Text: Customs Service Official on Drug Smuggling in Caribbean, Jan. 4

(Varrone says smugglers using Cuban waters as "safe haven")  (3900)

The United States has no evidence or intelligence that the use of
Cuban waters by drug smugglers to thwart U.S. counter-drug efforts is
being "promoted, supported, or coordinated in any way" by Cuban
government forces, says John Varrone, executive director for the U.S.
Customs Service's "Domestic Operations East" within the agency's
Office of Investigations.

Testifying January 4 at a field hearing of the House of
Representatives Committee on Government Reform in Miami, Varrone said
the role Cuba plays in drug smuggling "can best be characterized as
that of a method that smugglers use to thwart end-game interdiction
efforts."

This means, Varrone said, "that smugglers are aware that Cuban
authorities typically do not respond to their presence in Cuban waters
and airspace and that there are limitations on law enforcement
exchange and operational coordination between the U.S. and Cuban
governments."

Varrone said the information provided by cooperating drug-smuggling
defendants who have been arrested by the United States has "given us
some insight as to the role that Cuba has played in their
drug-smuggling operations." The information provided by these
defendants, Varrone said, "largely supports our characterization of
Cuban waters and airspace as a place used by smugglers for a 'safe
haven' from drug interdiction forces."

Following is the text of Varrone's prepared remarks:

(begin text)

Introduction

Mr. Chairman and other members of the Committee, it is my pleasure to
have the opportunity to be here today to talk to you about the
important issue of drug smuggling, and in particular smuggling in the
Caribbean, including Cuba, and the overall enforcement mission of the
Customs Service.

My name is John Varrone and I currently serve as the Executive
Director, Operations, East, within the Office of Investigations. In
this capacity, I am responsible for the investigative operations of
seven Special Agent in Charge offices on the East Coast of the United
States, including our operations in the Caribbean.

As you are aware, the courageous and devoted employees of the Customs
Service serve everyday on our nation's borders. Today you have asked
me to discuss our efforts to interdict drugs. However, I would like to
take a moment to highlight the work of our officers in Port Angeles,
Washington, who recently thwarted an individual attempting to smuggle
deadly explosives into our country. Customs truly is America's
frontline.

The Customs Service is the primary Federal law enforcement agency with
responsibility for the interdiction of drugs in what we call the
"arrival" zone, where international smuggling ends and the domestic
distribution of drugs begins. As you may know, the counterdrug
community has divided the drug transportation process into three
zones: Source, Transit and Arrival. U.S. counterdrug efforts are
directed at disrupting drugs in each of these key points in the
movement of drugs from manufacture to delivery in the United States.

In addition to our responsibilities in the arrival zone, the Customs
Service, through our Air and Marine Interdiction assets and our
foreign attache offices, also provides significant assistance to other
domestic and international law enforcement agencies who have
responsibilities in the both the "transit" and "source" zones, which
extend through the Caribbean and into South America.

Operations in the Caribbean

The Customs Service has committed a significant law enforcement
presence in the Caribbean.

The Office of Field Operations has 209 Customs Inspectors and Canine
Enforcement Officers assigned to the islands of Puerto Rico, St.
Thomas and St. Croix. The specific ports of entry we have staffed are
San Juan, Fajardo, Ponce, Mayaguez, St. Thomas and St. Croix.

The Office of Investigations has 82 Special Agents assigned to the
island of Puerto Rico and eight more Special Agents assigned to St.
Thomas. These agents are supported by 8 Intelligence Analysts and 31
other support staff.

The Customs Service has dedicated 9 aircraft to the Caribbean Air
Branch; 3 tracking aircraft, 3 helicopters and 3 twin engine fixed
wing aircraft.

The Customs Service has dedicated a total of 41 vessels to the
Caribbean. These vessels include 22 interceptors, 7 patrol craft, 11
utility craft and I blue watercraft.

The Air and Marine Interdiction Division is currently undergoing a
reorganization to fully integrate the air and marine interdiction
elements of the Customs Service into a unified command structure. This
reorganization will streamline the air and marine efforts and provide
a seamless handoff between detection and monitoring efforts and
endgame of law enforcement operations.

In addition, the Customs Service maintains a communications facility
on Puerto Rico that is manned 24 hours a day to support our
enforcement operations in the region.

One of the unique aspects of the Customs Service operation in Puerto
Rico is that all of our operations, with the exception of our Air
operations, are funded through the Puerto Rico Trust Fund, which is
itself funded through the collection of Customs duties in Puerto Rico.

The overall counter-narcotic strategy of the Customs Service in the
Caribbean, and everywhere else, is to identify, disrupt and dismantle
organizations that smuggle drugs and launder their illicit proceeds.
Our Customs Inspectors and Air and Marine Division personnel disrupt
trafficking groups, primarily through interdiction operations, while
our Special Agents are focused on taking a proactive investigative
approach to the identification and dismantling of these drug
organizations and their illicit profits.

Enforcement Activity in the Caribbean

As this Committee is aware, the Customs Service continually develops,
collects and evaluates a variety of drug intelligence from the
Caribbean area where it is estimated to be the entry point for the
approximately 40% of the cocaine destined for the United States.

In Fiscal Years 1998 and 1999, respectively, the Customs Service
seized 20,673 and 20,492 pounds of cocaine in and around Puerto Rico
and the Caribbean. In addition, in Fiscal Year 1999 we seized 3,442
pounds of marijuana in the Caribbean, an increase of more than 500%
from Fiscal Year 1998 when we seized 664 pounds. While the criminal
organizations responsible remain primarily Colombian, it is important
to note that other groups from Caribbean countries are engaged in the
importation and distributions networks, particularly criminal
organizations operating in the Dominican Republic and Haiti.

In assessing a threat of narcotics smuggling in a particular region,
Customs divides drug-smuggling operations into two primary categories:
"commercial" and "non-commercial."

We consider cargo, passengers and trucks in the air, sea and land
border as commercial. In the "non-commercial" arena we include private
vehicles, aircraft and pleasure boats. The interdiction operations of
the Customs Service and other agencies in the Caribbean have
demonstrated that non-commercial smuggling operations remain a
significant threat in the region.

Intelligence analysis and drug interdiction successes in recent years
have provided law enforcement insight as to how these operations are
conducted. For example, private aircraft are not used as often for
direct flights from source countries to the United States as they once
were. We believe that this change is due, in large measure, to our
success in the interdiction and seizures of private drug-smuggling
aircraft. This success raised the costs of smuggling organizations and
forced them to change their tactics. Instead, our enforcement
operations and related intelligence now indicate that private aircraft
are used to conduct airdrops in the transit zone to a variety of
vessels. The drops are predominately to what we call go fast boats,
which are recreational boats up to 45' in length that have been
modified for operation at high speeds over long distances in open
ocean, that are then used to smuggle the drugs into Caribbean nations
for subsequent delivery into the United States. The areas where we
have seen this activity most frequently has been in the waters off
Haiti, the Dominican Republic, Puerto Rico and the Bahamas.

One of the current areas of increasing threat for Customs is Haiti,
where the smuggling an coastal freighters presents an inspectional and
investigative challenge. The political instability in Haiti combined
with its lack of marine law enforcement has meant that smuggling
organizations have been able to operate with relative impunity.

While smuggling by private aircraft remains a threat, our current
assessment is that non-commercial maritime smuggling is a growing
trend in the Caribbean.

I have two charts that will illustrate this. The first chart is a
summary of the confirmed and suspected non-commercial maritime
smuggling events that were detected during calendar year 1998 in three
areas of particular concern to this Committee: Jamaica/Bahamas, Puerto
Rico/Virgin Islands and Haiti/Dominican Republic.

I should note that this information is derived from the Consolidated
Counterdrug Database, to which the Customs Service and other
interdiction agencies contribute. I should also advise that this data
represents both "confirmed" and "suspected" events based on all source
intelligence available to the agencies.

The second chart is a summary of the "confirmed" and "suspected"
non-commercial maritime smuggling events that were detected during
calendar year 1999. As you can see, the flow of cocaine in the
non-commercial maritime environment has increased by 15%.

One of the factors that we think may account for the increase in
maritime activity over air shipments is the minimal investment
required for a maritime smuggling venture compared to air shipments.
The number of go-fast boats found abandoned in Puerto Rico by Customs
and other agencies definitely supports our intelligence that smugglers
consider these to be disposable smuggling platforms. Also contributing
to this phenomenon may be the Colombian and Peruvian government
counter-drug efforts to destroy smuggling aircraft detected in their
respective airspace.

Drug Trafficking Trends: Cuba

I would like to briefly discuss how the Customs Service views the
threat presented by Cuba in the area of drug smuggling.

As this committee is aware, the economic embargo against Cuba has been
in place since 1963. For this reason, authorized trade with Cuba,
other than U.S. sales of food, medicines, medical equipment and
humanitarian donations, is prohibited.

However, whether Cuba plays a role in the non-commercial smuggling
arena must be considered. Our enforcement experience in the Caribbean
has led us to believe that the role Cuba plays in non-commercial
smuggling can best be characterized as that of a method that smugglers
use to thwart end-game interdiction efforts. By this I mean that
smugglers are aware that Cuban authorities typically do not respond to
their presence in Cuban waters and airspace and that there are
limitations on law enforcement exchange and operational coordination
between the U.S. and Cuban governments. We do not have any evidence or
intelligence that this use of Cuban waters to thwart our interdiction
efforts is promoted, supported or coordinated in any way by Cuban
government forces.

However, as you have heard in previous testimony on this subject,
radar track data indicates that in 1999 there has been a decrease in
air tracks that transit Cuban airspace. I have brought with me four
additional charts that illustrate this change.

As you can see from the first chart, in 1998, there were 34 confirmed
or suspect tracks that transited Cuban airspace. As the second chart
indicates, in 1999 the number of confirmed or suspected tracks that
transited Cuban airspace declined. The third and fourth chart
illustrates the air track data for Haiti for the same period. These
charts show a 25% increase in tracks over Haiti for the same period.

A recent case worth noting wherein the U.S. received assistance from
Cuba was in 1996 when the Cuban government assisted the Customs
Service and U.S. Coast Guard in a significant interdiction operation.

I am referring to the seizure of the M/V Limerick that occurred in
October 1996. In that incident, the U.S. Coast Guard boarded the
Limerick based on a U.S. Customs and DEA lookout in the Windward
Passage off the eastern coast of Cuba. During the search of the vessel
the crew attempted to scuttle the vessel, which forced the evacuation
of the U.S. Coast Guard boarding party and the crew. The vessel later
drifted into Cuban waters and grounded on a reef. The Cuban government
salvaged and towed the Limerick to Santiago de Cuba where they
discovered 6,000 kilograms of cocaine.

Intelligence on Cuba

Because of the nature of our law enforcement mission, the Customs
Service investigates and arrests numerous drug smugglers. It is
routine to debrief smugglers who agree to cooperate with the United
States government, often as part of a negotiated plea arrangement with
the Department of Justice. Debriefings of cooperating defendants
provide important insight into the inner workings of drug-smuggling
organizations. The intelligence and information provided by these
sources are used to focus our interdiction targeting and investigative
strategies for the greatest impact.

As you are aware, Customs had occasion to debriefed cooperating
defendants who have given us some insight as to the role that Cuba has
played in their drug-smuggling operations. The information provided by
cooperating defendants largely supports our characterization of Cuban
waters and airspace as a place used by smugglers for a "safe haven"
from drug interdiction forces.

One example of this type of information is that which was provided to
Customs debriefers in 1999 by a Colombian transportation coordinator
who was arrested in 1998.

The report of this debriefing has been provided to the Committee
staff. The general description of this cooperator's information is
that smugglers use Cuban waters and airspace to conduct airdrop
operations because they believe they are safe from U.S. interdiction
efforts. The source further states that after airdrops are completed,
smugglers waft in Cuban waters until they are sure law enforcement
assets are not in the area before they depart for a their final
destination. This cooperator indicated that while smugglers transit
Cuban airspace, it was not necessary to coordinate with or seek
permission from Cuban authorities. This cooperator's general opinion
of Cuba was that smugglers do not factor Cuban government forces into
their plans since they do not seem to react to their presence.

It should be noted that this cooperator's description of airdrop
operations inside Cuban waters has been corroborated by U.S. Customs
Service P-3 surveillance operations.

The ability of our interdiction assets to effect "end-game" seizures
is largely dictated by our ability to stage in a given area and wait
for the smugglers to exit Cuban waters.

Seizure of 7.2 Tons of Cocaine by CNP

In December 1998 the Colombian National Police (CNP) seized
approximately 7.2 tons of cocaine that was destined for Cuba.

Prior to the seizure the Customs Service had conducted training for
the CNP in Colombia and they have given partial credit for this
seizure because of the training that was provided by the Customs
Service. Colombia is one of seven countries where the Customs Service
has conducted training under the auspices of our Americas Counter
Smuggling Initiative (ACSI). The ACSI program is an element of our
Industry Partnerships Program and focuses on providing Customs
training and expertise to government and businesses in an effort to
reduce the use of commercial cargo to conceal and transport drugs.

I should emphasize that since this was a foreign interception, DEA has
primary responsibility for the investigation of this incident. A
member of the Customs ACSI team in Colombia responded to the seizure
to assist DEA and CNP with an immediate assessment of the situation.
Based upon our liaison with industry we were able to obtain shipping
documents regarding this and prior shipments. This information was
immediately provided to DEA for use in their investigation.

More recently, as the DEA investigation has expanded, they have
obtained additional commercial documentation that the Customs Service
has a unique expertise in interpreting. DEA has recently requested
that the Customs Service provide additional technical and analytical
support to their ongoing investigation. DEA has requested Customs to
review additional documentation. In the immediate future Customs
personnel will be detailed to support DEA.

Caribbean Initiatives

I have talked for some time about the Caribbean and how the Customs
Service views the threat in this region. I would like to take a few
moments to describe for the Committee how the Customs Service has
tried to respond to this threat and some of the successes that we have
achieved.

From a historical perspective, the Customs Service and the other
Federal law enforcement agencies have recognized for some time the
critical role that Puerto Rico and other Caribbean entities have come
to play in the arena of drug smuggling and money laundering.

In response to the drug threat in the Caribbean, in March 1996, the
Customs Service initiated Operation Gateway to insulate Puerto Rico,
the U.S. Virgin Islands and their surrounding waters and airspace from
drug smugglers. This multi-year operation was a natural extension and
expansion of Operation Hardline that focused on the Southern land
border of the U.S.

In 1996, Customs expenditures of $8.2 million for Operation Gateway
were supplemented by $2.45 million from the Government of Puerto Rico.
In 1997, Customs received an additional $28 million for Operation
Gateway which was supplemented by another $3.65 million from the
Government of Puerto Rico.

These increases in resources allowed the Customs Service to
significantly increase staffing in both Puerto Rico and the U.S.
Virgin Islands.

More recently, the Customs Service and other law enforcement agencies
have undertaken several operations to address the air, maritime and
money laundering threats in the region.

One of these was Operation Two Dozen, which was a joint effort between
the Customs Service, Coast Guard, DEA, U.S. Army and Bahamian Police.
The focus of this operation was to interdict vessels and aircraft
smuggling into the Bahamas and South Florida. It was operated between
February and March 1999.

During the four phases of the operation interdiction patrols were
conducted for a total of 13 days. These patrols resulted in the
seizure of approximately 2,060 pounds of cocaine, 850 pounds of
marijuana, the seizure of three vessels, one aircraft and the arrest
of 40 individuals, including 29 illegal aliens. In addition, one
aircraft identified during the operation is believed to have been
destroyed by Colombian authorities when it returned to Colombia after
an airdrop.

In one recent maritime smuggling example, which occurred an March 26,
1999, a vessel attempted to elude Customs agents by colliding with a
Customs vessel. Agents were forced to fire rounds at the suspect
vessel to disable the engine. When the five crewmembers were arrested
they were all wearing facemasks and bulletproof vests. No weapons were
recovered. The Coast Guard did recover 1,900 pounds of cocaine that
the crew had jettisoned during the pursuit. Customs Service law
enforcement efforts directed at Haitian drug-smuggling organizations
has also focused on the movement of illicit currency back to Haiti.
Since September 1999, the Customs Service has seized $987,165 in
suspected drug proceeds that were destined for Haiti.

In response to this emerging threat from Haiti that I discussed
earlier, the Customs Service has led a multi agency enforcement
operation called Operation Riversweep, which focuses on Haitian
coastal freighters that attempt to smuggle drugs, principally cocaine
into the U.S. This effort involves the Customs Service, U.S. Coast
Guard, U.S. Immigration & Naturalization Service, U.S. Border Patrol,
Metro-Dade Police Department, Miami Police Department, Drug
Enforcement Administration, Federal Bureau of Investigation, Florida
Department of Law Enforcement and the Department of Environmental
Resource Management.

Since its inception in 1998, this operation has resulted in the
seizures in excess of 8,256 pounds of cocaine, 12 Haitian coastal
freighters, $1,405,685 in currency, 129 arrests, and the recovery of
19 stolen vehicles. In the last 90 days, Customs has seized 1,740
pounds of cocaine from Haitian coastal freighters on the Miami River.
The preferred method of concealment for the smuggled cocaine has been
inside concealed compartments within the structure of the vessel. Very
often, those locations present health issues for our officers.
Hazardous fumes, while examining Haitian coastal freighters in 1999,
have overcome several Customs Inspectors.

A recent money laundering investigation in Puerto Rico, Operation
Double Impact, focused on a heroin-smuggling and money-laundering
organization based in Puerto Rico. The investigation identified an
extensive money-laundering network which utilized a Black Market Peso
Exchange through businesses in San Juan and Miami. This operation has
resulted in 44 arrests and the freezing of more than $10 million in
bank accounts throughout Puerto Rico.

Customs Service law enforcement efforts directed at Haitian
drug-smuggling organizations has also focused on the movement of
illicit currency back to Haiti. Since September 1999, the Customs
Service has seized $987,165 in suspected drug proceeds that were
destined for Haiti.

A recent example of a successful Customs air interdiction operation
occurred in August 1999 when Customs intercepted a private aircraft in
Fort Myers after it was detected as a suspect aircraft that had
originated in Cap Haitian, Haiti. The aircraft was intercepted after
it attempted to elude Customs aircraft and agents. In this case, 56
pounds of cocaine was seized, five illegal aliens and the pilot were
arrested.

In another recent cooperative effort, on November 14, 1999, FBI,
Customs and DEA agents in St. Thomas seized approximately 4,672 pounds
of cocaine discovered aboard the M/V Adriatik which was based upon an
El Paso Intelligence Center lookout.

Summary

I would like to thank the Committee for the opportunity to provide the
Customs Service's perspective on this important issue. I have tried to
present to you a snapshot of the operational environment in which our
frontline employees engage in every day. We are always proud of the
experience, expertise and accomplishments of our dedicated officers
who make many sacrifices and frequently place themselves in harms way
on behalf of the citizens of the United States.

Attachment:
Customs Search Authority in Puerto Rico

I would like to talk to the Committee for a moment about how the
uniqueness of Puerto Rico also extends to the use of the Customs
Service's unique and broad search powers.

As any Customs Officer will tell you, one of the things that sets the
Customs Service apart from our other Federal law enforcement
counterparts is the broad search authority that we exercise at the
borders of our country.

Puerto Rico's Commonwealth status means that the Customs Service's
broad border search authority is directed at merchandise and persons
who are entering the island from foreign, non-U.S., locations.

From a practical real-world point of view, this means that once drugs
arrive in Puerto Rico, they have effectively arrived on the mainland
of the United States from a Customs Service perspective. This reality
is also well recognized by smuggling organizations and is the reason
why Puerto Rico has become the focal point for non-commercial
smuggling in the region.

There is one important qualification regarding our search authority.
The Customs Service border search authority does permit sea
containers, vessels and unscheduled aircraft to be searched when they
arrive in the U.S. mainland since they have been in international
waters and have had an opportunity to acquire foreign merchandise
while crossing from Puerto Rico. This is significant since it is
believed that a large quantity of the cocaine smuggled into Puerto
Rico is believed to leave in shipments of commercial cargo.

However, commercial air passengers that depart Puerto Rico are not
subject to Customs search authority when they arrive on the U.S.
mainland. The distinction is that passengers on scheduled flights from
Puerto Rico would not have had an opportunity to acquire foreign
merchandise, therefore subjecting them to Customs search authority.

(end text)

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Department of State)