Posted on 10/03/2004 3:23:52 PM PDT by yonif
In this gritty border town known as a haven for drug smugglers, arms dealers and counterfeiters, stacks of money change hands in the open on every corner and thousands of people each day stream across Friendship Bridge into Ciudad del Este. They carry packages on their backs, in wheelbarrows or on carts, and border police stop few.
Such chaotic scenes give life to the city's reputation of lawlessness and U.S. officials' description of the tri-border area where Paraguay, Brazil and Argentina meet as a key South American point for Islamic terrorist fund raising to the tune of $100 million a year. Yet few arrests have been made or assets frozen, and local officials told The Associated Press they are ill-prepared to fully track financial movements and they discount terror links.
"We need more resources and greater controls," said Juan Carlos Duarte, a district attorney in Ciudad del Este who recently carried out several raids on currency exchange houses. "Frequently, it's difficult for even the Paraguayan Central Bank to track these movements. To get to bottom of this we need more staff. We won't be able to solve anything without more help."
Paraguay, Latin America's second-poorest country after Bolivia, is in the throes of a financial crisis that has left basics like computers for government offices hard to come by.
The raids carried out this spring are aimed, in part, at snuffing out illegal transactions and helping investigators piece together a money trail used by drug runners and counterfeiters and other purported businesses operating in Ciudad del Este, Duarte said.
Dozens of exchange houses - some little more than one-room offices - crowd alleyways offering to send money as far away as Asia and the Middle East. On street corners, money changers' fanny packs bulge with U.S. dollars, euros, Brazilian reals, Paraguayan guaranis and Argentina pesos. Store owners open cash tills brimming with bills.
Coming off Friendship Bridge, which connects Ciudad del Este with sister city Foz do Iguacu in Brazil, people load and unload boxes, carts, even trash bags filled with knockoff brands of televisions, underwear, diapers, leather jackets, and watches.
Meanwhile, street vendors and middlemen shout into cell phones and walkie-talkies. Private security officers, some clutching rifles, stand alongside armored trucks. It all is testament to this region's reputation as South America's contraband and smuggling capital - a place where anything from drugs to arms to pirated software reputedly can be had.
That reputation brought U.S. scrutiny in the post-Sept. 11 era. Much of the focus has fallen on the 25,000-strong Muslim community in the area built up by former Paraguayan dictator Alfredo Stroessner during the 1970s as a trading hub for his iron-fisted regime.
Yet after more than three years under U.S. watch, American and some regional officials remain divided over the potential for terrorist links, and unregulated trade flourishes.
U.S. officials suspect as much as $100 million a year flows out of the region, much of it diverted to Islamic militants linked to Hezbollah and the Palestinian militant group Hamas.
Authorities in Ciudad del Este say many among the Middle Eastern immigrant community send money home, but it is difficult to determine where the funds end up. Contributions to religious groups are even harder to trace.
U.S. officials say much of the money is sent back through an assortment of difficult-to-trace means - via couriers, complex wire transfers, some hand-carried.
"We are concerned about material support emanating from the area and its weaknesses: the ability to move people, goods, and money in a way that goes largely untracked," said Juan Zarate, the U.S. Treasury Department's deputy assistant secretary for terrorist financing and financial crimes.
In June, the Bush administration ordered U.S. banks to freeze any assets found belonging to a Ciudad del Este-based businessman. The Treasury Department accused Assad Ahmad Barakat of using his electronics store as a cover for Hezbollah fund raising, saying he mortgaged his import-export business to borrow from a bank in a fraud scheme and "coerced" other Arab merchants into making Hezbollah contributions.
However, some regional officials question assertions of terrorism links and maintain that fund raising for Hezbollah is legal here since it is recognized as a political party.
Paraguayan Foreign Minister Leila Rachid recently told the Argentine newspaper, La Nacion, that the fact that Hezbollah supporters send part of their salaries to the political party in Lebanon "does not mean there are terrorist cells" in the tri-border area.
Many in the Arab community have expressed outrage over increased scrutiny of the community, saying most are traders and small business owners from Syria and Lebanon.
At the Mosque of the Prophet Muhammad, the main mosque in Ciudad del Este, several people gathering for Friday prayers recently complained of unfair treatment.
"They say there are terrorists here or terrorist support only because they think there must be with so many Arabs living in one place," said Hassan Ali, an electronic salesman. "But where is the proof? Not one person has been convicted of terrorism here."
Yet, U.S. and Argentine officials point to arrests, including Barakat's, that they say prove the area has been a base for several people with alleged links to Hezbollah and other groups.
Another arrest involved Mohammed Ali Hassan Mokhlis, an Egyptian who reportedly spent time in the tri-border area, according to regional intelligence officials.
A suspected planner of the 1997 Luxor massacre of 58 foreign tourists at the Temple of Hatshepsut in southern Egypt, he was extradited to Egypt from Uruguay last year after he tried to cross into Brazil using a false Malaysian passport. Four Muslim militants also were killed.
Still, Brazilian and Paraguayan law enforcement see the main problems as drug and contraband trafficking. U.S. officials, who believe the terrorist risk is real, say they are helping train Paraguayan authorities to better monitor financial transfers and bolster border controls.
Meantime, the Brazilian city of Foz do Iguacu across the river from Ciudad del Este is fighting to improve the tri-border image. Last year, the city launched an advertising campaign in Latin American newspapers trying a lighthearted touch to play down claims of terror links.
Hoping to attract more tourists to a region that includes the world-famous Iguazu waterfalls, the city ran full-page ads featuring a photograph of fugitive al-Qaida leader Osama bin Laden and the caption: "If bin Laden would ever risk a visit to Foz do Iguazu, it's only because it's worth it."
Argentina, for example, has a very large Syrian-based population, and oddly enough, they are over-represented in the Army officer corps. Put that factoid alongside the many troubling reports of al-qaida-type operations (training bases, etc.) in the tri-border area, and the potential for trouble can easily be seen. Great place for the terrs to learn enough Spanish to blend in better, when they walk across our border. Or, a great place for them to pick up Argentine, Paraguayan, or Brazilian passports, weapons, airline connections, you name it.
Anyway you slice it, latino-muslim corruption is a nasty business for us.
This area is right next to the most beautiful water falls in the world, Iguacu Falls(I probably spelled it wrong).
We were there on a business trip about six months ago.
It is a really beautiful area and the people, at least in Foz do Iquacu, were warm and welcoming. The "Falls" were awesome!
Our hosts, however, warned us about not travelling alone, because there have been some kidnappings of tourists and businessmen. We heeded their advice.
Because of all the warnings we got, it may be awhile before we return. Saw lots of Muslims. It was a surprise to me.
Since our return, I've read alot about the "Tres Frontiere".
Had I read it sooner, I probably would not have gone.
Also a bit unerving is the fact that Brazil is now developing its own nuclear fuel/weapons(?) program.
Christians In Action are thicker on the ground there than anywhere else in this hemisphere.
While I haven't been in over eight years, I know this place well. Back then, some 15 billion dollars went through that little town every year. 15 billion!
Our distribution in Paraguay, i.e., Ciudad del Este, for US consumer goods lines were consistently no. 1 in all of Latin America, including, often Mexico. The market was huge. I moved out when we were able to sell directly into Brazil. The border market still exists, although I understand it is much smaller than before.
My Arab clients, as far as I can tell, and I'm fairly sure of it, were all good people, just chasing a buck. I can look back and see that the 2nd tier of less-than-reputable merchants had other motives and means. One client, I used to conduct business with over a bottle of whiskey per deal. He always bitched whenever his mother in law came to his house, because his wife made him hide the booze. Whenever he wanted a drink, he'd joke, all he'd have to do is look under a cushion, or behind a door... He always had fresh Havanas... delivered weekly by a Varig pilot from the Havana route.
With that kind of money about, the place was ripe for laundering of all sorts, includingy, sadly, for terrorism.
I didn't know any of this at the time. Just this past year I had a chance conversation with a U.S. Gov official who has studied the area. Believe me you, it's under surveillance.
Btw, this article is full of bad assumptions regarding the drug and counterfeit trade in Cuidad del Este. The core business of the place is in legitimate brands sold at lower prices than are available elsewhere in Brazil, or Miami for that matter. The counterfeit trade is no worse than anywhere else in Brazil, except cheaper and more concentrated, and it fools no one. You want counterfeit, you go to the counterfeit shops or the street. You want legitimate, you go to the legitimate shops who sell only that, and who spend huge monies advertising and ensuring their reputations. There are merchants there from all over the world, including arabs, asians, and europeans. I don't know of a single Ciudad del Este-based American, but I know plenty of Americans who have and probably still do conduct business there. The Arabs are numerous, but hardly dominant in the region.
Also, the drug trade is a government concession, so that, too, from this article, is crap. And, the principal Arab population is on the Brazilian side of the border. Brazil, as much as Paraguay, is a problem there.
Just so folks know, from what I have found in google searches, the Hezbollah operative they caught ran two businesses in Ciudad del Estte, "Casa Apollo" and "Barakat Import Ltda."
I never heard of either one. There are many, many businesses there, and these names are not among the legitimate, large ones that I knew (we're talking some businesses with multi-hundreds of millions in sales). Still, the amount of money going through there is huge, so Barakat was probably working with large sums.
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