Blood Profits

by Vanessa Neumann

  The lesson gleaned from the 9/11 attacks, contained in 2002’s National Security Strategy of the United States of America, was that whereas “enemies in the past needed great armies and great industrial capabilities to endanger America, now shadowy networks of individuals can bring great chaos and suffering to our shores for less than it costs to purchase a single tank.”5 Because of the convergence of criminals and terrorists, whereby a small gang can threaten a country, Professor Robert Mandel considers that asymmetric threat “unprecedented since the emergence of the nation-state.”6 According to 2011’s White House Strategy to Combat Transnational Organized Crime, “Criminal networks are not only expanding their operations, but they are also diversifying their activities, resulting in a convergence of transnational threats that has evolved to become more complex, volatile and destabilizing.”7 Combating transnational criminals is now viewed as critical to cutting the funding of terrorist operations.

  This is because, increasingly, terrorists and criminals are colluding. The net effect of the growing criminal-terrorist collusion is an accelerating subversion of good governance and law and order. They collude most frequently in wealthy countries, where profits are highest and law enforcement capabilities are strongest, because that is where they need each other the most.8 Criminals and terrorists share at least one overarching desire: an alternative space of governance in which they are the predominant force, whether this is achieved visibly through a violent overthrow (the means of jihadists and insurgents) or invisibly through insidious corruption and intimidation (the means of the classic criminal archetype). In both cases, the intermediate step to attaining their goals is not an empty, ungoverned space—it is a governable yet criminalized space, where the terrorist or criminal organization, rather than the elected (or otherwise official) government, is the controlling force.9

  Keeping a government structure is key, for without it there would be no effective delivery system to allow them to carry out daily criminal activity—namely, the infrastructures of transportation, communications, and finance, as well as access to the markets to which the criminals want to sell and access to the goods they want to buy. Personal security and the ability to protect private property are prime reasons why major transnational and terrorist facilitators run their operations from wealthy, First World countries, which are dependent on a strong state structure with (ironically) a strong rule of law.

  Generally speaking, the World Bank and International Monetary Fund consider that a state has been “captured” when there is corruption on such a grand scale that the state’s decision-making processes are predictably skewed in favor of private interests through nonobvious means. Others prefer to talk about “the criminalization of a state”10 rather than its “capture.” In both cases, government institutions stop defending the rights of the average citizen. The increasing lawlessness creates fertile ground for criminals and the disaffected, who turn to violence and insurgency. Both state capture and criminalization usually begin with corruption.

  Corruption and violence are complementary tools. Key government officials are often given a very clear choice: plata o plomo—“silver or lead,” money or a bullet. Those who don’t accept the silver get the lead, and are hung out to dry—in the most literal sense—as an example to the next person facing the choice. “Following the money” is the path not just to finding corruption, but to finding the connections between criminals and terrorists. If you follow the money, though, it gets messy: instead of the crime you were tracking, you get a whole network of interconnected crimes pursued by competing authorities struggling to cross jurisdictions.

  You also get our complicity: the money starts with each of us, as consumer or supporter. Much of the financing of illicit trade comes from the small everyday choices consumers make: buying that counterfeit handbag on the street, buying drugs or ten minutes of a live-performing stripper on the Internet. So, consumer tolerance is high, the penalties are small, and the profit margins are big, in all cases—the counterfeit handbag, for example, is a more profitable item than heroin.11

  Boundaries and borders are the reasons for the profit margins; as licit business seeks competitive advantage by developing supply and distribution chains efficiently, so with illicit business—production is handled in areas where costs are low, and product is shipped to places where prices are high, with enforcement risk priced in.

  Following the money leads to the money launderers, one of the key points of convergence between terrorist and criminal organizations. Their service, in the world’s great financial institutions, is one of the prime reasons that illicit superconnectors are more prevalent in wealthy First World countries than in poor countries.

  A Defense Department study conducted by Dr. Scott Helfstein during his time at the Combating Terrorism Center at West Point12 reveals just how intertwined transnational smugglers are with terrorists. Examining 40 individuals who were known transnational smugglers, Helfstein’s team found that all of them were in regular contact with 754 others. Of those 754 people, 221 were involved in narcotics, while 86 were involved in terrorism. By the time the network analysis reached the second degree of separation from the starting group, terrorists outnumbered drug traffickers: of the 1,942 individuals identified at this level, 392 were involved in narcotics, while 404 were terrorists. The rapid intertwining of criminals and terrorists poses dangers of both the criminal and terrorist varieties in one network. This is the convergent threat of the crime-terror pipeline, and is unique for two reasons.

  First, the threat is adaptive. Both criminal and terrorist organizations have broken down their networks into small, separate cells to thwart the effectiveness of law enforcement, military, and intelligence services. This microstructure design is calculated on the premise that if only one or a few cells are taken down, the chance of collateral damage being inflicted on the greater organization is minimized. Intelligence agencies function the same way: it’s called “compartmentalization.”

  The head of each of these cells can manage only the activities of his or her cell members, not beyond. Also, the cell head usually receives management and direction from someone at a higher level whom he or she knows only by a code name and through telecommunications devices that are changed out every few days. That way, if law enforcement captures the cell head, he or she cannot give up a superior or disrupt the rest of the organization, either under interrogation or as part of some plea agreement. Because of this miniaturization of the cells, organizations such as terrorist groups and drug trafficking organizations have the ability to quickly rejuvenate. Even if government succeeds in taking down a number of cells simultaneously, the remaining cells shift and realign, quickly morphing into something that neither looks nor acts like what government security forces were focused on just a few months earlier.

  Battling crime-terror networks is a real-life war game: while we work to disrupt and degrade their operating environment, the criminal and terrorist groups engage in actions to either restore their original operating environment or alter it to something more beneficial to them. While we try to exploit their vulnerabilities, they simultaneously try to exploit ours—and we are at a terrible disadvantage.

  The United States has far more exploitable seams than the criminal organizations: while we are stymied by borders and authorities, they use these borders to play hide-and-seek with law enforcement authorities. Miami was once the main entry point for cocaine in the US; when we increased security in that part of the Caribbean, the smugglers rerouted into Central America and through Mexico to get to the US. We increase security on the Southwest-Mexico border, they shift to boats and small submarines to evade detection. Cocaine use goes down and marijuana becomes increasingly legalized, the cartels increase the push of methamphetamines and opiates, whether fentanyl or heroin. Europe increases security on its eastern border, smugglers come in through the southern border, particularly Greece. Europe increases security in Greece, smugglers shift and enter via Italy and Spain from North Africa. Our
foes in the criminal universe use a much more open playbook than we do: they are unconstrained by law and order or procedural and institutional checks and balances, such as getting warrants and due process.

  This is what international relations professor Jakub Grygiel calls “the power of statelessness”: the “power without the responsibility of governing.”13 In other words, transnational bad guys embrace their lack of national ties as an asset, because it increases their organization’s chances of survival. Organizations that are substate or (even worse) transnational are far more difficult to target, enclose, or sanction. In short, both criminals and terrorists want to exploit state infrastructure, but they do not want to be as vulnerable to attack as the state structure they have subverted.

  Second, the links between different illicit trades are blurring: narcotics and weapons smugglers are also smuggling tobacco and people. While this approach complicates investigations by possibly getting different agencies entangled if handled incorrectly, it presents an opportunity for law enforcement: it means multiple law enforcement agencies can tackle a single network as part of their core duty. The Central Intelligence Agency, the Federal Bureau of Investigation, and Special Operations Command tackle terrorism; the Drug Enforcement Administration, narcotics; for the financing of any threat, a panoply of authorities can be activated, from the US Treasury’s FinCEN to the Financial Action Task Force. A transnational organized crime network, depending on its tentacles, can be investigated by the Drug Enforcement Administration, the Federal Bureau of Investigation, the Department of Homeland Security, Interpol, Europol, the UK’s National Crime Agency, and the Central Intelligence Agency and its counterparts in other countries. This is the “multiagency swarm” tactic: like hornets simultaneously attacking the same victim.

  Each of these law enforcement and military organizations with the authority to act against their corresponding bad actors is collaterally affected by illicit trade. Each one therefore requires valuable and actionable information about the illicit trade in which these criminal and terrorist pipeline organizations are involved. This is what Asymmetrica has specialized in: pulling the thread on private sector information regarding illicit trade to find the intelligence on threats of interest to government.

  It is not easy work. Criminal organizations tend to expand from one illicit enterprise into another and to spread their tentacles across borders and into government. Mexico’s drug trafficking Gulf cartel (based in the border city of Matamoros, Tamaulipas) actually arose in the bootlegging era of the 1920s. It expanded as a prime drug trafficker in the 1980s—uncoincidentally, at a time that cocaine was all the rage in the US—when its leader, Juan García Abrego, established business relationships with both Colombia’s Cali cartel and the Mexican federal police.14 Like Los Zetas, the Gulf cartel’s cells fragmented and got into other forms of illicit trade, including extortion and fuel theft. Los Zetas had such territorial control, the government had to dispatch federal troops in May 2014 to reimpose government authority in the oil-rich state of Tamaulipas.

  WHEN IS CONVERGENCE REAL?

  There are two different views regarding the convergence of criminals and terrorists in a pipeline of money. One is that the data bears out great organizational convergence: two groups actually working together for mutual benefit over an extended period of time. The second is that there is sometimes tactical convergence, also known as “activity appropriation,” in which groups borrow each other’s tactics in order to achieve a particular objective. The two scenarios are very different.

  Organizational convergence involves two groups working together, not the unilateral appropriation of one group’s set of tactics by the other. Activity appropriation may be short-lived, but convergence among groups is generally long term, lasting well beyond a single illegal narcotics transaction or arms deal. Examples of organizational convergence include: the Haqqani network’s relationship with Al Qaeda; D-Company’s relationship with Lashkar-e-Taiba; the protection provided by the former Irish Republican Army (IRA) and the Ulster Defense Association (UDA) for smuggling and prostitution enterprises in Northern Ireland run by Italians, Serbians, and Chinese triads; and the Venezuelan vice president Tareck El Aissami’s drug trafficking in support not only of his own enrichment but of Lebanese Hezbollah.15

  On the other hand, the activity appropriation of the more superficial tactical convergence is pretty horrific. Los Zetas (who were formerly Mexican Special Forces) have committed acts of terrorism, the most renowned of which is the 2011 firebombing of a casino in Monterrey that killed 53 people, as well as the torture and mass execution in 2011 of 193 migrants who were traveling through northern Mexico by bus, but had not paid their extortion fees.16

  These acts should not be mistaken for an organizational convergence: they are merely examples of one group temporarily employing the tactics of another to achieve particular ends. Splinter drug trafficking organizations Los Rojos (“The Red Ones”) and Guerreros Unidos (“United Warriors,” or “United People of Guerrero,” the state in which they are based) have expanded into kidnapping and extortion. The Guerreros Unidos are responsible for the disappearance and murder of forty-three Mexican teacher trainees (students) who’d been handed over to them by corrupt local authorities in Iguala, Guerrero.17

  In some Latin American countries where I have worked, the threat to state government from the collusion of transnational organized criminals with terrorist groups is less than the threat presented by collusion among private armies or paramilitaries, which creates the conditions for insurgency, usurping the state. Criminals (including narcos) collude with insurgents and paramilitary groups because doing so maximizes their power. They collude to create the “permissive environment” security analysts are so fond of discussing. They each bring important components for a strategy of asymmetric war—also known as “total war.”

  In fact, the problem is not so much that the environments themselves are permissive but that the effective presence of either group produces what economists term a “positive externality”: a by-product of one group’s activity that benefits the other, like a bacterium whose presence changes the alkalinity of the liquid in which it lives, making it easier for other bacteria to grow.

  Criminals want more than just profit—they want sanctuary: a space where they can operate with minimal pressure from law enforcement and other government agencies. Criminals do not want to exercise “positive political control” by governing; they want to exercise “negative political control” by denying others the ability to govern effectively. And the best group at challenging a government and making it more difficult for that government to assert political control? Terrorists.18 Thus, criminals and terrorists benefit from a symbiotic destabilization of government. When terrorists attack the government with brutal violence, the criminals benefit; when criminals destabilize the government through physical attacks or well-planned corruption campaigns, terrorists benefit just as much as organized crime.19 The crime-terror pipeline represents the best way to weaken and exhaust the state.

  The initial basis for criminal and terrorist collusion is practical efficiency. Drug traffickers and other transnational criminals have ample money and lines of transportation and communication. Insurgents and paramilitaries have organization, discipline, and leadership over a constituency of motivated followers. These components allow organized criminals (particularly narcos) to project their power within and across countries, enabling them to protect their substantial assets. Insurgents and paramilitaries need the financial, logistical, and communications support that transnational criminals have.

  When transnational criminals, terrorists, paramilitaries, and insurgents collaborate in some combination, their power to challenge the state increases drastically. “Whether the insurgents are reformers or criminals is irrelevant, for their avowed objective is to take direct control of the government and state.”20 Indeed, criminal violence can resemble political violence in more than just its brutality: it shifts control and authori
ty from the state to “violent nonstate actors.” Successful criminal organizations resemble insurgencies: they rival the state for control of territory, people, and resources; their commercial motivations comprise an implicit political agenda.21

  All of this crime-terror intersection accelerates learning for both groups. Over time (a very brief time), they adopt each other’s more efficient techniques, resulting in activity appropriation. A case in point is the use of vehicle-borne improvised explosive devices (VBIEDs, also known as car bombs), at which Hezbollah is an expert. Recent incidents involving the use of car bombs in Mexico marked a significant change in tactics employed by drug trafficking organizations and conjure images more typical of the Middle East. While no specific and irrefutable connection has been made, Hezbollah’s extensive use of car bombs raises strong suspicion concerning a possible connection to Mexico’s drug cartels.

  In the summer of 2012, the Juárez drug cartel used a remote-controlled car bomb that killed four and wounded twenty others in Ciudad Juárez, Mexico’s murder capital, creating a massive blast within walking distance of downtown El Paso, Texas. A second car bomb exploded outside a police station in Ciudad Victoria. With $19 to $35 billion a year in income, these groups are also well equipped with military-grade weaponry and powerful enough to challenge government agencies. The weapons are mainly procured from the US: cars and trucks bring drugs into the United States and money and weapons down into Mexico. Cartels hire teenage kids to be “straw buyers” of weapons inside the United States, paying them $100 for every weapon they buy.