Merchant of Death
Money, Guns, Planes, and the Man Who Makes War Possible

Blood from Stones

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Press Releases

The Slow Unraveling of Hugo Chávez and his Terrorist Ties
While Venezuelan president Hugo Chávez has long viewed criticism of his autocratic rule and growing abuses as part of the impending Yanqui invasion, he has suffered two significant blows in the past week and the United States was not part of either. The developments are further signs that Chávez is finally being understood as an anti-democratic strongman who consistently supports terrorist groups that the rest of the world shuns.

The most recent blow came from a Spanish judge who linked the Chávez government to support for the Basque terrorist organization ETA, as well as the Colombian FARC, in attempts to assassinate senior Colombian officials.

The allegations, made in a court document by investigating magistrate Eloy Velasco, said that the Chávez government had acted as an intermediary between Eta and the Revolutionary Armed Forces of Colombia (Farc) guerrilla group.

"There is evidence in this case which shows the Venezuelan government's co-operation in the illegal association between Farc and Eta," the magistrate said as he issued international arrest warrants for six alleged Eta members and seven Colombians believed to be members of Farc.

At the center of the controversy is Arturo Cubillas, an alleged Eta member who works in Venezuela's ministry of agriculture, who was named as the main link among the three groups: the Venezuelan government, FARC and ETA. Cubillas, who has lived in Venezuela since 1989, is married to a senior member of Chávez's government.

The allegations appeared to confirm Colombian intelligence reports that the FARC and ETA have worked together often and exchanged technological know-how and training.

The judge said that two Farc members, Victor Vargas and Gustavo Navarro, had travelled to Spain twice to identify possible targets among the Colombian community for assassination.

He said the Farc members had relied on Eta for support during their visit, and attempts had also been made to find a way of killing President Alvaro Uribe during a visit to Spain.

The investigating magistrate said that up to half a dozen Eta members had travelled to Venezuela to train Farc members in the use of C4 explosives and mobile telephones as detonators.

Members of the Venezuelan armed forces appeared to have accompanied them on at least one occasion, he added.

He also said that several Eta members had also travelled through Venezuela to Farc camps in Colombia to receive training there.

The other, earlier incident was sparked by an unusually blunt 300 page blistering report by the human rights branch of the normally-timid Organization of American States documenting the multiple and ongoing abuses of the Chávez government.

The report asserts that the state has punished critics, including anti-government television stations, demonstrators and opposition politicians who advocate a form of government different from Chávez's, which is allied with Cuba and favors state intervention in the economy.

The report outlines how, after 11 years in power, Chávez holds tremendous influence over other branches of government, particularly the judiciary. Judges who issue decisions the government does not like can be fired, the report says, and hundreds of others are in provisional posts where they can easily be removed.

The commission said some adversaries of the government who have been elected to office, such as Caracas Mayor Antonio Ledezma, have seen their powers usurped by Chávez.

"The threats to human rights and democracy are many and very serious, and that's why we published the report," Paulo Sérgio Pinheiro, a member of the commission who specializes in Venezuela, said by phone from his home in Brazil.

In both cases Chávez reacted as he has in the past, by threatening, blustering, and personally attacking those documented his abuses, rather than substantively addressing any of the allegations. He shares this characteristic with Rafael Correa and Evo Morales, who, rather than debate the merits or truth of any criticism simply attack the messenger.

But slowly the mask is slipping on the creator of 21st Century Socialism. Rather than ushering in a new era of poverty reduction, social justice and prosperity, he is presiding over an increasingly criminalized state with one of the highest murder rates in the world, rampant corruption and shrinking freedoms. Viva la revolución!
The Death of Edgar Tovar and FARC's Cocaine Pipeline
Relatively unnoticed in Colombia, the government confirmed the death of Edgar Tovar, a senior FARC commander and one of the group's chief ties to Mexican drug cartels.

Tovar, AKA Gentil Gomez Marin or Angel Gabriel Losada Garcia, was the commander of the FARC's 48th Front, which operates primarily along the Ecuador/Colombia border, which has recently grown into the main cocaine conduit for supplying Mexican drug cartels. This makes him a key figure in the FARC's financial structure.

With the FARC leadership being relatively unable to communicate with each other and the contacts with the Mexican organizations a closely guarded among a few members of the 48th Front, Tovar's death is a significant blow. It removes one of the key facilitators of a terrorist group in dealing with transnational organized criminal groups.

Because of these ties, as outlined in my recent Ecuador study Tovar was a primary target for the Colombian police and military. Tovar had also been in charge of the security of Raul Reyes, the FARC's second-in-command, killed in Ecuador on March 1, 2008 by a Colombian attack.

One of the most interesting elements about the FARC in recent times is how groups like the 48th Front, which provide much of the logistical support for the rest of the FARC while collecting most of the cocaine money, have become more independent from the General Secretariat.

Internal intercepted communications of the FARC in recent months have shown that, despite pleas for money by the Secretariat, the 48th Front has simply refused to comply, and has shown in marked disinterest in fighting the Colombian military.

Given the FARC's dependence on the 48th Front's trafficking network (it works closely with the 29th Front, which is in charge of much of the weapons procurement), such defections could be lethal.

I and others have predicted the core FARC that still claims to have an ideological compass will be greatly reduced over time as the group becomes more and more criminalized. As the illicit trade becomes an ever-more dominant reason for existence - no longer tied to benefiting the revolution but entirely tied to personal gain - this fracturing will continue.

Working closely with Tovar is Oliver Solarte, the hands-on manager of the 48th Front's cocaine network. He lives on the Ecuador side of the San Miguel River, controlling the area around Puerto Nuevo, where his family lives, owns lands, runs brothels and supermarkets and generally displace the Ecuadoran state as the real authority.

Despite the wealth of knowledge on Solarte (also detailed in the Ecuador report), the Ecuadoran authorities have been unable and/or unwilling to apprehend him. This could be in part because he is in charge of paying the bribes to the Ecuadoran military and police that operate in the area, insuring that the cocaine flows with impunity and that the Mexican buyers who arrive are not bothered.

I have been to several organized crime and terrorism conferences in recent weeks and have sought to help focus on what the definition of "victory" should be in counter-narcotics efforts, be they in Colombia, Mexico or elsewhere.

Eliminating key financial and logistical operators like Tovar have an important degrading effect on the trafficking organizations. But the degradation of capabilities is usually temporary and, even if it is more long-lasting, it simply makes the trafficking structures less efficient and less profitable.

If they are less efficient and less profitable, they are less able to corrupt and murder, but also harder to target because the structures are somewhat atomized, rather than being centralized.

But if they are atomized, they become a problem that does not challenge the state, but rather can become a local police or military problem, where enough space for the state to reassert control can be created, further weakening the criminal and/or terrorist structures.

And that, I think, is the definition of victory, at least in the mid-term. Pushing the problem elsewhere, reducing the challenges to the state and atomizing the criminal structures so they can be dealt with at a local level are the best that can be hoped for given the profitability and endless supply of consumers.
A New Indictment for Viktor Bout and His American Accomplice
The U.S. Justice Department today handed down a new indictment against Viktor Bout and his Syrian-American partner Richard Chichakli, alleging the Merchant of Death with laundering money and attempting to buy two aircraft in the Unites States through a series of front companies.

The indictment may add to Bout's legal woes, and certainly is a blow to Chichakli, who has been happily holed in Moscow, with occasional trips to Damascus while using his website to mock the U.S. government, along with you truly and others. The indictment and Interpol alert will likely keep him holed up in Moscow, at least for a while.

Chichakli, who prided himself on his ability to create fetching fruit platters, fled the United States when his assets were frozen by the Treasury Department's Office of Foreign Assets control. He used Lufthansa frequent flier miles to purchase his ticket, as he had no money available, and then proceeded on to Syria, before joining Viktor in Moscow.

Bout, of course, is still in a Thai jail, awaiting an appeals court decision on whether he can be extradited to the United States to stand trial for attempts to knowingly sell surface to air missiles and other lethal equipment to undercover agents posing as FARC operatives. Last year a lower court ruled that Bout could not be extradited, and the appeals court ruling will be final.

The charges may be used to try give the Thai court more reason to authorized Bout's extradition to the United States. It will also certainly make Chichakli, who helped Bout set up his operations in the UAE in the 1990s while acting as his accountant, a less mobile figure.

Bout's attempt to buy the aircraft show how mobile his network - which supplied the Taliban in Afghanistan, the FARC in Colombia and other terrorist groups - had become. The indictment alleges Bout and Chichakli wired some $1.7 million through the United States on behalf of a front company named Samar Airlines, to purchase two Boeing aircraft in the United States.

"Viktor Bout was originally charged in March 2008 with conspiring to kill Americans by selling millions of dollars worth of weapons to Colombia-based narco-terrorists. Further investigation has revealed additional criminal activities by Bout including money laundering and wire fraud conspiracy. The additional charges contained in the newly unsealed superseding indictment amply illustrate the extraordinary breadth of Bout's deadly criminal enterprise," said DEA administrator Michele Leonhart.

The move violated the executive order that banned any U.S. company or bank from doing business with Bout. The companies doing business with Bout were not fully identified and the indictment alleges that both Bout and Chichakli hid their involvement in Samar Airlines in order to avoid sanctions.

It is not clear what the aircraft would be used for. Bout's aging fleet of Soviet era aircraft had suffered a series of accidents, where difficult to maintain and costly to keep running. Perhaps that is one of the reasons he was keen to move over to Boeings.

"Viktor Bout allegedly made a career of arming bloody conflicts and supporting rogue regimes across multiple continents, even using the U.S. banking system to secretly finance a private fleet of aircraft. The United Nations and the United States have long-standing sanctions against Bout that stem from, among other things, his support of the most violent and destabilizing conflicts in recent African history. Until his arrest in March 2008, Bout had found a way to circumvent these sanctions, successfully evading the rule of law. This Office is committed to working with our partners in the United States, at the United Nations, and around the world to bring transnational criminals like Viktor Bout to justice," said U.S. Attorney PREET BHARARA.
The FARC and the Quest for Surface to Air Missiles
The Miami Herald today reports that the Colombian FARC has likely already fulfilled its long-time goal of purchasing surface to air missiles to be used against U.S.-supplied helicopters in Colombia.

The FARC has long placed a very high strategic priority on acquiring SAMs, going back to at least 2003. The commanders officially requested money from Libya and Nicaragua at that time to purchase the weapons because the insurgency was being so badly hurt by helicopters acquired by the military and police.

The helicopters allowed the military and police to extend their supply lines, increase mobility and pursue the FARC and other groups from the air, something that helped fundamentally shift the dynamics of the war.

It is not a good weapon to have in the hands of a terrorist organization that derives its revenue from cocaine trafficking, kidnapping and extortion. The FARC is on the ropes militarily, and one of the few things that could give the group an immediate boost is the acquisition of SAMs. Other terrorist groups have acquired the missiles, including radical Islamist groups that tried to down an Israeli jetliner.

The information on this case originates in a Peruvian court case, where 12 men are on trial for the illicit sales.

The Peruvian prosecutors' records detail the sale of at least four Russian-made Strela and Igla ground-to-air missiles between May and October 2008 and another three in 2009, ``each one for the sum of 45,000 US dollars.''

They were sold by Jorge Aurelio Cerpa, a Peruvian air force official, and were delivered to Freddy Torres, an Ecuadorean who had been buying weapons for the FARC since 2007, according to the records. They and nine others were arrested and charged with collaboration with terrorism, and several have confessed.

Note the transnational nature of the arrangement. From corrupt Peruvian officials to a FARC middleman operating in Ecuador, to the FARC. Again, an Ecuadoran and Ecuador appear as vital pieces in the FARC's strategic resupply network, as outlined in the recent paper I co-authored titled Ecuador at Risk: Drugs, Thugs, Guerrillas and the Citizens' Revolution

It was not a one-off deal by Torres, but part of a long string of sales he helped engineer in order to keep the FARC well armed and lethal.

Peruvian army and police officers also sold Torres hundreds of hand grenades for up to $60 apiece, 40-50 heavy machine guns for $19,000 each and tens of thousands of rounds of ammunition, according to the records, first published by the La República newspaper in Lima.

Torres, who was arrested Dec. 19 on Peru's northern border with Ecuador, was paying $150,000 to $200,000 for arms deliveries ``every 15 or 20 days,'' a copy of the records provided to El Nuevo Herald showed.

The case shows how diversified the FARC has become in its acquisition of weapons, and how broadly it casts its net. One can only assume that, while the black market is being worked, the supplies from friendly governments, particularly Venezuela, continue to flow as well.

All of this bodes ill for the conflict in Colombia, already in its 44th year. With new cocaine routes being opened to Europe via West Africa and the expansion of the Mexican cartels southward to deal directly with the FARC, the revenue stream to the organization is unlikely to diminish any time soon. And that could mean decades more of costly and bloody conflict for Colombia.
The Downward Spiral in Latin America
Several developments over the past week add to my growing sense of pessimism over certain parts of Latin America.

The first is the decision of Venezuelan president Hugo Chávez to bring on board a senior Cuban official with a long time specialty in internal security and torture to act as a consultant on Venezuela's energy crisis.

What Ramiro Valdes, one of the four remaining "originals" of the 1959 revolution, can bring on the electrical side is open to question, given that Cuba is not a model of electrical efficiency and management. What he can bring is a strong sense of how to control the internal opposition and make repression more efficient, which is his specialty.

This leads to my second concern. As Chávez grows more beleaguered and under siege, the one card he holds to wreak havoc in the region is his relationship with the FARC in Colombia.

Valdes, the old guerrilla with a strong penchant for supporting armed movements, is a likely candidate to help escalate that relationship at a time when the FARC, a designated terrorist organization, has money from cocaine sales to pay for increased training and access.

Another desperate regime, that of Iran, is also scrambling to survive, and the two friends are likely to jointly seek ways to save themselves while sinking their own countries and others.

A third area of concern is increasing violence in Juarez, Mexico, where I just was. The massacre of the 16 young people has brought to the forefront the sense of despair and hopelessness people feel, and the profound disillusionment with the government and its counter-drug efforts.

When people lose all faith in a government, the situation will be very difficult to reverse. The narcos and allied gangs such as Barrio Azteca and Artistas Asesinos feel a complete sense of impunity that is well-deserved. Less than 2 percent of all homicides in Mexico are ever prosecuted and in Ciudad Juarez the numbers are even lower. The military is widely viewed as corrupt and abusive, the federal police generate little trust and the municipal police are viewed as handmaidens of the cartels.

This leads to the type of terror on the streets of a once lovely city, with 2,600 homicides last year and already on pace to surpass that by a significant amount.

A fourth issue is the eroding freedom of expression across the Bolivarian sectors of Latin America. It was driven home to me after the release of our new report on Ecuador, Ecuador at Risk. Not only has the ordered his ambassador in Washington to see if he can sue us, his government has threatened to try to find my sources.

So one can only imagine the censorship that goes on in the local media in Venezuela, Ecuador, Bolivia and Nicaragua. Chilling indeed.

As this German press report shows, we did not go into all the details on Ecuador's problems. It is about to be listed by FATF as a high-risk country for financial transactions because it has not ratified 48 of the 49 conventions on fighting money laundering and terror finance.

As the Hoy newspaper in Quito noted in an editorial defending our report,:

it is not enough to close one's eyes to the facts and consider them to be a plot to smear the government. It is urgent that we redouble our efforts against drug trafficking and revise our policies of who we allow into our country.
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