Patrolling America's Backyard?

A military deal between the U.S. and Paraguay has put U.S. Special Forces in the sweaty heart of South America, just south of the Tropic of Capricorn. It has also fanned fears that the Bush administration is tip-toeing towards a revised Cold War interventionism on a continent increasingly distanced from Washington.

U.S. officials say troops will operate in small numbers, for short periods of time and will conduct some humanitarian missions along with Paraguayan units, according to a July 7 statement released by U.S. embassy officials in Asunción, the capital.

"U.S. personnel in small numbers, generally between 10 to 20 people, will train with their Paraguayan military colleges during periods from two to six weeks," the statement said. "The U.S. soldiers will not be deployed for extended periods of time and there will never be more than a few dozen U.S. service members in Paraguay for more than 45 days." U.S. officials have downplayed the deal, stressing that the joint exercises, which will focus on counter-terrorism, drug-interdiction and humanitarian aid, are similar to past ones.

But the agreement, approved by the Paraguayan Congress in June, has raised popular worries that the U.S. is trying to establish a permanent military base in South America. Suspicion of ulterior Washington motives involves a large but mostly unused airfield at the Mariscal Estigarribia base in the northern Paraguay. Lawmakers have given the Pentagon access to the base, which was built by U.S. technicians in the 1980s and is larger than Paraguay's civilian airport in Asunción.  

Theories have spread in regional media and on the streets. One says the Pentagon wants to get close to vast natural gas reserves in Bolivia, a country where populist political movements are gaining power.  Another claims the U.S. wants to control the Guarani Aquifer, one of the world's biggest underground water aquifers. "The only thing the U.S. wants is the aquifer," says Noelia Delgado, a store clerk in Buenos Aires, echoing a common sentiment here. "They want what is below the ground."

Perhaps the most intriguing belief is that the U.S. wants to better monitor the so-called Triple Border (or Triple Frontier) area, a lawless jungle corner 500 miles from the Mariscal base where the borders of Argentina, Brazil and Paraguay meet. The area -- which is anchored by three sister cities of Ciudad del Este, Paraguay; Foz do Iguazú, Brazil; and Puerto de Iguazú, Argentina -- is home to a vibrant community of Arab merchants whom U.S. officials have accused of sending millions, perhaps billions, of laundered dollars to Middle East terrorist groups annually.

Though a U.S. Embassy source interviewed last month would not discuss allegations of terrorist financing in the Tri-Border, for people such as Milda Rivarola, a Paraguayan political analyst, the writing is on the wall.  "This is about getting closer to the Triple Border which the U.S. believes is involved in terrorism," said Rivarola.

Others agree. Earlier this month during an interview with Brazilian television, Venezuelan President Hugo Chavez said the Bush administration is likely using its war on terrorism as a pretext to stifle leftist political movements in the region, according to The Washington Times. Secretary Donald Rumsfeld and other U.S. officials have accused Chavez in recent months of using oil money to fund destabilizing political elements in neighboring countries such as Colombia, a key Washington ally.  

Suspicions also run high in Washington. A recent report by The Council on Hemispheric Affairs, Washington-based think tank, says the proximity of the Paraguayan base to Triple Border Area is "particularly unnerving" and "meant to give the U.S. military a more justified presence in the eyes of many would-be critics." Dr. Larry Birns, the group's director, pointed out that, like the Paraguayan case, Pentagon officials in the 1990s denied interest in turning a small Ecuadorian airstrip into a permanent base, which it eventually did. "We are afraid the same will happen in Paraguay," he said.  

A Modern-day Casablanca?

Ciudad del Este, a gritty city of 200,000, is the king of bad reputations. It's also home to a concentration of businesses owned by Arab who immigrated from the Middle East some 40 years ago. Media reports, rumors, and government officials have labeled -- some say unfairly -- Ciudad del Este and its sister cities as a nexus point for global crime networks, from Taiwanese mafia to Colombian drug lords to FARC rebels. The CIA fact book calls the tri-border an "unruly region" that's a "locus of money laundering, smuggling, arms and illegal narcotics trafficking, and fundraising for extremist organizations." 

Last year, Army General James T. Hill, then head of the Pentagon's Latin American operations, reported in Congressional testimony that " branches of Middle Eastern terrorist organizations conduct support activities in the Southern Command area of responsibility" and that "Islamic radical group supporters extending from the Caribbean basin to the tri-border area of Paraguay, Argentina and Brazil conduct fund-raising activities."

Whether global terrorist bank or just a modern day Casablanca, the city spreads out like a chaotic, filthy monument to globalization. Streets are clogged with billboards in Chinese, Korean, English, Arabic, Spanish and Portuguese advertising everything from Sony cameras to Japanese fishing rods. Money changers wait in stalls with fanny packs stuffed with dollars. Dingy malls brimming over with cheap electronics -- many widely believed to be stolen -- are guarded by men with pistols and shotguns. Motorcycles and taxis wait to ferry people and goods through the porous border between Paraguay and Brazil. Sidewalk vendors sit before tables brimming with rings, necklaces, perfume, pornography.  Knock-off DVD copies of "Oceans 11." Fake Rolexes. Coke. A carton of Marlboro for three dollars. Much of what's bought from local shops and blackmarketeers is boxed or bagged then loaded onto truck, human shoulders, van and bike, anything that will move it -- with only occasional interference from Paraguay's customs police -- across the border and into the global economy.  

Past Clues

It is the proceeds from many of those sales -- legal and illegal -- that U.S. and other government officials say is laundered and wired to Middle East groups. And the alleged amounts are staggering. According to a 2003 study by the Library of Congress, Brazilian authorities have estimated that $6 billion dollars is illegally laundered out of the tri-border area annually.

The area first appeared on U.S. radar in the 1990s when Argentine investigators claimed Islamic groups from the area were responsible for deadly bombings of the Israeli Embassy and a Jewish community in Buenos Aires, though the accusations that were never proven.

The U.S. is now involved in counterterrorism and financing programs with all three area governments. But it wasn't until after 9/11 that Washington dropped the hammer. In the aftermath of the attacks, U.S.-backed police operations swept up some 20 suspects in Ciudad del Este with alleged links to Hamas. They also investigated $22 million in more than 40 accounts suspected of links to terrorist groups, according to a Washington Post report citing Paraguayan authorities. The Post and other media also reported at the time that a Lebanese merchant was arrested with financial statements showing $250,000 in monthly transfers to the Middle East. And another man, Ali Khalil Mehri, was given a six and a half year prison sentence for funneling millions of dollars to Hezbollah with proceeds from the sales of counterfeit software. British authorities later claimed Mehri he was an al Qaeda financier.  

Though no government has found direct evidence of terrorist training camps or active cells, the area's reputation was made worse in 2002 by a controversial investigative story in the New Yorker, written by Jeffrey Goldberg. Goldberg claimed to have evidence that the Tri-Border was home to Islamic terrorist cells, including Al Qaeda, as well as a major money laundering and funding source for Hizbollah. The Tri-Border, he wrote, had garnered the reputation as "the most lawless place in the world."

Many say that reputation is more myth than reality. Muslims are especially angry at the United States, saying they have been stigmatized since 9/11. A group of men standing at the entrance to a Ciudad del Este mosque refused to be interviewed by this American reporter. But Gustavo Moussa, a spokesperson for The Islamic Organization of Argentina in Buenos Aires, said in an August interview that many South American Muslims feel Washington unfairly labeled the Tri-Border as a terrorist ally. "They made those claims without evidence," he said.

In a July statement, U.S. Embassy said the U.S. had no intervention plans for Ciudad del Este except "the support of programs to create jobs for Paraguayans in the city." The statement also denied that the U.S. had any interest in the Guarani Aquifer.

For many South Americans, however, assurances coming from Washington mean less than nada.