Criminal Threat Convergence Must Be Elevated as a National Security Urgency

Keynote Address: Criminal Threat Convergence Must Be Elevated as a National Security Urgency

David M. Luna, Executive Director, International Coalition Against Illicit Economies (ICAIE)  

Intelligence Support to Gray Zone Activities & Irregular Warfare Symposium

Ronald Reagan Center, Washington, DC 

24 June 2025

I would like to thank the organizers for their warm invitation, including the Office of the Under Secretary of Defense for Intelligence and Security (U.S. Department of Defense), the Irregular Warfare Center (IWC), and Gray Zones Consulting, LLC. 

I find the central theme of the importance of strategic intelligence to support gray zone activities and irregular warfare quite timely, including the national security objectives of fighting the menacing threats posed by the Mexican cartels, transnational criminal organizations (TCOs), and antagonistic foreign governments’ illicit activities including those by China, Iran, and others, both directly and through their use of violent criminal proxies.

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Let me pose two questions that can help to frame Day 2’s program: 

1. Are the United States and Latin American nations losing the fight against the cartels and TCOs in the Western Hemisphere?
2. Has the United States lost political influence and economic market share to China and other adversaries in Latin America through irregular-illicit activities?

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Colleagues, I say emphatically: we must move with greater urgency to confront criminal threat convergence.

The cartels and some TCOs in Latin America have greater power and political influence through market diversification, networked-alliances, and coercive aggression in the region, and globally.

State power is in fact also being exercised in the shadows ruthlessly, and efficiently, across today’s crime-threat convergence realities. For example, in the Western Hemisphere, adversaries are not “only eating our lunch” but in the case of China, “cleaning our clocks” economically, and through their strategic corruption and leveraged ecosystems of criminality they are weakening American strengths.

This is why we need to harness greater full spectrum approaches, leveraging all instruments of American power over such adversaries with both persistent and precise intelligence to assist our warfighters and law enforcement operators alike.

Not only to prevent, disrupt, and degrade them, but also to safeguard the resiliency necessary to contain any second- and third-order effects and fallout disruptions, disorder, and further insecurity.

First, I do applaud the President’s more robust approach to combatting the Mexican cartels and crime groups like Tren de Aragua.

I also believe that the Trump Administration must work through due process considerations, and as the federal courts have ruled, operate within the confines of the rule of law, especially since existing laws and authorities can help to achieve criminal prosecutions such as the new narco-terrorism cases. 

Having said this, it is true that transnational criminal groups, terrorist groups, and state-sponsors of criminality do not play by the rules or care to follow market regulations or laws.

The U.S. must take a muscular, calibrated approach to dismantle these homeland security threats in the United States, and overseas including working with the Five Eyes (FVEYs) and with other trusted partners.

In advancing the President Trump’s Executive Orders against designated Mexican cartels and TCOs, I hope this includes developing more coordinated capabilities and resources within the USG, and internationally, and bringing leveraged cross-border public-private partnerships to the fight.

This is also why, in my opinion, designating the cartels as terrorist groups has some merit to root out their criminality and justly neutralize the threat.

The Destabilizing Effects of Threat Networks

But Make No Mistake: We are already engaged in global asymmetrical warfare, be it the cartels using terrorist tactics – or Iranian-funded terrorists attacking U.S. forces in Iraq and Syria – employing violence and intimidation of communities to achieve political aims and financing insecurity; or the activities of antagonistic adversaries such as China.

In this regard, I do think that it is important to utilize all instruments of national power across the American interagency, including more dynamic actions leveraging the strategic intelligence of the Defense and Intelligence communities.

This includes attacking the lethal convergence of criminal networks, illicit economies, and narco-terrorism, especially those engaged in the deadly fentanyl trade that continues to kill tens of thousands of people every year across the United States, Canada, and other countries.

As we heard yesterday, gray zones are quite active these days because both state and non-state adversaries see advantage in confronting us in these modern asymmetrical battlefields by hurting our communities with drugs, disrupting our critical infrastructure, buying off allies through incentivized economics and strategic corruption, and taking other active measures designed to divide and weaken us.

This is why I believe that the Chinese Community Party (CCP), or CCP Inc. as some call it, is complicit in not only the illegal fentanyl trade and precursor chemicals, but in expanding illicit economies globally to weaponize insecurity as part of their 2049 national strategies to in order to become the world’s leading military, economic, technological, cultural, and financial power through all necessary licit, illicit, and irregular means and ends.

This is also why if we are going to succeed in this battle against transnational crime in the gray zone, we must be honest with ourselves and continue to also put greater pressure on China and other antagonistic states’ involvement in expanding illicit markets, illicit finance, and malign influence. 

CCP Inc.’s criminality also enables Chinese Money Laundering Organizations (CMLOs) and Asian triads to advance China’s national interests by investing in crime and insecurity, including laundering the proceeds or “value” for the cartels, and other transnational criminal networks, as we have seen from Oklahoma and California to Maine, and globally:

Examining DEA’s “Project Sleeping Giant”, we know that CMLOs utilize platforms like WeChat, other social media, and intricate underground banking systems, and are weaponized as part of China’s irregular warfare, sophisticated geopolitical strategy.

We must disrupt the scale of these illicit pathways of the CCP Inc. as the most influential criminal syndicate in the world, and the leading global illicit market stakeholder in 11 of the 12 biggest transnational crime sectors including flooding markets with fakes, counterfeits, and illegal products.

The Trump Administration must also designate a number of Chinese and Asian triads, and CMLOs, as part of the President’s Executive Orders on countering the illegal fentanyl trade and transnational crime, and even narco-terrorism given their money laundering and funding operations of the designated cartels and other TCOs.

Thus, to begin a more concerted national effort against today’s array of criminal adversaries, we must see today’s global security landscapes through a threat convergence prism that leverages intelligence and financial overlays across a spectrum of threats and converts to actionable intelligence.

We need to build on earlier ODNI Threat assessments in 2024, and 2025, that highlighted how gray zone campaigns and activities are likely to increase and become a greater dominant feature of power competition and non-state actors’ criminal subversive actions.

This includes organized crime, illicit economies, threat finance, active measures, or hybrid/irregular warfare activities such as cyber attacks, and foreign malign influence. 

Because the reality is that the business of crime, in physical markets, across the digital world, and in gray zones, is more lucrative than ever for not only organized crime, criminal entrepreneurs, and illegal money brokers.

But increasingly also for nation-states leveraging ecosystems of criminality to enrich ruling elites, finance their militaries, and to leverage power through coercive economics, co-option, and active measures as part in today’s IW hot spots.

Most importantly, in my humble opinion, in the current war against the designated cartels, we must extend the battle beyond the Southwest Border, and have a more targeted focus across the hemisphere. 

And certainly, before there is greater spillover violence or retaliatory threats that bleed deeper into the U.S. homeland.

As such, it is critical that we examine the converging trafficking pathways beyond Mexico, into Central and South America, and inter-linked hubs and underground safehavens in other parts of the world.

Everything is connected in both globalized societies and a threat convergence world.

I would argue that there are concerning zones of criminality that finance the power of the cartels beyond Mexico as they diversify, and transact with other imputed TCOs such as the prison gangs, Chinese triads, Italian and Eurasian Mafias in Brazil, Chile, Ecuador, Paraguay, Peru, and other hot spots in this hemisphere. 

Today, except for Hezbollah later on, I will not focus too much on terrorist groups such as the Taliban, ISIS, Al Shabaab, and others, but clearly their illicit behaviors converge to worsen global insecurity landscapes.

However, I will be a bit more granular in scope and share further insights on the complexity of today’s TCOs; and malign state adversaries such as China, Russia, and a weaker Iran, and how their collective criminalities converge, for example in the Americas, to create a bigger national security threat altogether for the United States.

A Booming Global Illegal Economy

In the past decade alone, illicit threat vectors and criminality by transnational criminal and terrorist groups have exploded around the world. 

Globally, the size and scale of numerous specific illicit markets are measured in the hundreds of billions of dollars in illicit trafficking and smuggling transactions every year.  

From the dense forests of the Amazon and the cyber spaces in Eastern Europe across the internet, to the bustling ports, risky free trade zones in the Gulf, and hidden financial havens in the Mekong’s Golden Triangle– human traffickers, counterfeiters, narcotics kingpins, and darknet and cyber criminals act as the new financial money brokers and venture capitalists to shape illicit economies.

The global illegal economy, which was booming before COVID-19, was further accelerated across the digital world during the pandemic.

It continues to thrive post-COVID including in the digital world, now through the use of social media apps, AI, other leap-ahead technologies, and the opaqueness of cryptocurrency and e-commerce transactional laundering.

The illegal economy includes criminalities such as the trafficking of narcotics, weapons, humans, endangered wildlife, illicitly-harvested timber, illegally caught fish; pillaged gold, critical minerals, and rare earth elements; counterfeit consumer goods and medications, and other illicit enterprises including the trade in illicit alcohol and tobacco products.

The Illegal Economy is a Top 5 Global Economy

According to some estimates, the illegal economy accounts for eight to 15 percent of world GDP, and in many parts of the developing world it may account for several times this estimate.

The specific revenues generated by transnational illicit networks and organized crime groups are astonishing:

• Bribery: Close to $1 trillion
• Narcotics Trafficking: $750 billion to $1 trillion
• Counterfeited and Pirated Products: $500 billion
• Environmental Crime (illegal wildlife trade, logging, trade in CFCs, and toxic waste dumping): $150-250 billion
• Human Trafficking/Forced Labor/Sex Trafficking: up to $150 billion annually
• Pig Butchering and Finance Scams: Tens of billions of dollars every year

As of 2024, illicit trade has emerged as a Top 5 World Economy (GDP) – yielding criminals, bad actors, and illicit threat networks at least $3-5 trillion a year. [behind the GDP of the United States, China, and Japan]

This is a staggering amount!

The United Nations has estimated that the dirty money laundered annually from such illicit activities constitutes at least $4 trillion.

Crime Convergence is multi-dimensional, multi-sectoral, and a threat multiplier.

A new report from the World Bank also brings a renewed focus to the impact of organized crime on economic development in Latin America and the Caribbean, highlighting how organized crime is a key force exacerbating the region’s economic woes.

Reinforcing our own ICAIE research, the World Bank report highlights four main ways criminal groups in Latin America and the Caribbean impede development:

1) through the monopolization of licit and illicit markets within their territories;

2) imposing criminal governance to substitute for the state and leverage taxes on basic services;

3) extorting legal businesses, siphoning market share, and driving up their costs; and,

4) state capture through the corruption and manipulation of state actors, like politicians.

Despite representing just 8% of the world’s population, the region accounts for nearly one-third of global homicides.

In the Americas, the new reality is that the region’s transnational criminal structures have undergone a profound, transformative reordering and restructuring.  

The proliferation of criminal networks and the convergence of their illegal activities threaten our collective security.

Criminal networks in Latin America, including the Mexican cartels, Tren de Aragua, MS-13, and other transnational criminal organizations have also expanded and diversified.

Many cartels and TCOs already sanctioned continue to be well-resourced and outfight security forces with an arsenal of military-grade equipment and weapons in their countries including drones, armored tanks, Javelin and Stinger missiles, submersibles, improvised explosive devices (IEDs), advanced technologies, and encryption.  

They also are able to finance their impunity through bribery, corrupting public officials at all levels of government, corroding rule of law institutions, and creating a climate based on fear (“plata o plomo”). 

In Mexico, innocent civilians, police officers, soldiers, elected officials including Mayors and their Municipal staff, judges, investigative journalists, and even children attending Church mass or festivals are indiscriminately murdered and maimed regularly.  

No one is safe in this climate of fear.

Extreme violence and strategic corruption put politicians at the mercy of the cartels, and thus allowing the cartels to take control of the fundamental government structures and expand their criminal agendas.

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In Mexico and the rest of Latin America, the cartels are not only spreading deadly violence, but are systemically diversifying their illicit portfolios in agriculture, mining, hospitality, tobacco and alcohol, and other industries.

They continue to co-opt governments at the federal, state, and local levels. 

Through their corruptive influence, they now control strategic and critical infrastructure such as major ports, Free Trade Zones (FTZs), critical industries, and have penetrated market institutions. 

More alarming, their criminal illicit webs and reach are now global, expanding to other regions of the world particularly Africa, Europe, and the Asia-Pacific.

The Americas: Consolidation, Diversification, New Alliance Structures

Multi-billion-dollar illicit economies across the region that have long been centered on the cocaine and narcotics trade, are expanding as criminals and other illicit networks diversify.

New actors, new markets, and new products are driving fragmentation among traditional groups, and consolidation of criminalized economies from the Bolivarian Joint Criminal Enterprise (BJCE) led by the Maduro regime in Venezuela to numerous other strategic alliances among TCOs, business elites, and ideologically agnostic authoritarian states.

Illicit market competition among different criminal actors this driving the growing regional instability.

It is now an often-violent race for control of strategic infrastructure, trafficking and smuggling routes, critical spaces where the state is absent or co-opted as a partner.

As stressed earlier, these criminal groups consolidate their control through fear and brutality to accumulate greater power and wealth.

We also see this being played out, for example, in Venezuela, Bolivia, Brazil, Ecuador, and Haiti.

CJNG: Diversification towards counterfeit medicines and other Illicit Markets. 

The Sinaloa cartel, the Cártel de Jalisco Nueva Generación (CJNG), and other organized criminal organizations in the Americas such as the PCC in Brazil or the Tren de Aragua continue to diversify and exploit illicit economies to grow their criminal enterprises through new income streams. 

For example, CJNG’s expansion and diversified economic profile across the Americas now includes a growing dominance in the illicit trafficking of fake medicines and counterfeit pharmaceuticals, a multi-billion illicit industry which endangers the public health and safety of citizens across the Western Hemisphere.

In Mexico alone, some reports have found that 60 percent of commercially sold pharmaceuticals are falsified, counterfeited, expired, or stolen. Some pills are even laced with deadly fentanyl and highly addictive meth.

The counterfeit medicines are sold online, in the informal economy, and in professional brick-and-mortar pharmacies, where CJNG liaisons coerce pharmacists and storekeepers to sell and store them alongside real medicine.

Confiscated fake medicines have included treatments for HIV, cancer, osteoporosis, diabetes, blood pressure, cholesterol, and obesity.

The CJNG and other cartels are seeking dominance in Central America and stretching their illicit empires into South America with newer alliances, where they can control more illicit markets, ports, and governance structures through bribery and intimidation.

From a trans-regional perspective, the fragmenting and realigning of organized crime operations across borders has also seen the rise of Eastern European, Chinese, Turkish, Italian and Balkan syndicates vying for market share in Latin America, and; reciprocally, increased illicit business by the cartels, the Primeiro Comando da Capital (PCC), and other Latin criminal networks in lucrative markets in Europe and overseas.

Costa Rica represents a newer prime expansion area for these criminals, due to its large international ports, lightly monitored coastline, lack of strong law enforcement entities, easy access to the dollarized international financial system, and geographic proximity to the deeply criminalized Ortega regime in Nicaragua, creating a nexus among different global illicit markets including illegal gold trade.

Expansions by CJNG and other TCOs in the Americas is putting these groups in contact with Chinese triads and Eurasian criminals, especially in the ports and money laundering havens. Italian organized crime, in particular groups with ties to the ‘N-dran-gheta’, are also expanding their presence in Argentina, Brazil, Chile, and Uruguay to open new drug trafficking routes to Europe.

In many cases, one-time ideological opponents are no longer enemies, but potential partners who can provide or purchase specific criminal services and financial rewards.

Take for example MS-13, which now operates in Mexico, concentrated in Tijuana and other key border areas.

The Primeiro Comando da Capital (PCC), based in São Paulo, has expanded is operation to Bolivia, Paraguay, Argentina, Africa and Europe.

The Tren de Aragua has operations in Ecuador, Peru, Chile and Central America.

These groups are building alliances that could allow them to expand their operations in unprecedented ways in the global drug trade, illicit economies, and armed conflicts and insecurity in the hemisphere, and in other parts of the world.

These newer hybrids are rapidly amassing formal political power and seeking new alliances with each other and with other state and non-state armed actors to achieve their goals of becoming major political forces embedded in the state.

Ecuador, once among the most peaceful countries in Latin America, faces an existential threat from an array of criminal groups.

In 2023, leading presidential candidate Fernando Villavicencio was brazenly assassinated by Ecuadorian gang Los Lobos, believed to be aligned with Mexico’s Jalisco New Generation cartel.  This created chaos in political circles and power struggles among criminal gangs, which in 2024 set off coordinated riots in prisons and an even greater wave of violence across the country.

A rival gang, the Choneros, backed by Mexico’s Sinaloa cartel, called for peace in a statement apparently issued from Mexico City. But the reality is that both gangs, with roots in the prison system, continue fighting for criminal supremacy. Aligned with other transnational organizations, these gangs are creating more violence, waves of murders, and turf wars over territory for drug trafficking and predatory crimes such racketeering, kidnapping, extortion, and money laundering, making the nation the most violent in the hemisphere.

But the collapse of Ecuador’s rule of law is another manifestation of the impunity, diversification, expansion, and joint ventures among today’s leading TCOs.

In addition to the increasing presence of the Chinese triads, Ecuador also has to deal with external threats posed by the Albanian, Italian, and other Eurasian mafias in trans-Atlantic cocaine-smuggling routes to European demand markets.

Panama continues to serve as a central logistics hub for multi-continental criminal organizations.  Its role came into further focus in November 2022, when a multi-jurisdictional task force arrested 49 people in Dubai, Spain, France, Belgium, and the Netherlands, all with alleged ties to a transnational-networked ‘Super Cartel’.

Defendants were allegedly coordinating a massive drug trafficking operation out of Panama with support from leading cartels in Ireland, Italy, Dubai, Bosnia, the Netherlands, and Morocco.

Panama’s Atlantic port and free trade zone (FTZ) of Colón is also a logistical hub notorious for illicit trade, corruption, drugs, illicit tobacco products, gangs, violence, and money laundering, as are other ports and FTZs in the Americas such as the mega-port of Peru’s Chancay, Brazil’s Santos or TBA and the port of Vancouver.

Of equal concern in Panama, China had leveraged bribery of government officials in the recent past to win concession rights to control the port of Colón and other critical infrastructure along the Panama Canal for commercial and military purposes.

President Trump and Secretary of State Marco Rubio have rightly put Panama on notice of the concerns by the U.S. over the corrosive capital from, and malign influence of, China that helps to expand its global trade logistics and illicit economies.

Why is Panama so important to U.S. national security?  Because it is a global trade hub through which 40 percent of all U.S. maritime container shipping passes, valued at almost $300 billion.  It is also a strategic military navigable waterway and chokepoint.

Through American diplomatic pressure with Panamanian President José Raúl Mulino, Panama has agreed to exit China’s Belt and Road Initiative and is providing greater oversight in two of the Chinese-controlled canal-side ports.

Risky Ports and Free Trade Zones (FTZs): Illicit Pathways and Tariff Evasion

As mentioned earlier, just like the cartels in Mexico wield great influence over the largest seaports in Mexico including Lázaro Cárdenas, Manzanillo, and Veracruz, from where they can launch their smuggling operations on an array of counterfeits and other contraband, China now owns or controls over 40 of the biggest ports in Latin America.  This allows the Chinese triads to also conduct extensive illegal activity in the area.

With the $1.3 billion investment by PRC state owned COSCO Shipping in Chancay, Peru, with more than $2.2 billion more to be injected in the next three phases of the port construction over the next six years, this has become the PRC’s most important strategic port acquisition in Latin America and one of the crown jewels of its Belt and Road Initiative (BRI).

Chancay is part of a concerted effort by the PRC to not only expand its dominance of global trade, but is likely to become a preferred hub of illicit trade. 

BRI projects, particularly ports, are sourced for being hubs of criminality for Asian triads and cartels alike for cocaine trafficking, trade in counterfeits, trade-based money laundering, strategic corruption and malign influence operations.

In the current tariff wars, we have heard much about transshipment points that are exploited to evade tariffs.

Criminal groups maneuver skillfully within potential tariff-induced chaos, arbitraging price differentials across markets, and developing alliances with other criminals to develop new trafficking and smuggling routes including offshoring and trans-shipments operations.

As the prices of authentic goods rise, so does demand for counterfeits.

Counterfeiters and savvy exporting countries have learned sophisticated tactics and means to outmaneuver tariffs, such as via transshipping, a logistical process by which a country ships their products through a third country so that the product will mask its true origin and look like it’s coming from the third country, thereby evading duties or tariffs.

In today’s tariff rows, counterfeiters are increasingly using Southeast Asia and nearshoring in the Americas as relay points, rerouting goods “Made in China” through third trans-shipment countries like Vietnam, Indonesia, and Malaysia, and Central America, and relabeling them as “Made in _______ [Not China].”

Chinese intermediaries even advertise these services openly, offering to help manufacturers circumvent restrictions by altering documents and disguising shipping routes.

This is why I believe that the legislative bill introduced by Senators Cassidy and Whitehouse, the Containing and Limiting the Extensive Abuse Noticed in Free Trade Zones Act (CLEAN FTZ), is critically important in protecting our national security and trade security alike, as well as the Container Security Initiative (CSI), and trade-transparency units (TTUs) to counter illegal trade across some of today’s risky free trade zones and ports around the world exploited by criminals.

It is not an understatement to say that in many parts of Latin America a perfect storm is brewing. A growing climate of insecurity and economic opportunities are being leveraged by China, Russia, and Iran through predatory activities and criminalities to finance greater insecurity and chaos in the region.

A few last points on China: China’s involvement in expanding illicit economies around the globe has had a triple whammy effect:

1. increases tremendous illicit wealth for its ruling CCP elite;  
2. hurts U.S. national security, American competitiveness, and innovation; and
3. finances China’s global ambitions to become the predominant superpower by 2049 in a multi-polar world. 

On the crime convergence front, China leverages ecosystems of criminality through its state-owned enterprises, banks, and  manufacturers to become the world’s largest player in almost every major sector of transnational crime. 

Several trillion U.S. dollars in illicit proceeds every year are generated from predicate offenses for money laundering that touch China’s jurisdiction and markets (through underground banking where all traceability ends), and are often used to finance China’s authoritarian regime and the PLA’s modernization.   

China continues to steal Americans’ personal identifiable information (PII), trade secrets, and intellectual property that finance its foreign malign influence campaigns against the United States. 

China also has helped Russia, Iran, and others evade international sanctions, including on oil exports. 

These Chinese threats will require even more attention as China (and Chinese triads) continue to expand across Latin America, and other regions.

• As a former SOUTHCOM Commander testified a few years back, China is the No.1 underwriter for the Mexican drug cartels, other criminal networks, and an array of despotic regimes.

Colleagues, whether it is fentanyl, counterfeits, or money laundering for narco-terrorists and other criminal networks, illegal trade or replacing the dollars as the world currency, if it harms the United States and the West, China will continue to use all of its national instruments to weaken us, while achieving President Xi’s 2049 strategic goals.

Finally, if we look at Canada in recent years, it has become a forward operational hub for Chinese money laundering and CCP police stations in North America.

Based on extensive investigative reporting, we now know that there is a nexus of PRC Intelligence Services operators converging with local Chinese triads in cities, often Fujian crime networks, and coercive practices of diasporic communities, through the United Front Work Department (UFWD) working to foment insecurity, and clandestinely fund influence and election interference. 

In fact, China’s National Intelligence Law of 2017 calls on Chinese individuals, companies, and organizations to act as citizen-spies for national security purposes.

These PLA ground stations, and network of civilian space and satellite programs in the Americas, have the potential to expand Beijing’s global military surveillance and defense capabilities in the southern hemisphere and in areas close to the United States.  

Through economic coercion, China is also buying islands across the Caribbean (e.g., in Antigua and Barbuda), building special economic zones, and likely planning to use these commercial outposts for military purposes and geopolitical gains by:  

• Corrupting or quelching any PRC opposition;

• co-opting democratic institutions/policies;

• disincentivizing U.S. support including DOD/US military; and

• replacing co-opted regimes with friendly PRC networks and proxies.

But this is also true in the South China Sea, where as we know, China has built military bases on several locations in the Spratly Islands and Pacific Islands, including air force facilities and other military installations to project power and shore up its vast territorial claims over virtually the entire South China Sea, and build a bridge towards the Americas.

In the U.S. Indo-Pacific Command (INDOPACOM) theater, PRC’s efforts have destabilized the Solomon Islands, attempted to infiltrate Guam, undermined democracy in the Northern Mariana Islands and other Pacific Rim islands, and are seriously harming US relationships with those communities while isolating Taiwan diplomatically.  

As democracy weakens and poor governance rises across these Pacific Rim Islands, China pounces and expands its influence through strategic corruption and their multi-polar agenda.

Since the military took over in Burma/Myanmar, the PLA has worked with the Junta to build fentanyl factories to export precursors to Australia, Canada, New Zealand and anywhere else where they could get access, and also turned a blind eye to criminality and financial scams in the Golden Triangle Special Economic Zone (GTSEZ) in the Mekong Valley.

These monies helped fund the PRC’s malign influence and truth pollution, used to corrupt elections by using AI in Taiwan, Hong Kong, the Solomon Islands, Canada, the U.S. and other countries according to the FBI.   

I encourage our intel analysts to examine the archipelago of illicit pathways of the BRI investments globally that help in the global expansion of illicit economies, and overlay it with China’s commercial expansion and forward military operations in the Pacific Rim and across Latin America, for example.

In fact, the BRI global footprint, which is weaponized as an IW strategy as well (like fentanyl), tracks some of the biggest criminalized routes known for corruption, money laundering, and illicit trade.

Finally, another great example of Chinese asymmetrical warfare is China’s dominance of the mining of rare earth minerals and magnets critical for advanced missiles and military weaponry, wind turbines, robotics, telecommunications, electronics including in cars, and where China controls over 90 percent production of such rare earth materials.

In his Art of War, Sun Tzu emphasized the importance of exploiting an enemy’s weaknesses while avoiding their strengths. China now has another tool to exert greater leverage to cripple critical automotive, electronic, and defense industries, and exploiting market vulnerabilities against its enemies.

Russia

Russia is another criminalized state that also profits from a vast array of illicit enterprises to fund the Putin regime and its military operations abroad, while leveraging organized crime and paramilitary groups such as the Wagner Group (now Africa Corps) to advance President Putin’s global agenda especially through illicit means. 

For example, Russia’s Wagner Group has assisted in a series of coups in Africa that have brought some juntas to power or enabled further democracy backsliding and the reign of kleptocracies ;  

In exchange, Russian proxies now run gold and diamond mines, high value timber and other natural resources and commodities industries. 

From Africa and Europe to the Americas, the Kremlin’s proxies move money, weapons, and contraband through an intricate web of shell companies and criminal networks specializing in illicit trafficking, illegal trading, and sanctions-busting.

What results is chaos and regime protection of authoritarian rulers that face condemnations of their human rights abuses against their own people.  

Some of the dirty profits derived by Russian mercenaries and organized crime have helped Russia fund its war in Ukraine, and active measures around the world.

In Latin America, Russian criminal networks and proxies continue to expand their illicit operations to destabilize U.S. national interests, including through disinformation campaigns. 

Russia’s integration of organized crime has also leveraged such proxies in irregular activities especially out of Cuba, Venezuela, Nicaragua and other Central American countries.

As democracies are weakened and states begins to fail, Russia and other antagonistic adversaries capitalize, profiting from illicit economies and instability.

The Siloviki too may be asked to engage in kidnappings and assassinations on behalf of their masters in Moscow.

Finally, it is troubling that Russian criminal networks and intelligence agencies are selling some of the more advanced surveillance technologies to state and non-state criminal actors in Latin America, greatly enhancing their ability to monitor and attack political enemies, law enforcement, journalists, human rights workers and anyone else they perceive as a threat.   

Iran

Regarding Iran: While Iran has threatened U.S. interests for decades as it tried to erode U.S. influence in the Middle East by fomenting insecurity and terror in neighboring states, it too has expanded operations in Latin America;

and helped to support Hezbollah and its financiers operating in the dark economies, and in the hiring of criminal gangs as proxies to conduct assassinations and subversive activities.

Iran established its beachhead in Latin America through Venezuela through the early support of Hugo Chávez for its military’s irregular warfare campaigns, and for the Iranian Hezbollah Threat Network operatives and surrogates to expand their clandestine operations, fund raising through criminality, and malign influence activities across Latin America.

In the on-going Israeli conflict against Hamas after October 7, 2023, Israel has not only weakened Hamas and other Iranian proxies, but Iran itself.  

However, it is vitally important to keep monitoring the situation for any immediate and future retaliatory actions.  Sworn enemies never forget.

While the situation remains fluid, Iran, through its Islamic Revolutionary Guards Corps (IRGC) and Quds Force, will remain, employing subversive active measures through its embassies, terrorist proxies, and criminal networks in Latin America, and support from it allies in Bolivia, Cuba, Nicaragua, Venezuela, and other countries.  

Iran’s operational platforms and disinformation campaigns against the United States and its democratic allies are at times coordinated with China and Russia.

Given Israeli current military dominance over Iran, how IHTN is possibly leveraged against the United States, Israel, and other allies in Latin America will require even more precision intelligence to protect American national interests and our citizens.

This latter development takes greater urgency given some unconfirmed reports that additional intelligence assets have been repositioned in recent weeks to Venezuela including reallocated financial resources to support them towards possible future asymmetric operations against the West.

Leveraged and Coordinated IW and Diplomatic Actions

In closing, the current reality is that transnational criminal groups and state-sponsored criminality are growing in this hemisphere as cartels and TCOs are gaining more power, diversifying, and building alliances that could allow them to expand their operations in unprecedented ways that harm our homeland and regional stability. 

This is also true for antagonistic foreign governments operating across Latin America.

Another reality is that security forces have become largely reactionary instead of proactively, increasingly being out-resourced, outmanned, sometimes out-gunned,

Action beats reaction every time.

We do not have sufficient tools to tackle transnational crime and related money laundering of the CMLOs.

This is why I believe that we must develop anticipatory, actionable responses to counter transnational crime and converging threats.

In the past, efforts have been over-siloed and holistic whole-of-government, whole-of-society approaches were not fully manifested.  

This is why it is important to:

Integrate precision intelligence and analysis into military, economic and criminal operations and targeting, to remove a significant portion of the problem; 

Put some hurt on adversarial command and control and cut off the financing and infrastructure that threat networks use to grow and sustain their efforts. 

In addition to the recent designations, make criminal threat convergence a first-tier national security priority, as well as include it in the National Intelligence Priority Framework (NIPF) so that there can be greater data collection, information-sharing across sectors, and more joint and coordinated law enforcement operations with committed partners overseas.  I would also encourage the National Intelligence Council (NIC) to undertake a new National Intelligence Estimate (NIE) on today’s criminal threat convergence landscapes especially in Latin America, and also release an unclassified version and an accompanying strategic infographic/chart (similar to U.S. CTOC national strategy in 2011).

This also includes the leveraging of national assets and resources by focusing greater attention to CMLOs and China’s state-sponsored criminalized trade and strategic corruption in the Americas as a higher collection priority.

Through a more comprehensive Counter Transnational Threat Convergence framework, the USG can holistically help national security communities to not only understand the threat intelligence overlays of global ecosystems of criminality and corruption in gray zones, but to equip them with a sharper set of:

Pragmatic resource-sustainable IW tools and anti-crime capabilities, equipment, and trainings;

greater data analytics and data mapping including by establishing a US-funded network of intelligence fusion centers that are integrated with our strategic partners across Latin America;  leveraging DEA’s Sensitive Investigation Unit (SIU) in Colombia, the Information Analysis Center (IAC) in Mexico; and HSI’s Transnational Criminal Investigative Units (TCIUs); and

utilizing operational lessons learned in the recent past including DEA-DoD cooperation in Afghanistan aimed at dismantling heroin trafficking networks and narco-terrorist groups engaged in criminal activity and related extreme violence.

As we innovate force-multiplying solutions and pathfinding actions in the gray zone, we can ensure Irregular Warfare strategies meet today’s multi-dimensional security threats and illicit vectors faster and decisively, and to expand the competitive space to our advantage, counter illicit operations from poly-threat networks, and neutralize their own competitive strategies.  

Without more anticipatory intelligence and innovative IW frameworks that fully integrate strategies to counter strategic corruption, criminality, and malign influence, we may not meet these challenging threats. 

Given Secretary of State Rubio’s hawkish views on organized crime in the Americas, I hope that he can make the necessary investments at the State Department to undertake criminal deterrence and cross-border capacity-building to support partner nations’ abilities to disrupt and dismantle transnational criminal networks and the burgeoning illicit economies in the region including a Marshall Plan-type initiative to restore U.S. leadership and influence in the Americas.

Other sizeable anti-crime and counter transnational organized crime investments are needed in our law enforcement agencies and DoD, including our Southern Command, to take back market share from the cartels and TCOs and break their economic power and corruptive influence by confiscating their assets and money flows.

The newly-formed bipartisan Congressional Cartel Task Force can work to ensure that the USG has the necessary legislative authorities, resources and recommended policy actions to support the intelligence, law enforcement, and defense communities, and partner nations, to invest in strategic dominance to further mitigate their harms to our communities.

I again strongly recommend also designating key CMLOs and Asian triads in the current fight against the cartels/violent TCOs- these, in my opinion, are the biggest threat to U.S. national security.

Fighting transnational crime and converging threats remains an uphill battle.

It will continue to be an uphill battle given the sophistication and advances in technologies and underground digital banking used by the cartels and other TCOs.

Unless we up our game and get ahead with the required political will, resources, and diplomatic energies needed to push these challenging security boulders up the hill, the battle against many of today’s cross-border threat convergence harms will remain a Sisyphean task.  

No one agency or government should have to push that boulder up the hill alone; it takes integrated intelligence, coordinated multi-dimensional capabilities, and dynamic partnerships to confront today’s spectrum of threats.

Thank you.