homeless too. >> to watch this visit our website at studentcam.org. >> buckeye broadband supports c-span as public service along with these other television providers giving you a front-row seat to democracy. >> next a hearing examining the role of shell companies in facilitating transnational crime such as fentanyl trafficking, the corporate transparency act was passed in 2021 with the

intention of outlawing the anonymous shell companies in the u.s. the hearing was held by the senate caucus on international narcotics control. it runs just over an hour. >> we welcome everybody to the hearing and thank you very much for participating. i will start with my opening remarks and turn to the distinguished cochair and for

his opening remarks and for a brief video that he will play and then we will turn to our distinguished panel of witnesses. i thank you all very much for being here. a modern-drug cartel runs more like a fortune 500 conglomerate than like a street gang with departments specializing in logistics accounting, recruitment and chemical science cartels manage their empires with deadly sophistication. they operate like enormous businesses because they profit like enormous businesses. globally, drug trafficking revenues total as much as $652 billion according to estimates from global financial integrity. mexican cartels like sinaloa and jalisco new generation operate in the billions.$6 enforcement against these mass organizations usually focuses on their distribution networks which make some sense, the product is contraband and the

cases are easy once the drugs are found. but the distribution network is only a part of their operation. they have international supply chains bringing precursor chemical from china for their fentanyl mills. they have networks of shell entities and accounts to launder their dirty profits. both their supplyr chains and revenue management operate through shell companies and enablers. this includes u.s. shell entities i am sorry to say. head argument that the best place to hide and launder ill-gotten gains is actually the united states.". yes, the u.s. has allowed cartels, terrorist groups,

rogue states, chinese money- laundering organizations to use phony u.s. shell corporations and their illicit schemes. these shell companies may exist only on paper, but they enable deadly threats to americans lives and security. nearly 108,000 americans died of overdose in 2022, according to the cdc. 436 were rhode islanders. the death of those 436 people ripples across my small state in a tide of heartbreak. fentanyl and other synthetic opioids are behind many of these deaths. fentanyl's death toll was the direct result of shell corporations. shell corporations that hide the delivery of precursor chemicals and shell corporations that hide the profits from sales. what doj indictment last year design a network of shell companies in wyoming to launder millions of dollars for the

sinaloa cartel. in another case, narcotraffickers in new jersey were charged with using a shell company to buy fentanyl related substances from china which they pressed into counterfeit pills. the united states recently sanctioned syrian drug traffickers who used seemingly legitimate businesses to launder money. these examples are the tip of an iceberg. while this hearing is focused on the threats posed by shell companies serving the drug cartels, we cannot forget that terrorist groups, oligarch cronies, north korean operatives, and many others who wish harm to americans use these same opaque corporate structures. let me be clear. a network of shell corporations servicing these foes and the enablers who facilitate them are a clear and present threat to our national security.

in the battle with narco lords, into the shadows of the dark economy can go a long way. so i think co-chair grassley for our years of work together to shine beams of sunlight into that shadow economy. our corporate transparency act is one such beam of light. on january 1st of this year, the treasury department established a beneficial owner registry to sort out this anonymous shell company mess. at long last, helping law enforcement and national security officials find out who is behind american shell companies that facilitate criminality. the best place to hide and launder ill-gotten gains is actually the united states. this year, the treasury also announced puzzles related to dirty money and in the dirty money and in the it is regreatable that well-paid, white-collar american professionals, brokers and

accountants provide services. me enabler's act would crack down on those aiding and abetting america's enemies byty beaming daylight on key sectors. we can organize our efforts better against the global dark economy. i've introduced the bill to establish a cross-border financial crime center to coordinate investigations with nexus to u.s. border. finally, we should provide resources, the department of justice and federal agencies, time and again we have seen those seeking to harm the u.s. use opaque corporations to cover their tracks and obey accountable. we passed the beneficialup transparency law to defend our

safety and security against enemy who is do their dirty work through u.s. anonymous shell companies. and with that i turn it over to cochair grassley. >> first of all, i want to thank you for mentioning our working together on this very important piece of legislation and i wish we could get more out the cooperation that there is in a bipartisan way in the united states senate and i wouldn't have people at the back of my hometown meetings, how can you guys can never get along. i tried to explain to them that we can get along. but i'm not sure. congress often talks about how criminals use shell companies te launder money. the corporate transparency act is an important part of that conversation but it's only a part of the equation. criminals also use shell companies and corporate structures to secure the tools of the drug trade.

today i'd like to focus on one particular troubling example. the u.s. register plains are used and critical tool by the cartels to move drugs.to >> so let's see the video if we can. i hope this is not an example the video doesn't work. >> drug cartels use shell companies and government loopholes to get their hands on american plains. that same open market also supplies a key part of the logistics here. you can still see and meaning this plane originated in the

united states. >> u.s. planes are carrying poison to our shores killing americans and causing deadlye destruction. we can't let bad actors put our security at risk, close the loopholes, protect american lives. >> certain date on april 20th, 2020 sinaloa cartel crash landed in an american airplane in guatemalan forest. the plane was loaded with over 1600kilos of cocaine and the cocaine was desttin today the emunited states. u.s. law enforcement tracked the cartels' movement and the guatemalan military sprang into action. the first team to arrive just

ten soldiers. they were met with cartel army of 150. the same scene repeated itself hundreds of times in countries in central america leaving people to wonder how the cartels get their hands on american plains. the answer is buried in rings of fraudulent paperwork piled up at the federal aviation administration. faa for short. criminals disguise by shell companies dupe the faa into numbers, those tail numbers shield the planes from foreign law enforcement scrutiny. this allows millions of dollarst worth of drugs to sail through the air space undetected. once the drugs reach their destination, the plain is destroyed and the criminals walk

away with net profits. the faa, the faa is aware of this problem but hasn't changed its registration process. ten years ago we had a 2013 inspect or general report warning the fbi about vulnerabilities in this system. those warnings went largely inanerred and in 2020 the government accountability office gao report raised the issue once again. gao recommend the faa make 15 corrections to its registration process. four years later the fbi has only implemented 3 of those 15 recommendations. we've all seen the damage a plane can to in the hands of an

enemy. none of us will ever forgot how airplanes turn into weapons of mass destruction during the worst terrorist attack on american oil, 911 as you know but 23 years later the faa still appears to act like a rubber stamp instead of a watch guard. i want to thank senator white house for holding this important hearing and our witnesses for being here. i'm particular glad to have misrebecca shay here to speak about what the gao 2020 report says. lastly, i want to thank u.s. law enforcement military and our allies who risk their lives to keep us safe from criminals. i look forward to discussing how congress can provide needed tools for this fight. thank you. >> thanks very much, senators.

gassily. again, i thank our witnesses for being here. i give them quick introduction and five minutes to make your oral remarks and your full testimony will be made a part of the record of this hearing. first witness elaine, serves as senior director at the democracies. globally recognized expert and thought leadership on geopolitical risks supply chain and security, anticorruption and national security. senior director of the world economic forum from 2010 to 2015 you she led the partnering against incompetentive. she's held both political and career positions that the u.s. department of homeland security including deputy enacting assistant secretary for policy and director of cargo and trade policy. donald, retired from a 32-year federal law enforcement career

in 2022, served as assistant special agent in charge in dea's special operations division you he led the office of financial operations, the middle east and asia section and the chemical and pharmaceutical section. rebecca shay, director of investigative team in government accountability office where she oversees audits to identify abuses in agencies. in 2020 she led a team and examining issues with the federal aviation administration aircraft registration process which senator grassley referred

to. ms. shay worked for gao for 25 years. erika, the government affairs director at the financial accountability and transparency coalition, the fact coalition where she leaves the group engaged with policymakers. her work supported the passage of bipartisan legislation targeting the networks that fuel mass human rights violations in syria and the middle east and she campaigned augment counterterrorism measures and prevent diversion humanitarianrg aid. i appreciate all of you being here. .. .. ..

to move effortlessly across state lines and over national borders without any risk that the underlining actors are identified. in 2021 congress passed the corporate transparency act or cta outlining the companies requiring them to provide information about the beneficial owners. the real persons behind the corporate forum. reliable beneficial ownership provides a critical boost to law

enforcement allowing investigators to truly follow the money rather than chasing shell companies, trust, offshore entities and disguised owners. it replaces the proverbial law enforcement dead-end with a critical door to essential information. it's long exploited companies to launder money and aid in the transport ofem deadly narcotics into the u.s. in february 2022 a new york man pleaded guilty to laundering 650 million in drug proceeds through anonymous corporations sending the funds to domestic entities and foreign entities. in 2018, chinese nationals and his father were indicted for operating a global synthetic organization that shipped fentanyl analogues in over 250 other drugs to 25 countries and 35 states within the u.s. often

relying upon the companies for the distribution of money laundering. they have resulted in at least two fatalities in ohio. for every case uncovered it is reasonable to assume there are countless cases where the successful use of the anonymous vehicle stymied law enforcement and the cases never closed. in other words the examples that follow are the tip of the financial iceberg for the industry that's estimated to generate as much as $650 billion a year globally. in idaho a victim paid thousands of dollars to be an online website called pharmacy website that purported to sell prescription drugs. in reality they contained other substances including fentanyl aland its analogs.s they extradited a citizen for trafficking narcotics through the website but only after the victim died of an opioid overdosed in 2017. consistent with what we see across the drug trafficking

networks expedited companies to launder money and just last month of the las vegas man was sentenced to eight years for importing, processing and distributing hundreds of thousands of pills. howec did he pay for the drugs, not surprisingly it was shell corporations. unfortunately through anonymous companies we've tied our own hands gifting the cartels and longer is a magic curtain to shield of their identity and hide their wealth. of anonymity are far beyond the drug trafficking alone. terrorists in america's adversaries have been actively exploiting the companies for decades to further nefarious plots and make america and the world less safe. no example still illustrates the risk as concretely as the notorious international arms dealer convicted for selling millions of dollars to terrorist organizations thatt aim to kill

americans as well as fuel conflicts in africa, latin america and the middle east. alec leveraged an international network of companies to hide his activities including at least a dozen u.s. shell companies set up in texas, florida and delaware. not alone seeing the appeal of the companies, vladimir putin's allies used anonymous companies to buy 15 million-dollar mansions in washington, d.c. while the iranian, government used anonymous companies to cover it up ownership of the fifth avenue skyscraper in manhattan. businesses dodge sanctions and continue to enjoy access to the global financial system. african dictators have used anonymous companies to buy malibu mansions while corrupt malaysian officials used anonymous companies to help steal billions from public. unless the u.s. addresses the risk of anonymity in the financial system, we leave

ourselves vulnerable to manipulation, corruption and attacks by illicit actors in power collecting beneficial ownership information on the companies that operate in america is a straightforward and powerful tool to defend the homeland. there is no legitimate reason to delay the implementation of the corporate transparency act. on behalf of the foundation for defense of democracy, thank you for inviting me to testify. >> thank you very much. special agent, or formal special agent i should recall. >> thank you, senator whitehouse. senator grassley and the rest of the committee, members of the committee, i am pleased to appear to discuss critical challengesas law enforcement fas interning heroin, narco terrorism and other crimes.

it's one of the most criminal to operate and benefit from their own actions. however, identifying are difficult when these organizations are able to establish ther registered companies that conceal come protect their identities as well as their high-value assets. the late 2022 after 31 years conducting and supporting the narco terrorism investigations. from my time as a special agent assigned to thend u.s. special command we always encountered businesses. bank accounts many of which were in the name of the straw person or proxy, the front company, or even a registered limited liability corporation llc. with no true person associated, nor a physical presence. whether elements of the cartel

or the organized crime lebanese hezbollah, al qaeda, taliban or isis each of these entities used and continue to operate the front companies in some form or fashion to conceal operations. many of these are protected and hidden behind legitimate law firms and county firms in countries throughout the world. in my few years with of the special operations divisions, the identified numerous online pharmacies shipping real pharmaceutical drugs stolen from thousands of break-ins or counterfeit pharmaceutical drugs repackaged and sold online and shipped through male parcel systems. many of these pharmacies have established either shell companies bank accounts as well as crypto currency velvets to receive payments. the challenge is identify the beneficiaries of the payments with difficult at best. when such anonymous companies operate in both of the open and the dark web. from 2004 to 2016, the special

operations division with over 32 different agencies were able to identify the drug laundering opportunities that use the dealership companies in the united states to africa. the companies were used to establish various bank accounts that receive and/or send millions in drug profits throughout the world. thousands of vehicles were shipped to money laundering schemesle to africa and the mide east all the while the lebanese bank allowed to tens of millions and proceeds to flow freely into the companies of the bank accounts. the dea undercover operations were able to successfully identify these in the united states, south america, africa, the middle east, europe and australia. ultimately thele drug cartels, money brokers and coordination with of the treasury financial crimes enforcement network that led to the shutdown using the

sanctions. most criminal enterprises establish to create companies with corporate structures that can also operate nonprofit social or political organizations as cover. after the myriad of registered entities can access banking and investment crypto currency holy financial that offer various financial instruments such as credit cards, debit cards tied to bank accounts with their own limited fund or bank and non-bank loans that obscure and conceal the true beneficiary with of the source of funds. whether for tax evasion, drug, human arms trafficking, terrorist financing fraud or government corruption we've always had difficulty tracing and identifying the principles behind these activities. recently chinese organized criminal networks and

money-laundering organizations have been successfully laundering billions in colombian mexican drug cartels for the past two decades using legitimate companies throughout the world. currently, chinese organized orcrime and networks are laundering billions worth of marijuana cultivated throughout thousands of indoor farms in the united states. using trade based money-laundering in parallel funds and the proceeds end up investments for officials throughout northri america, asia and europe were transported to mexico, south-central america. all the while facilitating and amassing the cartels wealth and allows them to continue. thank you and i welcome any questions that you may have. >> thank you very much. i will turn next to rebecca whose work was mentioned by senator grassley in the opening

statement and take the opportunity as she prepares to deliver to put into the record the minority report of senator grassley, cochair and entitled national security assessment, explanation of the federal aviation administration registry. is there objection? >> without objection, please proceed. >> chairman whitehouse -- >> i don't know who the last witness was but they sure worked over that microphone. >> thank you. sorry for that. a chairman whitehouse, grassley

and members of the caucus, thank you for the opportunity to discuss the work on criminal and national security risks associated with the ownership information and aircraft registrations. faa's civil registry is the largest in the world with approximately 300,000 aircraft approved to operate with the well-known number on the tail end of the plane. he was a registration is preferred because of the standards for aviation safety and maintenance. the aircraft registration fee, five dollars for a souvenir period, is an added draw. they appreciate having a number because it can facilitate logging in and out of and around the u.s. with. u.s. citizenship for individuals or corporate aircraft owners but also various ways for noncitizen individuals and entities to meet these requirements for the use

of legal structures like shell companies, trust and voting trust while legal the structures and intermediaries that help applicants establish them can also serve to hide the identity of the owner of the aircraft. if the owners are up to no good, investigators ability is complicated to win their when tr information is unavailable or obscured. weof highlight a number of cases in the 2020 report where hidden ownership is associated with trafficking, sanctions evasion, money laundering and other activities. for example in one case an individual under oath for narcotics trafficking used the front man to offer proceeds to register his aircraft with faa. the national assessment noted that increasingly traffickers use private airplanes to augment

commercial smuggling and the high-value assets useful for money-laundering and as a part of the trade based schemes. with these risks and the volume of aircraft involved, they have an important role managing and preventing these risks by verifying the information applicants submit and collecting relevant data to support law enforcement however in the 2020 report we found they rely on applicants and collect a minimal amount of information. for most of this includes two documents, the application with their name and address which is valid and a bill of sale for the aircraft for those using more complex structures to meet eligibility requirements, faa collects trust documents stored in the files at the time of the e review. according to registry officials the role is to record and

maintain publicly available information on aircraft registration. faa checks the form is completed and signed and relies on applicants self certification that the information provided is truthful and accurate but if you've heard one thing from gao and almost every hearing and reportd on pandemic fraud over the past four years it's that self certification is not a control. it's a tool for prosecution, not prevention. it shows they attested to do something when they signed. it's not a control to prevent people from lying editsts the wy faa continues to do business as a rubber stamp for every application that comes in and complete. according to registry officialsn enat the time it believed fraud was the responsibility of other organizations and this is simply not accurate. all programs are required to manage risk with a focus on prevention. in 2020 we made 15 recommendations to close these

critical gaps in information verification processes. they've taken action on three related to the risk assessment which is foundation to other changes however they have more work to do on the remaining recommendations to prevent exploitation of the u.s. civil aircraft criminal purposes. i appreciate the interest in this important topic and i look forward to your questions. >> chair whitehouse and other members of the caucus, thank you for holding this hearing. i'm here on behalf of the financial accountability corporate transparency coalition and i its more than 100 memberso discuss what is presented to americans. the networks expand states into andconfidence threatening public safety and national security. witnesses have raised how drug traffickers use anonymous

companies as financial getaway vehicles to pedal products, protect profits and harm average americans. these are not new or are they abstract. the use of not enough companies hasta consequences for our community. the evidence is damning in light of the epidemic. since oneno case involving a series of pain management clinics in florida and tennessee be filled out to the tune of $21 million. this criminal overprescribing and that's just one case among dozens where criminals have used the companies to enrich themselves while exacerbating the public health crisis. they've made to the u.s. the u.e to financial crimes and is the true man raised the treasury secretary janet yellen has said there is a good case but right now the best place to wander is the united states. the united states as a stable democracy and home to the

world's largest economy. this means united states doesn't just shield the worst actors. it promises them the protection of the rule of law and drug profiteers have taken notes both down the block and across the borders the operations large and small rely on anonymous companies. in 2023, 12 people were indicted in connection with the meth trafficking organization. the defendants located in the united states, mexico and canada wanted 16 million through the companies. the secrecy of forwarded proves vital for sustaining the drug cartels into the violence they inflict on our cities. we also see them use as a part of other crimes the drug traffickers commit including environmental crime. a national using the team moved billions of dollars of illegally sourced gold through the united states as a means to.

as raised by other witnesses, one is particularly striking. one individual and moved in the iranian fund through companies registered in the united states and elsewhere. decades of sanctions ended still moves through the united states. any u.s. sanctions policy pursued without parallel steps to close the anti-money laundering loopholes is at best with wishful thinking and worse, a farce. we need to correct of course. weeding the the corporate transparency act which marks the most significant. prior to this, the u.s. states required more information to get a library card of the invaded

the former u.s. legal entity. now law enforcement officers have new tools to follow the money. it's crucial the implementation of the corporate transparency act goes well and so far it largely has. first launching the database on january 1 and more than 1 million businesses filed information about their owner. a second according to a recent poll by the small business majority nearly 70% of businesses that already filed was easy. anecdotally businesses have reported that it takes less than 20 minutes to complete the form and filing is free unless there needs to be updated, they may never need to interact that means after nearly 20 years ofed deliberations, congress struck the right balance with the anbipartisan wall to keep the country end of the region safe while keeping the cost of business is low. congress passed the law but now it needs to fund its implementation. congress should meet the request

of $216 million for the upcoming fiscal year. beyond the transparency act the u.s. must apply anti-money laundering to third-party professionals. if the shale companies or the financial getaway vehicle, the so-called neighbors provided critical's that allows them tou. make their escape into the financial system. both of the administration and congress must act to prevent the circumnavigation of the law. thank you and i look forward to the question. >> let me start with where she ended which is dealing with enablers and if you don't mind me asking you each to describe the role of importance after getting after these white-collar

professional enablers in addition to protecting against the anonymized shell corporations. >> thank you for the question. very important talking about the encounters, financial advisors, persons, professionalso personsn positions of authority with respect to establishing trust and corporate entities and sometimes serving as fiduciaries these are the people that graced the system and that's why it's important to get to the top off the supply chain if you will. we talked about shutting down this influence. if we have people in these positionsso who are not accountable for the people that they are representing, that is the problem so we need to close the loophole as much as we need

to establish the ownership registry. without the gatekeepers piece of this and going through that after new legislation, we will not haverk filled all the gaps. >> amis i correct in concluding the professional gatekeeper proportion that you just described all operated by virtue of licenses? >> that's my understanding. >> said these are people with professional licenses. your role from the investigative side? >> throughout the years of supporting investigations, the so-called facilitators are the ones that allow the bad actors to reap their profits and continue their crimes. however the issue isn't just going after the facilitators, in

many ways the lawyers, the bankers, accountants and so forth only get a reduced sentence. there's no incentive for that person to cooperate and when we don't have incentives for those individuals to cooperate we can't get to the next level. if we can't get to the next level we can't get the bad actors. a lot of the backers don't go to jail. to get onene to cooperate the benefit would be widespread. >> you spoke to this in your testimony but is there anything you would like to add? >> ifi echo my colleagues. we spent a lot of time when we

talk about the drug trafficking focusing on chasing after the products but these are crimes of profit and we can tackle the problem to go after their pocketbook and so it is the role of many of these to facilitate other bad actors in bringing their money into the global financial centers including the united states. one example in particular from texas he was found guilty in 2,020 of $500,000 a month on behalf of the narcotics ring and opioid trafficking and in a conversation he said one of the dealers he's a thug he just got a law degree. some make this a matter of business so the act would do a

great job to make sure they are not caught up in something. we've talked a lot about the law enforcement public safety concerns. he's very expert in the area and there is overlap between the law enforcement and national security concerns and what you might call military diplomatic or non-law enforcement concerns. can i ask you each briefly because mymy time has run out to highlight a few of the national security concerns where important u.s. safety and diplomatic and strategic initiatives may be implicated? >> thank you for the question. i think the place to start on

this is recognizing the key enabler so when we are talking about challenges with the adversaries and other regimes, there is no better tool to align with so that's really good the connection point when we are talking about national security and the ability for the purposes of the line actors it's one way that it's a done that's one of the most important so this is criticalal when we think about w we push back against a state-sponsored corruption how do we push back against dictators and moving that money into western financial systems like ours. all of this points to the beneficial ownership question so there's no way to separate the national security interest from what we are talking about.

>> final thoughts. >> i would add a particular example from a diplomatic and military angle there is a case a few years back in which a u.s. entity was hired on by the department of defense and the same entity was related to folks in afghanistan, locals that were supplying weapons to the delavan directly putting those groups in danger so this presents a real and pressing national security threat. >> your team compared registry data to the state department major money launderingse country list and found 251 registrations with addresses located in these countries.de the team also compared the registry to the office of foreign asset records and found

six planes registered to entities subject to u.s. r sanctions. as the faa have access to the same records you used to conduct your analysis? >> faa does have access to that information for that kind of an analysis. it's public information and all citizens are required to comply with it. >> what did they tell you about its authority to sanction individuals and due diligence? >> they told us it does not have the authority to deny the sanctioned individuals or situations where an aircraft is

sanctioned. i will leave with her that's whs accurate or not to the lawyers but one of the things that does indicate is a significant red flag that it should be managing and as a result in close collaboration and communication with law enforcement about that, howw to be handling that particular issue and one of the things we also found there's two different registries and while they placed a flag for that sanctioned individual and owner registry, there is no communication and the intermediary that had established to the registration for the sanctioned individual who later sanctioned himself was also registered as a dealer and

because there is no connection he registered the aircraft for over a year as a dealer so was able to use and fly through a valid certificate because they were not able to connect the two data sources. >> if they were a private company registering and it failed, would it be in violation of the u.s. sanctioned law? >> it would. all citizens are required to comply and i would also add if the u.s. company or charging a five-dollar fee it would have long been out of business. >> i referred to the report that i released and it's about your

recommendations. to this day 12 of you recommended they are outstanding despite agreeing with them and in your experience have they been unusually slow or negligent acting on your recommendations? >> i will give them a little bit of grace we issued the reported recommendations and march but it has been three years since then andso they've only completed action on three. it's a good foundation. it's a start but there were many things that should not have taken as long as they have in orderon to implement. >> in your 2020 report, you noted that the faa identified a risk that terrorists may access

the registry. could you explain the access they have to the registry as well as the ability to register aircraft? >> one of the things we talk about in the report is the rubberstamp approach essentially to accepting registration. they collect limited amounts of registration and look to see that the application forum and bill of sale is present and the application is complete. they did not verify that information and in the review they didn't mention anything about checking of the watchlist for example toic identify whethr terrorists are seeking to register the aircraft but because of the approach they take essentially not requiring significant information and minimal verifications, i don't see how they could possibly know if they were registering

aircraft in the u.s.. >> so my last question i think you just answered and i will make it as a statement, your report is more or less saying that the faa hasn't taken any steps that deny access? >> i don't think they would know if they have or have not. >> senator grassley is interested in pursuing a second round and i just want to thank him for his work and look forward to working with him on grremedial legislation and our appreciation for all the support as we look at this problem and with that let me turn it back to senator grassley. >> i will have just two questions and ask for some answers in writing.

in 2020 the gao recommended that the faa create written agreements for information sharing with law enforcement. it's been four years and the faa still hasn't signed an agreement. why did you make the recommendation? >> we made the recommendation based on quite a few interviews that we had conducted with agents and the homeland security investigation, the trade transparency unit, drug enforcement agency and even the faa assisting you in it and in those discussions we heard over and over about the difficulty is that law enforcement has in identifying the ownership of aircraft associated with drug

trafficking cases and the difficulty they had with information that could support but also the difficulty in receiving that information from faa. one of the data points in particular relates to the declaration of international operations. they help expedite the registration for an aircraft so that the owner can take the aircraft out within three days and you would imagine when somebody registers in aircraft at the same time they file a declaration for international operation it presents a money laundering risk and investigators know this so these could be very valuable pieces of information if they were to receive them timely. it takes a lot of time to trace funds so they can issue organs and seizures, but faa provides them on an ad hoc basis

sometimes monthly, certainly after the point which the press has already left so that is one of the areas we recommended they do a better job of sharing daily information with law enforcement. i don't think it would require much because there's no barriers. doing that on a daily basis is one of the things we recommended and it's not clear why they haven't done that as of yet. >> it seems it's not a reasonable period of time. are you aware of any barriers into entering such agreements? >> not aware of any barriers. they didn't raise any, they shared them on an ad hoc basis.o one of the things we've also done is added the recommendations to the priority recommendation list so they get

enhanced attention. we do a biannual report focusing on a couple of special recommendations into some of these are among them. >> your question is for comparative purposes. you served 31 years i believe and collaborated with other agencies. on average, how long does it take to sign an information sharing agreement with other agencies? >> in a matter of months. >> did you say originally no more than a year? >> no more from what i recall. >> let me turn to the experience relatedre also to let me make a confession first. i said in my opening remarks that i felt there was more

effort against the narcotics empires, on the distributions audited than with respect to the supply chains were their finances into financiers and i will confessed that i've been guilty of that myself. i've done those investigations, i've made those cases and laid out the drugs on the table, even where we did the major money laundering case he was keeping assets and gold bars so it's similar to what you would consider a traditional case. i didn't see a lot to look at

the finance side of how these organizations operated in the dark economy. i know there's going to be a very rough number or comparison, but i would say it's probably 90% of the enforcement goes to the distribution element of these operations with 10% less per supply chain and finance. am i wrong about that, do you see that going up? is that an order of magnitude of that comports with your experience? how much room is there on the finance side? >> unfortunately, the financial drug investigations have gone down. it was pretty robust seizing at least a billion in drug cartel

proceeds off the streets and even going after banks. however it decreased dramatically. i know the financial operations used to have a division. now it's just a unit. our capability to go after from the street level to pharmacies, the dark web and internationally it's not as robust as it used to be or could be. >> relatedly we would see investigations that bump into money laundering aspects and dispositions of finances and the wesale of illicit products. you would see what the fbi runs into with all of this in a state police investigations might very wellna run into this. my sense is that there is not a

robust office for coordinating between agencies the various points in which criminal enterprises that the agencies are investigating touch on the dark money dark economy networks through which the finances tend to flow. is that your sense as well and do you think there is a heightened need for the interagency coordination around money laundering and the dark economy? >> absolutely. we tried that on numerous occasions going back to the 1990s where the dea using its title 21 narcotic authorities allowed for the maximum punishment when it comes to crimes and attempted to host the component of law enforcement including the intelligence community to identify the big players involved using all these

authorities for customs legacy and going after the financial underpinnings of these entities whether it's drugs or tax evasion, having that component like a special operations division and i had a component of that when i was at the special operations division. i can give you an example where we identified an organization purchasing drugs using income tax rejects and we determined there were $26 billion in fraud taking place using income tax refunds so having an entity working together in the same location like the special operations division can go a long way. >> where should it be housed?

>> it has over 32 somebody agencies. it's been there since 1992, housing intelligence community, law enforcement, defense department entities as well. >> it would be probably the most effective place that is right now because there's also prosecutors. >> on that coordination question if you care to add anything. >> not much to add. i would just emphasize particularly if we are talking about solving the narcotics challenge and connection to beneficial ownership and closing the financial loop i think part of the challenges that it takes too long to get to the bottom of

these financial transaction into following the money has been too difficult and time-consuming and the resources have to go somewhere and they may go more towards the interdiction spending the time so this reinforces why it is so critical also at the state and local level it becomes essential to solving the case as quickly and allowing for better interdiction sooner in the investigation process, so it's all related. that is the key and based on my experience when we were looking for the terrorist threat knowing how difficult it is to find the needle in the haystack we have a similar problem around the fentanyl challenge where most of the focus has been onat interdiction and it certainly needs to be there about being able to cut the financial

elements of the money laundering transaction and the role of chinese money launderers in the u.s. and how the funds are slowing potentially getting cooperation from china at some point would make a huge difference in terms of balancing out what we do on the interdiction side with the work that could stop the flow before it actually hits the border. >> i would add to this brings us back to the point elaine raised the need for beneficial ownership to be part of the investigative tool. one of the most important things is to make sure law enforcement know they have this tool in their toolbox so it can be used for their investigation. one thing i'm considering in addition is the cases are often transnational so we have to

think about how information can be shared and also who do we have in place in the region that can be supportive to making these kind of requests. we've looked at those around the environmental criminal issue and when it applies to narcotics considering putting the liaisons intimacies could be something to help facilitate this additional focus on the element rather than just the interdiction. >> well, thank you all. i think your work is in the best traditions and i would be supportingin senator grassley ad his efforts to pursue legislative remedies to solve this problem and i think him for his attention here. i will close with my customary observation that we are as the

famous author once proposed in a clash of civilizations, but i think that all forgot the boundaries of the clash just a bit wrong. ia see the boundaries between rule of law and subtopics and corruption and i think when you look at the national security dangers americans face, whether it be the invasion of ukraine made possible by corrupt leaders and oligarchs in russia, whether it's extremism in the middle east funded through secret channels, whether it's covert and cyber efforts by china to steal american intellectual property and interfere with american democratic processes or whether it's international

corruption in the various security dangers that that creates over and over and over again it all touches on a vibrant secret dark economy that will help whatever corrupt criminal or autocrat that comes to it with money. very often those are american and european rule of law white-collar professionals who for money are willing to aid and a bed the conduct of some of our most dangerous enemies and we really have to get to the bottom of it and understand it's a national security danger to the country it's not just some peripheral thing that happens in some strange foreign country we otherwise don't pay attention to

that maintains fake accounts and opaque corporations and all of that. it is a dark network that supports an enormous amount of dangerous behavior and it does it for money and we need to put a spotlight on to it because national security imperatives of the country demanded and i think the other three witnesses who are here all spoke to that and understand it and i want to thank you for your work and for your testimony today. with that, the hearing will be adjourned. do we need to hold their record open for any purpose? >> there will be questions for the record coming your way most likely. when they do, try to answer as quickly as possible, but for now the hearing is adjourned.

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from those early days the eyes of the world have continued to be on new york. a year ago this great

•-middle-dot history enterprise and creativity suffered at the gravest of cruelties and showed itself to be a place of valor and generosity and grace. here so many innocent lives were suddenly taken the world saw acts of kindness and heroism that will be remembered forever. >> next a conversation regarding europe's support for ukraine during its ongoing war with russia. former ambassador to ukraine john hurst and others discussed the possibility of ukraine joining nato as it delayed by congress to pass another package. this discussion was hosted by the atlantic council.