Fears of terrorism are standard before any Olympics, but the peculiarities surrounding 2016’s Summer Olympics in Rio give added cause for alarm. These Olympics face a witches’ brew that have led to a sense of urgency in Rio: first, the frequency of recent attacks around the world by self-radicalized locals; second, Brazil’s relative inexperience in grappling with terrorism; third, Brazil faces a legitimacy crisis prompted by Operation Lava Jato, the investigations into corruption centered around the national oil company Petrobras; and fourth, its relative proximity to long-standing terrorist cells on its borders with Paraguay and Argentina.

Heightened Fears in Brazil

In mid-July, SITE Intelligence Group, renowned for its monitoring of the Dark Web and of jihadist messaging channels, reported that an obscure Brazilian outfit called Ansar al-Khilafah pledged allegiance to the Islamic State on a Telegram channel.[1] Trying to quell fears, Brazil’s main intelligence agency, ABIN, announced it has been working with foreign intelligence services and the Federal Police, an investigative force in Brazil that is similar to the FBI.[2] In the run-up to the Olympics, the Americans have even been training Brazilian law enforcement and military personnel at large American sporting events, including the Super Bowl in February. Brazilian antiterrorism units have been learning from their American counterparts about chemical and biological attacks, and identifying soft targets like restaurants, night clubs and shopping malls that are away from well-guarded Olympic sites. France, itself a victim of recent ISIS-inspired terrorist attacks, sent elite police units here to train their Brazilian counterparts in protecting airports and train systems. ISIS messaged that it was not fazed: it sent out missives in Portuguese that the French police had failed to thwart attacks on their own soil.

In June 2016, Brazilian investigators revealed that the FBI had helped them identify and track several of the 10 men arrested on suspicion of planning attacks for a Brazilian Islamist militant group called the Defenders of Shariah.[3] The suspects, all Brazilian citizens, have profiles similar to those of dozens who have been arrested in the United States. Rather than being seen as an effective counter-terrorism move, however, the arrests sparked a debate over whether Brazil’s government had overreached in detaining the men, who are being held at a maximum-security prison.

Brazil’s justice minister, Alexandre de Moraes, publicly acknowledged that the suspects (including Antonio Andrade dos Santos and Vitor Barbosa Magalhães) were not part of a full-blown cell with a sophisticated plot to attack a high-profile target like a plane or a stadium and described them as “amateurs;” the federal judge overseeing the case questioned whether the suspects could even be called terrorists.

However, although the acquisition of arms was not confirmed, the suspects had been seeking to buy weapons in Paraguay, including an AK-47 rifle. The Tri-Border Area straddling Paraguay, Brazil and Argentina, is awash in AK-47s, which can be easily picked up for $375.[4]

The Tri-Border Area: The Heartland of Crime-Terror Pipelines

South America’s Tri-Border Area (‘TBA,’ also sometimes referred to as the ‘Tri-Border Region’ or ‘TBR’) straddles the 965-square-mile intersecting corner of Paraguay, Brazil and Argentina. It is a simple matter of crossing bridges to connect the three cities that encompass it:  Puerto Iguazú, Argentina; Foz do Iguaçu, Brazil; Ciudad del Este, Paraguay. The Paraguayan and Brazilian sides are connected by the Friendship Bridge, which spans the Paraná River, just nine miles south of the Itaipú Hydroeletric Dam, the largest operating hydroelectric dam in the world.[5] The Tri-Border Area is both a place of remarkable beauty famed for its breathtaking Iguazu Falls and one of messy urban sprawl.

It is also an illicit trade badlands of lore: many security professionals compare the convergence of bad guys in its bars to the bar in Star Wars where Ben Kenobi booked passage for both he and Luke Skywalker on the Millennium Falcon. Its signs are in Chinese, Korean, Portuguese, Spanish and even Arabic. Most of the foreign merchants are of Syrian, Lebanese and Taiwanese origin, with Shia Syrian-Lebanese predominant amongst them. The main business is Paraguayan “re-export” to Brazil: cigarettes, clothing, electronics, perfumes and other luxury goods from the US, Europe and China are sold (often for cash, off the books) to Brazilian sacoleiros (literally: “bagmen,” petty merchants). As many as 30,000 sacoleiros a day cross the Friendship Bridge.

The TBA is the epicenter for fund-raising, drug trafficking, money laundering, plotting, and other activities in support of terror organizations from all over the world. Islamic terrorist groups with a presence in the TBA reportedly include Egypt’s Al-Gama’a al-Islamiyya (Islamic Group) and Al-Jihad (Islamic Jihad), al Qaeda, Hamas, Hezbollah, and al-Muqawamah (the Resistance; also spelled al-Moqawama), which is a pro-Iran wing of the Lebanon-based Hezbollah.[6]

The prevailing view is that the Al Qaeda network (some of it a precursor to ISIS) in the TBA was established in 1995, when Osama bin Laden and Khalid Sheikh Mohammed visited. Brazilian magazine Veja, citing an anonymous high official of the Brazilian Intelligence Agency (Agência Brasileira de Inteligência, ABIN), reported that a 28-minute videotape shows bin Laden participating in meetings at a mosque in the area during his visit. Al Qaeda’s Khalid Sheikh Mohammed is also believed to have visited the TBA that December, and reportedly returned to the Foz do Iguaçu area in 1998.[7] AQ (Al Qaeda) reportedly traffic weapons, drugs and uranium there, and, with the help of Chinese and Russian (Chechen) mafias, launder money.[8] There is no reason to think ISIS supporters would not do the same and bring those proceeds and weapons into Brazil.

The Precedent: Buenos Aires Bombing

Buenos Aires had two anti-Israel bombings executed by Hezbollah in the 1990s: the Israeli Embassy in Buenos Aires on March 17, 1992, and the bombing of a Jewish community center, the Argentine-Israeli Mutual Association (Asociación Mutual Israeli-Argentina – AMIA), a Jewish community center, in Buenos Aires on July 18, 1994. Both investigations traced back to Hezbollah operatives in the Tri-Border Area. In May 2003, Argentine prosecutors issued arrest warrants for two Lebanese citizens who were living in Ciudad del Este at the time of the AMIA bombing: Assad Ahmad Barakat and Imad Fayed Mugniyah. Barakat is both Hezbollah’s regional operations chief and its chief Southern Cone fundraiser.[9] Barakat was also suspected of having ties to Al Qaeda. Despite the fact that AQ is Sunni and Hezbollah is Shia, a good smuggler and money launderer can bring them together.

His company, Mondial (World) Engineering and Construction company, with offices in Ciudad del Este, Paraguay and Beirut, Lebanon, was suspected of having made contributions to Al Qaeda, using money obtained from real estate fraud from selling apartments in Beirut. One example cited by unidentified intelligence sources, was an authorization by Barakat, dated February 14, 2002, in Foz do Iguaçu ordering the transfer of an apartment for US$120,000 in Lebanon. Other unspecified front businesses created by Barakat were reportedly designed to channel funds to Osama bin Laden, under the pretext of charitable contributions to orphanages.[10]

Assad Barakat was designated by the US Department of the Treasury on 10 June 2004 as “one of the most prominent and influential members of the Hezbollah terrorist organization.”[11] The announcement stated that his businesses, Casa Apollo and Barakat Import Export, were fronts for Hezbollah and he used coercion to extort TBA shopkeepers. Barakat was the deputy financial director of the Husaniyya “Iman AI-Khomeini” mosque in Brazil. After Barakat’s arrest in June 2002, a prominent member of the Mosque prohibited anyone who is not a member of Hezbollah from attending services.

The designation announcement also had very serious allegations about his assistant: “Sobhi Mahmoud Fayad — a close associate of Barakat and possibly his executive secretary — is a known Hezbollah member and weapons expert. A high-ranking Hezbollah official in Lebanon in the 1980s, Fayad supports the terrorist organization in the TBA today. Fayad was arrested in 1999 for surveillance of the U.S. Embassy in Asunción, and was arrested again in November of 2002 and sentenced to six and a half years for tax evasion.”[12]

Investigations into the AMIA bombing vividly brought to life the links between smuggling in the Tri-Border Area and Iranian terrorism. One witness claimed that Hezbollah Supreme Leader Hassan Nasrallah himself handed down an order to Abbas Hijazi and Farouk Omairi that Hezbollah members in the TBA were to provide the Barakat network with “everything they needed to realize” the AMIA bombing. Hijazi and Omairi, obedient soldiers of the “Resistance,” provided the Barakat brothers high-quality forged passports and identity cards, money, maps and points of contact in Buenos Aires, including in the Iranian embassy.[13]

It was the prevalence of illicit trade and the culture of border region smuggling that facilitated the terror attack. An Argentine intelligence report of January 2003, concluded that the C4 plastic explosive that formed the core of the bomb, not only came through Ciudad del Este, smuggled into the country from Iran via a diplomatic pouch, but was actually assembled in the TBA before being delivered to Buenos Aires; other parts of the explosive or detonator came from Foz do Iguaçu.[14]

The convergence of interests among corrupt government officials and members of organized crime and terrorist groups operating in the TBA is illustrated by the revelations in July 2002 made by a witness in the case of the July 1994 bombing of the AMIA in Buenos Aires. The witness, Abdolghassem Mesbahi, a former Iranian intelligence officer, testified to Argentine investigators that the Iranian government organized and carried out the attack and then paid then-president Carlos Saúl Menem US$10 million to cover it up. The charges against Menem have never been substantiated, and he vigorously denies them. However, Menem acknowledged that he has had a bank account in Switzerland since 1986. As president, Menem, whose parents migrated to Argentina from Syria, appointed a Syrian army colonel to be customs overseer at Buenos Aires’s Ezeiza International Airport, which has been described as “a major hub for smuggling in South America.”[15]

During the AMIA attack, police corruption and involvement in the TBA’s lucrative illicit trades also came to light, illustrating the perfect triangulation amongst corruption, organized crime and terrorism. The white van used in the AMIA attack was traced back to the Argentine Police Commissioner Juan José Ribelli, who had long been suspected of using his position to traffic in stolen vehicles to Paraguay.[16]

Brazil’s Corruption Scandal as a Factor

Brazil has a youth bulge, where the young feel that education is no longer the societal elevator it was reputed to be even a few years ago. According to the Organization for Economic Cooperation and Development (OECD) economic forecast for Brazil of June 2016: “The deep recession is set to continue in 2016 and in 2017 against the backdrop of high political uncertainty and ongoing corruption revelations that are undermining consumer and business confidence, leading to a continuous contraction in domestic demand. As the economy shrinks, unemployment is set to rise further.” [17]

While there has always been some corruption, the Petrobras scandal, known as Lava Jato (‘Car Wash’), has plunged the entire country into a financial crisis and a simultaneous political crisis. Petrobras delayed its reporting of annual financial results for 2014, and disclosed in April 2015 that it would book almost $17 billion in write-downs due to graft and overvalued assets, which the company characterized as a “conservative” estimate of the actual impact.

A Senate report found on August 2, 2016[18] that Brazil’s suspended President Dilma Rousseff violated the constitution by manipulating government accounts, moving her drawn-out impeachment trial closer to deciding her fate. Rousseff is accused of altering official budget figures and using funds from state-run banks to cover up the real state of Brazil’s faltering economy as she ran for re-election in 2014. The report is expected to be approved by the impeachment committee on Friday and by the full Senate next Tuesday, leading to the final trial phase in which the 81 Senators must reach a verdict at the end of August or first days of September. The impeachment of the unpopular leftist leader has paralyzed Brazilian politics for seven months and held interim President Michel Temer in a legal limbo that has hindered his efforts to pull Brazil from fiscal crisis and severe recession. It would mark the end of 13 years of rule by the left-of-center Workers Party and leave Latin America’s largest economy in the hands of the Michel Temer, Rousseff’s conservative vice president.

Both the scale and the elitism of the Lava Jato scandal point to a perception of the changing nature of corruption in Brazil: it is viewed as less functional as a redistribution mechanism and more integrated in the hands of a ruling elite. Adding to this is Brazil’s long trend toward urbanization, where the poor are concentrated, where ideas spread faster and people are angered in a competitive environment, plus greater access to information, including jihadist messaging. After many years of living in Afghanistan, anti-corruption theorist Sarah Chayes[19] came to the conclusion that corruption erodes governance and engenders extremism. Again, there is no reason to think these factors would not also play out in Brazil.

In an early 2016 interview with Brazil’s answer to Anderson Cooper, Jorge Pontual, for Brazil’s Globo TV, the most powerful media organization in Latin America, I said that Brazil’s terrorist risk would not come off flights from overseas; it would be homegrown. Terrorist groups have long been proselytizing in the region, weapons are readily available, and we already have a precedent of the tools for multiple terrorist attacks being moved through the region and across its border. The Real Terrorist Threats to the Rio Olympics

 

---

[1] Max Bearak, “Brazilian extremist group uses Telegram to pledge allegiance to ISIS ahead of Olympics,” The Washington Post, July 19, 2016, https://www.washingtonpost.com/news/worldviews/wp/2016/07/19/brazilian-extremist-group-pledges-allegiance-to-isis-ahead-of-rio-olympics/?postshare=8691469031438146&tid=ss_in

[2] Simon Romero, “Brazil Arrests 10 in Terror Plot as Olympics Near, Officials Say,” The New York Times, July 21, 2016, https://www.nytimes.com/2016/07/22/world/americas/brazil-rio-terrorism-plot-arrests-olympics.html?_r=0

[3] Simon Romero and Michael S. Schmidt, “As ISIS Posts in Portuguese, U.S. and Brazil Bolster Olympics Security,” The New York Times, August 1, 2016, https://www.nytimes.com/2016/08/02/world/americas/rio-de-janeiro-olympics-terrorism-brazil.html?_r=0

[4] Federal Research Division, Terrorist and Organized Crime Groups in the Tri-Border Area (TBA) of South America, Washington, DC: Library of Congress: December 2010, p. 10.

[5] Christine Folch, “The Lawless Border Where Argentina, Brazil and Paraguay Meet,” Foreign Affairs, 6 September 2012.

[6] Federal Research Division, Terrorist and Organized Crime Groups in the Tri-Border Area (TBA) of South America (Washington, DC: Library of Congress: December 2010), p. 1.

[7] Federal Research Division, p. 15.

[8] Federal Research Division, p. 2.

[9] Federal Research Division, p. 13.

[10] Federal Research Division, p. 22.

[11] https://www.treasury.gov/press-center/press-releases/Pages/js1720.aspx

[12] https://www.treasury.gov/press-center/press-releases/Pages/js1720.aspx

[13] Matthew Levitt, Hezbollah: The Global Footprint of Lebanon’s Party of God (Washington, DC: Georgetown University Press, 2013), p. 92.

[14] Matthew Levitt, Hezbollah, p. 93.

[15] Federal Research Division, p. 47.

[16] Federal Research Division, p. 62.

[17] https://www.oecd.org/eco/outlook/brazil-economic-forecast-summary.htm

[18] “Dilma Rousseff’s Impeachment Trial is Almost Over,” Newsweek, August 2, 2016, https://www.newsweek.com/dilma-rousseff-impeachment-brazil-corruption-senate-trial-lula-486669

[19] Sarah Chayes, Thieves of State: Why Corruption Threatens Global Security (New York: Norton, 2015).