Friday May 30, 2008
Iran Moving Banking Operations to Venezuela
In a little-noticed move, Venezuela and Iran are joining forces not just in petroleum-relate ventures, but in banking ventures. The move toward joint banking is likely to boost Tehran's ability to circumvent U.S.-led sanctions against its financial structure that supports international terrorism and its nuclear program.
The formation of two banks in Venezuela comes on top of the hundreds of millions of dollars in aid Iran has promised the governments in the region that support the Chavez government in Venezuela-Nicaragua, Ecuador, and Bolivia, principally.
In addition to helping Iran evade sanctions, the banks, which will be largely operating outside the normal transparency required of financial institutions, will allow Chavez several new avenues to spread money to insurgent groups on the continent, particularly his allies in the FARC in Colombia.
On March 20, the Treasury Department's Financial Crimes Enforcement Network issued a warning against using several Iranian banks, including the Banco Internacional de Desarrollo, SA (BID), a wholly-owned Iranian bank based in Caracas, Venezuela.
Treasury warned that through state-owned banks, the government of Iran, the government of Iran disguises its involvement in proliferation and terrorism activities through an array of deceptive practices specifically to evade detection.
There are two interesting things about this BID, whose initials seem chosen to confuse potential clients with the International Development Bank, which uses the same name and acronym in Spanish.
The first is that the BID, operating since September 2007, was approved almost overnight, with an entirely Iranian board of directors. The second is that it seems not to have any branches elsewhere.
The second joint venture is the newly announced bilateral bank, Banco Binacional Irani-Venezuela, based in Caracas, with an initial capitalization of $1.2 billion, half by each country.
The stated purpose of the bank is to finance activities in the areas of industry, trade, infrastructure, housing, energy, capital markets and technology. The bank will also issue bonds to be placed on the international capital markets and "execute cooperation and technical assistance agreements with third parties."
The latter is of particular concern because it gives the two leaders a way to move funds, with virtually no accounting, to wherever they want.
Additionally, according to El Nacional, a leading Venezuelan newspaper, the directors and chief officers of the bank in Venezuela immunity from prosecution for any legal or administrative charges.
This means that if an Iranian official commits a crime in Venezuela, he cannot be tried for. How is that for an added benefit for a bank director-immunity from prosecution.
This is one of the most dangerous parts of the Caracas-Tehran alliance, and one sure to give the illicit and terrorist activities of both governments new operational staying power.
The formation of two banks in Venezuela comes on top of the hundreds of millions of dollars in aid Iran has promised the governments in the region that support the Chavez government in Venezuela-Nicaragua, Ecuador, and Bolivia, principally.
In addition to helping Iran evade sanctions, the banks, which will be largely operating outside the normal transparency required of financial institutions, will allow Chavez several new avenues to spread money to insurgent groups on the continent, particularly his allies in the FARC in Colombia.
On March 20, the Treasury Department's Financial Crimes Enforcement Network issued a warning against using several Iranian banks, including the Banco Internacional de Desarrollo, SA (BID), a wholly-owned Iranian bank based in Caracas, Venezuela.
Treasury warned that through state-owned banks, the government of Iran, the government of Iran disguises its involvement in proliferation and terrorism activities through an array of deceptive practices specifically to evade detection.
There are two interesting things about this BID, whose initials seem chosen to confuse potential clients with the International Development Bank, which uses the same name and acronym in Spanish.
The first is that the BID, operating since September 2007, was approved almost overnight, with an entirely Iranian board of directors. The second is that it seems not to have any branches elsewhere.
The second joint venture is the newly announced bilateral bank, Banco Binacional Irani-Venezuela, based in Caracas, with an initial capitalization of $1.2 billion, half by each country.
The stated purpose of the bank is to finance activities in the areas of industry, trade, infrastructure, housing, energy, capital markets and technology. The bank will also issue bonds to be placed on the international capital markets and "execute cooperation and technical assistance agreements with third parties."
The latter is of particular concern because it gives the two leaders a way to move funds, with virtually no accounting, to wherever they want.
Additionally, according to El Nacional, a leading Venezuelan newspaper, the directors and chief officers of the bank in Venezuela immunity from prosecution for any legal or administrative charges.
This means that if an Iranian official commits a crime in Venezuela, he cannot be tried for. How is that for an added benefit for a bank director-immunity from prosecution.
This is one of the most dangerous parts of the Caracas-Tehran alliance, and one sure to give the illicit and terrorist activities of both governments new operational staying power.
POSTED BY DOUGLAS FARAH
Tuesday May 27, 2008
The Death of Manuel Marulanda and the Future of the FARC
The FARC's announcement this weekend that its top leader, Manuel Marulanda (AKA Tirofijo, or "Sureshot") had died of a heart attack means the end of an era for the Marxist-inspired group that is now more criminal enterprise than insurgency.
Marulanda, whose real name Pedro Marin, was the last of old guard that founded the FARC (Fuerzas Armadas Revolucionarias de Colombia) in 1964, after spending more than a decade fighting in the wars between Conservative and Liberal party militias. His death comes as the FARC is suffering from severe internal strains and loss of leadership, leaving the future of the hemisphere's oldest insurgency murky.
In the past two months, the FARC's seven-member board of commanders has suffered three losses-Raul Reyes, Marulanda's chief deputy, whose captured computer has led to an unprecedented intelligence boon to government forces; Ivan Rios, whose own bodyguards executed him and cut off his hands and took his laptop computer; and Marulanda, who apparently died of old age. In addition, dozens of mid-level commanders have quit the movement.
This is a severe blow to a movement had had not lost even one of iits members of the high command (other than to natural causes) since its founding.
While living an extremely isolated life, in recent months, under the tutelage and direction of Hugo Chavez in Venezuela, the FARC was making a concerted effort to expand both its international sphere of influence and it international contacts. My friend Jonathan Winer outlines the latest revelations here.
Marulanda, as the grand old man, held the FARC together despite the demise of Marxism and Marxist movements around the world. He did it by allowing the movement to become highly compartmentalized and self-financing.
This was accomplished by letting different fronts of the FARC to engage in different types of criminal activity, from the cocaine trade to kidnappings for ransom. While an avowed Marxist himself, the cadres entering his force were, over time, less ideological and more profit-oriented. The group, which continues to hold hundreds of hostages, was designated a terrorist entity by both the United States and the European Union.
The choice of Alfonso Cano as his successor is the most interesting bits of news of how the FARC will operate in the near future, and one that is not likely to be accepted by some elements of the movement.
Cano has long been regarded as the political, not military leader of the FARC. In contrast, Jorge Briceno (AKA Mono Jojoy) is the leading military commander, and one most responsible for moving the FARC toward kidnapping Americans (Three remain in custody, seven others, all missionaries, have been killed in FARC custoy in the past decade) and the cocaine business.
Given the already-strained and ruptured command-and-control structures of the FARC and the implosion brought on by the military offensive and loss of cadres in recent years, it is unlikely the FARC will be able to remain a cohesive unit.
As with the demise of the Cali and Medellin cartels, the result may be, in some ways, worse than the status quo. The FARC is likely to degenerate almost entirely into a drug trafficking and criminal enterprise, operating in smaller, semi-autonomous or completely autonomous groups.
My prediction is that the numbers will shrink and the FARC will lose its capacity to directly challenge the state for supremacy in much of the national territory.
But I predict also that we will see a sharp rise in the level of violence against civilians, and internal wars over cocaine trafficking routes, as the groups seek dominance in the drug trafficking field.
The end is not in sight, but there is little doubt the FARC, as it has existed for the past four decades, is no more.
Marulanda, whose real name Pedro Marin, was the last of old guard that founded the FARC (Fuerzas Armadas Revolucionarias de Colombia) in 1964, after spending more than a decade fighting in the wars between Conservative and Liberal party militias. His death comes as the FARC is suffering from severe internal strains and loss of leadership, leaving the future of the hemisphere's oldest insurgency murky.
In the past two months, the FARC's seven-member board of commanders has suffered three losses-Raul Reyes, Marulanda's chief deputy, whose captured computer has led to an unprecedented intelligence boon to government forces; Ivan Rios, whose own bodyguards executed him and cut off his hands and took his laptop computer; and Marulanda, who apparently died of old age. In addition, dozens of mid-level commanders have quit the movement.
This is a severe blow to a movement had had not lost even one of iits members of the high command (other than to natural causes) since its founding.
While living an extremely isolated life, in recent months, under the tutelage and direction of Hugo Chavez in Venezuela, the FARC was making a concerted effort to expand both its international sphere of influence and it international contacts. My friend Jonathan Winer outlines the latest revelations here.
Marulanda, as the grand old man, held the FARC together despite the demise of Marxism and Marxist movements around the world. He did it by allowing the movement to become highly compartmentalized and self-financing.
This was accomplished by letting different fronts of the FARC to engage in different types of criminal activity, from the cocaine trade to kidnappings for ransom. While an avowed Marxist himself, the cadres entering his force were, over time, less ideological and more profit-oriented. The group, which continues to hold hundreds of hostages, was designated a terrorist entity by both the United States and the European Union.
The choice of Alfonso Cano as his successor is the most interesting bits of news of how the FARC will operate in the near future, and one that is not likely to be accepted by some elements of the movement.
Cano has long been regarded as the political, not military leader of the FARC. In contrast, Jorge Briceno (AKA Mono Jojoy) is the leading military commander, and one most responsible for moving the FARC toward kidnapping Americans (Three remain in custody, seven others, all missionaries, have been killed in FARC custoy in the past decade) and the cocaine business.
Given the already-strained and ruptured command-and-control structures of the FARC and the implosion brought on by the military offensive and loss of cadres in recent years, it is unlikely the FARC will be able to remain a cohesive unit.
As with the demise of the Cali and Medellin cartels, the result may be, in some ways, worse than the status quo. The FARC is likely to degenerate almost entirely into a drug trafficking and criminal enterprise, operating in smaller, semi-autonomous or completely autonomous groups.
My prediction is that the numbers will shrink and the FARC will lose its capacity to directly challenge the state for supremacy in much of the national territory.
But I predict also that we will see a sharp rise in the level of violence against civilians, and internal wars over cocaine trafficking routes, as the groups seek dominance in the drug trafficking field.
The end is not in sight, but there is little doubt the FARC, as it has existed for the past four decades, is no more.
POSTED BY DOUGLAS FARAH
Thursday May 22, 2008
A Much-Needed Push on Intelligence
Mike McConnell, the director for national intelligence, recently announced a significant revision in how members of the Intelligence Community will be paid.
Rather than rewarding employees for simply putting in time, the new pay system seeks to reward performance. As McConnell said, you usually get the behavior you reward.
It is undoubtedly something of a risk, but there is little doubt that it is vitally necessary as a way to reward innovation and those who take a modicum of risk in their jobs, as well as show superior competence.
This is particularly true given the massive drain of the old guard in the Community following 9/11. One of the complaints and criticisms of the old system, which was clearly broken, was that it could not reward competence. People rose through the ranks and were rewarded largely by how long they could stick around.
One of the truly alarming figures in assessing the intelligence community across the board is that more than half have five years of experience or less. The youth and lack of field experience of many of today's intelligence operatives is a significant source of concern among allied services and the few that remain who have more than 20 years of experience.
In order to help insure those people stay on a career track where they can gain experience and provide seasoned leadership, the pay system had to be reworked. Of particular importance is the flexibility so a unit member can earn as much as a supervisor.
This should help eliminate some of the constant pressure felt by good field agents who see their only course of advancement as switching over to management positions, whether that is their strength or not.
In some ways, the Community has been a victim of its own success and the inability of al Qaeda and its allies to carry out more attacks on U.S. soil.
As the attacks recede in memory, the walls among different part of the Community that had been broken do to a significant degree, are now back in place. My friends in the Community are often dismayed by how little of the initial progress remains, and how dominant turf fights and rigid institutional priorities have reasserted themselves.
The decision to reward performance, make it easier for people to move around inside the Community and help people stay in the jobs they are best at, is an important part of rebuilding the Community for the long term.
Rather than rewarding employees for simply putting in time, the new pay system seeks to reward performance. As McConnell said, you usually get the behavior you reward.
It is undoubtedly something of a risk, but there is little doubt that it is vitally necessary as a way to reward innovation and those who take a modicum of risk in their jobs, as well as show superior competence.
This is particularly true given the massive drain of the old guard in the Community following 9/11. One of the complaints and criticisms of the old system, which was clearly broken, was that it could not reward competence. People rose through the ranks and were rewarded largely by how long they could stick around.
One of the truly alarming figures in assessing the intelligence community across the board is that more than half have five years of experience or less. The youth and lack of field experience of many of today's intelligence operatives is a significant source of concern among allied services and the few that remain who have more than 20 years of experience.
In order to help insure those people stay on a career track where they can gain experience and provide seasoned leadership, the pay system had to be reworked. Of particular importance is the flexibility so a unit member can earn as much as a supervisor.
This should help eliminate some of the constant pressure felt by good field agents who see their only course of advancement as switching over to management positions, whether that is their strength or not.
In some ways, the Community has been a victim of its own success and the inability of al Qaeda and its allies to carry out more attacks on U.S. soil.
As the attacks recede in memory, the walls among different part of the Community that had been broken do to a significant degree, are now back in place. My friends in the Community are often dismayed by how little of the initial progress remains, and how dominant turf fights and rigid institutional priorities have reasserted themselves.
The decision to reward performance, make it easier for people to move around inside the Community and help people stay in the jobs they are best at, is an important part of rebuilding the Community for the long term.
POSTED BY DOUGLAS FARAH
Tuesday May 20, 2008
Good News on the Libel Front
Today there was good news on freedom of speech front, as the Wall Street Journal won a complete victory in a libel case involving terror finance issues. The lead reporter, the venerable Glenn Simpson, is now 4-0 since 9/11 in these types of cases.
While the victory is a testament to his tenacity and care, it is also a testament to the courage of the WSJ in willing to fight and win these cases. Most are lost simply because the will to fight has gone out of so much of the media, who would often rather settle than protect the truth.
A brief summary: The Tribunel Correctionel in Paris issued a ruling in Ancienne Bauche SA v The Wall Street Journal Europe. The Journal, editor Michael Williams and reporters Glenn Simpson and Benoit Faucon were all acquitted on charges of felony and civil libel.
The other WSJ cases are: One UK case was lost at trial but overturned by the House of Lords (the ground-breaking and precedent-setting case of Mohammed Jameel); one UK case was thrown out (Yousef Jameel); one UK case was dropped by the plaintiff (Al-Rajhi), and the Bauche case was won at trial.
The cases seem to indicate that careful, fair and accurate reporting on terrorism-financing can withstand legal challenge even in Europe, where plaintiffs are heavily advantaged in libel proceedings. The catch: You have to be willing and financially able to defend yourself. To all our benefit, the WSJ had the will.
Bauche, a Paris sugar-trading concern which did business with a trader in Gaza accused by the Israelis of backing terrorism, alleged libel over a July 2007 report regarding the use of commodities to transfer value from an Islamic charity in France to Islamic charities in the territories.
Bauche arranged shipments of sugar to Gaza financed by a charity in Paris called the Comite de Bienfaisance et Secours aux Palestiniens, which is legal in France but is banned by the US for allegedly financing terror. The group won a previous libel case against the Simon Weisenthal Center (currently on appeal).
At a trial at the Palais de Justice in Paris on April 1, the two reporters testified for about five hours regarding their work on the story, which took six months. Key to the defense was that the article made clear there was no reason to believe that Bauche had knowingly or intentionally supported terrorism.
At the end of the April 1 trial, the public prosecutor made some non-binding observations. She called the article "a serious in-depth investigation," which lacked invective or innuendo and contained "just stated facts." The journalist testimony regarding efforts to confirm the story in various places "shows they are serious and their rigour. They have multiple sources. Their sources are checked." So, she said, "I don't see how to say there is no good faith."
In their ruling today, the judges found that the story contained only one possible inaccuracy, which involved whether one of the sugar deals was blocked by the French police (as WSJ stated) or simply canceled by the Gaza trader after intervention by the Israeli police (as Bauche alleged). The potential inaccuracy "is not of the kind that would make the article defamatory as it matters little in what circumstances the transaction failed between one version and the other," the judges found.
"No impropriety, either intentionally or by negligence, is therefore alleged by [WSJ] against the plaintiff, except to consider, which the tribunal would not admit, that every commercial transaction with Palestinian partners is a priori suspicious."
In other words, the only thing the WSJ reported was that Bauche had done business with Palestinians, and there's no crime imputed in that.
Concluded the judges: "The facts reported as to the Bauche company are not damaging to its honor and reputation. The offense of public defamation against an individual is therefore not constituted. The defendants are, as a consequence, freed from prosecution."
As all serious journalism should be.
While the victory is a testament to his tenacity and care, it is also a testament to the courage of the WSJ in willing to fight and win these cases. Most are lost simply because the will to fight has gone out of so much of the media, who would often rather settle than protect the truth.
A brief summary: The Tribunel Correctionel in Paris issued a ruling in Ancienne Bauche SA v The Wall Street Journal Europe. The Journal, editor Michael Williams and reporters Glenn Simpson and Benoit Faucon were all acquitted on charges of felony and civil libel.
The other WSJ cases are: One UK case was lost at trial but overturned by the House of Lords (the ground-breaking and precedent-setting case of Mohammed Jameel); one UK case was thrown out (Yousef Jameel); one UK case was dropped by the plaintiff (Al-Rajhi), and the Bauche case was won at trial.
The cases seem to indicate that careful, fair and accurate reporting on terrorism-financing can withstand legal challenge even in Europe, where plaintiffs are heavily advantaged in libel proceedings. The catch: You have to be willing and financially able to defend yourself. To all our benefit, the WSJ had the will.
Bauche, a Paris sugar-trading concern which did business with a trader in Gaza accused by the Israelis of backing terrorism, alleged libel over a July 2007 report regarding the use of commodities to transfer value from an Islamic charity in France to Islamic charities in the territories.
Bauche arranged shipments of sugar to Gaza financed by a charity in Paris called the Comite de Bienfaisance et Secours aux Palestiniens, which is legal in France but is banned by the US for allegedly financing terror. The group won a previous libel case against the Simon Weisenthal Center (currently on appeal).
At a trial at the Palais de Justice in Paris on April 1, the two reporters testified for about five hours regarding their work on the story, which took six months. Key to the defense was that the article made clear there was no reason to believe that Bauche had knowingly or intentionally supported terrorism.
At the end of the April 1 trial, the public prosecutor made some non-binding observations. She called the article "a serious in-depth investigation," which lacked invective or innuendo and contained "just stated facts." The journalist testimony regarding efforts to confirm the story in various places "shows they are serious and their rigour. They have multiple sources. Their sources are checked." So, she said, "I don't see how to say there is no good faith."
In their ruling today, the judges found that the story contained only one possible inaccuracy, which involved whether one of the sugar deals was blocked by the French police (as WSJ stated) or simply canceled by the Gaza trader after intervention by the Israeli police (as Bauche alleged). The potential inaccuracy "is not of the kind that would make the article defamatory as it matters little in what circumstances the transaction failed between one version and the other," the judges found.
"No impropriety, either intentionally or by negligence, is therefore alleged by [WSJ] against the plaintiff, except to consider, which the tribunal would not admit, that every commercial transaction with Palestinian partners is a priori suspicious."
In other words, the only thing the WSJ reported was that Bauche had done business with Palestinians, and there's no crime imputed in that.
Concluded the judges: "The facts reported as to the Bauche company are not damaging to its honor and reputation. The offense of public defamation against an individual is therefore not constituted. The defendants are, as a consequence, freed from prosecution."
As all serious journalism should be.
POSTED BY DOUGLAS FARAH
Monday May 19, 2008
Is Hezbollah Now the Greatest Threat?
There is some serious re-evaluation of priorities in parts of the U.S. and European intelligence communities as to the who now poses the greatest strategic threat to the West-al Qaeda or Hezbollah.
Hezbollah has publicly emerged in recent days the premier military force in Lebanon, able to act with relative impunity while the army stands by.
But perhaps more importantly, Hezbollah has now become a public target of al Qaeda, as Osama bin Laden has explicitly stated in his most recent audio tape.
Bin Laden singled out by name Hassan Nasrallah, leader of Hezbollah, whose 2006 war against Israel boosted the group's popularity among Shiites and Sunnis.
Bin Laden said Nasrallah claimed he had enough resources, such as money and combatants, to fight Israel.
"But the truth is the opposite," he said. "If he was honest and has enough (resources), why then he did not support the fight to liberate Palestine."
He also attacked Nasrallah for allowing the deployment of U.N. peacekeepers in southern Lebanon "to protect the Jews."
Why the animosity? Perhaps because, for the first time in many years, the Sunni world-and the radical Sunni world in particular-are noticing how much more willing and able Hezbollah and its Shite government backers are to project a strength that at least rivals, and likely surpasses, that of its own fighting forces.
What makes Hezbollah particularly interesting and dangerous now is its hybrid status-a non-state armed actor, operating with access to state resources (Iran and Syria).
This means that, while nominally outside state control and the reach of sanctions available in the international sphere, it has access to state intelligence, arsenals and financial backing.
Hezbollah also has access to funds generated by the diamond trade in West and Central Africa, a host of other smuggling activities on that continent, as well as the criminal activities in Latin America and elsewhere.
If al Qaeda central or Al Qaeda in Iraq, lose $500,000, it is a serious blow to their structure. If Hezbollah were to lose that amount, it would be damaging, but they would have numerous options of where to turn to replenish their coffers in a very short time.
Because of the scope of Hezbollah's rapidly-increasing activities, both at home and abroad (particularly Latin America), its strong internal structure and high-level training, some in the intelligence communities are now arguing for a shift of at least some resources to tackle the Hezbollah issue more forcefully.
The argument is that Iran is increasingly desirous of extending its sphere of influence and that of Shite Muslims on a global scale. In order to do this, and perhaps to also detract from the worsening economic situation at home, the government is seeking to enter new arenas of conflict where the cost is relatively low but the payoff, in terms of prestige and financial gain, could be high.
One such areas is the northern tier of Latin America. Another, where action has already taken place, is in Lebanon itself.
Given the financing, training and documented ability and willingness to carry out terrorist attacks (Beirut, Buenos Aires etc.) Hezbollah is a growing force to be reckoned with.
Hezbollah has publicly emerged in recent days the premier military force in Lebanon, able to act with relative impunity while the army stands by.
But perhaps more importantly, Hezbollah has now become a public target of al Qaeda, as Osama bin Laden has explicitly stated in his most recent audio tape.
Bin Laden singled out by name Hassan Nasrallah, leader of Hezbollah, whose 2006 war against Israel boosted the group's popularity among Shiites and Sunnis.
Bin Laden said Nasrallah claimed he had enough resources, such as money and combatants, to fight Israel.
"But the truth is the opposite," he said. "If he was honest and has enough (resources), why then he did not support the fight to liberate Palestine."
He also attacked Nasrallah for allowing the deployment of U.N. peacekeepers in southern Lebanon "to protect the Jews."
Why the animosity? Perhaps because, for the first time in many years, the Sunni world-and the radical Sunni world in particular-are noticing how much more willing and able Hezbollah and its Shite government backers are to project a strength that at least rivals, and likely surpasses, that of its own fighting forces.
What makes Hezbollah particularly interesting and dangerous now is its hybrid status-a non-state armed actor, operating with access to state resources (Iran and Syria).
This means that, while nominally outside state control and the reach of sanctions available in the international sphere, it has access to state intelligence, arsenals and financial backing.
Hezbollah also has access to funds generated by the diamond trade in West and Central Africa, a host of other smuggling activities on that continent, as well as the criminal activities in Latin America and elsewhere.
If al Qaeda central or Al Qaeda in Iraq, lose $500,000, it is a serious blow to their structure. If Hezbollah were to lose that amount, it would be damaging, but they would have numerous options of where to turn to replenish their coffers in a very short time.
Because of the scope of Hezbollah's rapidly-increasing activities, both at home and abroad (particularly Latin America), its strong internal structure and high-level training, some in the intelligence communities are now arguing for a shift of at least some resources to tackle the Hezbollah issue more forcefully.
The argument is that Iran is increasingly desirous of extending its sphere of influence and that of Shite Muslims on a global scale. In order to do this, and perhaps to also detract from the worsening economic situation at home, the government is seeking to enter new arenas of conflict where the cost is relatively low but the payoff, in terms of prestige and financial gain, could be high.
One such areas is the northern tier of Latin America. Another, where action has already taken place, is in Lebanon itself.
Given the financing, training and documented ability and willingness to carry out terrorist attacks (Beirut, Buenos Aires etc.) Hezbollah is a growing force to be reckoned with.
POSTED BY DOUGLAS FARAH