Oct. 25, 2016

11 “We Pay, You Pay:” Protection Economies, Financial Flows, and Violence

Across the globe illicit flows have not only continued to sustain themselves; they have expanded into new sectors, with a series of new criminal markets now emerging. What is remarkable about this development is not so much the growth, although in some sectors this has been truly astonishing, but that the policy solutions to the phenomenon have been so underwhelming. After decades of focus on drugs markets, most analysts have conceded that law enforcement and associated development policies have failed to curb the power and expansion of illicit networks. In conflict zones, notably in Africa, where illicit trafficking has now become a standard—albeit understudied—feature, a series of tentative programmatic experiments appears not to have achieved the envisaged results.

Oct. 25, 2016

12 The Neglected Mega-Problem: Illicit Trade in “Normally Licit” Goods

We are all familiar with the “War on Drugs” initiated by Richard Nixon in 1971, Pablo Escobar’s infamous role in the cocaine trade, and the “Pizza Connection” trial that laid bare Cosa Nostra’s historic role in the global heroin trade. This recognition is well-deserved; even today, many of the most powerful organized crime groups, as well as terrorist groups, generate significant profits from the narcotics trade. As a result, counternarcotics efforts have enjoyed tremendous political and law enforcement prioritization, with estimates that over $100 billion are invested annually in combating it globally.

Oct. 25, 2016

9 ISIL and the Goal of Organizational Survival

The Islamic State, or ISIL, has emerged as a manifestation of two trends: the convergence between transnational terrorist and criminal organizations, and the erosion of the post-Westphalian world order. The conventional wisdom has long held that criminal organizations are driven by the venal pursuit of wealth, while terrorist organizations are driven exclusively by ideological motives, and would presumably be repelled by the materialism of ordinary criminals.1 ISIL, however, from its inception, has represented a merging of criminal activity for profit and terrorism. ISIL was founded as al-Qaeda in Iraq in 2004 by an infamous Jordanian thug known by his nom de guerre, Abu Mus’ab al-Zarqawi. Since its creation, the organization has changed names several times, but it has retained and expanded upon many of the innovations put in place by its founder, who used his experience as a gangster to create an unusually wealthy, vicious, and crude criminal/terrorist organization that also claims to be a state.

Oct. 25, 2016

7 Hezbollah’s Criminal Networks: Useful Idiots, Henchmen, and Organized Criminal Facilitators

Since its inception, Hezbollah has leveraged a worldwide networks of supporters—from formal operatives to informal sympathizers—to provide financial, logistical, and sometimes even operational support. Through these networks, the group is able to raise funds, procure weapons and dual-use items, obtain false documents, and more. Some of these are formal Hezbollah networks, run and supervised by Hezbollah operatives on the ground and back in Lebanon. But most are intentionally structured to be more informal than formal. That is, the links back to formal Hezbollah structures are opaque, providing distance and a measure of deniability for Hezbollah leaders. Generally, the Hezbollah criminal enterprise tends to be organized around loosely connected nodes, and does not depend on hierarchical links up the Hezbollah chain of command. The types of operatives and supporters involved in criminal activities benefiting Hezbollah run the gamut from trained and committed Hezbollah henchmen to what one Federal Bureau of Investigation (FBI) official experienced in Hezbollah investigations describes as “useful idiots who want to be associated with a glorious cause but don’t need or want to know more.”1 Hezbollah also plugs into preexisting criminal networks that provide specialized services to any client who pays.

Oct. 25, 2016

8 Convergence in Criminalized States: The New Paradigm

The reality of convergence of different terrorist and other threat groups with transnational organized crime (TOC) networks is still much debated in U.S. policy circles. Field research and open-source judicial cases where different types of convergence can be observed and documented are dismissed as anecdotal by skeptics. The intelligence and law enforcement communities dedicate few of their resources to exploring how and if groups join forces, under what circumstances, and the conditions necessary for this to happen, stunting a conversation critical to our national strategic interests.

Oct. 25, 2016

4 The March Is Not Linear: Big Party Politics and the Decline of Democracy Worldwide

Alternative models of governance have gained credibility in recent years, as the expectations set by post-Cold War democracy promotion programs initiated following the collapse of the Soviet Union were not met. In particular, China has increasingly become a source of inspiration for a number of developing countries seeking to replicate the country’s remarkable economic growth. As a part of this process of examination and emulation, the Chinese Communist Party (CCP) is increasingly seen as instrumental to China’s national development and the party’s centrality is now considered a long-term feature of their political economy, rather than being a transient phase. This revelation confronts the assumption of modernization theory, that economic growth prompts democratization; instead of fading into the background amid the growth of multiparty democracy, the CCP seems capable of maintaining hegemony within China—in fact, in a number of ways, the growth that was supposed to undermine the party seems to have strengthened its claims to legitimacy. The means by which the CCP has woven itself into a secure position within China’s political economy has not gone unnoticed by other political parties globally.

Oct. 25, 2016

5 Costs of Hedging Bad: The Global Threat Network and Impact on Financial Market Volatility .

The illicit world of crime and terrorism seems far removed from everyday activity and seems especially divorced from legitimate commercial endeavors. Increasingly, tragic attacks or fictitious-sounding jailbreaks perpetrated by criminals and terrorists make headlines, but their day-to-day activities are often thought of as shrouded in darkness and best left to professionals in law enforcement, intelligence, and elite military units. Isolating illicit activities like crime and terrorism from everyday activity fosters the illusion that illicit activities have, at most, a limited impact on governance, commerce, and economics. The barriers between the licit and illicit, as well as the impact of illicit on licit markets, may be more permeable than often acknowledged.

Oct. 25, 2016

6 Terrorist and Criminal Dynamics: A Look Beyond the Horizon

Criminal and terrorist labels provided a useful baseline for understanding nonstate actors for much of the 20th century. The Italian Mafia, left-wing European terrorist groups, and Colombia- and Mexico-based criminal enterprises, among others, usually fell cleanly into two categories: those motivated by greed and those motivated by grievances. To be sure, a spectrum of political and criminal activity existed within these two categories, particularly in the 1980s and 1990s, when some criminals participated in politics, served as local or regional patriarchs, or declared war against the state, using terrorism as a tactic, while others utilized criminal profits to replace revenues lost from state sponsorship or the unexpected absence of donations from abroad. In spite of this heterogeneity, analysts could usually discern a group’s goals and motives and assess their impact on international security.

Oct. 25, 2016

2 The Twin Insurgencies: Plutocrats and Criminals Challenge the Westphalian State

States within the modern global political economy face twin insurgencies, one from below, and another from above. On the one hand, there is a series of interconnected criminal insurgencies, in which the global disenfranchised resist, co-opt, and route around states as they seek ways to empower and enrich themselves in the shadows of the global economy. Drug cartels, human traffickers, computer hackers, counterfeiters, arms dealers, and others exploit the failures of governance systems to build global commercial empires that, in turn, provide them the resources to corrupt, co-opt, or challenge incumbent political actors. On the other hand, there exists a plutocratic insurgency, in which globalized elites seek to disengage from traditional national obligations and responsibilities. From libertarian activists, to tax haven lawyers, to currency speculators, to mineral extraction magnates, the new global superrich and their hired help are waging a broad-based campaign that aims either to limit the reach and capacity of government tax collectors and regulators, or to manipulate these functions as a tool in their own cutthroat business competition. Unlike classic 20th-century insurgents, who sought control over the state apparatus in order to implement social reforms, criminal and plutocratic insurgents do not seek to take over the state. These modern insurgencies do not wish to destroy the state, since they rely, like parasites, on the state to provide the legacy goods of social welfare: health, education, infrastructure, and so on. Rather, their aim is simpler: to carve out de facto zones of autonomy for themselves by crippling the state’s ability to constrain their freedom of (primarily economic) action. The net result: these transnational insurgencies from above and below are challenging the state’s control over the domestic economy, and destabilizing many of the conventions and assumptions rooted in the Westphalian model of governance.

Oct. 25, 2016

3 The Islamic State Revolution

In response to yet more slaughters perpetrated by the Islamic State (ISIL), security services deployed across Europe, Africa, and America.1 U.S. and Russian forces ratcheted up air attacks in Iraq and Syria, while politicians and pundits hammered their publics into existential dread. Perhaps never in history have so few, with such meager means, caused such fear in so many. But it is easy amid the bullets, bombs, and bluster, to lose sight of a central fact in the fight against the violent forces of radical Islam: not only are we not stopping its spread, but our efforts to contain the contagion appear to contribute to its strength, while further constraining our own freedoms.