contract and it creates jobs, we also are coming together to borrow from each other's networks. so one of the big challenges we might have from local suppliers, this vendor doesn't know who we work with and so it helps in that regard. we're going to be building out a work force development pillar as well. another example of somethinganother example of something that i think is relevant to the conversation today is this new initiative at the university now it's called the urban labs which is a project that is focused op doing very rigorous evidence-based research to inform policy. it's building on the success that we had with the crime lab and which you know very well was -- studied this program becoming a man which got into issues of youth violence, tested a program that showed how being in the program reduced youth violent arrests by 44% and that program then got scaled by the mayor to 2000 young men, the president met with those young men and then went back and that helped to spawn the my brother's keeper

initiative. creating lab in crime, there's one in education, there's one in poverty, there's one in energy and the environment and there's one in health. they will do random miezed control trials studying these programs and work with cities to help scale them up. so it's a way in which we leverage what we do. those are just a couple of the ways, but there's a lot that i think anchors trying to do to be catalyst for change. aamy: michael there is a lot of interest from probably everyone in this room and around the country, what the administration is going to do in this moment so we will touch on that. let's start first with my brother's keeper. it's a little over a year in implementation. you really received a lot of

local commitments to action. explain to people in the room who may not be familiar with it, what's the approach for my brother's keeper, what's the result now a year in? michael: good morning. my brother's keeper is really what the heart of the obama administration is, which is making sure we are expanding opportunity for all americans. not only restoring economic prosperity. that's what my brother's keeper is all about. you know, derek talked about the president meeting with these young men and i think that was an impetus after the death of trayvon martin, i think many of you may remember the president surprising the press briefing corps and sharing his raw emotions and trying to explain some of the anger and angst the americans were feeling about a life tragically lost. he said there has to be something we can do about it, i don't have a big plan up my sleeve, but i'm going to put my teams together and see what happens.

and six months after the president going to the press corps, my brother's keeper was launched. it's about addressing these gaps that boys of color face and making sure all young people reach their potential. if you look at the data, latino , tribal, certain asian-american and pacific islander the data is staggering. starting at making sure they're in kindergarten, ready to learn. reading at grade level, where they're trailing behind their piers and it's an important indicator. the high school graduation rate, we were just applauding that america, we're now at over 80% graduation rate, you look at black and latino and tribal boys, you're still at about 50%. we had a group of folks from rochester that were in -- meeting with us recently. just about three years ago their graduation was was 9%. if you look at interaction with the criminal justice system,

shopping, homicide, where black boys, for instance are 6% of the population, but more than half of the nation's murder victims. unemployment rates, you realize we need to pause and say what's going on here. the president did three things. he created the my brother's keeper's task force, a task force made up of almost every single cabinet member. he gave them 90 days to come back with a strategy on a series of recommendations, and they did just that. we're focused on a college career strategy. we are looking at young people zero to 24. and six key milestones in their lives, where if we can make a difference there, it can have long term transformation. you've seen in the past year all sorts of new and expanded grant programs, new public private partnerships, anything from department of labor and 100 million dollar apprenticeship program, which is making sure we're looking at this population. the corporation for opportunity americorps or even guidance where i think many of you know

the statistics that we see, kids of color being suspended at extraordinarily high rates as early as prek, sometimes involving the law enforcement system. and when you used to kind of get put in the corner for that kind of thing, it's exciting to see what's happening on the policy side. on the play side, where my heart is, the president launched something called my brother's keeper community challenge, and it was really a way to say, hey, local communities, we know that real progress begins and ends with you, and this can't be something that we're talking about from the grassroots, many of you have been working on this anyway, we now have 227 mayors tribal leaders and county executives that have accepted the president's my brother's keeper community challenge. they're aligning with our strategy, and they've taken the president to town to say, we're going to pick the areas we're going to focus on. we're going to convene local stakeholders to own the challenges and opportunities in

our community. we're going to do an exhaustive policy stance to see what works and what doesn't work. we're going to release a local action plan to tell the community how we're going to address these persistent opportunity gaps. we're kind of toward the beginning of that 180 day period, philadelphia was the first city to release their local action plan, followed by indianapolis, boston. several others, but philadelphia just to give you an example. they're doing some really interesting things, they have a bold goal to reduce juvenile arrests by 50%. that's what you're seeing in many of these plans. they're going to do that through a diversion program. they have a program where they're trying to bring in literacy specialists, to work with the hardest, the highest need kids. in indianapolis, they're expanding the police athletic league, and they're also doing bias training for all of their police officers. and boston, they've expanded their street worker program,

getting more youth workers on the streets to work with young people that may be at risk for crime and violence. they've expanded the mayor's mentoring position where he's challenging the city to get involved. what's exciting is, you're seeing people be very serious about this, but also blang for -- planning for the long term to hopefully prevent not only address what's happening now, but prevent challenges in the future. and real serious bold goals. lastly, i'll say, the president really called the private sector to action, what we've seen since the launch of my brother's keeper is more than $500 million, and serious private sector commitments, most recently just a couple weeks, we were with the president at the bronx where something was launched called the my brother's keeper alliance. the former ceo is leading us -- ceo of thedeloitte is

heading this. they launched about $80 million to $100 million in commitments, to really get behind these communities, so that these plans can actually be implemented. you name it, jpmorgan chase, ubs. many many corporations who have gotten behind this work, there's some good momentum here, and the next stage is making sure that we implement and are really shining a spotlight on what's working and where we're going to have impact. amy: to build off that, i want to move to the next set of topics. i want to make sure we open up to questions in about 10 minutes. we're going to do one last round of questions here, start thinking about what you want to ask, and i want to invite those from the web cast to start sending your questions to the #. when we think about, there's a lot of excitement and momentum here, and a lot of energy by the leaders on this panel. we know the work is unfinished we know this is a long game. so as we think about what's next for the field, we have to build on what we've learned. i think there has been a lot of learning. now, whether there's a lot of institutional memory in that it's not clear, we want to make

sure we don't replicate mistakes. i'd say -- i want the three organizations that have been in existence for 20 years to sort of tell us what you've learned that we really need to -- we need to build on. as we go forward. i think for derek, i think it would be great to hear from your administration hat, and now being on the ground what you think scaling at the national level looks like given the reality on the ground. and i think michael, your work on social innovation on evidence -- impact investing, leveraging to sustain and scale, proven programs, i think that's where the dialogue is. what you're learning from that, that we need to continue to hold on to. let's just run through real quick.

joel: i think a lot's been learned since the neighborhood transformation. and part of it connects to what's being done in east baltimore as well and the oliver , neighborhood. the oliver neighborhood can succeed because just south of it you had john's hopkins hospital and -- which is the largest employer. and in a lot of the old industrial cities, you had eds and meds, and they are now the major employers. and have you to connect to the investment and employments that are going into those eds and meds. and east baltimore development initiative, which is where they were originally cited to be. but because of politics, it was elsewhere. and we worked with bill just as you're working with build and prf, which is community -- really basic organization, out of the community that holds politicians accountable.

but what's happening for ebdi which is tough and gone through some cycles, because it's absolutely right. the involvement of john's hopkins, the involvement of the president of john's hopkins, this is really to derek. and the buying power and everything that derek said is in effect as well as a new school that hopkins is knee deep. in essence, the economic development and the employment has to follow and has to be connected. and it's still really hard and difficult, you go through cycles and your investment's got to be patient for the longer term. and enterprises doing similar kinds of efforts to that, in fact in new orleans around laffit, with the charter school, and with employment, et cetera. and in other places that it's operating. the final thing i'll say is you need patient long term capital. and calvert social investment foundation is trying to tap this

longer term capital that can come in and be part of the effort. and that really gets to cdfi's and to others that have to be able to have 7 and 10 year money. a lot of people would like to see if they have safety, that their capital can go to rebuild their cities in a really constructive way. that's all in the works too. there's some positive lessons learned, positive things on the ground. the biggest issue that isn't being addressed in my estimation by the administration and everyone else is, do we have an intention al intentional jobs program that gets down to the ground, to this concentrated poverty that really reconcentrated after the great recession in a major way, and

really threatens our cities? you know, this was not as much a race issue? you have an african-american mayor, prosecutor, et cetera. it's a poverty issue. and there's real anger. and it isn't just in baltimore, it's all over in different areas of concentrated poverty. donald: we learned over the years that -- i think the biggest lesson is that if you simply stop and ask a young person what they would like to do for their community. they're going to have many, many ideas. and we need to listen. this is how you started many years ago, and i've seen a consistently in the 17 years i've been involved with these program program, when we bring people together, ask them what they would like to see happen in

their community, they have many, many ideas. i love the energy behind a lot of the research that's going into finding what works, i want to make sure that we don't become too fragmented and we focus on one approach. it's just mentoring or just internships. it really is about -- it's about the instruction, the twrang, the development, mentoring internships, service. it's -- because none of what the young people are experiencing result of many policies and practices and attitudes and behaviors, right? we have to look at a holistic approach that provides the skill as an individual, as a leader, and that also allows them to heal. this is a poverty issue, right? the poverty issues way back have a racial element. and we have to confront that at some point. i have many friends.

my fellow latino friends and african-american brothers who say racism doesn't exist, but they can all point to an example where they were treated differently, because of who they were i have many white friends who say, i'm not a racist, but little things we do, come from a history of racism. we have to acknowledge that and confront that. the impact it's had on poverty if we learned anything, all we have to do is ask. and engage them in decision making. they put a lot of resources behind youth policy input. they're engaged in policy decisions within the organization. we want to make sure that we are listening and that we're bringing other folks into the conversation.

you mentioned that -- this is an ivory tower. on the list of attendees, i saw someone registered as mom and -- let's bring everyone into the conversation. amy: i want to follow up, this issue about two jobs, leadership two jobs, at the end of the day people do want to end up with that other worth, you know, and we talked a little bit about this beforehand. when the recession hit construction stopped. how did youth build create demand, find demand, so that young people can get work ready experience and end up in a place of employment. what's the model there? joel: we had to look at what

other industries were in demand, and so many youth programs started looking at health careers, starting as a nurse's assistant. and going to community college and there's an rn program there. and pursuing this path. in some regions, there is a need for people of color, and retail management, we're looking at -- we're taking a look at where the need is, right? and it matches our model, that it's engaging young people to meet the needs of the community, to meet the needs of this country, and so what's been a great development is that through our federal funder, the department of labor, we now have something called construction plus. youth build started out building homes. and a construction program is a youth leadership program, we build homes, we're also looking at other high demand industries, we know we have the skill and talent. donald: i would say one thing i didn't emphasize as much in the

first question. we definitely learned that our work is more impactful when we connect well organized data, and well organized money to organized people. we can connect data and money to transactions all day long. some of those transactions are self-sustaining. connecting those resources to organized people, and listening to what they want to have happen, and then executing on what they want to have happen is a whole different tier of success. it's much more likely to have the longevity, be valued in the neighborhood. and it spawns unintentional positive effects. our building oliver with build was part and parcel of a series of successes which led to a grocery store organizes with build and community organizations somewhere else in the city. and led to the political success

of the credibility which helped them advocate for a billion dollar school rebuilding. these things are not completely detached. they do -- success builds upon success, especially when you're connected to organize communities. it is the hardest money in the world to get, organizing money. nobody really wants these people to have an organized voice. there's the risk of what will they say and ask for? silence is a lot easier to manage, just like politicians can manage decline quite well. they can manage silence quite well. giving voice is threatening, but it's really important. the other thing i'd say is, you know, there's this premise within the world of community development, the places where we work are broken markets. are disconnected from the regional economy or disconnected from any particular pipeline of opportunity or resource. take it a bit further and live there for a little while and try

to invest, one realizes you're not just in a broken market, there's the other kind of market. the other kind of market where the residents of these neighborhoods are an input to a false and upside down economy which is keeping them in poverty, an economy that is fueled by the status quo. we see this in payday lending, in high costs of food in particular neighborhoods. we see it in abusive landlords not maintaining quality of residencies, it perpetuates itself. and this builds up a level of cynicism of anger of residents in place. we're rescuing people from kind of this bad economy that is using them as fuel. you listen to the radio, we watch tv, we are the product right?

we all forget this. we are the product being sold to advertisers, in poorer neighborhoods, the residents are being sold into an economy which is a weight on their shoulders keeping them where they are, that's how i think community development has changed, we've begun to realize that. you said earlier the need for cross sector approaches. community development can't do this on its own. as we talk about jobs, we need to come together with the workforce system and the economic development pillar. different motivations, you know, jobs are jobs, but jobs for poor people. jobs with suburban pickup trucks coming into the city to take advantage of the new jobs, and then we have a new opportunity with public health where a whole different profession, and frankly another silo is coming to bear in our work, if we can bring together the new world of health care community benefits with the classic municipal

county silo, around economic development, with community development, that's where the big opportunity is. amy: you said something earlier about capitol, and you talk about the scissors and how that's important to make sure we have good leveraged investment before you move on to a different neighborhood based on data. what's the lesson around capital now? especially long-term sustaininging these investments , takes a while. give us some thoughts on that. donald: we raised particular capital for our work, as i'm sure enterprise did. we went out and raised 10 -- $10 million and that patient capital coming from a wide lens of civic and community stakeholders was important.

providing a channel where the broadest audience can be invested in your work, it is much more -- it leads to more success, and it mitigates the risks that you will bump into down the road. when you need six degrees of separation from access to the mayor or access to the solution. if all of your money comes from one federal agency and parachutes down, and you're not invested in a set of civic stakeholders, that's a challenge. they do that quite well in blending forms of capital, and sharing ownership over the transactions. amy: eric? eric: yeah, the -- that was reflecting on this panel, given that i was in the white house and now i have been working more

on the ground, what are the things that if i knew then would i know now would be different. >> tell me. eric sounds like you're on the : right track. one thing i think we do a lot in government, is that when you're on the ground, it becomes an issue, is that there's -- we need to do more doing and less planning. not to say planning is a problem, but if you go into these communities, they have 50 plans and every year some new group is coming to do a plan. the city is going to announce a new plan. and they feel that they're essentially planned all the time, with nothing ever happening, it actually is a negative from the community perspective, because it creates disillusionment, it makes people feel that if the new thing of what we're going to do, but nothing ever comes of it. and i think that sometimes -- not to say that we shouldn't be doing planning, but the balance needs to be maybe tilted a little bit, where you're starting to do things.

make an investment, whatever. >> applied research? act before you study and while you study. derek: that's one thing that i think is very important. the second thing that we did that sounds like you actually figured this out. we spent a lot of time focusing on the city to our urban policy strategy, trying to figure out how we can work with cities, give them ideas, give them resources. i don't think we did enough to get the institutions and resources in the ballgame. the reality is the cities are all broke, for the most part states are all -- at least our states are broke. most states are broke, the federal government is always struggling. and so if you don't get the private sector or cdfi's, universities who have resources. not just to invest, but to see that investing community is in their interest, it's good for the city, good for the economy you're not going to make things

happen, there's so many ideas, but there's no money to ever do the stuff. you have to bring those people more and more into the game. the last thing i would say is that we also focused a lot on the capacity of cities, but not nearly enough on the capacity in neighborhoods. and one of the clearest things i saw when i went to chicago is that you have some neighborhoods with strong leadership and strong capacity, they get all the money, all the resources every foundation wants to give to them. you have some neighborhoods that don't have any of that, and they get nothing. people want to give to places that they know can execute. you have whole neighborhoods and communities that are cut out. i think we should have, and i would encourage my brothers keeper and other initiatives to really focus on how you can build up the capacity and infrastructure in the community. so you have strong, well organized, well functioning strategic organizations that can

do stuff. and you can work through them to make things happen. amy: michael, i'm going to -- i'm sure you have a lot of lessons you want to give. i want you to talk about scale. i think the one thing that folks experiences of all the proactive things that were done under derek's leadership and all the other things is lots of pilots. you see a lot of programs that are funded one year, two year, one year in testing this, or only in a couple places, you walk into any city, there's five pilots on skills development and another set of pilots on youth. what -- the biggest question that everyone wants, how do you get to scale? i do think that's what the social innovation office has been trying to figure out, what do you -- how do you respond to that? and any other lessons you want to observe? michael so the social innovation

: fund is one of six tiered evidence programs across the obama administration like the i-3 program at the department of education. it is about proving, improving and scaling what works. in order to get to the conversation of scale, have you to talk about what works. as obsessed as we are in america with data, our fit bits and apple watches, and trip adviser and yelp, when it comes to organizations and initiatives that are supposed to be the spring boards and safety nets, we throw all of that out of the window, and we keep investing in them, because our grandparents started it, or it has a friendly member in the legislature. and when we have an economy where need is up, and since the great recession, philanthropic and government investment into the social service organizations is flat at best, we have to do something a little differently. one of the things we have to do is realize that good is not good enough, and we have to stop investing in organizations that are counting how many kids went through, and not counting real meaningful impact.

and so that's the first thing about scale. you have to uncrowd the field a little bit, and bet on winners. and often times, i've been in philanthropy and the private sector of government, we are making the decisions with our hearts and we're dolling a little money here and a little money here and we're not investing on the youth builds of the world that have real meaningful evidence of impact. and so that's what we tried to do or were doing at the social innovation fund. what we do is, and to your point, we give real money, we make grants to foundations between one and ten million dollars, they're five year grants which is another thing we don't like to do in philanthropy, realizing that this work is not overnight, five year grants, 1 to $10 million a year, the grant makers match that 1 to 1, and then they help us to find evidence based on profits across the country who --

>> the u.s. house is coming in and just moments for what is expected to be a brief pro forma session. we will continue with this discussion on community policing right after the house finishes up its pro forma session. the speaker pro tempore: the house will be in order. the chair lays before the house a communication from the speaker. the clerk: the speaker's room washington d.c., may 22, 2015. i hereby appoint the honorable steve womack to act as speaker pro tempore on this day. signed, john a. boehner, speaker of the house of representatives. the speaker pro tempore: the prayer will be offered by our chaplain, father conroy. chaplain conroy: let us pray.

gracious god, we give you thanks for giving us another day. you have blessed us with all good gifts and with thankful hearts we express our gratitude. in this moment of prayer, please grant to the members of this people's house as they meet with their respective constituents the gifts of wisdom and discernment that in their words and actions they will do justice, love with mercy and walk humbly with you. on this weekend especially, we remember those men and women who have given their lives in service to our country. bless them with everlasting peace and give consolation and peace to those who mourn them. may all that is done this day be for your greater honor and glory. amen. the speaker pro tempore: pursuant to section 5-a of house resolution 273, the journal of the last day's proceedings is approved. the pledge of allegiance will

be led by the gentleman from colorado, mr. polis. mr. polis: i pledge allegiance to the flag of the united states of america and to the republic for which it stands, one nation under god, indivisible, with liberty and justice for all. the speaker pro tempore: the chair lays before the house a communication. the clerk: the honorable the speaker, house of representatives, sir, pursuant to the permission granted in clause 2-h of rule 2 of the rules of the u.s. house of representatives, the clerk received the following message from the secretary of the senate on may 22, 2015, at 9:12 a.m. that the senate passed without amendment h.r. 1690, appointments, board of visitors of the u.s. coast guard academy, commission on care, congressional award board, board of visitors at the u.s. military academy, board of

regents of the smithsonian institution, board of visitors at the u.s. air force academy. board of visitors at the u.s. naval academy. signed sincerely, karen l. haas. the speaker pro tempore: the chair lays before the house a communication. the clerk: the honorable the speaker, house of representatives, sir pursuant to the permission granted in clause 2-h of rule 2 of the rules of the u.s. house of representatives, the clerk received the following message from the secretary of the senate on may 22 2015, at 9:43 a.m. that the senate passed senate 261, senate 612, senate 501. signed sincerely, karen l. haas. the speaker pro tempore: pursuant to section 5-b of house resolution 273, the house stands adjourned until 3:00 p.m. on tuesda

>> the house wrapping up its work for the week and month. the house will not be in session next week as members head home for a week long district work period. we now return to a program hosted by the brookings institution. bella i do not know is that system is relevant. they may discourage that process. it was about bankers. there are policy recommendations that have been studied in a couple places through the foreclosure processes. >> let me go to the second question on lead poisoning. you are absolutely right. there was a survey of prisons, and a lot of prisons had

elevated levels of a tremendous amount positive. there's another unit in fact based in baltimore that's working around the country on green and healthy housing initiatives that's doing terrific work on that, and in factual find it doesn't solve for those older cases, but you'll see that the incidents of lead poisoning is way down. it is not perfect, but from where was before. so that's one of the things we're really positive progress is being made. that model is being shared across the country to get at this issue this is an elemental issue of led poisoning. amy: talk about the role of

adults. joel: another example of how our communities are economically cannibalizing their citizens. something that has come up a lot. young people are coming to our programs and they're reaching adults, why are they already in debt? because energy costs are so high, keeping the home warm and the lights on and paying rent and feeding your children gets to a point where it gets cut off in mom and dad's name. it's being turned on in one of the children's names, by the time they turn 18 it's time for them to establish credit and be an adult, they cannot they're having to repair that and this is way more common than you would think. it's something that we need to think about. it's another layer of caring adults. nothing new that we try to implement is going to work if

the young people don't believe that we care about them i always think about the fact that when they refer themselves to me, my mentor, my case manager, my friend. i thought the impact of the loving and caring adults. i realize how important it issed , and the day i started referring to them as my young people. many graduates, my friends, my brothers. it's important we see this as something that's not detached from us, but something that's connected to our collective well being. we have to have the courage to care, engage, to value their diversity of experience and let them know that we care about

them. that is why we are doing this. amy: we will ask everyone to keep their questions tight. >> good morning, thank you very much i lived in baltimore with friends on an offer almost a year. i saw the whole city. for the thing think -- think tank people in the room and the people up here, first of all, i would suggest that you know how much a quart of milk costs in some of these neighborhoods and how far you need to go to get it. and the expiration date and maybe a couple other products. and rent. because there's this concept out there that people who live in poverty can live cheap. and in my experience particularly in baltimore if you're poor and in a predominantly black neighborhood

that your access to milk is going to have a low expiration date and it's going to be expensive, because 7-eleven and cvs are your grocery stores. i would like you to respond to the needs for people to understand that living in poverty is not cheap living. >> i work at executive intelligence review. i'm a resident of baltimore for over 40 years. my heart eight when i saw the retirement homes burning that night. i think mr. harvey hit the nail on the head. these kids don't see a future.

former congressman mfume put it correctly. he said, the conditions are so bad in this area, it doesn't take much to set them off. even though baltimore does not have the same profile, it does have an economic problem. i fought for reindustrialization of baltimore. we had a port. we are capable of developing these communities. we need a national credit program like franklin roosevelt had. former governor o'malley is building jobs, building the city . i think we have to answer the question. without a national program, can we fix the rage and despair.

amy: this is a question from twitter. >> the woman's name is christina, and she would like to hear the panelist's thoughts on how to grow baltimore. donald: we were able to perform for the state of maryland, identify the food deserts with grade specificity to the degree to which food dollars are migrate ing identify those neighborhoods. we have financed two or three grocery stores in baltimore and there needs to be a lot more.

derek: on the point that it's expensive to be poor. at least in chicago, there's a transportation issue. a lot don't have the access to public transportation. they have to travel further to get to their jobs and what not. it's another component of the cost that poor folks face, that people don't often think about. i think that the food doesn't -- i know the city they're trying to focus on the issue. we just found out we're going to get the obama presidential library. the hope is that will bring some investments into the community that we haven't had in a while. amy: just do one, and then -- answer that, and we'll go to other questions. michael: validating your point on transportation. and second fox and the

department of transportation. they're a part of the task force. we are seeing communities use tiger grants on making sure there are better transportation routes, there are neighborhoods where there used to be jobs and the same neighborhoods where you have folks from low income backgrounds. people are having to commute longer. it spans that gap where kids are home alone for hours. we're seeing communities try to tackle and address. amy: on the school's piece, i know both trf and bart talked about reforming and building charter schools in the neighborhoods you're working. are those higher performing in these functions.

donald: we need a whole lot more than just charter schools. the henderson hopkin school, that's a contract school. it sits in between a conventional public school and a charter school. it took a lot of public and private resources to lift that off the ground. you know, the bond issue that has since come out around rebuilding and refurbishing schools, is essential money. it had to be state money baltimore couldn't have afforded that. it is also around alternative models. >> we took public schools and

had an agreement with the mayor as to what could and couldn't be done. moved the needle and we took the teachers invested in them and in the principles showed them exams, brought them back in we ran afoul of the union transferring out our principles. they both quit. it was 24-7. there are lots of issues, lots of experimentation going on right now, and you see it in new york, you see it in other places. and new orleans is the biggest example, they just blew everything up and started over again. there is hope there. it's not easy and the final thing i'll say on this, we watched our k through 8 go into a high school that we couldn't control. and we lost a lot of that

investment, because they had been in a nurturing environment and ended up in something that was out of control. we had to go to alternative schools. it's a hard long term continuum you're dealing with. to the jobs issue, real quickly. i often have thought that there has to be if you take a real lead in infrastructure, if you do that you hopefully can do something that may not be the most efficient but that is the most effective for getting people to apprentice and work and be able to be part of a program that is not shovel ready, but is longer term, that is aimed at integrating jobs that go all the way down to our cities. the problem with jobs training that we ran across was people

got trained and there wasn't a job. read jennifer's report, it's terrific on this. she has done a report on how to connect with baltimore. it's a terrific report she does. amy: we're going to have time for three more questions. we're going to go with sandy, i think this gentleman has had his hand up. you have also had your hand up for a wild. let's do these three. ma'am, you can have your question, and i want to keep your questions tight. >> what are two or three game changers that business can initiate at the local level and national businesses that would

actually have a major dent in the problem? i'm thinking in chicago of the internal revolution that whole foods is going through to change its business model to enter englewood. and any like that. >> looking at the intersection regarding jobs on where -- we work in the america's on the same issues, i'm also chairman of the board of a company in essex, maryland that hires 153 youth. it's called tessie mae's. we're working with whole foods on the food desert issue. the issue is the reform of the penal system. what it does to create fear. isolation and lack of trust. we talk about the connectivity issue that we need, but they're

always disconnected. they all have resources. they all have felony offenses. my son says, dad, the first thing is, lower your risk, these are termed high risk youth, why would you take this risk. you have to, who's working on penal reform? amy: let's hold, i think there's a lot of comments to that question. i think this gentleman in the back, and then we're going to take one more. >> two quick questions. the connection between nutrition and community development. my wife works at hhs and she's been hammering on me about this connection for the last five years. i didn't hear any discussion of urban community gardens, we're working in pittsburgh with a group of community gardens. kids not only grow their own food, but sell their own food.

they learn business skills. the second issue is a leadership issue. pittsburgh where i do a lot of work has a program modelled after the harlem children's village, and as i said to the director, these kids, if you get them to graduate from high school and get them into college, when they graduate, they're not coming back to homewood and hazelwood and some of these other communities. how do we keep the leadership, young leadership in those communities? amy: ma'am? >> i'm debbie goldberg. we had a lot of conversation about jobs and income, we haven't talked about wealth. there's a huge wealth gap in this country. i saw some research recently that a college graduate, african-american college

graduate has less wealth on average than a white high school dropout. that was the gist of it. we have decades worth of government policies that have helped to create this wealth gap, it's the gap that needs to be changed to promote future prosperity, economic security. and how do we get over this huge gap? a lot of this conversation has been on systemic issues, which is important, but is hard to connect back to the new zip code. it doesn't necessarily seem like it might fit into this conversation, but it's trying to connect some of these different structures and these different systems and streams of work at the neighborhood level. and i guess i'm interested in whether you have thoughts on how this regulation may be a tool to address these problems at the neighborhood level. amy: let me remind you of the topics. business models, criminal justice reform.

criminal records of these young adults. healthy foods and farming. leadership retention. wealth gap, housing, stickiness to neighborhoods. if you all can take two at the most to address those. then we will wrap up. joel: i would like to speak to criminal justice. i'll give you the experience working on the program. 50% of the people i was working with were involved in the criminal justice system. everything from being on probation, misdemeanor to felony offenses. where the policies, where the federal and state laws said they couldn't be deployed, it was really hard to work around. we are aware of this, bringing awareness to our young people, to our programs. we convene a group of amazing dynamic leaders, a number of groups, internal. a national group of young

leaders that are graduates of 11 other national youth development organizations, like city era like national gateway to college . and they put together a set of recommendations, and i'm kicking myself in the head right now for not bringing a copy with me. it's the national council of young leaders recommendation for decreasing poverty in america. amongst the recommendations there are recommendations around criminal justice reform, these are coming from young people from a cross sector group, not just from youth, but from young people who are coming from all communities, have been -- they're current and former opportunity youth. they're saying, here's what needs to be done. i highly recommend that everyone google the national counsel and the recommendations to increase opportunity and decrease poverty

in america. >> just to add on to that. winchester has a prison u connection. it has a large number of ex-offenders and we ran into one problem after -- they're an automatic exclude as you know, by maryland law. we had to go all the way back into the parole and prison system, et cetera, to try to find a job, and mentor on that very expensive, very long term it was one of our biggest issues, it remains a huge issue. getting it changed, which we attempted for many years, is very difficult. because it's a sound bite for a new politician. derek i would jump on two quick : issues, on the crime when i do want to say that there's another issue that's prevalent. i didn't know that much about

it, you all made. the cook county president, she was an alderman in the city of chicago for 20 years. when she got there she looked at the data and it showed that 80% of the people in jail had not been convicted. they were awaiting trial. she said, you have a huge number of people sitting there, maybe they did it, maybe they didn't do it, but they don't -- they can't afford the bond, they can't pay to get out, those who have resources, they don't sit in jail. she's taken policies, working with the court system, with the state attorney to try to reduce the number of people who are awaiting trial sitting in jail where it's very costly. >> [indiscernible]

derek: yes, these are county jails. on the game changer, obviously whole foods coming into englewood. englewood is one of the most challenge communities in the city of chicago. that has been a game changer. it spawned and catalyzed a lot of other investments coming in as whole foods often does. another game changer is one i talked about earlier is that coalition of large institutions we form in chicago, now invested in the neighborhood. we haven't got there yet, but we talked to some folks in cleveland and a couple at university circle or whatever they call it, they create a partnership with baxter, they got baxter to build a major facility, in a distressed neighborhood which had a physical presence creating a couple hundred jobs, and the way they got him to do it, they guaranteed him a long term contract when you can get that kind of collective -- we're talking about billions of

dollars we spend. you can get that and use that influence on the people that serve us, i think it has game changing potential. amy: michael, jump in on this point. michael i think we have to : realize there's an economic imperative here. i think there's something like 6 million kids who are disconnected from a society that is based on reduction and consumption. we can't have that. a couple game changing things that we're seeing, second chances, the mistakes of your youth should not be limited for the rest of your life. one thing that we're seeing around the country, this idea of banning the box. almost every single job where you have to fill out an application, you have to check that box, whether or not you've been arrested or had a felony conviction, there are 65 million americans that would have to check that box. data shows that there's really no difference for some of these

jobs what we're seeing across the country is companies like walmart are getting rid of that box so they bring these folks in. interview them, see if there's a skill set before they get to this kind of background check and see what's happening. the other idea is, we have to hire them, you're seeing organizations like jp morgan chase, making this a core part of their practice. they're bringing in kids from their sophomore years and training them and giving them mentors, they're following with them, working with them. getting them back for summer experiences, so they're preparing the workforce of the future. there's going to have to be a little more on forgiveness, but also an affirmative action oriented effort to make sure we're hiring these young people and giving them the skills that they may not have learned to make sure they're going to be a

part of our workforce. amy: i wants you to jump in on wealth gaps or any other topics. donald the wealth question pops : up. and then the income question , pops up. i'm not going to criticize the two dimensional picture. we're talking about policies in the needle. in a snapshot, and also in a time series. there are these programs programmatic limits, which prohibit wealth accumulation by not activating the market, not letting neighbors share in the appreciation. a project may build wealth for a household if the rent is affordable. it won't build wealth in a spillover effect because it never participates in a marketplace. there are a number of policies

there are a number of policies to change around well. no one helps us be longitudinal in our work. it is a challenge. i will go back to sandy on one. somebody that takes it upon themselves by standing up and being there. >> it is about creating the jobs but also the trading and development. we provide the marie stood training in starbucks. they now have the skills to work and move up. the great benefits of working at our starbucks is college reimbursement.

we have committed to hiring 10,000 a year. walmart is providing funding to programs working on health career exposure and training. these programs are around a focused career. it is about investing in the training and development prepare these young people for jobs. amy: we knew we could not boiled entire issue of poverty into a two-hour session but i think what you heard was a lot of energy and commitment and leadership in communities around the country. please join me in thanking our leaders for a dynamic discussion. [applause] thank you for joining us and please have a great day.

>> the book festivals will be covering this spring on c-span two. we closeout me at book expo america in new york city where the public and industry gives us an upcoming look. we are like for the chicago tribune lit fest including our three-hour in-depth program with lawrence wright and your phone calls. that is this spring on c-span twos book tv. >> yesterday, the health financial services committee held a hearing on combating the financing of terrorist groups specifically isis and iran known as a state-sponsored

terrorism. witnesses give recommendations for targeting organized crime and cutting off sources of terrorism financing including illicit oil sales, money laundering, and drug trafficking. mr. fitzpatrick: the chance force terrorism financing combat will come to order. the task force is dangerous nexus terrorism crime and corruption. the chairs authorized to declare recess of the task force at any time. and those that would have five legislative days for materials to the chair. without objection the members of the full committee may participate in the day's hearing for the purpose of making an open statement and questioning the witness. the chair now recognizes himself for three minutes for an opening statement.

i like to thank the ranking members for those in establishing and reaffirming the committee's commitment to using the role of the threat of terrorism as well as colleagues here today that will work tone -- to ensure the success. in the last hearing that demonstrated the scope of terrorism arm the world and evolved in the face avenue strong american response. the united states has seen some success in shutting the groups out of the international financial system, like squeezing a balloon, this is lent itself to the creation of more sophisticated and diverse fudged -- funding avenues for these terrorist organizations. groups have become entwined with the trans-national syndicates and involving into the role themselves and engaging in criminal activities that yield more profits and relying on the state sponsorship and great pocket donors. these activities range from

corruption drug trafficking, human smuggling and extortion. place the methods on top of the other nontraditional means discussed in the last hearing and it is easy to see the terrorist organizations are better financed than predecessor as decade ago. the day's terrorist groups and transnational criminals syndicates thrive in insecure regions of the world and the terror organization left side contribute to the regional instability and internal conflict well organized crime exploits environment force financial gain and corruptive influence. to witness the impact of the dangerous union, the united states has to simply look to the tri border area this. -- area. this is a relatively lawless region along the fronties of argentina, brazil. paraguay. and it has become a base for hezbollah's illicit activities to fund terrorist operations in the middle east and around the world. hizbollah has engaged in several

activities mention and though through them has succeeded in raising a substantial amount of money to bankroll their actions. in fact according to the 2009 rand corporation reports, had hizbollah has netted around $20,000,000 a year in this area alone. it is this type of connection that the intersection between terrorism, crime and corruption that the day's hearing will focus on including current techniques that are used by the groups effectiveness of the , current u.s. policy and combating them and where the , tactics will be improved. groups like hizbollah, and islamic state and boko haram to no longer simply be considered terrorist groups they have , evolved into suffocated global criminal conglomerates and in order to combat such a volume -- volatile threats the u.s. , policy will evolve as well. that is the purpose for the formation of the bipartisan task force. this is my hope that the day's dialogue with the diverse group of members and the expert panel of the witnesses joining us

leads us the better understanding of the challenges facing us and shapes our discussion of long-term solutions moving forward. this time, i would like to recognize the task force as ranking member and my colleague mr. lynch from massachusetts. mr. lynch: thank you, mr. chairman. i want to thank the chairman and miss water force their work on this as well as their own and vice chairman. and of course our panelist this , is morning. thank you for helping the committee for the work. the day's task force on the terrorism finance hearing will examine the dangerous nexus with terrorism, crime and corruption. and hearing is particularly timely, and the director of the national intelligence james clapper identified terrorism and trans-national organized crime as among the top eight global threats to u.s. national security when he testified this past february for the u.s. senate committee of armed services.

according to director clapper. the transe national criminal groups thrive in the highly insecure regions of the world where terrorist groups that contribute to instability and conflict. while trans-national organized crime groups exploit the environments for financial gain and corruptive influence. and one example of this can be found in venezuela. earlier this week the "wall street journal" reported that the u.s. drug enforcement agency and u.s. prosecutors in new york and miami are investigating the multiple many high level venezuela officials including venezuela's national assembly president on suspicion that they may have turned the country into a global hub of cocaine, and trafficking and money-laundering. the investigation is the response to the explosion of the drug trafficking in that oil rich country. u.s. officials say. and i bring up the example of venezuela. douglas has prepared remarks for the day's hearing to discuss how a block of countries will operate jointly as a political project with the under lying

goal of harming the united states and as a joint criminal enterprise. the countries are creating a -- alliances across the globe including with terrorist organizations like hizbollah and the drug trade seems to be a huge source of the revenue propelling this. the u.s. department of treasury's asset control sank shonled the corrupt venezuela government officials pursuant to the kingpin designation act. for acting for and on behalf of the revolutionary armed forces of columbia. and that is the narco terrorist organization that is often a direct supporter of the narcotics and arms trafficking activities. this nexus may not only play out in venezuela but another part of the world. and reported by the state department april 2014, the

tri-border region of south america is reflectivive the interrelationship of criminal activity terrorism and , financing. according to the report, the tri-border area of argentine ark brazil and paraguay continued to be an important regional nexus of arms and narcotics and human trafficking, counterfeiting, pirated goods, and money laundering. social for terrorist organizations. i hope that the hearing will shed light on the pervasive nests threats, that i look forward to hearing for witnesses so that we can exam initial the issues and potential solutions further. i thank you for your courtesy. i yield to the balance of my time. mr. fitzpatrick: i would like to rob the committee remember thank you, thank you. mr. pittenger: thank you. for the leadership and the vision and the task force for ranking members.

this would be very important and meaningful hearing. understanding the link between terrorism and crime is a vital step towards understanding the efforts to deter the terrorism financing. how are terrorists working with drug lords and what are the benefits? how they are working with the trans-national criminals to move through the financial system? should we be preparing for, for today. and the bigger question is what are we going to do to stop it? there are strong concerns that we do not have the capabilities in the intelligence and effective in the goals. i also have concerns about the current effects of the intergovernmental cooperation of

the flow of money to terrorists. and i look forward to hearing from the witnesses on the issues and continuing a task force to counterterrorism financialing. thank you, mr. chairman. i yield back. ms. waters: thank you very much. mr. chairman. i applaud the bipartisan efforts surrounding the task force and they will serve well to guard against key threats to the national security. today the task force will explore the dangerous new trends. the growing convergence of terrorism and crime. as terrorist organizations motivated and criminal enterprises generally by greed have been thought to operate from the testimony from witnesses for the day. this is no longer the normal. criminal groups means that the illicit networks are seen as a local resource concern and now

have global security implications. a limited approach is necessary to tackle these issues effectively. i am hopeful that this task force can serve as a catalyst action on these issues. i yield back the balance of my time. mr. fitzpatrick: arkansas for one minute. mr. hill: i am honored to be apart of the task force, and the thanks to the leadership for the national profit number one. how they interact with foreign terrorist organizations and driven by the ideology. when you combine them you have toxic soup. squary examples as note this had

morning of the relationship of criminal activity and terrorist organizations and interact throughout the world. i am looking forward to the morning with the fine panel of witnesses to learning more about that and finding out how we can interject that process and stop it. i appreciate it. i yield back. thank you. mr. fitzpatrick: the chair will recognize the woman from arizona. for one minute. ms. sinema: terrorist networks have developed new ways for deadly operations and to threaten america. and terrorists leverage criminal network to keep the country safe to be a step ahead of them cutting funding off and stopping their efforts. the islamic state is one of the most well financed terrorist groups. in 2014 they generated a million dollars per day predominantly through the sale of smuggled oil . that is why recently there is an amendment that is was accent

today direct the secretary of defense and coordination with the secretary of state and the sectretary of the treasury to pursue efforts to shut down isa's oil revenues. raising the possibility that they will destroy or sell priceless artifacts to fund militant violence. i look forward to my colleagues on both sides of the aisle to find solution that's will strengthen america's security. i yield back. mr. fitzpatrick: we now welcome our witnesses selena who is professor of practice at the william jay perry center for hells fear defense studies in the national defense study. and professional is a former u.s. dip machlt and international bank we are goldman sachs. and u.s. foreign policy adviser under the clinton and the bush administration. and professor of international security affairs. in the national defense georgetown.

george washington. and joint special operations universities. as the state department director of counterterrorism finance programs, professor realio managed a foreign assistance program to safeguard against terrorist financing. the professor is a graduate of the harvard business school. john hopkins of advanced studies and georgetown university school of foreign service. dr. david asher is a junction senior fellow for the center of the new american security and serves on the board of advisers of the center on sanctions and finance in the defensive democracy. over the last decade, he has devised a leadership of centcom and dea. dr. asher conceived up and the -- and spearheaded several of the most high profile and money

laundering events in history. asher organized and ran to noekt national security council and department of state. he received his doctorate in international relations from the university of oxford. richard barrett is a senior vice president of the group and fellow in the new american foundation in washington. royal united services for london and the center for research and security studies of islamabad. he served as the coordinator of the al qaeda and taliban monitoring team in the united nations in new york. in 2005 he helped to establish what became the united nations counterterrorism implementation task force following the adoption by the general assembly of the global strategy to counterterrorism for 2006. before joining the united nations he worked for the british government both at home and overseas.

douglas fairrah is currently president of the llc. he is senior nonresident associate in the center of the strat egyptic and interest national studies. he works as a consultant and subject matter expert on security manages in latin america. two decades before, he worked as a foreign correspondent and investigative reporter for the "washington post" covering the civil wars and central america. the witnesses will be recognized for five minutes to give the oral presentation of their testimony. without objection the witnesses written statements will be made apart of the record and

following their oral remarks. when they finish their testimony each of the task force will have five minutes of which they can ask their questions. the microphone we are told is sensitive. please make sure you are speaking into it. professor you are now recognized , for five minutes. we thank you for your attention here. prof. realuyo: thank you members of the task force for the opportunity to appear before you today to testify on the dangerous nexus of the terrorism crime and corruption that threatens the u.s. national security at home and abroad. the illicit networks of terrorists, criminals, and their facilitators actively capitalize the weak governments and corrupt security.

i will propose specific measures to further leverage our financial and national power to combat terrorism, crime, and corruption. illicit actors require critical enablers to realize their political objectives. they need leadership personnel illicit activities, logistics, communication, weapons technology corruption, and financing. financing is the most vinyl -- vital enabler. following the money trail is instrumental to dismantle these networks. public designations and

sanctions and capacity building programs. as a result of the efforts the al-qaeda operatives complained about the lack of funding for terrorist operations in the mexican cartels relet they could no longer launder easily. and measures to combat the terrorism and crime have unexpectedly rooted out corruption at the highest level of government. terrorism crime and corruption have existed since the dawn of time and have gone global with records of profits and violence. in many cases terrorist and gangs are better armed and funded than the government services and security force that's are 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 to have one interest purpose or goal. certain groups are demonstrating a hybrid terror crime behavior like the network of afghanistan. the farc in colombia. and isil. all eyes are with isis and brutal beheadings and advances.

and an example of convergence with its ambitions and profit seeking criminal activity. i still requires significant financing to relies their agenda and is considered the richest terrorist group in the world. it derives much of its income from illegal oil sales with additional funding from extortion, kidnapping come and human trafficking and some donations. one of the nine efforts of the u.s. strategies is to disrupt finances. it is focused on the destruction of revenue streams and financial systems and targeting the leaders and fascilitators with sanctions. on the military front, operations include airstrikes in syria and iraq. and as of may 8th. 1 52 tarring vets been damaged or destroyed according to the

u.s. central command. u.s. special forces conducted a daring raid against the senior leader in the chief financial officer of ice ill. that illustrates the growing importance of the isis finances and how valuable intelligence collected in the target site could be to attack the networks. to counter we will further leverage that international power and i propose a five following measures. number one, increase the resources to the government agencies to having and prosecute terrorism, crime and corruption. and number two, retain the afghan threat financial cell and establish new ones to target and remove threats like isis. number three, four nate all entities across agencies. number dedicate a percentage of four, the fines from sanctions and money lawnering to directly support the counter threat financial programs. lastly to promote the public

private partnership to empower the private sector to serve as eyes and ears to protect financial crimes. -- detect crimes. we have to understand our number that's confront us and denying access to enablers and the flow of funding to groups like isis. only through comprehensive interagency and international activities can we effectively combat crime and corruption in the world. it is a critical tool we have to take advantage of. thank you for your time and attention. mr. fitzpatrick: you are now recognized for five minutes. dr. asher: thank you for caring about this issue. this is a very important issue. money is the sinew of war.

we are in war against terrorists around the world. i want to highlight the experience i have had. i have been involved working in terrorism and financing and doing financial operations with drug cartels and governments weapons proliferation experts. in two dozen seven to my started to advise the drug enforcement administration that despite is an awesome organization and has done incredible well above and beyond. i have not seen a case where the united states itself has become the largest money laundering for terrorism in the world. and the lebanese canadian bank , a bank under the command and control of hizbollah and element within hezbollah is tied to terrorism.

the jihad organization attacked our embassy twice in the 1980s and killed hundreds of americans. that organization is the internal security organization to control the security apparatus and that reaches into the united states of america itself. to garner profit and engage in influence, they engaging in something that we would have the criminal resistance. they have used the $808 billion lebanese banking system. the third largest offshore center for dollars in the world i believe. as a center point for the global monitoring -- money laundering empire. the united states has dozens of banks with the correspondent relationships with lebanon. the fastest growing bank and lebanon until three years ago was called the lebanese canadian bank. that bank was under the control of hezbollah.

the dea was able to use undercover informants and use sources to penetrate these forces. this bank was engaged in buying primarily, used cars. in the u.s. and europe and textiles of asia as part of the massive money lawnering scheme along with the outfit that pablo escobar himself set up in the 1980's and 1990's to run the drug cartel. is all in opec treasury department document to find on the web. they were buying as much as $1 billion a year in used cars in the united states. cars that were generating almost no profits actually. exported the cars to west africa where the money was co-mingled with the trafficking proceeds coming out of europe.

the drugs were coming from columbia into europe and the money was being care your back to lebanon and wired to the u.s. by used cars here. and making its way into the lebanese canadian bank, the center of the hizbollah money laundering empire. it is the largest material supports scheme in the world and it remains so for a terrorist group. in 2020 -- 2010 they began to construct the take down strategy that i helped to devise on. i will not get into the details. we organized the lebanese canadian bank. the patriot act that cut off the united states. they blew up the bank. bankrupt in three weeks. thank you very much. we designated the drug kingpin from the drug cartel that was in the center of the thing in virginia for lawnering for a billion dollars a year.

he is indicted for his relationship with the lebanese canadian bank as well. we went after the car parks in west africa and designated those. and never did that before. so it was a huge success. i'm her to tell you that today unfortunately, there are more cars being expedited to west african carparks controlled by haslett than there were when we made the designation in 2011. our policy is a great success of interagency cooperation. i feel very proud with the bush administration and this administration has done to try to make a dent of this. unfortunately it did not succeed. we want to discuss the measure that's will help to advance that success. thank you. mr. fitzpatrick: thank you.

mr. barrett, you are recognized for five minutes. can you turn your microphone on please? mr. barrett: thank you chairman. 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. and is reasonable to assume that for the less money that the terrorist group has available, the less aid there will be to mount an attack. and if it does so limited finances will result in limited impact. terrorism is a semester by nature and in all its suspects financially. and and a cheap attack and

devastating impact. for example, the last al qaeda attack of the western country occurred in my country. four individuals associated with al qaeda blew themselves up on the public transport system in london. they killed 52 people. the official inquiry estimated it would cost less than 8,000 pounds. the group appears to have raised the necessary cash. he had a reasonable credit rating, multiple bank accounts.

he defaulted on his personal loan repayments. so very difficult to detect. despite the the low costs and the financial activities associated with it, it had a devastating impact of the united kingdom and beyond the cost of the u.k. it was estimated at 2 billion pounds in the rest of 2005 alone. the cost of the official inquiry itself was at 4.5 million. even the unsuccessful attack. that can have a huge impact and think of the costs that originated in the united kingdom. the 2006 plot to blow up airlines traveling to north america. the additional security checks imposed as a result costs billions of dollars. the point that i am trying to

make is that terrorism is not have to be expensive to be effective in the primary objective to make people afraid or force governmentes to react. the second point is that terrorists will fund operations through legal means and illegal means. and legal means may include the donations or the self financing of the london bombings. legal means that may include income of traditional means by terrorist groups to control taxing incomes and selling natural resources and so on. whereas legal means of course may include kidnap for ransom and other things we have heard about. it is my belief that though terrorists have few qualms about how to raise money, they have no preferred means. they do what ever is easiest and most effective them. will raise the money according to opportunity aiming all the , while of course to minimize effort and risk while maximizing a return.

and it complicates the terrorism as the money used is not criminally tainted before it collected. increasingly, they attract to less common areas of the world where they can control territory. these areas are ones that criminals use for their own sipments drugs and other contraband and things like that. to this extent, they've established a close relationship with crime and criminal gang. in my view they are likely to take a cut from the the criminal gangs than to join the raquets or to compete with them. terrorists and criminals that operate for profit are not natural bedfellows and the criminals see them as dangerous for themselves and also in that they are likely to bring attention from the authorities. an official might easily be bragged about conventional criminal but is less likely to

agree to turn a blind eye to terrorism. likewise, terrorists are special criminals and people have no sympathy and may attack or the tray if they saw a profit in doing so. so there is association with terrorism and criminalality . it is not necessarily a straight forward and no even universal. thank you. mr. fitzpatrick: you are recognized for five minutes. mr. farah: thank you very much for the opportunity to testify about the dangers next this among the terrorism crime and corruption. i will focus my remarks on latin america where we are seeing the convergence of three factors in new and dangerous forms. the convergence of terrorism transnational crime, and corruption are at the core of a strategic threat the united to states. i describe the emerging tier for

the security priority as criminalized states. the states that actively other -- use organized crime that the state craft would rely on active to its fund themselves. in our hemisphere come we primarily see this in a network that would emanate from venezuela where you have the political project amongst multiple nations whose underlying goal is harming the united states as well as operating the criminal enterprise. other than being pursued by law enforcement and effort to impede their activities transnational kamal networks and terrorist groups are able to operate in more stable, secure environments, something most businesses crave.

these groups are able to concentrate their efforts at the state on multiple levels. a host of new options becomes available from the sale of weapons and the use of the national aircraft register -- registries the use of banking the use of banking structures , and the national airlines and shipping lines to the the large quantities and accurate sdifgs diplomatic passports and other identification forms. the threat originating in venice i live is not confined to venezuela. argentina set out to redefine the political landscape in latin america. and the current government are also alive with the movement. this movement has been successful. unfortunately what the policies have brought in internally are the massive corruption and vie -- rising violence and a

collapse of intuitions and under the strategic level. this is brought no alliances with iran and hezbollah china and chinese organized crime, and mexican drug cartels. revolutionary forces that would by that european union and drug trafficking organization is supported by the boulevard and nations a matter of state policy. and a relationship with the state and nonstate actors will provide numerous benefits to both. farc and hizbollah will gain access to the nations without fear of reprisal and access to routes for exporting cocaine to the united states and europe. and using the same routes to import large quantities of sophisticated weapons and communications equipment. and return the government will offer state protection and republicans rewards of the financial ben fists the individuals and institutions derived from the cocaine trade.

iranian banks have been bard from the western financial system. they benefit from access to the national markets of bolivia financial institution that's will act as approximate sees and moving through iranian money to originate in their own banking structures. and the significant new evidence of the criminalization of the states the first recent investigation by the brazilian magazine showing the help of venezuela tried to help iran's nuclear program and violation of international sanctions and the "wall street journal" has a long list of senior venezuela administration officials being investigated for drug trafficking. a recent book chavez boomerang described detail the numerous eyewitnesses cocaine dealings in the highest level of the venezuela government and contacts with hizbollah and farc

in official meetings at the highest level. all of these mechanisms allow for billions of dollars to states completely unaccounted for by legislative oversight or by any form of accounting. understanding how these groups develop and how they relate to each other and form from outside the region make these a tier one threat and something critical we need to understand how they often don't look at in the underlying underpinnings of the movement. thank you. mr. fitzpatrick: we thank all the witnesses for their testimony today. at our 1st hearing of this task force we had testimony.

it was mentioned here today the testimony, i will ask a question that the professor could respond to. i would like to hear the response, the thoughts of each of the panel witnesses. whether or not a concept similar, if replicated in latin america, could that be an effective means to combat terror criminal hybrid franchises that operate their in latin america? prof. realuyo: one of the lessons learned unfortunately from our experiences has been that enter agency and law-enforcement collaborative fugitive cells have been successful. in terms of latin america, it depends upon the different groups.

a lot of activities are drug trafficking related as well as human trafficking related and we have to figure out which would be the most suited. a concept of creating a task force. the joint the joint terrorism task force established by the fbi are a model that has been studied by many academics as well as other ways to leverage the know-how and resources. one other one is an effective one, the joint interagency task force based in florida. it's an interagency program with uniformed services. the full-time officers mother countries.

the primary mission is countering illicit trafficking. they used to be just drug him trafficking. they are encountering precursor chemicals as well as alien smuggling. how we can use these lessons learned and applied. dr. asher: my experience at 1st, absolutely spot on. i do feel that you need almost an untouchable approach to this stuff. you need a group of people in charge to you after the money. and have global authority of rome. and has blood today, china than anywhere else. in my testimony, massive amount. we have identified.

guess what? people are so accepting billions of dollars a year from places like lebanon. we need a top-down approach. we know based on over at evidence that has been presented in court that this is going on. why is it still happening? when you approach -- way you are interested in is important. it needs to be threat specific. why are we not applied the rico charge. it is a racket. terrorism is against the law. all of their assets are all over the world.

mr. fitzpatrick: of the issue of trade -based money-laundering what is your assessment of current policy? dr. asher: ineffective. and it is not the lack of effort. everyone i have worked with that i i have had the honor and pleasure to work with. great people, awareness of the issues that we never had before. as we should go after the financial networks are a means to tackle the whole network. it is revolution, but it is not working. more money has been going to terrorism than in 2011. we need to approach these things more like organized criminal rackets. terrorism almost honors these people. we need to impose opec penalties with much greater. -- greater impunity. mr. fitzpatrick: at this time i will recognize ranking member lynch for five minutes.

mr. lynch: i want to i want to thank the witnesses. i've had a chance to read your testimony. for a while with the lebanese canadian bank we had great success using section 311 sanctions and identifying them as primary money-laundering concerns. not just us but the financial community. it shut them out of the legitimate, you know, banking system, especially the united states. would this work if we expanded everyone want 311 to go after, say, you know, the auto dealers and west africa that are operating? if we, you know, if we continue to use that the 11 type five

mechanism, would that be enough to choke off the funding? dr. asher: we need to look at imposing section 311 against the actual nation. it is a temporary measure. they are going to provide mutual support for terrorists organizations. you of course we have section 311. they can be lifted easily to protect our nation from money-laundering. there is massive money-laundering going on and definitely going to a terrorist organization and the military wing of the and are engaged in

activities against our interests in the middle east. we do not have these laws on the books for nothing. i believe an enforcement approach is critical. we cannot imposing sanctions and force the bank to be the enforcer of the law. we need law enforcement to get into gear. and develop a mental cases against these complex agencies. they are complicated. it can be done. i support a hybrid approach. mr. lynch: let me stop you there. we have a problem coming up, the agreement that the administration is trying to pursue with iran. we have sanctions against iran and a number of banks that have previously worked with them on nonproliferation issues, and those are major sanctions.

the iran sanctions act, iran syrian sanction act, and the president is negotiating taking away those sanctions, dropping those sanctions in return for assurances and verification that iran is no longer pursuing -- not actively pursuing a military nuclear program. on the on the other hand, we have a whole set of sanctions based upon the work that you have been doing, which is -- iran has been financing has -- hezbollah islamic jihad. , they even gave money to al qaeda. those activities, if we were to drop the sanctions and allow the economy to grow what is to stop , them from continuing that activity with respect to the work of the islamic revolutionary guard is perpetrating, directly supportive of illicit activity

the criminal activity. dr. asher: moral and human average. at the end of the day, the terrorism record stands -- for those of us that worked in the war in iraq, we had more involvement in attacks then -- and then any other nation state. i was senior advisor to the united states government. i worked on the dark side, you -- dark said to go after their finances in north korea. we have to have a hybrid approach, but on terrorism we must draw the line. mr. lynch: is it your understanding that those sanctions, things that are targeted toward the criminal

activity that has been enforced by banks, they should not be doing any business -- those should remain. those cannot be policy. dr. asher: the record stands. mr. lynch: right. mr. fitzpatrick: the chair now recognizes the vice chairman. mr. pittenger: thank you. i asked the secretary about the effectiveness on communication and coordination as it relates to stopping the financing of terrorism, specifically u.s. customs and their full access of data would limit access. do you believe that we should be looking more seriously and better coordination particularly as it relates to trade -based financing. should we be looking and targeting this type of cooperation?

dr. asher: u.s. customs is an awesome organization. everyone everyone deserves to take a look. they do not get nearly enough credit. i have been so impressed by their data systems and facilities. they try to stop more terrorism than any other organization. sharing data is very important. they are good they are good at receiving data. their ability to take data and use it would be very proper and to the greater good because so much of trade -based money-laundering is going on these customs receipts that occur when you ask for something. they are not linked together. it hold us back in enforcing the law in trade-based schemes. trade based money-laundering is where it is that today. mr. pittenger: you mentioned section 311 and how effective it

was. we saw how important it was relating to north korea. do you believe that this is a central focus that we should have in terms of trying to force some of these institutions to not be able to exist back do -- to be able to exist? do you think there are other institutions that clearly we are in a classified an unclassified briefing from but should that be a focus of our effort? dr. asher: most powerful leader in financial warfare. it is something that must be utilized not everyday but periodically. it is it is an incredible course tool, and nothing like cutting someone off from the united states financial system. it is not our job to offer access to terrorist groups and criminals to our financial system. when we see it happening, we

should be allowed to cut it off. 311 offers an option. mr. pittenger: mr. barrett, in your testimony, you talked about smuggling. could you compare isis? the smuggling used by saddam hussein? my sense is isis is using the same routes and perhaps the same people. our allies haven't succeeded in stopping this. why haven't we been able to deal with this the second time around? what should be do we -- what should we be doing to stop it? mr. barrett: it is an interesting question. of course, the program was a huge agreement by the international community through the security council in with 1991 saddam hussein, with the government and did allow a certain amount of export of oil in order to be able to allow the iraqi government to fees people. -- feed its people. that that was open to many abuses and was, indeed, have

-- abused. the sale of which saddam hussein was operating was different from the scale on which this current regime operates. over the course of that program they probably sold $50 billion worth of oil, the islamic state is selling up to $2 million a week. a hundred million per year. also, whereas the export oil under saddam hussein was authorized, it was done in a regular way. in the islamic state it is done on a small scale, homegrown refineries it may take it to turkey, kurdish areas, even the syrian government. most of it is sold and consumed within the area controlled by the islamic state itself which makes it harder for outside

powers to control that. possibly turkey, but generally speaking, it is difficult. mr. pittenger: professor, you mentioned some about the transport and sale of oil. have we been affected at all in that affected at all in trying to minimize that and what else can we be doing? prof. realuyo: the decision specifically to target the oil infrastructure. there has been damage done but you cannot outright destroy the actual supply route that feeds the regular lives at economy. a lot of this market is driven by nuclear eyes consumption. this oil is not entering global markets. it is a question of how to spend

the demand locally. it is driven by those who are looking for a cheaper gallon of gasoline. mr. fitzpatrick: the gentleman's time has expired. ms. waters: i would like to continue discussion. i am interested in pursuing information on closing money-laundering loopholes. and this is, i suppose, question for professor realuyo. an investigation recently conducted by the new york times

confirmed the ease by which anonymous foreign billionaires can purchase can purchase real estate with few questions asked. half of residential properties in the united states and now purchased anonymously through shell companies. persons have been exempted. the patriot act allows them to temporarily exempt entities in a requirement to establish anti- money-laundering programs. one of the exemption was persons involves the listed closings and settlements. do you believe that large cash purchases of luxury real estate -- they could pose a risk that needs to be addressed. prof. realuyo: that has been a

question. since the wake of september 11 other businesses could be used to launder money and move funds have an illicit nature. we have the know your customer practice. we try to actually try to enforce a broadening of the coverage who will be required to know your customer and take a look at things such as real estate. i do a lot of work in mexico where this is a huge issue of -- issue. notary public's were critical in order to transact purchases of sale and be required to do reporting and due diligence on their clients and it is something i feel we might consider here. a lot of the money in real estate in the u.s. by foreigners is suspect of tax evasion of their home jurisdictions.

this is something should also be concerned about, particularly if the money is coming from corrupt governments abroad who are coming to seek financial state haven within the united states market. ms. waters: several years ago i became interested in money-laundering because we discovered that one of our national banks have purchased the lot of the small banks in mexico. the world -- that were known to launder drug money. i do not 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 who had large sums of money in this bank and of course, the same thing was true with the brothers from nigeria who had all of their money in our banks. while i'm interested in this real estat