I've finally set aside some time to read the GAO report on Venezuela released a couple weeks ago that everyone's chattering about, "U.S. Counternarcotics Cooperation with Venezuela Has Declined." The main talking point on this so far has been to focus on Venezuela's evolution as a major transit hub for hemispheric narcotics trafficking, principally thanks to entrenched government corruption. While Venezuelan authorities claim to have their own counternarcotics operations, the GAO finds caveats with just about every one of them. From the Venezuelan government's standpoint, the report is hypocritical, a political ruse, a distraction, a lie, among a host of other objections.
The report purports to determine:
- What is known about cocaine trafficking through Venezuela;
- What is known about Venezuelan support for Colombian illegal armed groups; and
- The status of U.S and Venezuelan counternarcotics cooperation since 2002.
And I suppose it does its job. But to be honest, none of it will really be news to anyone even remotely paying attention (sections are headed by such lucid titles as "Venezuela is a Major Drug Transit Country" and "Venezuelan Lifeline to Illegal Armed Groups Threatens Colombian Security"). What the report does well is aggregate in one place what everyone already knows. You know, instead of pointing to some Reuters article here, a Bloomberg report there, some Daily Telegraph article over there, oh and don't forget the Economist, and of course everyone loves a good octopus story.
And that's just since the beginning of 2008. If we wanted to go back further, well I have saved to file a number of other articles whose links have gone dead so I won't point you to those, but an LA Times dispatch is still up from March 2007, as well as Bloomberg/EFE, and El Universal, and Newsweek, and Foreign Policy editor Moises Naim...I think you get the point.
I mean really, after a while, your eyes start to go blurry from it all.
But in case it's STILL not clear, let's just go straight to the horse's mouth. Check out the DEA's Ex-Chief of Ops Michael Braun testifying before the House Subcommittee on Western Hemisphere Relations:
"Recent political developments in Venezuela and Bolivia have created special challenges for DEA operations in Latin America. Venezuela serves as a major transit country for Colombian cocaine. While some cocaine is transported into the country via a variety of air, river, and land-based smuggling routes, the predominant shipping method relies upon vehicles to transport cocaine along traditional land routes. Primarily destined for markets in the United States and Europe, the cocaine leaves the country either by commercial sea freight, non-commercial ships (including "go-fast boats"), or airplanes.
In the past year, DEA in Caracas has been in a precarious situation. Some press reports in Venezuela portrayed DEA negatively, and trusted Venezuelan counterparts, who had good working relationships with DEA, were replaced with employees considered more loyal to President Hugo Chavez and who have a negative history with DEA. For example, President Chavez appointed General Morgado as the head of the Anti-Narcotics unit of the National Guard. Shortly thereafter, General Morgado disbanded the DEA Vetted Units manned by personnel from the Venezuelan National Guard and Cuerpo de Investigaciones, Criminalistas Penales y Cientificas (CICPC).
Despite these handicaps, DEA has managed to work within the parameters established by the Government of Venezuela and maintains a presence in the country. DEA has contributed intelligence information related to narcotics trafficking to numerous other DEA offices and in light of the restrictive environment, has still managed to retain a significant influence in investigating narcotics trafficking in this region.
DEA, through the U.S. State Department, is currently reviewing a previously established working agreement with the Government of Venezuela, in which progress has been made. DEA has been working with the U.S. Department of State to create a document that is acceptable to both governments. It is hoped that a mutual agreement will be reached in the near term, which will return DEA agents to their normal status in Venezuela."
Pretty telling, right? Is that evidence enough for you that something indeed is afoot? Guess what: Braun gave that testimony MORE THAN THREE YEARS AGO.
So what are we doing here? Is this GAO report really just a way to amp it up a notch, to push it over the top, to get the ball rolling, to jumpstart the engine, to get this party started, to fire off one more salvo, hey guys we really really really really mean it this time, we're reeeaaalllly serious...
Because really, if what you're after is an up-the-minute framework stating in no uncertain terms what's at stake in Inter-American relations, I think Bob's latest contribution to the Huffington Post pretty much nails it. Meanwhile, I'm going to take this opportunity to point out an aspect of this that the GAO report doesn't even come within miles of touching and that is seldom discussed publicly in general: how the finances for any of these narco-activities get laundered.
Here's the food for thought that I can put out off the top of my head on the topic:
By most accounts, the legendary Colombia Black Market Peso Exchange that gained fame in the 1980s has nowhere near the same traction anymore;
The pricing dynamics of the parallel market for bolivars today are almost precisely opposite of those defining the parallel market for Colombian pesos during the CBMPE's heyday;
Venezuela-Colombia trade is set to go on freeze.
As a major oil exporter, Venezuela/PDVSA is generating dollar revenues that need to be repatriated back into bolivars...which puts it on the same side of the transaction as the narcos in the Colombian model, at least from a counterparty standpoint;
Venezuela has nowhere near the export diversification that Colombia had or has;
Arbitraging between the official bolivar rate and the parallel market rate is legal provided it's done through investing in Venezuelan bonds;
Mexico, which has become the new locus of financial power for the region's drug trade, has no capital controls;
...Not by any means an exhaustive list. Now, two open questions for consideration on where to go next:
1. What does Mexico-Venezuela trade look like?
2. To what extent is there a parallel market for dollars in Mexico?
What do these puzzle pieces add up to? My brain is shot on this topic right now so I'll resume this train of thought another day.
To those reading this who contributed to the GAO report, and to anyone connected in any way to the Senate Foreign Relations Committee who is learning something new here, let us know when you guys are done looking back and are ready to join the rest of us in looking forward. While we appreciate the thought and effort you put into your report, a good part of it you could have just pulled straight from my hard drive. All you had to do was ask.
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