iranians, say, $50 billion as a signing bonus for the nuclear program, it is highly likely that some of that money would go to assad? >> and to the rest of his proxies that are seeking domination of the middle east. >> have you seen anything to suggest the iranians are changing the behavior for the better of when it comes to the region? >> on the contrary sir. they're become more aggressive in many facets. >> would you say they're the most aggressive they have been in modern times? >> yes, sir. >> yes. >> would you say that the iranians are directly responsible for toppling a pro american government in yemen by supporting the houthis? >> they contributed to it for sure. >> would you agree with me that now that we have lost our eyes and ears in yemen, al qaeda in the arabian peninsula is growing as a threat to the homeland? >> not only that but isis is also gaining position in yemen. >> do you agree with me that syria is now a perfect forum to launch an attack from the united states because there are so many foreign fighters with western passports? >> yes. >> do you agree with me that the shia militia on the ground in iraq are controlled by the iranians? >> yes. >> do you agree with me that we're doing permanent damage tootability of iraq to reconstruct if we allow the shia militia to continue to have dominance on the battlefield? >> yes. >> do you see any good thing coming from this strategy being continued? >> no. >> no sir. >> it is destined to fail. >> and there is a better way, we just have to choose that way? >> correct. >> there is a better way? do you all agree? >> yes, sir. >> yes, sir. >> thank you. >> any more? senator cruz? >> thank you, mr. chairman. gentlemen, thank you very much for being here. thank you for your service and your leadership. i'd like to ask the panel first for your assessment of the current level of success we're saying in the military campaign against isis. >> it is failing, senator. that's our assessment generally across the board is that it is failing in iraq it is failing in syria and it is failing across the board in the region. >> and why is it failing? >> in my view, it was ill conceived to begin with because it focused exclusively on iraq. it was badly underresourced and excessive restraints and constraints have been put on the limited resources that we are willing to deploy. >> could you please elaborate on the excessive constraints that have been placed on our military? >> yes, sir. we have forces in theater that could have made a significant difference, i believe, in the fight for ramadi had they been allowed to embed at lower levels, had they been allowed to perform functions of forward air controllers and bring in precision air support, had the -- some of the rotary wing aviation that we have in theater been used in direct support of that fight had the forces that we have in theater been able to go out to the tribes and reach out to them directly rather than relying on the tribes to come to them. there were a number of things that even this limited force could have done, i think that would have made a difference but the force was probably too limited to be decisive in any event. >> just to add on to that, you know the military -- these other components that the president's strategy and used problems with them as well but the military component is clearly underresourced, not enough trainers not enough advisers and the role offed ed a edthe advisers is fundamentally flawed itself. the advisers have to be down where the units are doing the fighting, at least at the battalion level. what reason is that? because they help them plan. they help them execute. they contribute to their success. they have the capability to call in air strikes. they have the capability to use drones in support of those ground forces to help acquire intelligence for them, and they can use attack helicopters as well. and therefore the air strikes that we currently have, which are excellent in taking out command and control other infrastructure logistic infrastructure depos, facilities, they get -- it starts to fall off very rapidly when you're dealing with mobile targets, and then senator, the overwhelming amount of combat that takes place to use military terms is close combat in urban centers, that are populated and where we get -- we, our forces, iraqi forces get very close to the enemy. to be able to do that, you have to guide the bombs from that airplane, take control of them, and that's called close air support. that's what we need to forward air controllers for. so the effectiveness of our air power is this. 75% of the missions that are flown come back with their bombs because they cannot acquire the target or properly identify the target so they have some assurances that they're not going to hurt somebody with those bombs that we don't want to be hurt. that changes dramatically if we put those forward air controllers on the ground. i'll tell you what, if you're fighting as a fighting took place in ramadi, and as that fight unfolded the scenario that they have prepared for weeks to get to ramadi, this was not due to a sandstorm. this is taking out supporting towns, other attacks diversionary attacks that led to finally an assault using suicide bombers' vehicles to do that. if that force had anti-tank weapons, they could have killed those vehicles. if they had apache helicopters, they could have killed those vehicles. those vehicles blew up and destroyed almost entire blocks and destroyed entire units because the explosives were so heavy on it. after that came the fighting forces themselves. if depend,again, if we had close air support we could deal with the fighting forces before they closed with the iraq why ii military. apache helicopters, close air support would have impacted then and then we have a close fight and assuming the iraqi forces could deal with that. i would tell you this, many of those iraqi forces did fight heroically in ramadi and a lot of them fled, but that resolve gets stiffened very quickly when they watch those suicide bombers get blown up before they get to them, when they watch those units, those caravans coming down the road after them get blown up before they get to them because we have proper surveillance, we have resources that can deal with that, anti-tank guided missiles and the like. we start to change the dimension on the battlefield very significantly as a result of providing them with the proper resources. these are the constraints that are out there, that are manifested in itself in the behavior of the iraqi security forces, they have their own problems leadership discipline morale and compensation. i'm not suggesting they don't. but there is a lot we can do that can make a difference. >> let me ask one final question, which this is the administration is currently declining to arm the kurds. the peshmerga are fighting isis, effective fighters they have been allies of america. in my judgment, the policy of not arming the kurds makes very little sense. i would be interested in the panel's assessment of should we be arming the kurds and is the current policy reasonable and effective in defeating isis? >> sir, we -- i think it is a consensus on the panel that we should be helping the kurds defend themselves, but that the kurds will not be able to be effective partners in retaking the portions of arab iraq that isis now controls but that certainly we should be helping the kurds defend themselves, i think. >> could i point out actually we're not refusing to arm the kurds. the problem is is it goes through baghdad, and that the kurds continue to complain that there is not the kind of facilitation of the delivery of those weapons, but the senator's point is, for all practical purposes, i think, correct. senator king. >> one of the -- a phrase you just used struck a chord with me. there was weeks in preparation for going to ramadi. raises the question of intelligence. and general keane, would you comment, do we have adequate intelligence, do we have any intelligence and have we become too reliant on signals intelligence and therefore don't have human beings giving us information? >> yeah. i mean, that's a great question. and it is more appropriately put to the military leaders when they come in here, because they have the details of it and -- but this much i do know, my sensing from talking to my sources is the intelligence function is not robust enough. and, yes we are relying on national intelligence sources and some regional intelligence sources. some of that is surveillance. some of that is, you know, signals intelligence as well. but there is a lot more that we can do to assist them. we use surveillance a lot to assist the use of air power because it is not controlled by forward air controllers. we need different kinds of surveillance in there to assist ground forces. when we were fighting in iraq and now finishing up in afghanistan, our maneuver units used a different kind of droenznes, they're much smaller. and they assist the ground commanders. that kind of capability there controlled by u.s. would dramatically make a difference for the ground forces that are in the fight because that would give them the ability to see the preparations the enemy is making, to see the execution before they -- it impacts on them and most importantly to do something about it. i think the entire -- the entire intelligence function has got to be put under review. we have a tendency to focus on other things that are kinetic, but the intelligence function in this kind of warfare is significant in terms of its enhancing ground forces and air forces to be able to use their capabilities to the fullest. >> it is unfortunate that we continue to see -- we seem to continue to be surprised. >> sir if i could, on the ramadi issue, just add, i'm at the university of south florida and we drafted a paper outlining that ramadi was going to fall early last week. and we were looking at data that is only available to us through open source information but understanding the enemy their intent, trying to get inside how they're orchestrating the fight. and it is not just about having the intelligence, it is knowing what to do with the information and how to think about it. the warnings were there. the indicators were there. if we could see it at the university of south florida, and others here like the institute for the study of war, i think also saw that, then we shouldn't have been making public statements midweek officially saying that ramadi was not going to fall, that it wasn't really under threat, because that creates another problem of its own, because then you have the collapse and it looks like there is a real problem in our communication and understanding at the most highest levels of our government. >> it makes the -- isis look invincible and more powerful and that's -- that helps in their recruiting and becomes a self-fulfilling prophecy. you made a strong case for things like close air support, forward controllers, all of those kinds of things. but isn't one of the fundamental problems -- we could have all of those assets, but if the iraqi security forces don't have the will to fight, and if the local population doesn't have the -- any confidence in the government in baghdad it's still a very difficult, if not impossible, proposition. can you give me some thoughts on that? >> senator, i agree with the statement that you made. if those two conditions are true, then it is difficult to impossible. i don't think it is true that the iraqi frss sforces don't have the will to fight. i think they have the will to fight. i think as general keane pointed out and as we have seen repeatedly, will to fight is one thing, belief in yourability ability to succeed is another component. we can make it so that the iraqis don't have to workry about being overrun. that's what we used to do. we are allowing them to be overrun in these circumstances and that erodes their will to fight significantly. your point about the political accommodation is also incredibly important. we absolutely need to have an iraqi government that is prepared to reach out to sunni effectively and we haven't seen that. unfortunately, the more we try to subcontract these conflicts to local forces in preference to our own -- >> shia militia. >> exactly, sir. >> which only exacerbates the sectarian conflict which makes isis look good to the sunni chiefs in anbar. >> or more -- more tolerable perhaps than the alternative. >> i don't think they look good to anybody. >> yes, sir. >> but if they don't have confidence, i mean isn't that one of the fundamental problems here is that isis has been swimming in -- if not a friendly sea, a neutral sea in terms of the sunni provinces in. >> i think it is a very fearful sea. and i think that's you know we shouldn't forget that terrorism works both ways. and these guys are incredibly brutal in dealing with the populations that they control, so people are going to require a certain amount of assurance that if they rise up against these guys, that they will win because the alternative is that they will be completely destroyed as communities. >> you know, the other thing is -- the force that we had in iraq, the iraqi security force that took us -- it took us a while to get them to be effective, to be frank about it and one of the things that made them very effective during a surge period when general petraeus changed the dimension on the battlefield and said we're not just going to provide them advisers, we're going to ask them to fight side by side with us. platoon side by side, company side by side, battalion side by side. that dimension exponentially increased the capability of the force, because they could see what right looked like. they could see. it was right there. a sergeant could see a u.s. sergeant's performance, how he acted under stress soldiers could see it. other leaders could see their counterparts performance. this force grew rather dramatically and we were there multiple weeks throughout 2007 and 2008 the three of us on this side of the table. and that was an effective force. i can tell you for a fact, because i saw it with my own eyes, i saw -- i saw battalion commanders brigade commenders and division commanders distinguish themselves in combat and under significant stress. and we felt good about that force. we were saying wow, they finally -- they got it together. what happened to that force? well, so much attention has been placed on maliki's malice and what he did to undermine his political opponents he destroyed that force because he saw those distinguished leaders who were accomplished as a result of their performance on the battlefield and people were devoted to them, he saw them as threats to him, politically as well as his political opponents. and he undermined that force. he purged that force. so that force is not there. the one we used to have. he put in his political phonies and cranks and other people who didn't have the military competence. that changing leadership and getting that leadership back and others who are willing to have that kind of commitment and competence, that takes a little time to fix. but the fact that we did have it, senator at one time, and it was pretty good, tells you that there is -- there is something there that we can work with and we can get it back there. whether that can be done in time is another issue. >> i may be the chair so i'll give myself another ten seconds. one simple question, in 2008 how many americans were in iraq? >> certainly, i mean, we had somewhere in the neighborhood, correct me if i'm wrong, about 130,000. in iraq. and that's how that force grew to the -- what i'm saying to you is when we finished, when we had completed our involvement in iraq, the force that we left there was a capable force. the iraqi security force. >> i understand that. the question is what do we have to do to rebuild it? i'm out of time. >> thank you, mr. chair. gentlemen, thank you for your testimony. wanted to talk initially about the issue of credibility and you know, there has been a lot of discussion about how we lost credibility with our allies in places like syria, but i also want to talk about the importance of the issue of credibility with the american people. and there has been i think a narrative from the administration that it has not been helpful in that there has been an emphasis on the fact that we are now -- our combat role in the middle east is now finished. well, of course it isn't finished. just tell that to the pilots who are flying daily missions. we think of combat in terms of the infantry soldiers a lot of times we forget the brave men and women flying the missions daily and their -- that's combat. and obviously also with the recent delta force mission by some very brave americans, that's boots on the ground. so we're in combat. we even have boots on the ground. there is still this narrative that somehow we're done. so, general keane what i wanted to ask you is do you think that this narrative which is a false one in my view, has inhibited our ability to actually develop a robust strategy? do we need j-tacks, other forces on the ground? and yet we're competing with the narrative from the white house who says, no, no no we're done. it seems to me that would be a limiting factor to developing a strategy that ultimately is -- would do what we all want it to do protect america's national security interests. >> well, yes, i certainly -- when i look at it, and try to speculate about what is driving some of our decisions, what is -- what is driving our narrative, you know, one thing i've observed since i've been closer to it in recent years than i was when i was a younger officer is that most administrations, democratic or republican, have a tendency to overreact to what took place in the previous administration. and i think this one is no exception to that. making it a principle of the administration to have a guarantor that we will not be involved in any military activity in the middle east or in south asia that could lead to another protracted war. and i think that's probably good -- a good principle. but the -- but the issue is that should not trump what is necessary to do, given the fact that isis represents a new organization with new leadership, a new vision in terms of its global and regional strategy, and that it is a barbaric organization committing genocide assassination, enslavement of women and raping of women as we all know and that it is fully intent on conducting a religious war based on their ideology. and we cannot let the rear view mirror of iraq and afghanistan so disincentivize us to deal with the reality of what this is. and i'm convinced that the american people when we inform them and we educate them, and we take them through this i mean i dealt with the bush administration, they never truly explained what radical islam is and why it was so dangerous. we never truly took apart the ideology. we never truly fashioned a strategy to deal with it in a comprehensive way. >> i'd like to -- >> here we sit with the same problem today. >> i think that's a great point. and it is something that i think my own rueview is you're directly on point. if we talk about the threats, talk about the strategy that is really important, many of you have been raising that i think everybody recognizes what we -- once we lay that out, what we would or wouldn't have to do to address it. so let me ask a related question for mr. kagan. you've written on the long war, the idea of that i think sometimes we look at what is going on with isis and other issues in the middle east, and think, hey, we're going to have this done in a couple of months 18 months, 20 months, maybe a couple of years. do you think that there is an importance to having the leadership, both in terms of congress, but particularly the executive branch, talk more broadly and, again, level with the american people about what this might be a generational conflict. this might be akin to the cold war, where we have to lay out a broad strategy and mr. katulis, i think your point early on in your testimony about the need for a strategic concept is so important, lay out a strategy that the executive branch and legislative branch and the american people can get behind. and then execute it. and level it with the american people that this might not be done in 18 months. so would any of you care, mr. kagan, i know you've written about the long war, would you feel free to talk about that? and mr. katulis i would interested, when you talk about the strategic concept, what is it? 20 seconds left, that's a big topic. but if you can point us in the direction of your writings or principles that all of you thought about, i think that would be helpful. mr. kagan? >> senator, i mean this is a generational struggle that we're in at least. it may be longer -- >> we don't talk about it that way, do we? >> no, on the contrary. the point you opened with is an important one. when the administration's narrative is we're ending the wars, it is impossible to develop a coherent strategy for fighting the wars and we do need to understand that this is a war, these are battle fronts on a common war that is going to last for a long time and we don't get to end it unless we win. but you don't get -- you don't get to decide -- we may not be interested in war, but war is interested in us. and this is going to continue to be a problem. and we need to level with the american people as you say as a basis for developing any kind of strategy, i totally agree with you. >> i think we need to define what we need to achieve. quite often in afghanistan and iraq and now with isil, we define our objectives in terms of what we're going to counter in defeat. that's important. but what has been missing i think, comprehensively, whether in a particular theater like iraq or syria or afghanistan is the definition of what we actually need to leave behind in those societies, how we help others help themselves. i do believe at certain points president bush certainly did this, certain points president obama does this, talks about the long-term nature of this. if you look at their planning documents at least for the anti-isil strategy, it doesn't say let's end this as the administration used to say about afghanistan, and iraq, we're going to end it at a particular period of time it extends into who will be the next president. your point is terribly important, and i've written several articles and a book about this too it is important because for our own society there is a new generation called millennials that are actually this year in number larger than the baby boomers or i'm a generation xor. our leaders aren't messaging in a cohesive way. part of it is the partisanship in the politics and other things. i'm a strong centrist internationalist. i believe we need to bring the american people along with us. something senator caine said earlier and before is that the debate that we need to be having on the authorization of the use of military force and action on it this is a moment which has not been seized. you can criticize the administration or criticize whom ever in congress there has been this muddle and i think part of the reason it goes back to we actually haven't defined for the american public in the way that fred and others have argued here that the u.s. has a special leadership role in the world. our leadership countries in the region are looking to us to do more. but we need to actually take those steps beyond the questions on military and security steps, which are terribly important, we need to then talk about how do we defeat these ideologies. we have done it before with naziism or communism. they're on the margins. our model is much better. our values are better. but what happened to the battle of ideas? we had that debate for a couple of years after 9/11. we kind of rediscovered it for a little bit but i think our add, attention deficit disorder in our own society, that's what i think as thought leaders as leaders in congress, we have a responsibility to talk about this in a sustained way. >> thank you. thank you, gentlemen. >> we all had one round, but if anybody has a second round, i'm just going to seize the moment here to continue for a few minutes if we can. i'm interested we had visits in the senate foreign relations committee from leaders that are our allies, king jordan in january. we had questions with saudi leadership including the saudi ambassador and every time we have the discussions i ask them, tell us what you think the role of the u.s. should be vis-a-vis isil the battle against isil. and in particular, because this is a point of difference among some on the foreign relations committee, i asked about their thought about american ground troops. i want to tell you when they've said, i'm curious about your opinions about what they have said. the king of jordan said that would be a mistake. this is our battle not yours, and if it gets positioned as the u.s. against isil, then that will not be a helpful thing. if it's we stand up against the terrorist threat in our own region, and the u.s. helps us in a vigorous way but clearly a supporter, not the main driver that's the way this should position and significant u.s. ground troops would -- like the u.s. is doing 90% of the air strikes, the ground troops would make this the u.s. against isil. the mayor of qatar said similarly if there is significant ground troop presence from the united states, this will be the -- a recruiting bonanza for isil. in saudi arabia, and the immediatings with thee ing meetings with the saudis occurred right after they went in a major way into yemen they're willing at least somewhere to take some significant military action to deal with threats in their own region but they also said u.s. ground troops against isil would be problematic. i did not read that to not even one, but they were wary about the notion of u.s. ground troops. we're trying to work that out on the foreign relations committee as we think about an authorization. are they right, are they wrong? if they're right, how would you square that with what a u.s. -- u.s. presence, u.s. support should mean. >> if i could start, the thrust of my remarks were on this coalition. i think for all of the criticisms of the obama administration strategy, some of which i share, this is the one component that simply did not exist before. it is one that has been underutilized, i believe, i do think that things like the dcc summit last week though there were a lot of optics and news articles about it, there is a conversation about what can we do in partnership with them. if there is one thing we should have learned from 2003 to 2010 or '11 in iraq is that, yes, u.s. forces can have an important impact on the security situation there. but there is also downsides to having such a visible presence. i don't think anyone on the panel, unless i misheard it was talking about ever going back to, say 2006, 2007 posture. but i do think striking the right balance is the key question. i think the administration has been understandably reticent about what it does in iraq afghanistan, syria, and other places. given the unforced errors on the part of the united states. but this regional dynamic has shifted quite a lot, which is what i was trying to emphasize. the region itself recognizes that the u.s. in a very visible presence on the ground does have significant downsides for their own legitimacy with their own populations. the region also is taking action in what it sees as its own self-interest, what i was trying to say in terms of a multidimensional -- not only security support. it is investment in media campaigns and different political forces across the region. where i think the u.s. strategy right now, and, again, it is more honed in on what my expertise and focus is where we need to enhance it more is working with those reliable partners from jordan to the united arab emirates to saudi arabia, to a number of different allies including the kurds we talked about and some iraqis to actually take what has been a significantly larger amount of resources and energy and activity and channel it towards more constructive purposes. i don't see that happening in yemen right now. i don't see that happening yet in syria. and i don't see that happening in many other theaters. so i think the basic answer to that question, the leaders that you spoke with i think, are reflecting a very popular view at the popular level in their countries as well. they understand that for whatever happened in the iraq war, the surge and other things the u.s. is better sort of seen as a backbone of support behind them as opposed to visibly out in front. >> senator, i think we need to distinguish between the ideal and reality. ideally, of course, it would be better for regional states to take care of regional problems and regional militaries to be involved with a caveat that we do have a regional war going on and the regional actors we're talking about are being seen as on one side of that. we need to think about what the iranian reaction would be to saudi divisions deploying into iraq on behalf of the iraqis. i don't think we would enjoy that very much. i think it might be worse than the iranian reaction to the deployment of u.s. forces in there. it is a complicated dynamic. in the world of reality, the jordanians, they don't have the forces to do this. the saudis don't have -- the regional militaries are not capable of providing the kind of assistance to iraq that we can provide. they don't have it in their force structure. >> how about the turks? >> the turk ss -- the turks might be able to provide some element of it but no one provides the capability that the u.s. provides to its allies including the turks and they would be dependent on us. but, again, i'm really not sure the optics of the return of the ottoman empire in force to iraq would be better that be the optics of having a limited number of american troops on the ground there. so i think that the regional leaders you're talking to are expressing an ideal version of a strategy which we would all like to see but it is not in accord with reality. as you think about an aumf i would say an aumf in which congress micromanages what forces can or cannot be sent, and thereby, in my opinion, infringes on the prerogative of the president to choose how to fight a war that congress authorize authorizes, but also in this circumstance that would constrain the deployment of american ground forces when they're so clearly necessary would be extremely damaging. >> senator caine if i could this reminds me of the myth that i heard in iraq about u.s. forces were the generator of the antibodies that caused the insurgency. it was a real misreading of what was going on in iraq and the drivers of the fight. we have to be focused on what our u.s. interests and how do we defeat this enemy. and the seeds of strategic failure are in failing to define the enemy define the interests the costs and the risks. and if we do those things, and we think about our interests, it will drive us to engage more seriously than we have in my mind. i think it is a very similar situation today. we study radicalization, recruitment for the foreign fighter flow. the u.s. presence in iraq is not going to want to dramatically increase that foreign fighter flow. it is being driven by a range of issues. and the different types of recruits that are being pulled in from tunisia and elsewhere the driver within iraq is not the u.s. presence it is shia domination. it is the fear for their future and their own lives and lack of political inclusion, et cetera. that's the issue we need to get our head around. >> yeah. i -- i agree with what everybody said here. and i think we talk past each other a little bit on this issue. no one here certainly is advocating that we should have ground units occupying towns and villages and securing them and therefore protecting them from isis attack that would put us right in the mainstream of defending against isis. i think that's unnecessary and it would be a mistake. but also when we have a policy that says no boots on the ground, that doesn't make in he sense either. because it denies us from having advisers that have a role to play, it denies us what -- from forward air controllers that have a role to play as we pointed out and other military capabilities that are unique to us and we elaborated on what they are. they are significant enablers that make -- would make a difference in what the 60 nations have agreed to do which is support the iraqi ground forces as imperfect as they are. let's give them a better hand to play than what we are doing and i don't believe there is a single nation that would object to anything of what we are describing is -- are enablers that would make a difference. second, when it comes to syria, i think this is a difference. and if you spoke to them about that you know what their view is about assad. we already dealt with that in the regime. and they know full well that to deal with isis in syria this is going to take a ground force and they would have to contribute to that ground force. i would think that they would logically ask us to participate in that with them. we would -- i don't think we would necessarily have to be the largest contributor, but i think we would have to participate. and i think they would reasonably want us to because of our experience, and our capabilities, if we would actually lead it maybe not. but i think those two things would probably be on the table for discussion. i think it is reasonable that that kind of allocation of u.s. capability and leadership to deal with isis in syria is in fact, an eventuality. >> senator blumenthal, do you have questions for the panel? >> i do. thank you very much. thank you, all, for being here and for your very thoughtful and eloquent remarks. i was here for the beginning remarks, and unfortunately as so often happens here, i was diverted to another committee meeting after our vote. i want to come back to what mr. kagan was describing as the evil of isis isil. and the absolutely horrid unspeakable acts, and i agree with you they are one of the most evil, if not the most evil institution in history, we can argue about it, but when i go home this weekend most folks are going to ask me what's the threat to the united states. and 50 years from now, others will be sitting where you are and where i am talking about probably other evil institutions that are committing mass brutality because that seems to be unfortunately and tragically the nature of the human condition. it happened throughout our history. and i think the ordinary person in connecticut over memorial day weekend is going to wonder what our role should be in stopping that from occurring, unless there is a threat to this country. so perhaps you and others on the panel could tell me what i should tell the people of connecticut about why the united states should be involved, whether it is special operations forces or better air support, or whatever the involvement is and why that matters to our security. >> senator, i think it is a fair question. and as a connecticut native, i'm concerned about what you have to tell the connecticut people to get them on board with this. may i start by saying, as i was driving down to virginia the other day, i drove past the holocaust museum and saw the sign up there, that is always there, which is never again. and i would submit that we need -- one of the things we need to tell the american people is that america is not i had store eke historically a country that watch these atrocities occur and does nothing. it is a core american value to take a stand against these -- we do it very late we try to talk ourselves out of it have long arguments about it but ultimately we generally do it. that's one thing that makes us america. i think we shouldn't lose sight of that moral imperative as we talk about this. but your comments are very well taken, sir. the reality is isis poses a clear and present danger to the united states homeland. it has been encouraging, condoning and applauding lone wolf attacks, here. it made it clear it has objective of attacking america in west that it is actively recruiting cells in america and the west, and it will do that with the resources of a mini state behind it which is something that we have never seen before with al qaeda. this is not a group of bandits hanging out in the mountains in afghanistan and that attack was devastating enough. but if we reflect on the resources that isis has access to controlling mosul, fallujah ramadi, oil infrastructure, the resources that were in various universities in mosul and so forth, that thousands of fighters, tens of thousands of recruits this is an army and this is an army that is very sophisticated and has an ability to conduct planning and executed that is in advance of anything i've seen from any of these groups. and it has declared its intention to come after the united states and shown a willingness to do that. that is something i think the people of connecticut need to be concerned about. >> yeah, i would certainly agree with what fred is saying is that it -- it should be a concern to us in a couple of ways. certainly what they're doing to motivate and inspire others who are not necessarily in the region, but are in other countries and i can identify with this movement, and many of them are self-radicalized or possibly already radicalized but motivated to take action and take violent action. we have seen plenty of evidence of that. the longer you permit the organization to succeed, can you imagine what has gone out on the internet from isis around the world as a result of this success in ramadi. and how that has motivated others that isis in fact is winning. and they're standing up against the united states, they're standing up against these strong allies of the united states and the region in europe, and they're actually winning. so there is huge danger there. as long as you let this organization stay and we don't decapitate it then the motivation and inspiration of self-radicalization continues to grow. that's one thing. the second thing is in the region itself, and we showed on a map, they're moving into other countries. at the same time they're defending what they have in syria and iraq and expanding in those countries, this is what makes this organization so very different than what we have dealt with in the past. and they're looking at libya as -- because of the social and political upheaval in libya and hardly a government there, and anybody to push back on it, they're going to put huge resources in there. why are we concerned about that? our interest in the region our interest in north africa the debt would be on the southern tip of nato there, not too many miles away from italy. in afghanistan, they have expanded rapidly beyond most of our expectations i would assume, into eight provinces in afghanistan. we have interests in afghanistan for obvious reasons. so this is a movement that we can tie directly to the security of the american people and to our national security objectives of the united states in this region and in south asia. >> so it -- if i -- if i can put it a different way just to conclude it is more than -- by the way american values are directly and inevitably linked to stopping human atrocities i agree with you, mr. kagan. but our interests go beyond that -- those values and, by the way, all of the reasons you -- the reasons i voted for the training and equipping measures that have been implemented, but my frustration is that as you also have observed there is the goals and missions that we have outlined for the united states and the actual action that we're undertaking that train and equip activities are way behind what we might have hoped by this point. and there's no clear timetable for really achieving the level of capability that we expected or hoped. so i think this has been a very sobering morning and i thank you all for being here. thank you. >> well, i want to thank the witnesses and it's been i think very helpful to all members and this is not an issue that's going away, so i'm sure that we'll be seeing you again. thank you. >> thank you, mr. chairman, for taking it on. here are some of our featured programs for this holiday weekend on the c-span networks. on saturday and sunday, starting at noon, commencement speeches by politicians white house officials and business leaders. as they offer advice and encouragement to the class of 2015. speakers include south carolina senator tim scott at south carolina state. u.s. ambassador to saudi arabia joseph west fall at the oklahoma state university and hulu founding member at chapel hill. monday morning at 11:00, live coverage of the memorial day ceremony from arlington national cemetery. and at 9:00 p.m. eastern, interviews with four freshmen members of congress. new york's lee zeldin, hawaii's mark takei and bonnie watson coleman. on book tv saturday night at 10:00 p.m. eastern on afterwords on the ideas for potential improvements in america's rail and road transport. sunday evening, cokie roberts talks about the lives of some of the women who worked there. monday evening at 8:00, books on first ladies including michelle obama and eleanor roosevelt. on american history tv on c-span 3 saturday night at 8:00 p.m.'s earn, on lectures and history, university of minnesota professor erica lee to angel island, california, from 1830 to 1930 and how their arrival compared to the europeans to ellis island in new york. sunday afternoon the 1945 production of the true glory which chronicles the events from d-day to the surrender of nazi germany. monday evening at 6:30 on american artifacts the recreation of the grand parade including portraying the u.s. color troops who weren't allowed to participate 150 years ago. find our complete schedule at c-span.org. for he today that sheds his blood with me shall be my brother. be he so vile, this day shallend gentle his condition and men shall themselves acursed that they were not here. >> one drop of blood drawn from thy country's bosom should grieve thee more than streams of foreign gore. >> director of the folger shakespeare library, michael whitmore talks about shakespeare and how politicians use quotes from the famous playwright in their speeches. >> well, sometimes you have to just go with the music of the words. the poetic images the sound of the rhymes, and also the way in way as senator byrd did you're able to pause and linger over a long phrase and then stop and keep going. i think he's really using the rhythms of the language which is something that shakespeare did so brilliantly so he can take english and put it in high gear at one moment and then slow down. that he's something that shakespeare lets you do if you're a politician. >> sunday night at 8:00 eastern and pacific on c-span's q&a. >> good night, good night, parting is such sweet sorrow and it really is. this sunday night at 8:00 eastern on first ladies, influence and image. we'll look into the personal lives of three first ladies. anna harrison letitia tyler and julia tyler. anna harrison never set foot in the white house because her husband dies after a month in august. tyler becomes first lady when her husband vice president john tyler assumes the presidency, but she passes away a year and a half later. the president remarries julia tyler, the first photographed first lady. this sunday night at 8:00 p.m. eastern on c-span's original series first ladies, influence and image. examining the public and private lives of those who filled the first lady position. sundays, on c-span3. as a complement to the series, the new book, "first ladies, presidential historians on the lives of 45 iconic american women." it's available as a hard cover or an ebook through your favorite bookstore or online bookseller. yesterday the house financial services committee heard about the terror financing of isis, hezbollah and iran. witnesses provided recommendations for targeting transnational organized crime and cutting off illicit sales and drug trafficking. michael fitzpatrick of pennsylvania chairs this terrorism financing task force with representative stephen lynch serving as the ranking member. this is about two hours. >> the task force to investigate terrorism financing will come to order. the title of today's task force hearing is a dangerous nexus, terrorism, crime and corruption. without objection the chair's authorized to declare recess at any time. and without any objection all members will have five legislative days to submit materials for inclusion in the record. without objection members of the full committee who are not members of the task force may participate for purpose of making an opening statement and questioning the witness. the chair now recognizes himself for three minutes for an opening statement. i'd like to thank chairman hensarling and ranking member waters for working to establish this and reaffirming this committee's commitment to using its role to address the threat of terrorism as well as my colleagues here today who will work to ensure its success. at our last hearing, demonstrated the breadth and scope of terrorism throughout the world as well as how these groups have evolved in the face of a strong american response. while the united states has seen some success in shutting these groups out of the international financial system, like squeezing a balloon this has lent itself to the creation of more sophisticated and diverse funding avenues for the terror funding organizations. terrorist groups have become entwined with transnational syndicates or evolves into the role themselves engaging in criminal activities which yield greater profits than simply relying on state sponsorship or big pocket donors. these range from corruption, drug trafficking, human smuggling and extortion. place these funding methods on top of other nontraditional means discussed in the last hearing, and it ease easy to see that today's terror organizations are better financed than their predecessors even a decade ago. today's terrorist groups and transnational criminal syndicates thrive in highly insecure regions of the world. they contribute to the continued regional instability and internal conflict while organized crime exploits the environments for financial gain and corruptive influence. to witness the impact of this dangerous union, the united states has to simply look to the triborder area. this is relatively lawless region along the frontiers of argentina, brazil and paraguay has became the base for hezbollah activities. hezbollah has engaged in several of the criminal activities mentioned. and through them has succeeded in raising a substantial amount of money to bank roll their actions. in fact, according to 2009 rand corporation report hezbollah has netted around $20 million a year in this area alone. it is this type of connection the intersection between terrorism, crime and corruption that today's hearing will focus on. including current techniques being used by these groups effectiveness of the current u.s. policy in combating them and where these tactics can be proved. groups like hezbollah, the islamic state and boko haram can no longer simply be considered terrorist groups. they have evolved into sophisticated global criminal conglomerates. in order to combat threats, u.s. policy must evolve as well. that's the purpose for the bipartisan task force and it's my hope that today's dialogue between our diverse group of members and the expert panel of witnesses joining us leads us to a better understanding of the challenges facing us and shapes our discussion of long term solutions moving forward. at this time i'd like to recognize this task force's ranking member and my colleague, mr. lynch, from massachusetts. >> thank you, mr. chairman. i want to thank chairman hensarling and ms. waters for their work on this as well as your own and vice chairman pittenger and of course our pan panelists this morning. today's task force on terrorism financing hearing will look at the dangerous nexus between terrorism, crime and corruption. this is particularly timely. the director of national intelligence james clapper identified terrorism and transnational organized crime as among the top threats when he testified this past february before the u.s. senate's committee on armed services. according to director clapper, both terrorist and transnational criminal groups thrive in highly insecure regions of the world where they contribute to the regional instability and internal conflict. they exploit them for financial gain and corruptive influence. one example can be found in venezuela. the "wall street journal" reported that the u.s. drug enforcement agency and u.s. prosecutors in new york and miami are investigating the venezuelan government officials including venezuela's national assembly president on suspicion they have turned the country into the global hub of cocaine, trafficking and money laundering. it is response to the drug trafficking in that company. i bring up the example of venezuela because dennis farah's prepared remarks discuss how a bloc of countries led by venezuela now operate jointly both as a political project with the underlying goal of harming the united states and as a joint criminal enterprise. these countries are creating alliances across the globe with terrorist organizations including hezbollah and the drug trade is a huge source of the revenue. the u.s. department of foreign asset control previously sanctioned corrupt venezuelan government officials pursuant to the kingpin designation act. for acting for or on behalf of the revolutionary armed forces of columbia. which is the terrorist organization. it's a supporter of narcotics and arms trafficking activities. the crime terrorism nexus may not only play out in venezuela but other parts of the world. as reported by the state department in the april 2014 country reports on terrorism, the triborder region of south america that the chairman has identified is reflective of the interrelationship between terrorism and financing. according to the report the triborder area of argentina, brazil and paraguy continue to be an important regional nexus of arms and human trafficking, counterfeiting pirated goods and money laundering. all potential funding sources. i hope this will shed light on the pervasiveness of such threats and i look forward to hearing testimony so we can examine the issues and potential solutions further. thank you for your courtesy. i yield the balance of my time. >> next i'd like to recognize the vice chairman of the committee, mr. pittenger, for one minute. >> thank you, chairman hensarling, in establishing this task force and to ranking member waters and chairman fitzpatrick for your leadership and mr. lynch. i would like to thank the witnesses for joining us today. this will be a very important and very meaningful hearing. understanding the link between terrorism and crime is a vital step towards understanding what efforts we can to deter the financing. the drug lords and for what benefits, how are they working with transnational criminals, to move money through the financial system. how are they utilizing the same smuggling routes today that have been used for years in past? and what means have they been previously not been utilized like cyber warfare should we be preparing for today? and the bigger question -- what are we going to do to stop it? knowing that we have ended the threat finance cell there are strong concerns that we don't have the capabilities and intelligence necessary to be effective in our goals. i also have concerns about the current effectiveness of intergovernmental cooperation to undermine the flow of money to terrorists. i look forward to hearing from the witnesses on these issues. continuing the task force effort to counter terrorist financing. thank you, and i yield back. >> chair recognizes the ranking member of the full committee, ms. waters, for one minute. >> thank you very much mr. chairman. i applaud the bipartisan efforts surrounding this task force and believe it will serve us well as we work to guard against key threats to our national security. today the task force will explore dangerous new trend -- the growing convergence of terrorism and crime while terrorist organizations motivated by ideology and criminal enterprise is driven generally by greed have been thought to operate independent from one another. the testimony from the witnesses today makes it clear that this is no longer the norm. furthermore, in an age of globalization, the growing convergence of terrorists means that illicit networks once seen as a local and regional concern now have global security implication, while the approach is necessary -- certainly necessary to tackle these issues effectively. i'm hopeful that this task force can serve as a catalyst for action on these issues and falls squarely in our jurisdiction. the value of our current anti-money laundering and counterterrorism financing enforcement regime would be a good place to start. i yield back the balance of my time. >> the chair recognizes the gentleman from arkansas, mr. hill, for one minute. >> thank you, mr. chairman, i'm honored to be a member of this task force. my thanks to the leadership for the formation. i think it's important that we focus on the transnational criminal organizations that they're driven by profit, number one. and how they interact with foreign terrorist organizations or driven by ideology. you combine those two things you have a toxic soup. we have seen many scary examples as noted as the relationship between criminal activity that interconnect throughout the world. i'm looking forward to this morning to learning more about that and finding out how we can interdict that process and stop it. i appreciate it and i yield back, mr. chairman. >> chair recognizes the gentle woman from arizona, for one minute. >> thank you. terrorism is an undeniable threat to our global stability. terrorist networks develop new ways to finance share deadly operations. terrorists frequently leverage criminal networks and to keep our country safe we nuss stop their efforts. the islamic state is one of the most well financed terrorist groups. isil generated approximately $1 million per day predominantly through the sale of smuggled oil. that's why i offered an amendment to shut down the oil revenues and report on resources needed for the efforts. isil recently captured the famed archaeological sites at palmyra, raising the possibility they will destroy or sell priceless artifacts to fund their militant violence. i look forward to working with my colleagues to keep money out of the hands of terrorists and strengthen america's security. i yield back. >> we now welcome our witnesses, celina realuyo is from the william j. center. professor is a former u.s. diplomatic, international banker with goldman sachs u.s. foreign policy adviser, and professor of international security affairs at the national defense, georgetown, george washington and joint special operations universities. as the state department director of counterterrorism finance programs, professor realuyo safeguarded financial systems, and she's a graduate of the harvard business school. johns hopkins university school of advanced international studies. and georgetown university school of foreign service. dr. david asher is anned a junts senior fellow at the national center for the new american security. and serves on the board of advisers of the center on sanctions and elicit finance for defense of democracies. over the last decade dr. asher has advised the leadership of so com, centcom on top threat priorities. dr. asher conceived of and spear headed several of the highest profile anti-money laundering actions in history. from 2002 until 2005 dr. asher organized and ran the north korea elicit activities initiative for the national security council and the department of state. dr. asher graduated from cornell university and received his doctorate in international relations from the university of oxford. richard barrett is a senior vice president, and a fellow at the new american foundation in washington. the royal united services institute in london and the center for research and security studies in islamabad. from march 2004 to december of 2012, mr. barrett served as the coordinator of the monitoring team at the united nations in new york. in 2005, he helped establish what became the united nations counterterrorism implementation task force following the adoption by the general assembly of the global strategy to counter terrorism in 2006. before joining the united nations, he worked for the british government both at home and overseas. douglas farah is currently president of ibi consultants, llc. he's also a senior non-res dent associate at the center for strategic and international studies and from the assessment and strategy center. mr. farah works as a consultant on security challenges, terrorism and transnational organized crime in latin america. for the two decades before consulting, he worked as a foreign correspondent and investigative reporter for "the washington post" covering the drug wars in andean region the diamond trade in west africa and radical islam and terrorism financing. the witnesses will now be recognized for five minutes to give an oral presentation of their testimony. without objection the witnesses' written statement will be made part of the record following their oral remarks. once they have finished presenting their testimony, each member of the task force will have five minutes within which to ask their questions. on your table for the witnesses there are three lights. green means go. yellow means you're running out of time and red means stop. the microphone we're told is very sensitive so please make sure you're speaking directly into it. with that, professor realuyo, you're recognized for five minutes. >> thank you, mr. president, vice president, ranking member lynch and members of the task force to testify on the dangerous nexus of terrorism, crime and corruption that threatens us at home and abroad. the terrorists actively capitalize on weak governance and corruption around the world. after examining the critical enablers of the networks in particular financing, illustrating the convergence in the case of isil i will propose specific measures to combat terrorism, crime and corruption. illicit networks threaten the four key missions of the nation state. to provide security, promote prosperity, safeguard the rule of law and ensure that the government represents the will of the people. elis it actors require critical enablers to realize their revenue objectives. they are logistics, communications, weapon, technology, corruption and financing. financing is the most vital enabler since money serves as the oxygen for any activity. following the money trail is needed to dismantdzal the networks. since 9/11 through intelligence and the lawmaker operations like the iraq and afghan threat finance cells. public sanctions and capacity building programs. as a result of these efforts the al qaeda operatives complained about a lack of funding for terrorist operations, and the mexican cartels realized they could no longer launder profits through banks. it's also unexpected rooted out graft and corruption at the highest levels of government. terrorism, crime and corruption have existed since the dawn of time but now they have gone global with the record levels of profits and violence. in many cases terrorists, cartels and gangs are better armed and funded than the very government services, security forces responsible for confronting them. we are witnessing a dangerous convergence of terrorism and crime that threatens our national security. convergence is the process of coming together and having one interest, purpose or goal. certain groups are demonstrating a hybrid terror crime behavior such as the network in afghanistan, the farc, hezbollah and isil. all eyes are now on isil with its brutal beheldings military advances in syria and iraq. dramatic foreign fighter flows. it is an example of convergence with the ambitions for a caliphate and profit seeking activity. isil requires significant financing to realize its evil agenda and is considered the richest terrorist group in the world. as you all know, it derives much of the income from illegal oil sales with additional funding from extortion, kidnapping, stolen antiquities, human trafficking and some donations from external individuals. one of the efforts of the u.s. strategy to counter isil is disrupting the finances. it is focused on restricting the access to international financial systems, and targeting isil leaders and facilitators with sanctions. on the military front operation inherent resolve has conducted air strikes against the oil infrastructure and supply networks in syria and iraq. as of may 8th, 152 targets have been damaged or destroyed according to u.s. central command. this past weekend, u.s. special forces conducted a daring raid in syria against abu sayyaf. and it shows how valuable the financial intelligence connected could be to attack its networks. to counter the illicit networks we need to leverage the international power and i have proposed the five following measures. number one increase resources to government agencies to investigate, prosecute and prosecute terrorism crime and corruption. number two, retain the afghan threat finance cell and establish new ones to target emerging threats like isil. number three, revitalize the inner agency working group to coordinate all activities across the agencies. number four, dedicate a percentage of the fines from money laundering to directly support counterthreat finance programs and lastly, promote public/private partnerships to serve a our eyes and ears to detect the crimes. in conclusion we must understand the illicit members that confront us and deny their access. stemming the flow of funding to groups like isis and hezbollah can neutralize their very violent agendas. only through comprehensive, interagency and international strategies can we effectively combat terrorism crime and corruption around the world and the financial instrument of national power is a critical tool that we must take advantage of. thank you for your time and attention. >> dr. asher, you're now recognized for five minutes. >> chairman fitzpatrick, vice chairman, congressman lynch, it's an honor to speak before you. i actually want to say thank you for giving a care about this issue. this is a very important issue. it's really not in the weed, it's the heart of the matter. money is thesy sinew of war and we are in a war around the world whether people want to admit it or not. i have been involved in nearly 25 years of working against terrorism financing, doing financial operations against drug cartels. adversarial governments, weapons proliferation networks, i have seen it all. what i hadn't seen until 2007 when i started to advise the drug enforcement agency which has done incredible stuff for our national security, well above and beyond its remit, i hadn't seen a case where the united states itself has become the largest money laundering vehicle in the world and that's involving the lebanese canadian bank. a bank under the command and control of hezbollah and the element within hezbollah it appears -- and this is still subject to being proven in court, that it's tied to terrorism. the islamic jihad organization that attacked our embassy twice in the 1980s. that organization is known as the external security organization of hezbollah and controls the security opera us the of hezbollah which reaches into the united states of america itself. to garner profit and gain influence, they have engaged in something that i would call the criminal resistance. i.e. they have used the $80 billion u.s. dollarized lebanese banking system which is the largest in the world for dollars, i believe, as a center point for their global money laundering empire. the united states has dozens of banks with correspondent relationships with lebanon. the largest -- the fastest growing bank in lebanon until three years ago was called the lebanese canadian bank. that was under the control of hezbollah. through dea's operation tightening which i had the honor to advise on from 2007 onward, the dea used undercover informants and i'm speaking based on the classified information and from a personal viewpoint only. this bank was engaged in buying primarily used cars in the united states and europe as part of a massive money laundering scheme in partnership with the outfit that pablo escobar himself set up in the 1980s and '90s to run the drug cartel. you can find this all on the web. so they were buying as much as $1 billion a year in used cars in the united states. cars which were generating almost no profit, actually. exporting the cars to west africa where the money was comingled with narcotics proceeds coming out of europe. this is the world we live in, it's very complicated. the drugs were flowing from colombia into europe. the money was being curried back to lebanon, being wired to the united states to buy used cars here. as well as buying used cars in europe with cash. it was making its way into the lebanese canadian bank which is at the center of the hezbollah money laundering empire. so it was the largest scheme in the world, and it remains the largest material scheme in the world for terrorists. the dea constructed a take down strategy that i helped to advise on. i won't get into all the details. we organized the designation of lebanese canadian bank under 311 of the patriot act. that cut it off $5.3 billion hezbollah bank bankrupt in three week, that was a success. so we designated the drug king pin, he was indicted in eastern district of virginia for laundering over $1 billion a year. he's indicted for his relationship with lebanese canadian bank and designated as well. he's been wanted for arrest. we went after the car parts in west africa. it was a huge success. but i'm here to tell you today unfortunately there are more cars being exported from the united states itself to west african car parks controlled by hezbollah than there were when we made the dez ig neighs in 2011 and 2012. our policy is a great success of international cooperation, i feel very proud with the bush administration even this administration have done to try to make a dent in this. unfortunate i whatly it's not succeeded. i want to talk about some that might advance that success. thank you. >> thank you, dr. asher. mr. barrett, you're recognized for five minutes. mr. barrett, can you turn your microphone on, please. >> i'm so sorry, thanks. thank you, chairman fitzpatrick, ranking member lynch, distinguished members of the house financial services committee. it is an honor to testify before you today on this issue of perennial concern. although terrorism along with other forms of violent crime lacks a profit motive, any terrorist attack costs money. it's reasonable to assume that for the less money that the terrorist group has available, the less able it will be to mount an attack. if it does so, limited finances should result in limited impact. but terrorism of course by its nature is asymmetric and asymmetric in all aspects including financially. even a relatively cheap attack can have a devastating impact. for example, the last al qaeda attack in a western country occurred in my country. on july 2005, four individuals associated with al qaeda blew themselves up on the public transport system in london, killing 52 people. the official inquiry into the attack estimated that it would cost less than 8,000 pounds. that's about $13,000 or so. to quote from the report, the group appears to have raised the necessary cash by methods that would be extremely difficult to identify as related to terrorism or other serious criminality. kwan appears to have provide most of the funding. having been in full-time employment since university he had a reasonable credit rating, multiple bank accounts each with just a small amount deposited for a protracted period. credit cards and a 10,000 pound personal loan. he defaulted on his personal loan payments and he was overdrawn on his accounts so very difficult to detect. but despite the low cost of that attack and the unremarkable financial activity associated with it, it had a devastating impact of course on the united kingdom beyond the deaths, the cost to the economy was estimated at 2 billion pounds just in the rest of 2005 alone. and the cost of the official inquiry itself i might say was put at 4.5 million pounds. so even unsuccessful attack which might therefore cost even less can have a huge impact. think of the other attack, the 2006 plot to blow up airlines traveling to north america. the additional security checks imposed on airports is a result of costing billions of dollars. the point i'm trying to make, terrorism does not have to be expensive on the effective. whether it's in the primary objective of making people afraid or forcing governments to react. the second point is that terrorists can fund their operations through legal means, quasi-legal means and legal means. legal means might include the nations or the self-financing of the london bombings. quasi-legal means might include the raising through traditional means in controlled tex territory. as well as the legal means might include kidnap for ransom or the other things we have heard about. and it's my belief that although terrorists have few qualms about how they raise money, they don't have any preferred means. they do whatever is easiest and most effective. and they'll raise money according to opportunity aiming all the while to minimize effort and risk while maximizing their returns. and this complicates the financing of terrorism as the money used is not necessarily criminally tainted before it is collected. increasingly, terrorists are attracted to places where they can control the territory and inevitably too these areas are ones that criminals use for their own transshipments of drugs or other contra band and things like that. and to this extent, terrorists have established a closer relationship both with crime and with criminal gangs. in my view they're more likely to take a cut from the criminal gangs than to join their rackets or compete with them. terrorists and criminals who operate for profit are not natural bedfellows. criminals see terrorists as dangerous, both in themselves and also in they're likely to bring attention from the authorities. and an official might be bribed to allow conventional activity but is less likely to turn a blind eye to terrorism. likewise likewise, terrorists are sympathy of those who might attack or betray them. the point i wanted to make sure mr. chairman although there is undoubtedly an association between terrorism and criminality it's not necessarily straightforward or even universal. thank you. >> thank you, mr. barrett. mr. farah, you're recognized now for five minutes. >> members of the task force, thank you very much for the opportunity to testimony about the dangerous nexus between terrorism, crime and corruption. i speak only on behalf of myself, and not on behalf of the institutions i'm affiliated with. i'm going to focus on latin america where we see this in new and dangerous forms. the convergence of the crime and corruption are the core at what i believe is a significant strategic threat to the united states. i described this emerging tier one security prior as criminalized state. that is states that actively use transnational organized crime as an instrument of state craft, rely on the revenues from illicit activities to fund themselves and often overlap this protective mechanism with terrorist organizations. in our hemisphere we're primarily seek this in the network that operates from venezuela, where you have the political project the joint political project among multiple nations who is harming the united states, as well as operating in the cojoint criminal enterprise. rather that being pursued in an effort to impede the activities the criminal networks and protected terrorist groups are able to operate in more stable secure environments something that most businesses crave. rather that operating on the margins of the state or seeking to co-op small parts, the criminal groups in the states are able to concentrate their efforts on -- at the statement on multiple levels. within the stable environment, a host of options become available. from shipping registries, the easing use of banking structures, the use of national airlines to move large quantities of unregistered goods and the acquisition of diplomatic passports and other identification forms. the threat originating in venezuela is not confined to venezuela. hugo chavez operating with others, fernandez in argentina, set out the redefine the political landscape. senior members of el salvador's current government are also alive in this movement. to a large degree this movement self-describes the alliance that's been successful. unfortunately what their policies have brought internally are massive corruption, rising violence and disdain for the rule of law and the collapse of institutions. on the strategic level this has brought new alliances with iran and hezbollah russia and russian organized crime, china and chinese organized crime as well as mexican drug cartels and colombian criminal organizations. the armed forces of colombia, a designated terrorist organization by the united states and a major drug trafficking organization is directly supported by the nations as a matter of state policy. such a relship between state and nonstate actors provides numerous benefits to both. the farc and hezbollah gain access without fear of reprisals. they gain access to identification documents and access to exporting cocaine to the united states. while using the same one to bring in large sophisticated weapons and in return the government offers state protection and reaps the rewards of the individuals as well as institutions derived from the cocaine trade. iranian -- iran whose banks have been largely barred from the western financial system benefit from the access to the international markets through venezuela, ecuador and bolivian financial institutions which moves the iranian money as if it originated in their own unsanctioned banking structures. the significant new evidence of the criminalization of these states, the first is the recent investigation by brazilian magazine showing venezuela with the help of argentina tried to help iran's nuclear program in violation of international sanctions. "the wall street journal" has a long list of senior venezuelan officials being investigated for drug trafficking. the recent book, chavez bang rang describes the cocaine dealings of the highest level and their contacts with hezbollah and farc operatives in officially sanctioned meetings and at the highest level and the recent designation by finn sen is of primary money laundering control. all of these mechanisms allow for literally billions of dollars to slosh through states that are completely unaccounted for both in their -- by legislative oversight or by any form of accounting. understanding how these groups develop and how they relate to each other in the form -- and form from outside the region particularly given the up a it pace with which they're expanding their control across the continent and across the hemisphere make -- i would argue a tier one threat in something critical that we need to understand is something we often don't look at in the underlying ideological underpinnings of the movement. thank you. >> well we have -- we thank all the witnesses for the testimony. the chair will recognize himself for five minutes. at our first hearing of the task force, we had some testify on the question of the iraq/afghanistan threat finance cell and because that was mentioned again here today, professor realuyo's testimony i will ask the question that perhaps the professor if you could respond to it. and then i'd like to hear the response of the thoughts of each of the panel witnesses. it's whether a threat to the finance cell, if replicated in latin america could that be an effective means to combat these terror criminal hybrid franchises that operate there? in latin america. >> well, one of the lessons learned unfortunately from our experiences in iraq and afghanistan has been that inner agency and more importantly collaborative fusion cells have been effective. particularly when you're designing a list of targets and more importantly harvesting information that comes of a financial and economic nature to actually incorporate it within our broader set of understanding these adversaries. in terms of latin america it would depend on different groups. more importantly, since a lot of the active cities are -- activities are drug trafficking related as well as human trafficking related we have to figure out which of the agencies would be the most suited. it's a concept of creating a task force. in the case of post 9/11 the joint terrorism task forces established by the fbi are a model that had been studied by many academics such as myself as well as other ways to actually leverage the know how and more importantly the resources that each of the agencies brings to bear. one other one which we did thotd discuss today is a very -- which we did not discuss today which is the joint terror -- joint interagency task force, based in key west, florida. it actually is intraagency with all the uniform services but more importantly the intelligence and the law enforcement agencies represented there as well as liaison full-time officers from other countries. their primary mission is countering illicit trafficking which already reflects the way they're changing the look -- instead it used to be drug trafficking. they're encountering a lot of precursor chemicals as well as sadly alien smuggling going through there. so it's a better way of how to use the lessons learned and more importantly apply them to emerging threats. >> dr. asher? >> well, my experience at first to celina's is spot on. i do feel though that you almost need an untouchables type of approach to this stuff. you need a group of people that are in charge to go after the money and to have global authority to roam. the money goes global. you see more money being laundered if it's in to a lower drug cartel and hezbollah and in china more than anywhere else. but we have a massive amount of laundering right through the united states, right to the purchase of used cars. we designated this, and we identified it to banks and people are accepting billions of dollars a year from lebanon for buying used cars that are going to west africa. we need a law enforcement top down task force approach and the law enforcement professionals and the prosecutors need to be held accountable for results. we know based on overt evidence that's been presented in court that this is going on. so why is it still happening? we also need an approach that -- so i think the task force approach that you're interested in is very important. but i don't think it be regional. but it needs to be almost threat specific. so hezbollah, al qaeda. why have not we applied the racketeering -- the rico charge against al qaeda? it's a racket. terrorism is against the law and the reason would matter on a financing level, we can go after long arm capabilities all their assets all over the world. we more than enough countries in the world that endorse terrorism as the national level crime. >> dr. asher, on the trade based money laundering what's your assessment of the current u.s. policy? >> absolute interest and unfortunate ineffectiveness. everybody i have worked with, i have had a great honor and pleasure to work with. they're great people in our government. there is awareness of these issues that we never had before. there's awareness that we should go after the financial networks as a means to tackle the whole network. it's a revolution. i'm very proud of it. but it's not working. there's more hezbollah money being garnered in the united states than in 2011. we have to look at the strategies like rico. we need to approach them more like criminal rackets than just terrorism. terrorisms almost honors these people and we need to have met greater impunity and cut off our systems from threats. >> at this point i'm going to recognize ranking member mr. lynch for five minutes. >> thank you. and again, i want to thank the witnesses. we had a chance to read your testimony, very helpful. dr. asher, for a while there with the lebanese canadian bank we had great success using section 311 sanctions and identifying them as, you know, know -- you know, primary money laundering concerns and it was not just us. it was the financial community. that saw them as toxic and everybody backed away. so it basically shut them out of the legitimate, you know banking system, especially the united states. would this work if we expanded 311 to go after say, you know t t -- the auto dealers in west africa that are operating? if we -- you know, if we continue to use that 311 type mechanism, would that be enough to choke off some of this funding? >> yeah, in my written testimony i recommended that we look at implementing 311 against the actual nation. i would propose it as a temporary measure. i don't want to obliterate the area, but the used cars are providing material support for a terrorist organization. of course we should be -- we have section 311 which is a regulation. okay? it can be lifted very easily. to protect our nation's financial system against money laundering. there is most definitely money laundering going on here and it's going to the terrorist organization and going to the military wing we believe of the military organization, the one that's killed hundreds of american citizens in the past and is engaged in activities against the interests in the middle east. i mean, we don't have the laws on the books for nothing. but i do believe annan enforcement approach is critical. we can't just force the banks to be the enforcers of the law. we need law enforcement to get into gear and to build financial cases against these complex conspiracies. they're very complicated and hard to prosecute. but they can be done. so i support a hybrid approach. >> let me stop you there. i have another question. i don't want to use all my time. we have got a -- we've got a problem coming up which is the agreement that the administration is trying to pursue with iran. we have -- we have sanctions against iran and a number of banks that had previously worked with them on nonproliferation issues and those are major sanctions. the iran sanction act, the iran syrian sanction act. and the president is negotiating taking away those sanctions in return for assurances and verification that iran is no longer pursuing a -- not actively pursuing a military nuclear program. on the other hand, we also have a whole set of sanctions that are based on the work that you have been doing which is iran has also been financing hezbollah. islamic jihad. according to the book, they even gave money to al qaeda. so those activities if we're to drop the sanctions and allow their economy to grow, what's to stop them from continuing that activity with respect to some of the work that the islamic revolutionary guard is perpetrating which is directly supportive of some of this -- you know, illicit activity. the criminal activity that's happening in so many other countries. >> moral and human outrage if those laws are rescinded. okay? at the end of the day, the terrorism record stands. you know, for those of that worked in the war in iraq we had more involvement in efp and other ied around than certainly any other nation state. you know, i was the senior adviser to the united states government for the talks in north korea. i know what nuclear diplomacy looks like and i understand, you know we have to have a hybrid approach sometimes in the nuclear counterproliferation, but on terrorism we have to draw the line. >> right. your understanding is those sanctions, 311, things like that are are targeted towards the criminal activity that have been enforced by banks banks that don't want to do any business with a bank that's doing business with iran because of the criminal activity those should remain, right? those should not be part of the -- >> terrorism record stands. >> okay. >> the chair recognizes the vice chairman of the task force, mr. pittenger, for five minutes. >> thank you. dr. asher, last march i asked secretary lew about the effectiveness of our intergovernmental communication and coordination as it relates to stopping the financing of terrorism. specifically, u.s. customs in their full access of data with limited access by finn sen. should we be looking more seriously and in better coordination as it relates to trade based financing should we be looking and targeting this type of better cooperation? >> actually, first u.s. customs is an awesome organization. everyone deserves to take a look at what they do. they don't get enough credit. i have been so impressed by their data systems. however, sharing data is very important. they're very good at receiving data. i think that the ability to take some of their data and use it for example in organizations like finn sen would be very proper and to the greater good because so much of the trade based money laundering is going on in a way that's difficult to measure. one of the only ways to measure it is is through the bills of lading that occur when you export something. to the extent that that i aren't linked together it holds us back in enforcing the law against the trade based schemes and trade based money laundering is where it's at today for money laundering writ large. >> you mentioned section 311 and how effective that was with the lebanese canadian bank. of course we saw how important it was in the bank of macaw as it related to north korea. and other instances. do you believe that this is a central focus that we should as well have in terms of trying to force some of these institutions no not be able to exist, utilizing 311? do you think that there's other institutions out there that clearly are in an unclassified briefing, but should that be a focus of our efforts? >> it's the most powerful lever we have ever developed in financial warfare against adversaries. and it's something that needs to be utilized you know, not every day but periodically. it's an incredible course a tool. and nothing like cutting someone off from the united states financial system which is -- it's not our job to offer access to terrorism -- terrorist groups to our financial system. when it happens we should be allowed to cut it off. 311 offers that opportunity. >> mr. barrett in your testimony you talked about smuggling and the link between terrorism and crime and some measure. can you briefly compare isis oil smuggling and the smuggling used by saddam hussein to evade the oil-for-food program? and my thought is that isis is using the same mechanisms and the same people. what haven't we been able to deal with this the second time around and what should we be doing to stop it? >> well, it's an interesting question, vice chairman. of course, the oil-for-food program was a huge agreement by the international community through the security council in 1991 with saddam hussein as you said, with the government. and did allow a certain amount of export of oil in order to be able to allow the iraqi government to feed its people. and that ofs open to many abuses -- and that was open to many abuses and it was indeed abused but the scale on which saddam hussein was operating as a government is very different from the scale on which the islamic state is able to operate. whereas saddam hussein i think over the 12 or 13 years of the oil-for-food program probably sold about $50 billion worth of oil, the islamic state is selling perhaps now up to $2 million a week, and also whereas the export of oil under saddam hussein was authorized and therefore done in a regular way, in the islamic state it's done very much in small scales out of sort of almost home grown refineries into trucks which may take it into turkey. may take it into kurdish areas. may sell it to the syrian government. or most of it in fact is probably sold and consumed within the area controlled by the islamic state itself. so this makes its very much harder for outside powers to control there. possibly turkey, but generally speaking it's difficult. >> thank you. generally speaking, it's difficult. >> thank you very much. you mentioned about the transport and the sale of oil going out of iran into turkey. have we been effective at all in trying to minimize that, and what else could we be doing? >> so there's a decision specifically to target the oil infrastructure through the military campaign i described in my testimony. and there has been damage done. but the bigger problem is we cannot actually outright destroy the supply routes that feed the regular elicit economy as well as the movement of the people who are the innocents, who are basically in the way of a lot of isil. a lot of the market is driven by more localized consumption. i've been asked a lot having worked on wall street looking at oil markets it's not actually -- this oil is not entering global opec markets. it's actually a question of how to stem the demand locally. a lot of it is crossing into turkey, which is disturbing. but it's driven by those looking for a cheaper gallon of gasoline. gasoline. >> thank you. >> chair now recognizes miss watters for five minutes. >> thank you very much. i would like to continue discussing about money laundering, and i'm interested in pursuing information on closing money laundering loopholes for persons involved in real estate closes. # and this is a question. an investigation recently conducted by "the new york times" revealed the easeback to billionaires can purchase luxury real estate in the united states with few questions asked. nearly half of the most expensive residential properties in the united states are now purchased anonymously through shale companies. -- has exempted persons involved in real estate settlement and closings from having to ask basic questions from maintaining a laundering program in accordance with the bank secrecy agent. the patriot act allows them to temporarily exempt certain entities from new requirement to establish and to have money laundering programs. one person involved in real estate closings and settlements. do you believe large cash purchases of luxury real estate by anonymous buyers could oppose money laundering risks that need to be addressed? >> that's always been a question in terms of covered institutions since basically the wake of 9/11 9/11. the idea that other businesses including real estate could be used to launder money as well as funds of elicit nature. we have under the banking system, you're well aware of the know your customer practice. so there have been moves afoot, not just in the united states but around the world, to try to enforce a broadening of the coverage of who would be required to know your customer and more importantly taking a look at things such as real estate. i do a lot of work in mexico, where this is a huge issue of the cartels buying out businesses, but more importantly real estate. and now a move there for notary publics who are critical in order to transact the purchase or the sale to actually also be required to do reporting diligence on their clients, and it's something we may be able to consider here in terms of the u.s. as well. a lot of the flows of the money, particularly in real estate here in the u.s. by foreigners is also suspect of tax evasion of their home jurisdictions, which is something we should also be concerned about. particularly if that's coming from corrupt governments abroad, coming to seek financial safe haven within the financial markets. >> several years ago i became interested in money laundering because we discovered that one of the national banks had purchased a lot of the small banks in mexico that were known to launder drug money. and so in taking a look at that we discovered that our banks were not following any know your customer policy. i don't think they had a registration on hand for one of the officials at that time. i think it was a brother of one of the presidents of mexico. the same thing was true with the brothers from nigeria, who had all of their money in our banks. and while i'm interested in the real estate aspect. you did mention you brought up know your customer products with our banks and given that the statute that i referenced allowed only temporary exemptions, do you believe it's time that those involved in these type of real estate transactions should be required to implement u.s. anti-money laundering programs? >> yes, and that's actually what we're trying to look at now. as financial innovations and new ways of moving and potentially laundering money or financing terrorism evolved, things such as the virtual world we need to think about legislation that keeps up with the financial innovations in order to preclude dirty money from entering the u.s. system. thank you very much for your interest on this topic but anything that moves in terms of hiding money the criminals and terrorists are very good at trying to circumvent our measures. >> thank you and i suppose you are aware of the extensive article done about the time warner center and it's absolutely startling to take look at the purchase of the properties and who is buying them and i think this information is very instructive. and don't want to take a closer look at what to do about these real estate transactions. thank you very much. i yield back. >> chair now recognizes the gentleman from texas, mr. williams, for five minutes. >> thank you i appreciate it. i have two questions. the first one to you and the second to dr. asher. in your testimony this morning, you spoke about how countries like iran whose banks are largely barred from the western financial systems have been able to gain access to international markets to countries like in latin america. would you help this committee further understand what implications terrorist or criminal groups who are supported or allowed to operate in latin measuring have on this country. >> thank you for the question, sir. i think if you look at the way iran has penetrated the financial systems, particularly where i have documented is venezuela and ecuador. where you have iranian banks setting up under falsified banks and operating as venezuelan banks or in the case of ecuador where the president of ecuador authorized a small bank to become a channel of money and authorized it explicitly and to have the communications encrypt and the financial communications held in the iranian embassy. that's little unusual, i would say, for a normal banking structure. and i think the problem in this setting is when you have a state sanctioning those activities no one is going to investigate them. no one is going to move further down the road. and that goes to the point of immunity that the state cover provide. once you have to a state willing to use both as part of the state sanction policy as opposed to what we see in mexico. they won't condemn them or let them cross. what these guys, the construct of latin america is state protected and state driven. and that opens the door for what you see hezbollah doing in the region, iran doing in the region unfettered access to financial institutions in ways not possible without direct state participation. >> thank you for the answer. doctor asher, let me visit with you real quick and go back to the used car situation. what was the number you said used cars going out of this country? was it a billion dollars? >> well, just bending alone may be a billion dollars. >> where and who are buying the cars? are they buying them from auctions? from dealers, are they buying them from individuals? >> they're buying them in auctions typically. the money is coming out of lebanon. thousands and thousands of people. i think the customs has denied thousands of these. it's unfortunate for the people of lebanon. but the people coming here are being told go buy cars. and they just do it. they're going to get a big cut on the payment because it's drug money. so i dheent care how much money is being made on the transaction itself. they want the car. without the car they can't launder the money. so they buy them. you see car lots in the state of virginia or baltimore. you go there and see the cars sitting there and you never see anyone in the car lot. ask yourself, who is running the racket in they season the cars on the lot. they is the there for a few days, and then they're off on a railroad boat to west africa to lots owned by hezbollah. >> the cars around $2500? >> a lot of cars are below the $2500 customs threshold. so they don't come into the statistic statistical data base. >> so they know how to beat the system? >> they know how to beat the system. they're really brilliant, actually. >> and how are they being paid for? cash? >> no it's typically wire transfer. so the banks are involved, you know, and this is an issue. i don't want to blame the bankers. they're trying very hard to enforce and

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