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Cigarettes and the Criminal-Terrorist Nexus
The minority staff of the House Committee on Homeland Security has, as first reported by Fox News, posted an interesting report on the ties between cigarette smuggling and terrorism.

The report focuses primarily on smuggling in New York and the billions of dollars in lost revenues suffered from illicit cigarette sales.

But in fact, the smuggling and sales of cigarettes have long been one of the primary life-blood sources of criminals and, increasingly, of terrorist activities.

The criminal-terrorist nexus is not new, but it is of growing importance.

The Taliban's deep engagement in the poppy trade and the FARC's growing dominance in the cocaine trade are the two clearest examples, but there are countless others.

Some of it is petty crime, but often the overlap comes in the world's largest illicit markets, precisely because the true ownership and connections are hardest to detect in those settings.

Cigarette smuggling is one of those venues, and is not new, but is perhaps now more dangerous.

The report, (with little additional evidence other than a footnote attributing the information to interviews with law enforcement) concludes that:

Historically, the low-risk, high profitability of the illicit cigarette trade served as a gateway for traditional criminal traffickers to move into lucrative and dangerous criminal enterprises such as money laundering, arms dealing and drug trafficking. Recent law enforcement investigations, however, have directly linked those involved in [the] illicit tobacco trade to infamous terrorist organizations such as Hezbollah, Hamas and al Qaeda.

The connection is likely to be less linear than the prose suggests, but it is likely there, as it has been for other organizations for decades.

I wrote an extensive piece on it 10 years ago for the Washington Post on how the main Colombian drug cartels use cigarettes to launder their profits and to corrupt the political process.

As with any such enterprise, the profit margins drive the business. It is easy to look at the new methodologies for raising and moving money to for criminal activities, but it is often the old, tried and true methods that bring the best results.

Hezbollah learned that lesson in cigarette smuggling, as has the FARC in Colombia, Hamas, and the thugs who run Burma. The criminal and terrorist groups need not control the entire operation to benefit.

For example, FARC need only control some of the points of entry on the Caribbean or Pacific coast in order to extract hundreds of thousands of dollars in transit fees from the smugglers. The organization does not need to have contacts in Aruba or Panama, where the shipments originate.

The reason is simple. Despite successful law suits against tobacco companies for knowingly helping to launder drug proceeds, and despite repeatedly-trumpeted campaigns against cigarette smuggling, little has changed in the ability to enforce existing laws.

Like cocaine and other drugs fought in the "drug war," tobacco has a built in market, able to constantly expand to new markets when old ones stagnate. North America doesn't like smoking? Latin America does. Or China. Or much of Europe. Etc.

While pressure is exerted on "traditional" methods of financing terrorist activities (ie., those that were suddenly obvious after 9/11, such as the use of charites), little is done on fronts that can yield equal, and low risk profits.

Those engaged in terrorist actions or criminal enterprises are generally smart people, able to operate in harmony with the laws of supply and demand. Underestimating their creativity in making and moving money is lethal.

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