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Subject: notes of team meting and interview with Doug Wanke

I

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Subject: "The Economic Environment of Osama Bin Laden"

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WSJ.com - UPDATE(2):US Seizes Drug-Laden Boat; Al-Qaida Suspected Page 1 of 2

THE WALL STREET JOURNAL. O N L I N E '

December 19, 2003 7:00 p.m. EST

UPDATE(2):US Seizes Drug-Laden Boat; Al-Qaida

Suspected
DOW JONES NEWSWIRES

(Adds background, comments from experts)

WASHINGTON (AP)--The Navy has seized a boat carrying nearly two tons of hashish in the
Persian Gulf, U.S. officials said Friday, in what could be some of the first hard evidence of al-
Qaida links to drug smuggling.

The guided missile destroyer USS Decatur intercepted the 40-foot boat on Monday. Aboard were
a dozen men, three of them believed to have al-Qaida connections, and 3,780 pounds of hashish,
the Navy said Friday.

"This is the first empirical evidence I've seen that conclusively links al-Qaida with the drug trade,"
said Bruce Hoffman, a terrorism expert at RAND, a think tank that often does work for the
Pentagon.

The Decatur seized the boat, a wooden vessel called a dhow, near the Straits of Hormuz, a narrow
part of the Persian Gulf where it opens into the Arabian Sea. The area is a known smuggling route
for al-Qaida, the Navy said.

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The drugs are worth between $8 million and $10 million, the Navy said.

Military officials wouldn't say Friday why they believed the boat, its cargo and some of its crew
were linked to Osama bin Laden's terrorist network. The boat remained under the Decatur's
control and it hadn't been determined what to do with the men on board, the Navy said.

Terrorism experts and government officials long have said they believe that al-Qaida makes
money through criminal enterprises including the drug trade. A U.N. panel reported last month,
for example, that al-Qaida had financed some of its operations through drug trafficking.

Before the Sept. 11, 2001, attacks, bin Laden had been sheltered in Afghanistan by the Taliban,

http://online.wsj .com/article_print/0,,BT_CO_20031219_007616,00.html 12/21 /2003

US Official: AI-Qaida, Drug Traffickers May Establish Ties
Jenny Falcon
New York Voice of America News
02 Mar 2004, 00:37 UTC
http://www.voanews.com/article.cfm?obiectlD=BD81DAD9-32C8-41EE-AAC3FBF774EE77E5
Listen to Jenny Falcon's report in New York (RealAudio)
Falcon report - Download 309k (RealAudio)

U.S. officials working to combat the international drug trade are warning of possible future links
between al-Qaida and drug traffickers in Colombia and Mexico.

Harold Wankel, the assistant administrator for intelligence at the U.S. Drug Enforcement Agency,
says U.S. officials are increasingly concerned that al-Qaida terrorists will also turn to international
drug trafficking and Colombian organized crime to transport funds, people, and banned weapons.

"If al-Qaida comes to South America and they need to get something done in the United States
that requires movement, whether it is movement of commodity or movement of people, they need
not set up infrastructure, they need not set up an operation capable of doing that," he said. "They
need to get x-number of dollars and go to the people who are the professionals, the people that
are the best at it, and that is the Colombian and Mexican organized criminal groups that are
closely aligned these days."

Mr. Wankel says al-Qaida sympathizers in Latin America could turn to the drug trafficking network
as the international crackdown on al-Qaida's finances dries up funds.

Colombia's ambassador to the United States, Luis Alberto Moreno, says Colombian authorities,
are monitoring possible collaboration between Muslim extremists and drug cartels.

"There is always going to be an opportunity for any one group to try to develop that. We have
very respectable people from Arab communities in our country who have legitimate businesses,"
he said. "There are other people in the illegal business of smuggling products into our country
and they could be, at one point, a link to it. We have not seen it, so far. We monitor it constantly,
but yes, this something that could develop."

U.S. drug enforcement officials say FARC, the Revolutionary Armed Forces of Colombia, is the
only terrorist group with clear links to international drug traffickers.

Drug money has helped sustain FARC militants in their three-decade long struggle against the
Colombian government, which has included deadly bombings, kidnappings, murders and
hijackings.

U.S. drug enforcement officials say the Iranian-backed Hezbollah, along with Afghanistan's
former Taleban movement, have profited from drug dealing, but it is unclear whether al-Qaida has
benefited from drug funds.

The officials made their remarks during a panel discussion hosted by ABC News in New York.
The Connection between
Drug Trafficking and
Terrorist Financing

A Presentation for the

Financial Action Task Force

by

Harold D. Wankel
Assistant Administrator for Intelligence
Drug Enforcement Administration
United States Department of Justice

Paris, France
February 24, 2004
Committee on International Relations, U.S. House of Representatives Page 1 of6

Committee on International Relations

U.S. House of Representatives
Washington, D.C, 20515-0128

Statement of
Karen P. Tandy
Administrator

Drug Enforcement Administration

Before the

Committee on International Relations

U.S. House of Representatives

February 12, 2004

'United States Policy Towards Narco-Terrorism in Afghanistan"

Chairman Hyde, Ranking Member Lantos and distinguished members of the Committee, thank
you for the invitation to testify today on the important issue of opium production in Afghanistan and its
potential links to terrorism.

Overview

Afghan drug production is a priority for the DBA that guides our enforcement strategy in the
region. As you know, opium production in Afghanistan has resumed over the last two years, although it
is still lower than the highest level reached under the Taliban. While we expect that only a small portion
of the resulting opium and heroin will ultimately reach the United States, these drugs are of great
concern because they increase worldwide supply and have the potential to fund terrorists and other
destabilizing groups. Because the situation inside Afghanistan presents unique challenges to law
enforcement, the DBA has successfully acted with neighboring countries to control the spread of Afghan
opium and heroin through Operation Containment.

I have just returned from Kabul where Assistant Secretary of State Robert Charles, other senior
officials representing the United States, and I participated in discussions with Afghanistan Transitional
Authority President Hamid Karzai, United Nations Office of Drugs and Crime Director Antonio Costa
and other representatives from Afghanistan and the European Union on the challenges posed by Afghan
drug production. The international drug control community shares our view that concerted multilateral
efforts will be required to effectively address these problems. I look forward to discussing each of these

http://wwwc.house.gov/international_relations/108/tand021204.htm 2/13/2004
 2 of 4 DOCUMENTS

Copyright 2004 Federal News Service, Inc.

Federal News Service

February 12,2004 Thursday

SECTION: CAPITOL HILL HEARING

LENGTH: 16338 words

HEADLINE: HEARING OF THE HOUSE INTERNATIONAL RELATIONS COMMITTEE

SUBJECT: AFGHANISTAN DRUGS AND TERRORISM AND U.S. SECURITY POLICY

CHAIRED BY: REPRESENTATIVE HENRY HYDE (R-IL)

LOCATION: 2172 RAYBURN HOUSE OFFICE BUILDING, WASHINGTON, D.C.

WITNESSES: PANEL I:

MARK STEVEN KIRK (R-IL);

PANEL II:

ROBERT B. CHARLES, ASSISTANT SECRETARY, BUREAU FOR INTERNATIONAL NARCOTICS AND LAW
ENFORCEMENT AFFAIRS;

WILLIAM B. TAYLOR, JR., COORDINATOR FOR AFGHANISTAN, DEPARTMENT OF STATE;

KAREN P. TANDY, ADMINISTRATOR, DRUG ENFORCEMENT ADMINISTRATION;

THOMAS W. O'CONNELL, ASSISTANT SECRETARY OF DEFENSE FOR SPECIAL OPERATIONS AND LOW-
INTENSITY CONFLICT, DEPARTMENT OF DEFENSE;

BRIGADIER GENERAL GARY L. NORTH, USAF, DIRECTOR OF POLITICO-MILITARY AFFAIRS FOR ASIA-
PACIFIC, JOINT CHIEFS OF STAFF

BODY:
REP. HENRY J. HYDE (R-IL): The committee will come to order. Today's hearing continues this committee's
oversight of the U.S. global war on terrorism, including efforts by the U.S. government to eliminate financial support
for terrorism. We have learned much. In testimony before this committee last July, Ron Noble, the secretary- general of
INTERPOL warned publicly that al Qaeda and other terrorist groups operating in Kosova, Syria, Lebanon, Chechnya
and Northern Europe were materially benefiting from the sale of counterfeit goods such as music, popular goods,
videos, jewelry, designer clothes similar to those items sold openly on the streets of every major city in the world.
The theft of intellectual property and its link to international terrorism will receive further attention from the
committee this year, but today we turn our attention to a phenomenon that both derives benefits from and provides
benefits to terrorists: the illicit drug trade in Afghanistan. This hearing will examine among other things how opium
 jmmittee on International Relations, U.S. House of Representatives Page 1 of4

Committee on International Relations

U.S. House of Representatives
Washington, D.C. 20515-0128

STATEMENT BY
THOMAS W. O'CONNELL
ASSISTANT SECRETARY OF DEFENSE FOR SPECIAL OPERATIONS AND LOW
INTENSITY CONFLICT

BEFORE THE
UNITED STATES HOUSE OF REPRESENTATIVES COMMITTEE ON
INTERNATIONAL RELATIONS

UNITED STATES HOUSE OF REPRESENTATIVES

108th CONGRESS

STATEMENT FOR THE RECORD FEBRUARY 12, 2004

COUNTERING NARCOTERRORISM IN AFGHANISTAN

Chairman Hyde, Representative Lantos, and distinguished Members of the Committee, it is my

honor to appear before you today to discuss the problem of illegal narcotics trafficking in
Afghanistan, its relation to terrorism, and the programs the Defense Department is developing
to defeat this problem. I am particularly pleased to discuss these issues with you, because the
Congress has been very responsive in supporting my office's initiative in requesting funding for
counternarcotics programs for related to Afghanistan in the FY 2004 supplemental
appropriation. As you know, Congress supported the Administration's request for Department
of Defense funding of $73 million for these purposes.

Taking Immediate Actions while Building Long-Term Capability

The narcotics problem in Afghanistan presents a special challenge. The international

community and the Afghan leadership, with the support of the United States, are addressing
this challenge. The United Kingdom has the lead in providing international assistance, and the
Afghan leadership, including President Karzai and Minister of Interior Jalali, is beginning to
take action. This is the appropriate course to take, because this problem requires a long term
effort that the Afghan government must lead, with assistance from the United States and the
rest of the international community.

Our current actions must also aim not just at immediate positive effects, but also at sustainable
long-term results. This can only be achieved by devoting some of our current efforts to helping
create a strong, long-term capability for Afghanistan to control this problem on its own. This is
especially important because, as we know from successful counternarcotics efforts in other
countries, success is achieved not just by destroying fields and disrupting traffickers, but also
by creating a strong law enforcement framework, with effective police equipped with adequate

http://wwwc.house.go v/international_relations/108/oco021204.htm 2/13/2004

Committee on International Relations, U.S. House of Representatives Page 1 of 5

Committee on International Relations

U.S. House of Representatives
Washington, D.C. 20515-0128

Testimony by -,
Robert B. Charles \t Secretary of State

Bureau for
International Narcotics and Law Enforcement Affairs,

House International Relations Committee

Thursday, February 12, 2004

U.S. Policy towards Narcoterrorism in Afghanistan

Mr. Chairman, and distinguished members of the Committee: Thank you for the opportunity to
talk to you today about the narcotics situation in Afghanistan and what we are doing about it.

Success in rebuilding Afghanistan, an epicenter in the war on terrorism, is one of the

Administration's two highest priorities. More than two decades of war have destroyed
Afghanistan's physical infrastructure and much of its human and social capital as well.
Operation Enduring Freedom's ousting of the Taliban regime, the subsequent Bonn process
establishing peace between rival factions, and the presence of the moderate Hamid Karzai as
head of an interim government, have solidified Afghanistan's strong and supportive
relationship with the U.S. and Coalition partners. However, as the international community and
the fledgling central government begin the task of building for Afghanistan an infrastructure,
economy, and public institutions, the country faces major threats from different directions,
including the resurgence of illegal drug cultivation and an unstable security environment. The
challenge is enormous.

I have just returned from the International Counternarcotics Conference on Afghanistan held in
Kabul on February 8 and 9. The Conference brought together practitioners and policy makers
from a host of countries, and underscored the concern of the international community about
the narcotics situation in Afghanistan and our common commitment to assist the nascent
institutions of the government of Afghanistan in dealing with it.

For as you know, there is much to be concerned about. For the past decade, opium poppy
has been Afghanistan's largest and most valuable cash crop. After a one-year "poppy ban" in
2000-2001, under the oppressive rule of the Taliban and during which drugs were stockpiled,
Afghanistan has reemerged as the world's leading supplier of illicit opium, morphine and
heroin. The CIA's Counternarcotics Center estimated the 2002-2003 crop at 61,000 hectares
- a 98% increase over the 2001-2002 crop. Opium was cultivated in 28 of Afghanistan's 32

http://wwwc.house.gov/international_relations/l 08/char021204.htm 2/13/2004

5. Osama bin Laden a 'narco-terrorist'

ROWAN SCARBOROUGH
Washington Times

The al Qaeda terror group has embraced heroin trafficking to such an extent that its leader,
Osama bin Laden, is now a "narco-terrorist," says a U.S. congressman just back from a fact-
finding mission in Pakistan and Afghanistan.

"It seems clear to me heroin is the No. 1 financial asset of Osama bin Laden," Rep. Mark Steven
Kirk, Illinois Republican, told The Washington Times. "There is a need to update our view of how
terrorism is financed.

"And the view of Osama bin Laden relying on Wahhabi donations from abroad is outdated. And
the view of him as one of the world's largest heroin dealers is the more accurate, up-to-date
view."

Mr. Kirk wants a pronounced shift in how the Bush administration tries to stop al Qaeda funding.
Up to now, Washington has focused on bin Laden's traditional sources: Islamic charities and his
family fortune.

But the Bush team has choked off much of that flow, forcing bin Laden to adjust. In Afghanistan,
bin Laden has the benefit of the world's largest poppy crop, as he evades capture in Pakistan's
notorious border areas. He is reaping $24 million alone from one narcotics network in Kandahar,
Afghanistan, according to Mr. Kirk's investigation.

The congressman said it is no longer sufficient to go after only the charities and bank accounts.
Washington now must fuse counterterrorism and counternarcotics into an inseparable mission.

"The most important thing here is to change the language to not describe Osama bin Laden
anymore as a terrorist, but to more accurately describe him as a narco-terrorist," said Mr. Kirk,
who sits on the Appropriations subcommittee on commerce, justice, state and judiciary.

Mr. Kirk and his team of House staff investigators spent five days in Pakistan and Afghanistan,
whose farm areas once again are sprouting thousands of acres of poppies from which opium and
heroin are produced. Hundreds of illicit drug labs have sprung up to process the heroin for
shipment to Pakistan.

The al Qaeda-heroin connection is becoming more clear to Washington. The first big break came
last month, when Navy ships seized boats concealing large stashes of heroin and operated by
crew members linked to al Qaeda.

In Afghanistan, Mr. Kirk talked to a variety of sources, including U.S. Drug Enforcement
Administration agents, U.S. troops and Afghan counternarcotics officials.

A kilogram of heroin that can fetch $2,000 in Pakistan can get $10,000 in Turkey. That is why al
Qaeda has begun sending drug-laden boats into the Arabian Sea: to find more lucrative markets
outside Pakistan.

"If he can expand his operation closer and closer to the retail market, he will dramatically increase
his profit," Mr. Kirk said.

Defense Secretary Donald H. Rumsfeld is reluctant to get his troops too deeply involved in the
drug wars, aides say. Some Pentagon officials view counternarcotics as predominately a law
enforcement duty. In Afghanistan, where the United Nations reports 264,000 poppy-growing