Terrorist Finance (merged thread)

[Jedburgh]

As far as her analysis being tainted by her politics, i don't think that makes different than any other person who has ever written anything.
Everyone writes from their own personal perspective. However, when composing anything that purports to be an in-depth analysis of an issue, it is important to make a conscious effort to put those personal biases aside, otherwise the final product leans more towards op-ed than reasoned analysis. I tend to be more dismissive of the former than the latter.

Jedburgh, maybe it just seems like more of a problem becuase you don't agree with her politics?
Now you are the one making assumptions. Anyone attempting to come to grasp the nuances of any issue needs to look at it from many points of view. Dismissing perspectives because you dislike their politics is foolish. Dismissing a product because it is poorly put together is a completely different matter. I think perhaps Rex's specific observations highlighted the latter point about the book better than my general comment.

Either way, calling a well researched book by written by a former Fulbright scholar and London School of Economics PhD "junk" is a bit misguided.
I you believe that Fulbright scholars and PhDs (the institution doesn't matter) are somehow on some sort of intellectual pedestal and incapable of publishing "junk", then you still have much to learn.

[relative autonomy]

jedburgh, i understand your points and i think they're fair enough but do you know of any economic analysis any work similar to this that you think is superior?

[Jedburgh]

...Do you know of any economic analysis any work similar to this that you think is superior?

No. I'll just quote Rex here:

More broadly, I think there is an interesting phenomenon whereby a variety of audiences--politicians, policymakers, the press, the public, even new CT professionals--look for an easy, engaging, sweeping diagnosis and answer to current security challenges. In my view, not only is it NOT that easy, but the real pay off is in understanding precisely the complexities and variations at work.

The operational funding of terrorist networks and autonomous cells is a very complex issue that also encompasses such diverse subject areas as transnational organized crime, diaspora funding of insurgent movements, narco-and-human trafficking, black markets - both local and transnational, etc. To truly understand all of the above in the context of any specific terror organization also requires a baseline of knowledge about that organization's operational structure and the environment in which it operates.

Rather than seeking a single tome with all the answers, I suggest good old fashioned research and study. It would probably help if you initially narrow your focus and try to study in-depth just one aspect. Look over what's available from official sources, such as EuroPol, FinCEN, the GAO, NCJRS, etc. etc. as well as looking over products from the wide spectrum of private entities. The people who show up at Congressional and Senate hearings on the subject often have interesting things to say - and the transcripts are almost always available on-line. As an FYI, Tamara Makarenko is one author who has written a great deal of substance on transnational organized crime as well as its links - existing and potential - with terrorism.

[bourbon]

As an FYI, Tamara Makarenko is one author who has written a great deal of substance on transnational organized crime as well as its links - existing and potential - with terrorism. [/URL]

I have been raiding my local libraries Jane's achieves, burning out Xerox's, copying Makarenko articles these days. Good info there.

Has anyone read Alms for Jihad: Charity and Terrorism in the Islamic World, by J. Millard Burr and Robert O. Collins? Cambridge press got sued under the U.K's generous libel laws by an Arab businessman, and they recalled the lot and pulped it. I snagged a copy. If there is interest, it's possible a contraband pdf could materialize out of the ether.

[Jedburgh]

WINEP, Nov 08: The Money Trail: Finding, Following, and Freezing Terrorist Finance

....Chapter 1, the introduction to this monograph, provides a broad overview of the subjects we cover, as well as some of our basic findings. In chapter 2, we explain the importance of the little-understood efforts to combat terrorist financing, and why they are and should be an important part of the global counterterrorism campaign. Chapter 3 lays out how terrorist financing—like the terrorist threat itself—is rapidly evolving, frequently in response to international efforts to combat it. As we discuss in this chapter, the terrorist groups’ adaptation in how they raise, store and, move funds can often frustrate governmental efforts to detect and stop them. In chapter 4, we assess U.S. and international efforts to combat terrorist financing since the September 11 attacks—first laying out the many areas where steps forward have been taken, then exploring some of the remaining challenges. In chapter 5, we gauge how effective U.S. and international efforts have been, pointing to specific signs of success in an area in which progress is often difficult to measure. In chapter 6, we offer numerous recommendations for U.S. policymakers to bolster the international regime in this critically important area. Chapter 7 provides three case studies, providing “status checks” on the terrorist-financing related activities of three key terrorist groups—al-Qaeda, Hamas, and Hizballah.....

[Jedburgh]

RAND, 2 Mar 09: Film Piracy, Organized Crime, and Terrorism

This report presents the findings of research into the involvement of organized crime and terrorist groups in counterfeiting a wide range of products, from watches to automobile parts, from pharmaceuticals to computer software. It presents detailed case studies from around the globe in one area of counterfeiting, film piracy, to illustrate the broader problem of criminal—and perhaps terrorist—groups finding a new and not-much-discussed way of funding their nefarious activities. Although there is less evidence of involvement by terrorists, piracy is high in payoff and low in risk for both groups, often taking place under the radar of law enforcement......

[Rex Brynen]

Let me move the discussion away from Napoleoni for a moment, and towards a broader issue that has increasingly troubled me. It may seem like a bit of a tangent to begin with, but you'll see by the end how it connects.

Since 9/11, there has been--for obvious reasons--a dramatic expansion in the number in the number of (government) analysts addressing CT and Middle Eastern issues. Many of these have been newly-minted graduate (or even undergraduate) students with some topic or area expertise. Some of this group are already very good, some may be good one day, and some are far from impressive. A key issue here will be mentoring, and whether organizations have the seasoned, skilled, mid-level analysts who can nurture a new generation. A second key issue will be human resource management, and whether the system recognizes and appropriately deals with the gifted, the promising, and the flawed among the new recruits.

In addition, there are a number of organizations with traditionally little CT or ME analytical responsibility, where they've felt the need to develop it, whether by new hires or by reassigning mid-level professionals with very different previous responsibilities. I've found that, at times, this group seeks an overarching framework of analysis, a theme or motif as it were, to make sense of the complex new world and responsibilities into which they've been thrust. As a result, they buy into catchy (sometimes rather politicized) explanations that reduce issues to near sound-bites, and hence make the complex world around them more intellectually manageable.

A case in point: I was at a conference of security and intelligence professionals and scholars a few weeks ago in which a great number of the participants fell into this later category. One of the speakers was Melanie Philips, British author of the book Londonistan.

Now, I recognize that immigration, refugee policy, diasporas, and multiculturalism all have security implications. However, Philips presentation (and the book) was a thinly-veiled rant against all of these things in the name of preserving a narrow, even racist, vision of British identity. As her website notes:

Melanie Phillips pieces together the story of how Londonistan developed as a result of the collapse of British self-confidence and national identity and its resulting paralysis by multiculturalism and appeasement. The result is an ugly climate in Britain of irrationality and defeatism, which now threatens to undermine the alliance with America and imperil the defence of the free world.

The actual presentation was far more strident.

As I listened to her, I was certain that everyone in the room would see her simplistic, narrow-minded, highly ideological "analysis" for what it was. Much to my surprise, however, a great many people found it attractive: the problem of terrorism could be simply understood by recognizing that we had departed from our classic 1950s values, that we had contaminated Western culture with foreign imports, that we had become defeatists inappropriately ashamed of the grand colonial past, that the vast majority of Muslims were jihadist sympathizers, and that consequently immigration and refugee policies were little more than fifth columns. Typically those that found the call most seductive were middle-aged professionals recently thrust within their departments into some sort of security and intelligence role, and much less so younger analysts (and almost no one with any extensive analytical background in the issues). Clearly there was a real danger that this simple (and simplistic), nicely-packaged drivel
could drive out much more nuanced, messy, and less easily digested diagnosis. As someone who spends his analytical time with well-informed, experienced area and issue professionals, it was frankly quite a shock.

My reaction to Napoleoni is, in some ways, fueled by the concern that although she offers a very different analysis (and clearly knows her issues infinitely better than Philips, who is a political columnist and not a scholar), it offers the same kind of seductive appeal and suffers from some of the same shoehorning of data to fit a preconceived analytical frame.

I've also become intrinsically suspicious of scholars and analysts with flashy self-promoting websites that use their own name as the domain URL

Jedburgh (and anyone else): I would be interested if you've observed any of the same issues arising from the expansion of CT and analytical capabilities within organizations, especially those with less prior experience in these areas. Or did I just have an unlucky experience?...

[Rex Brynen]

The problem with writing SWC posts from your office is that you get distracted by phone and visitors, take half an hour to finish your comment, and one of the regulars posts on an overlapping issue before you can get your two cents in

[Abu Suleyman]

While I have yet to read the book, and am loathe to comment based merely upon a review, or a summary which may over simplify an otherwise elegant explanation, I think that the title may be of value.

Perhaps it is just me, but the title seems to be reminiscent of the Murder Inc. of depression era Organized Crime. In that case, organized criminality became an industry, almost unto itself. Of course there were supporting funds, such as the ubiquitous prostitution, extortion and 'rum running'. Nevertheless, it is possible that there is an undercurrent of political economy. This may be worth exploring in a separate thread. Are we dealing with an entire economic movement, and if so is it more like the advent of the automobile industry, and part of the existing structure, or is it more like communism and antithetical to existing economics? Should this be discussed elsewhere, or has it already been?

[marct]

This may be worth exploring in a separate thread.... Should this be discussed elsewhere, or has it already been?

Probably worth exploring and we may as well keep it in this thread for now...

Are we dealing with an entire economic movement, and if so is it more like the advent of the automobile industry, and part of the existing structure, or is it more like communism and antithetical to existing economics?

Is it an economic movement? Sure, but it has also been around for quite a while - at least 100 years and, I'm certain, probably a lot longer. I don't have the exact references at hand, but I believe that the extent was estimated at about 4-5 billion Euros in the EU in 2004, and that was only the part dealing with fraudulent claims for government assistance that was being funneled into the network.

It is definitely part of existing structures of capital flow, but those are, currently, closer to a form of capitalist feudalism that either free market or central planning (BTW, the same was true of Henry Ford's operation).

[Jedburgh]

....Perhaps it is just me, but the title seems to be reminiscent of the Murder Inc. of depression era Organized Crime. In that case, organized criminality became an industry, almost unto itself. Of course there were supporting funds, such as the ubiquitous prostitution, extortion and 'rum running'. Nevertheless, it is possible that there is an undercurrent of political economy. This may be worth exploring in a separate thread. Are we dealing with an entire economic movement, and if so is it more like the advent of the automobile industry, and part of the existing structure, or is it more like communism and antithetical to existing economics? Should this be discussed elsewhere, or has it already been?

The point that has been made thus far in the thread is that there is no all-encompassing, world-wide "economic movement" financially supporting terrorism. Each terrorist organization has to be examined in its own unique context, i.e. like the case study RAND completed a few years back looking at the LTTE and diaspora support.

There have also been a few outstanding studies of how former violent leftist organizations shifted funding after the fall of the Soviet Union - many just fell apart, some dropped the ideology and shifted to become plain ol' criminal enterprises, a small number managed to blend various aspects of illicit funding with continued operations, often with a bit of a different focus.

There is certainly value in exploring financial support to various specific terror organizations. Perhaps it may be better to discuss the issue in the specific regionally-focused forum where the group in question operates (i.e. Jemaah Islamiyyah in Asia-Pacific, Hezballah in the Middle East, or the FARC in the Americas.)

[marct]

Hi Ted,

The point that has been made thus far in the thread is that there is no all-encompassing, world-wide "economic movement" financially supporting terrorism. Each terrorist organization has to be examined in its own unique context, i.e. like the case study RAND completed a few years back looking at the LTTE and diaspora support.

Quite true. What we appear to have is a rise in micro-economic networks, some of which are being used by terrorist organizations, some of which have no bearing on them, and some of which may be partially used by them.

Personally, I think it is important to differentiate between systems, system components, actors within those systems and the motivations (tactics) of those actors, and this distinction may prove useful. I've been working with a mature student for a couple of years now (she works for our federal government) looking at the manipulation of social programs by "terrorist" organizations (sorry, but you know I have a problem with that label ).

So, let me give you a case in point....

Some years back (about 1993-4) Canada let in a large number of Somali refugees (~6,000), concentrated in Ottawa and Toronto on humanitarian grounds. I'm not sure how much all of you know about the refugee system in Canada, but it is much closer to that of Europe than that of the US: subsidized (or free) housing, welfare checks, medical and dental care, etc. Pretty soon, it was discovered that a fair amount of the money being paid out in social welfare payments was being sent back to family members in Somalia through informal banking systems, usually with a 10-15% carrying charge. Some of this money ended up being used to buy weapons, which is not surprising if you know anything at all about Somalia .

All of this is technically "legal", but some of the money ended up in the hands of groups and individuals who are considered to be "terrorists". Was this a "plot to defraud the Crown"? Nope, it was an extension of the clan system which requires that all clan members aid others in the clan - a very ancient system. There have been systematic attempts to defraud the Crown (and other Western governments), but there is certainly no overarching mastermind behind them .