A (0:00)

Welcome back to the watch floor. I'm Sarah Adams. This week, pretty much all the headlines have been about Venezuela, about Nicholas Maduro, who clearly is a fashion icon about accountability, collapse, capture, heck, kidnapping, depending what your source of news is. Venezuela didn't become important to the United States overnight. It didn't become a problem because of oil prices or governing ideology or even one election cycle. It mattered because over time, it allowed itself to become something far more dangerous than like a poor or mismanaged country. It became a permissive state. A place where terrorists, hostile intelligence agencies, organized crime and sanctioned regimes could work together with 100% immunity. And while Americans argued about whether we should care about Venezuela at all, we bared the costs through drugs, mass migration, intelligence costs, counterterrorism and counter narcotics operations, and long term geopolitical damage. This episode isn't about politics, it's about consequences. And more importantly, it's about the costs that you never see. When people hear the term failed state, they imagine chaos. No control, no systems, no functioning institutions. That is not what Venezuela became. They still had working systems, right? Their airports still function just fine, ports still move cargo. The government offices would still issue documents, banks process transactions. The state didn't disappear, it chose instead who it worked for and who it worked with. That difference matters. A permissive state isn't weak, it's selective. It enforces all these rules and controls and regulations on ordinary citizens, but it carves out all these exemptions for people who bring them money, bring them leverage, and provide protection for the regime over time. Corruption isn't really some sort of flaw, it's a feature. Venezuela offered, something these groups couldn't get anywhere else. When I talk about these groups, it's again, those criminal organizations, the terrorist groups, the hostile intelligence services. Remember, none of these organizations or institutions want any sort of chaos that causes risk to them. They want predictability, right? Predictable bribes, predictable access, and of course, predictable outcomes. That's what they were getting from Maduro's government. That's how a country stops being just a domestic problem and becomes infrastructure for external actors again. Infrastructure. So they never collapsed, but they became something useful to the bad actors that we care the most about. And once a state becomes useful to the wrong people, removing them is never simple. So once you understand Venezuela as infrastructure, not chaos, the next question should be, infrastructure for what? So when we discuss Venezuela as infrastructure, of course, one of the first countries that come to mind is Iran. Now, usually people are talking about what would be energy cooperation or oil. But I want to talk about a few of the things that get ignored. One of the key items is identity. Venezuela offers Iranians identity and I want to explain to you what that is. They essentially issue it to them. So in Venezuela, like let's say I'm an Iranian intelligence officer, I can get state backed identity documents. So it's passports, national identity cards. So I'm not even a Venezuelan citizen, but it says I am. Now when you think of like the mass migration that came to the United States from Venezuela, this is a major problem because now you can't assume every person that came from Venezuela is Venezuelan. Right? And now we have a huge counterintelligence problem in our own country that they enabled. I don't know if you saw this, but it was about a year plus ago and the FBI actually put out like a public alert. This is really rare they do it and it was for an assassin and they said, hey, we, we think this assassin might be in the United States. He might be targeting a senior leader in our government. He's likely Iranian and potentially in the United States on fraudulent Venezuelan documentation. So I'll get his image and put it up. It actually isn't the best image. I shouldn't laugh about an assassin, but it really does look like we're looking for a SIM character. I'm excited to give you this early look at the Sims 4. You'll get to meet our new Sims. But I really do hope he's found because this is very dangerous. As most people know, the Iranian regime has had a lot of plots in place against senior leaders in our government, especially against our President Donald Trump, primarily due to the 2020 strike he took on the head of the Quds Force cost him Soleimani. So we don't want any of these assassins kind of going under the radar in our country and, and unfortunately Venezuela helped back some of these efforts. It's very, very dangerous. So this isn't some sort of bureaucratic problem. It's much different. Identity is this tool of modern society. Weapons can be intercepted, you can follow the money, but when you have a legal identity document, you can travel through airports, you can cross borders, you can open bank accounts, you can rent property, you can apply for visas, you can build long cover legally. This is really great for the bad guys. You don't need to sneak across a border if all your paperwork is legitimate. And this is why intelligence services value the concept of documentation over weapons or explosives. Because identity really does enable every other piece of the picture by allowing these foreign operatives access to the identity. Venezuela didn't just look the Other way, they improve the external operations capabilities of some of our most dangerous adversaries. That doesn't always mean attacks, okay, so often it means allowing access, building logistics chains, preparation, enabling intelligence collection. These are slow, patient activities that occur over years, but they're so much harder to detect than just straight up violence. Iran didn't really need Venezuela as some like proxy battlefield. So you can't really think of it that way. They needed this access, right? First these documents I talked about, then access to banking institutions, to these logistics routes, and a friendly government that just ignores questions most other countries would ask, like, why are you doing this here? Venezuela provided all of this to Iran. Another thing that was very concerning and it's just kind of a little more zoomed in on one of the issues is that there are all these transport routes via air from Iran to Venezuela and back. Limited manifest, no oversight, no real answers to the public. Remember, air travel or the movement of goods via air is like an artery. So especially to kind of bad actors, they move people, equipment, cash, weapons. You know, on the financial side, Venezuela also helped Iran evade sanctions through a bunch of different opaque systems. Even at times using cryptocurrency. These weren't one off favors. They created like systematic mechanisms to do this again and again. You know, sanctions don't fail because they are kind of written in a weak way that they fail because enough countries help those sanctioned get around them. Venezuela really became kind of a front for Iranian activities. And a long time doesn't get discussed, you know, once. Now you have identity solved, freedom of movement, right? Like the air thing, the next requirement is of course, money, right? Access to funds, financial institution, banking pipelines. And that's where now another terrorist organization enters this picture of our story. Of course, when we're mentoring a terrorist group, we're talking about Hezbollah. Now, Hezbollah's activities in Latin America is really grossly misunderstood. And every few years you hear about it, it pops up to the surface and everybody's surprised. Oh, my gosh, Hezbollah is in Latin America. But what they're doing there, it's not exactly that they're building like a ton of sleeper cells and, and they're like deploying them to United States to blow up our cities. It's really more like the business operations side of the terrorist group. So we're talking about fundraising logistics and kind of the movement of people and things. Venezuela has provided Hezbollah, like, political protection. And then of course, financial access, which is very important with the amount of money these terrorist groups bring in and how much it costs to Run the global operations, both on the fighter side and then the operational business side of things. You know, it matters to be able to do this with a lot of freedom. You know, terrorist organizations don't need to launch attacks from a country for that country to be strategically relevant. And Venezuela has been incredibly relevant to groups like Hezbollah. You know, it's a place where they can raise money, move people around, and they can really operate without any kind of interference. They're not like being targeted by the government anyway. And this is really then what the concept is, of course, of like a safe haven. And terrorist groups long look for these permissive environments to allow them these safe havens. You know, think of it kind of like supply chain management. Terrorists are amazing at this concept. You know, so they can raise money in Venezuela, use the Venezuela banking systems to move the money, evade sanctions using those systems, and then get the money to their operations in Lebanon or, you know, or wherever else they're targeting. And it all moves very easily through a system where it might not all work that way if they try to do every step from their base in Lebanon. You know, Iran's relationship then with Venezuela also overlapped with Hezbollah's activities. Not because Venezuela is trying to, like, drive Islamist terrorism, but because they built and allowed this ecosystem to exist for these type of actors. Once these networks are established and there is like a safe haven and terrorists start getting kind of like rooted into these places, they don't disappear. You know, they adapt to the situation. They persist. And then that persistence is really what is a threat to us here in the US but it's not just terrorist groups who have been beneficiaries of Venezuela's permissive environments. As you can imagine, other nation states have also taken advantage. Of course, when we're discussing other nation states, we're discussing Russia and China. So they had different purposes. In Venezuela. Russia's focuses was like proximity and pressure. China was focused on depth, data and durability. So we're just going to quickly jump into what each of those means. Russia's interest in Venezuela wasn't economic. It was so it could aid its strategic competition against the U.S. venezuela offered proximity, right? It put Russia into the Western Hemisphere. It allowed Moscow to signal capabilities near us without firing any shots. They had military visits, security cooperation agreements, and intelligence exchanges. None were clearly to defend Venezuela. As we saw this last weekend, they were asymmetric pressure against the U.S. this permissive partner allowed Russia intelligence access. And when we say that, we're talking about listening posts, different collection opportunities, access to regional dynamics and other relationships the US is engaged in with our southern partners. From Russia's perspective, every dollar or even every hour the US wasted worrying about Venezuela was a win. Now with China, they played a much quieter game. They came into Venezuela and they led with loans, infrastructure and technology at a time when Venezuela had very few options and really had to create dependencies with small someone. As we talked about leverage matters, and in this case, then the dependency created leverage for China. Now, when China builds infrastructure, it's not just to move goods, right? It is to put surveillance systems in place, to put in telecommunications systems, to add digital platforms that collect and generate data. Right? That is one of their main purposes. And they weren't there trying to destabilize Venezuela in any way. They were just anchoring themselves closer to us. So Russia creates noise, China creates permanence. But really both were focused on and were intending to decrease U.S. influence. So when you're involved in all these things, of course Venezuela needed something on their end to make a lot of this work. And of course what they need is money. And they didn't just get money from foreign nation states like Iran, Russia, China, or terrorists like Hezbollah. Right. One of their main sources of income were drugs. So Venezuela became one of the main trafficking and transit points, as most people know, of cocaine. At one point, about a quarter of all the cocaine in the entire world passed through their territory. But it's not really drugs that are the story here. It's kind of the mechanism that the drugs fueled. Right? So the drug revenue fueled gangs, traffickers, some of these terrorist groups, corrupt officials, state protection. It greased the skids of every other relationship. And then as pressure increased elsewhere, these trafficking routes shifted to places like the Caribbean, forcing us to expand our counter narcotics operations and then causing other domestic problems. Now, when you allow a corrupt system to persist and to continue, of course the damage doesn't just stay in Venezuela, it goes elsewhere and it shows up elsewhere. And guess where it showed up? Right here on U.S. soil. Venezuela's permissive environment clearly imposed costs on the U.S. we've covered the sanctions evasion, the erosion of U.S. influence, the fact it allowed intelligence and counterintelligence collection to affect us being from Iran, Hezbollah, Russia, China, you know, the opportun opportunity costs here is real. One of the things we haven't even talked about yet is also the mass migration of Venezuelans to the United States. You know, kind of during this permissive state problem with Maduro that hopefully now is completed. So roughly 770,000 Venezuelans relocated to the U.S. and of course, when that happens, it's not like the cost is just at the border. You know, we have to fund housing and health care, education, different legal processes, different local services, obviously to make sure they really can take root and be successful in this country. We also funded other humanitarian aid costs revolving around Venezuelans. Those costed about $3 billion. Venezuela's instability really rolled over here and, and a lot of it did happen because of this mass migration, because unfortunately, a lot of people who came weren't properly vetted. There were criminals who came here, drug traffickers, as I told you, terrorists on false identification documents. When those bad actors got in, it increased other crimes and problems obviously affected drug flows. This then caused polarizations. And in our communities, especially kind of if you're like left wing, right wing. And then adversaries really took advantage of that with messaging campaigns and they amplified it to further divide Americans. That's kind of one of the things we really got to worry about when all of these actors, you know, come into play together. There's so many, like second and third order effects that we really miss, you know, And Venezuela isn't unique. It should be a case study. Right. Permissive environments are becoming like strategic terrain. I mean, think about it. They're cheaper than wars, much cheaper. They're quieter kind of alliances. If you're thinking, oh, it's just an economic agreement between Venezuela and, let's say, Russia, you're not thinking through all the other things like we talked about, like counterintelligence. And then it's really harder to confront what is going on directly. So it allows adversaries to operate below the threshold of really, like direct, open conflict. And then they still get to impose costs on us. And I think that's why we really saw an operation against Maduro in that fashion. Right. We counted it in the same way they were allowing adversaries to harm us. It was very, very interesting. It was smart, it was strategic. And I really think it was done in that way to be a lesson to other regimes, especially Iran, saying, you might think these arrangements you're having are survivable. We're going to make sure they're not. And that is a risk we can't ignore. And I think at least this last week showed that someone is really paying attention to that and say, enough is enough. Now I hope after today, you know, we don't just focus on the media narratives out there that Venezuela is only about oil. You know, I hope you learned that this permissive environment that was allowed in Venezuela really enabled our adversaries. But unfortunately, when it did, it imposed costs on us, right, the US taxpayers. And no one has really taken the time and put in the effort then to, to explain those cascading effects and costs to you now going forward, we do not know what the day after is going to be in Venezuela, right? That is almost impossible to predict. You know, I went into Libya about 10 weeks after the fall of Gaddafi and I can tell you the population was excited. We were excited. There is a lot of positive energy, energy, you know, about what would happen. And then unfortunately, when the government really got pulled back together and institutions got put into place, it became very clear that the government was really going to be led by Al Qaeda affiliates and the Muslim Brotherhood. And, you know, when I ended up finally leaving Libya about 10 weeks after the attacks, you know, against us in Benghazi that year, it felt very, very different, right? Like I was leaving thinking, I'm never coming back. The mood in the country had like dampened. The excitement was gone and I really left feeling like, oh my, there is a long, rough road ahead for Libya and I don't think anybody understands what's coming. So our hope is, of course, you know, Venezuela learns from the mistakes of some of these other quick kind of overthrows of these countries and we really get a win out of it. And no matter what, we'll keep watching what happens with Venezuela. Thanks for tuning in today to the watch for.