Monday March 2, 2009
Organized Crime, Terrorism and the Banking Crisis
One of the most interesting side effects of the current credit and banking crisis, as noted in this weekend piece in the Washington Post is the growing influence of those who do have money to lend-organized criminal groups that have billions of dollars they need to keep moving through the money laundering cycles.
There is strong anecdotal evidence that cartels from South America to Southeast Asia and Europe (and likely the United States, but I have not seen anything to reflect that) are stepping in to credit breach, building relations with businessmen desperate to stay in business, who would not normally look to the "informal" economy for a loan.
This will serve to extend the tentacles of these groups even further into the legal society and financial structure. As the article notes, "Stronger organized crime means a weaker state."
The state is already hard pressed to confront organized crime, and the reasons are not hard to find. One side has resources, the other does not.
The story says a new report estimated that organized crime syndicates in Italy - including Naples's Camorra, Sicily's Cosa Nostra, Calabria's 'Ndrangheta - collect about 250 million euros, or $315 million, from retailers every day. That is about a billion dollars every three days, or about $122 billion a year siphoned out of a single economy. Is it any wonder Italy is a constant economic wreck?
This is not entirely new, especially in rural areas.
Who loans small farmers in Afghanistan money for their next crop? The Taliban, provided they meet their opium production target. Who loans the campesinos in Bolivia, Colombia and Peru money to be productive? The cocaine cartels, as long as the coca leaf is also planted. In Colombia, it is often the FARC who makes the small loans. The coca trade has given the FARC the only social base it still retains.
The state is not present in these areas, and the longer the absence of economic alternatives endures, the more reliant the economy becomes on illicit activities, providing a social base for those who run the operations, be their terrorists, criminals or some hybrid.
What is new is that the respectable business class now finds its alternatives so curtailed that a growing number of its members are also turning to criminal franchises to meet their needs.
This has a triple effect: Money is drained from the legitimate economy subject to taxes and regulation; criminal organizations make a handsome profit and; the illicit trades gets further embedded in legitimate trade, where it is able to spread like a cancer through coercion and corruption.
Given the current state of the economy, this correlation of resources is not likely to change soon. But the longer it endures, the higher the cost of moving toward a functioning, transparent economy.
There is strong anecdotal evidence that cartels from South America to Southeast Asia and Europe (and likely the United States, but I have not seen anything to reflect that) are stepping in to credit breach, building relations with businessmen desperate to stay in business, who would not normally look to the "informal" economy for a loan.
This will serve to extend the tentacles of these groups even further into the legal society and financial structure. As the article notes, "Stronger organized crime means a weaker state."
The state is already hard pressed to confront organized crime, and the reasons are not hard to find. One side has resources, the other does not.
The story says a new report estimated that organized crime syndicates in Italy - including Naples's Camorra, Sicily's Cosa Nostra, Calabria's 'Ndrangheta - collect about 250 million euros, or $315 million, from retailers every day. That is about a billion dollars every three days, or about $122 billion a year siphoned out of a single economy. Is it any wonder Italy is a constant economic wreck?
This is not entirely new, especially in rural areas.
Who loans small farmers in Afghanistan money for their next crop? The Taliban, provided they meet their opium production target. Who loans the campesinos in Bolivia, Colombia and Peru money to be productive? The cocaine cartels, as long as the coca leaf is also planted. In Colombia, it is often the FARC who makes the small loans. The coca trade has given the FARC the only social base it still retains.
The state is not present in these areas, and the longer the absence of economic alternatives endures, the more reliant the economy becomes on illicit activities, providing a social base for those who run the operations, be their terrorists, criminals or some hybrid.
What is new is that the respectable business class now finds its alternatives so curtailed that a growing number of its members are also turning to criminal franchises to meet their needs.
This has a triple effect: Money is drained from the legitimate economy subject to taxes and regulation; criminal organizations make a handsome profit and; the illicit trades gets further embedded in legitimate trade, where it is able to spread like a cancer through coercion and corruption.
Given the current state of the economy, this correlation of resources is not likely to change soon. But the longer it endures, the higher the cost of moving toward a functioning, transparent economy.
POSTED BY DOUGLAS FARAH
Friday February 27, 2009
Mexico Finally Rises Near the Top of the Agenda
For those of us who have been watching Mexico's death struggle with the drug cartels, the sudden surge in official interest is both welcome and overdue.
It is particularly welcome because it both acknowledges the depth of the problem and the danger it poses to the United States directly (as well as the Mexican state), while also at least nodding to the fact that the United States itself bears a significant burden of responsibility for what is happening.
What is no longer in debate is that Mexico is at war, and the war is having severe spillover effects across the border. (For a graphic look at how and where the killings occur, as well as links to important stories, see interactive map and other resources at the Los Angeles Times.)
As DHS Secretary Janet Napolitano stressed in her recent Congressional testimony, Aiding the Mexican government's fight against drug cartels is a top priority that demands the "utmost attention" of U.S. security officials, Homeland Security Secretary Janet Napolitano said yesterday, announcing new steps aimed at preventing the spillover of violence into the United States.
As is clear elsewhere, if there is chaos, systemic corruption and government weakness, it is inevitable that other groups besides just the drug traffickers will seek to take advantage of the situation. This is as true of other organized criminal activities as it is of terrorist and other non-state actors.
As the Wall Street Journal writes, the cartels may have grown too powerful for the state to control. While President Calderon clearly chafes at the suggestion Mexico could become a failed state, it is clear that significant pockets of the country are under the control of drug trafficking organizations, not the state. This opens significant opportunities for opportunistic groups to form alliances of convenience for use of that territory.
While the corruption, violence and associated problems in Mexico have been chronicled, the fact remains that the United States is one of the largest cocaine markets in the world, providing the financial remuneration that empower the cartels.
Just as disturbing, and much more complicated because of the internal U.S. politics around the Second Amendment, is that many of the most lethal weapons the cartels acquire come from the United States, particularly the hundreds of gun shops along the border.
This has led to the ironic situation of the U.S. government making contingency plans, including possible use of DoD personnel and resources to bolster border security should the violence spill over in a more sustained and damaging way.
The DEA and other USG agencies are taking the threat seriously, as shown by the recent takedown of important Sinaloa Cartel assets, largely inside the United States.
As the Colombia experience shows, these wars against independently financed, non-state groups can take years. But the Colombia experience also shows that significant progress can be made when both the host country and the United States agree on a plan and generate the resources necessary to tackle a ruthless enemy. The most significant danger, both in Mexico and the United States, is to underestimate the resources and commitment of the drug traffickers to impose their will, regardless of the human toll.
It is particularly welcome because it both acknowledges the depth of the problem and the danger it poses to the United States directly (as well as the Mexican state), while also at least nodding to the fact that the United States itself bears a significant burden of responsibility for what is happening.
What is no longer in debate is that Mexico is at war, and the war is having severe spillover effects across the border. (For a graphic look at how and where the killings occur, as well as links to important stories, see interactive map and other resources at the Los Angeles Times.)
As DHS Secretary Janet Napolitano stressed in her recent Congressional testimony, Aiding the Mexican government's fight against drug cartels is a top priority that demands the "utmost attention" of U.S. security officials, Homeland Security Secretary Janet Napolitano said yesterday, announcing new steps aimed at preventing the spillover of violence into the United States.
As is clear elsewhere, if there is chaos, systemic corruption and government weakness, it is inevitable that other groups besides just the drug traffickers will seek to take advantage of the situation. This is as true of other organized criminal activities as it is of terrorist and other non-state actors.
As the Wall Street Journal writes, the cartels may have grown too powerful for the state to control. While President Calderon clearly chafes at the suggestion Mexico could become a failed state, it is clear that significant pockets of the country are under the control of drug trafficking organizations, not the state. This opens significant opportunities for opportunistic groups to form alliances of convenience for use of that territory.
While the corruption, violence and associated problems in Mexico have been chronicled, the fact remains that the United States is one of the largest cocaine markets in the world, providing the financial remuneration that empower the cartels.
Just as disturbing, and much more complicated because of the internal U.S. politics around the Second Amendment, is that many of the most lethal weapons the cartels acquire come from the United States, particularly the hundreds of gun shops along the border.
This has led to the ironic situation of the U.S. government making contingency plans, including possible use of DoD personnel and resources to bolster border security should the violence spill over in a more sustained and damaging way.
The DEA and other USG agencies are taking the threat seriously, as shown by the recent takedown of important Sinaloa Cartel assets, largely inside the United States.
As the Colombia experience shows, these wars against independently financed, non-state groups can take years. But the Colombia experience also shows that significant progress can be made when both the host country and the United States agree on a plan and generate the resources necessary to tackle a ruthless enemy. The most significant danger, both in Mexico and the United States, is to underestimate the resources and commitment of the drug traffickers to impose their will, regardless of the human toll.
POSTED BY DOUGLAS FARAH
Friday February 27, 2009
What is Missing in the Terrorist Threat Assessment
In recent days two high-level assessments of the threats facing the United States have come out, and both are striking for their stark omissions of the same central theme: the criminal/terrorist nexus that is driving so much of what we see around the world.
The first assessment is the Annual Threat Assessment presented by Dennis Cl Blair, the Director of National Intelligence, presented as Congressional testimony.
The second is FBI Director Robert Mueller to the Council on Foreign Relations.
Both are interesting reading, and is heartening to see the Horn of Africa move far up the priority scale in both discussions. The DNI report also focuses some passing (but more than any other public statement) attention on Latin America, particularly Venezuela.
Director Mueller correctly states that: The world in which we live has changed markedly in recent years, from the integration of global markets and the ease of international travel to the rise and the reach of the Internet. But our perception of the world—and our place in it—also has changed...The universe of crime and terrorism stretches out infinitely before us, and we, too, are working to find what we believe to be out there, but cannot always see.
What has changed less, it seems, is the ability to integrate into out thinking and assessments changes as they occur. The paradigm shift in terrorist financing from states and large donors to crime and quasi-state institutions is a clear trend that is accelerating.
While the Taliban use of drug money is mentioned in the DNI statement, and there is a passing reference to the FARC's drug revenue, organized crime receives a small, separate section in the report, and no overlap with terrorist activity is noted.
Given the shared information that likely shaped both presentations, it seems the conventional thinking in the intelligence and law enforcement communities (with the notable exception of the DEA) is that organized criminal groups and terrorist groups remain separate entities, with little overlap.
The objective reality is that this is no longer true. The Taliban, FARC, AQIM, Hezbollah, HAMAS, ETA and others all rely on significant organized crime ties to survive.
Hezbollah has perfected the ability to work with established networks of Lebanese diaspora entrepreneurs, legal and not, to collect funds totaling tens-if not hundreds-of millions of dollars a year. (see the West Africa diamond trade and Tri-Border region) AQIM participates in and collects taxes on cigarette smuggling and human trafficking. Etc. Etc.
These activities are not tangential to the terrorist operations, but fundamental. That is why the failure to grasp this nexus is so important. If the mutually-beneficial ties are not understood, tackling the threat will be impossible.
The first assessment is the Annual Threat Assessment presented by Dennis Cl Blair, the Director of National Intelligence, presented as Congressional testimony.
The second is FBI Director Robert Mueller to the Council on Foreign Relations.
Both are interesting reading, and is heartening to see the Horn of Africa move far up the priority scale in both discussions. The DNI report also focuses some passing (but more than any other public statement) attention on Latin America, particularly Venezuela.
Director Mueller correctly states that: The world in which we live has changed markedly in recent years, from the integration of global markets and the ease of international travel to the rise and the reach of the Internet. But our perception of the world—and our place in it—also has changed...The universe of crime and terrorism stretches out infinitely before us, and we, too, are working to find what we believe to be out there, but cannot always see.
What has changed less, it seems, is the ability to integrate into out thinking and assessments changes as they occur. The paradigm shift in terrorist financing from states and large donors to crime and quasi-state institutions is a clear trend that is accelerating.
While the Taliban use of drug money is mentioned in the DNI statement, and there is a passing reference to the FARC's drug revenue, organized crime receives a small, separate section in the report, and no overlap with terrorist activity is noted.
Given the shared information that likely shaped both presentations, it seems the conventional thinking in the intelligence and law enforcement communities (with the notable exception of the DEA) is that organized criminal groups and terrorist groups remain separate entities, with little overlap.
The objective reality is that this is no longer true. The Taliban, FARC, AQIM, Hezbollah, HAMAS, ETA and others all rely on significant organized crime ties to survive.
Hezbollah has perfected the ability to work with established networks of Lebanese diaspora entrepreneurs, legal and not, to collect funds totaling tens-if not hundreds-of millions of dollars a year. (see the West Africa diamond trade and Tri-Border region) AQIM participates in and collects taxes on cigarette smuggling and human trafficking. Etc. Etc.
These activities are not tangential to the terrorist operations, but fundamental. That is why the failure to grasp this nexus is so important. If the mutually-beneficial ties are not understood, tackling the threat will be impossible.
POSTED BY DOUGLAS FARAH
Monday February 23, 2009
Cross Pollination in Terrorist Groups
My colleague Zachary Abuza wrote an interesting look at the Tamil Tigers, now in demise. As he notes, the LTTE pioneered many innovations in the use of terrorism that spread to other terrorist groups around the world.
Among the strategies the LTTE innovated are the use of suicide bombings and fund raising outside of state sponsorship. One of the most adaptive groups using some the LTTE model has been the FARC in Colombia, while suicide bombing have been taken up by Islamist groups around the globe.
This is, to me, one of the biggest changes that the new world order has brought in the past 15 years among non-state armed groups-the ability to rapidly exchange "best practices" and experiences across the globe.
In years past, Marxists would train Marxists, (the Cubans, Sandinistas and FMLN for example, in the Central American conflicts) and U.S. sponsored groups would receive instruction, but there was no real way, except direct meetings in camps and under state sponsorship, to exchange experiences.
The internet has changed that, and the end of the Cold War has helped erase many of the lines that once existed in who will deal with whom. At the same time, state sponsorship for many organizations was being reined in or cut off.
The shifting lines was largely lost on the intelligence community looking at radical Islamist groups, who believed Sunni groups like al Qaeda would not deal with Shiite groups like Hezbollah, although the documented cross-training between the two groups began at least in the ealry 1990s, while bin Laden was in Sudan.
As LTTE pioneered certain tactics, so did ETA in Spain (the use of explosives and LNG bombs), the IRA and IRA-P in Ireland (also explosives and cell structures) and others. The FARC, in turn, picked them up, improved on them, and taught new techniques.
The sharing is not new. But the Internet and lack of ideological constraints have greatly accelerated the ability to share knowledge among terrorist groups. Manuals can be found on the internet, the FARC and other groups regularly exchanged ideas with both non-state actors and state actors (Cuban and Venezuelan intelligence) and the lag time has shortened.
Those using IEDs in Iraq were quickly able to transfer the technology to the Islamists in Afghanistan, in matters of hours or days, rather than weeks or months. Money transfer mechanisms, pioneered by the drug cartels and other groups around the world (the Black Market Peso Exchange, a perennial favorite in the drug world, has been adapted by terrorist and organized crime groups around the world, with regional adaptations.)
My point is that the cross-pollination among terrorist groups, secular and religious, has greatly accelerated and now any group will deal with almost any other group in the mix if the situation is mutually advantageous to do so.
We can no longer compartmentalize among them and pretend they don't deal with each other. They do, and often it does not have to be face to face at all. Chat rooms, electronic bulletin boards and virtual classrooms make that unnecessary. The Tigers, FARC and others are far ahead in information sharing than the law enforcement and intelligence community is.
Among the strategies the LTTE innovated are the use of suicide bombings and fund raising outside of state sponsorship. One of the most adaptive groups using some the LTTE model has been the FARC in Colombia, while suicide bombing have been taken up by Islamist groups around the globe.
This is, to me, one of the biggest changes that the new world order has brought in the past 15 years among non-state armed groups-the ability to rapidly exchange "best practices" and experiences across the globe.
In years past, Marxists would train Marxists, (the Cubans, Sandinistas and FMLN for example, in the Central American conflicts) and U.S. sponsored groups would receive instruction, but there was no real way, except direct meetings in camps and under state sponsorship, to exchange experiences.
The internet has changed that, and the end of the Cold War has helped erase many of the lines that once existed in who will deal with whom. At the same time, state sponsorship for many organizations was being reined in or cut off.
The shifting lines was largely lost on the intelligence community looking at radical Islamist groups, who believed Sunni groups like al Qaeda would not deal with Shiite groups like Hezbollah, although the documented cross-training between the two groups began at least in the ealry 1990s, while bin Laden was in Sudan.
As LTTE pioneered certain tactics, so did ETA in Spain (the use of explosives and LNG bombs), the IRA and IRA-P in Ireland (also explosives and cell structures) and others. The FARC, in turn, picked them up, improved on them, and taught new techniques.
The sharing is not new. But the Internet and lack of ideological constraints have greatly accelerated the ability to share knowledge among terrorist groups. Manuals can be found on the internet, the FARC and other groups regularly exchanged ideas with both non-state actors and state actors (Cuban and Venezuelan intelligence) and the lag time has shortened.
Those using IEDs in Iraq were quickly able to transfer the technology to the Islamists in Afghanistan, in matters of hours or days, rather than weeks or months. Money transfer mechanisms, pioneered by the drug cartels and other groups around the world (the Black Market Peso Exchange, a perennial favorite in the drug world, has been adapted by terrorist and organized crime groups around the world, with regional adaptations.)
My point is that the cross-pollination among terrorist groups, secular and religious, has greatly accelerated and now any group will deal with almost any other group in the mix if the situation is mutually advantageous to do so.
We can no longer compartmentalize among them and pretend they don't deal with each other. They do, and often it does not have to be face to face at all. Chat rooms, electronic bulletin boards and virtual classrooms make that unnecessary. The Tigers, FARC and others are far ahead in information sharing than the law enforcement and intelligence community is.
POSTED BY DOUGLAS FARAH
Friday February 13, 2009
The More Things Change...Chavez Rolls On
Despite repeated promises and public statements, Venezuela's Hugo Chavez continues to allow the FARC to operate from Venezuelan territory. This is not surprising, given that Chavez has not often kept his word on such issues.
What is interesting is that the support continues despite the FARC's recent killing spree of indigenous people in Nariño province. Wasn't the Bolivarian Revolution supposed to be against that? Respected groups like Human Rights Watch have documented the incidents.
Then there is the rising anti-Semitism of the Chávez folks, and the official hate speech and attacks on places of worship,.
But the point is that such reports of ongoing support come as the FARC is showing clear signs of regrouping after a very difficult past few months. The release of the handful of hostages has perhaps helped people forget the other 700 that remain behind.
The revelation in Semana magazine that the FARC summarily executed 11 Colombian members of congress in 2006, when they mistook some comrades for an army patrol should remind folks of what the FARC is really like.
Clearly the FARC, with access to cocaine revenue streams and extra territorial support, can survive long after their ideology has faded away. It is, slowly, regrouping in the triple canopy jungle, enjoying a rear-guard protected by Chávez and making their presence felt by a series of attacks against unarmed civilians.
When a group has as little popular support as the FARC does in Colombia (as one former FARC commander told me), they feel they have nothing to lose by attacking the civilians.
Chávez continues to buy far more weapons than he could use internally, and his AK-47 factory, leased from the ever-willing Russians, will be on line soon. That will provide the FARC and other groups with even more access to weapons, meaning the conflicts in the region will not end.
This will spill over severely into neighboring countries such as Brazil, Ecuador and across the continent. It is no small matter to have a state-sponsored logistics pipeline if you are a non-state group. The Reyes documents show how many active groups and front groups there are. The entire region will pay a heavy price for Chávez's support of terrorist organizations.
What is interesting is that the support continues despite the FARC's recent killing spree of indigenous people in Nariño province. Wasn't the Bolivarian Revolution supposed to be against that? Respected groups like Human Rights Watch have documented the incidents.
Then there is the rising anti-Semitism of the Chávez folks, and the official hate speech and attacks on places of worship,.
But the point is that such reports of ongoing support come as the FARC is showing clear signs of regrouping after a very difficult past few months. The release of the handful of hostages has perhaps helped people forget the other 700 that remain behind.
The revelation in Semana magazine that the FARC summarily executed 11 Colombian members of congress in 2006, when they mistook some comrades for an army patrol should remind folks of what the FARC is really like.
Clearly the FARC, with access to cocaine revenue streams and extra territorial support, can survive long after their ideology has faded away. It is, slowly, regrouping in the triple canopy jungle, enjoying a rear-guard protected by Chávez and making their presence felt by a series of attacks against unarmed civilians.
When a group has as little popular support as the FARC does in Colombia (as one former FARC commander told me), they feel they have nothing to lose by attacking the civilians.
Chávez continues to buy far more weapons than he could use internally, and his AK-47 factory, leased from the ever-willing Russians, will be on line soon. That will provide the FARC and other groups with even more access to weapons, meaning the conflicts in the region will not end.
This will spill over severely into neighboring countries such as Brazil, Ecuador and across the continent. It is no small matter to have a state-sponsored logistics pipeline if you are a non-state group. The Reyes documents show how many active groups and front groups there are. The entire region will pay a heavy price for Chávez's support of terrorist organizations.
POSTED BY DOUGLAS FARAH