Narco-Trafficking: What Is the Nexus With the War on Terror?

The Whole of Government Approach – Applying Full Spectrum Capabilities in Dismantling Transnational Illicit Networks and Corruption Nodes in the Crime-Terror Continuum

On behalf of the U.S. Department of State, I am honored to be here this morning participating in this important discussion related to the challenges of combating transnational crime and terrorism and their impact to our national security.

We applaud the leadership of Admiral Stavridis, General Renuart, U.S. Southern Command, U.S. Northern Command, and the AFCEA International in advancing the dialogue forward and we hope that various communities continue to work together on developing the necessary ideas, strategies, partnerships and innovative tools in our joint efforts to combat these threats.

The nexus between crime and terrorism has received much attention in the post September 11 world. Since 9/11, the international community has come to learn more about several narco-terrorism links and terrorist financing angles – ranging from Colombia (the FARC: coca trafficking) to Afghanistan (the Taliban: heroin/opium trafficking); from Morocco (Al Qaeda in the Maghreb: hashish trafficking) to the Bekka Valley (Hizballah: cannabis/heroin); from Europe (PKK: heroin) to Southeast Asia and to other parts of the world.

But how strong is the complicity of criminal networks with terrorist organizations today beyond the well-known narco-terrorism cases? And what trends around the world are we seeing today and what lessons have we learned that are applicable today, especially in our own backyards? Given that drug money often fuels other crimes, what is the current situational awareness related to the impact of narco-corruption and narco-trafficking in the war on terrorism in communities across the Western Hemisphere?

Over the past decade, drug trafficking, transnational gangs, and other criminal organizations have grown in size and strength. They aggressively seek to undermine and intimidate government institutions in Mexico and Central America, compromise municipal and state law enforcement, and weaken governments’ ability to provide public security and advance the rule of law.

What challenges remain across the criminal-terror spectrum that may imperil our national interests, destabilize countries, and foment a climate of greater insecurity, chaos, and lawlessness? How can we bring greater synchronization and unity of effort through joint and coordinated initiatives and the use of technologies to enhance our law enforcement and security efforts? What sequence of actions, necessary steps, and resources are important to achieve operational success and fulfill national strategic objectives?

While the debate moves forward on the extent of the crime-terror nexus, what is a given is that terrorists are indeed engaging in more criminal activities to guarantee success of their actions and evolving into criminal enterprises. It is also true that a few criminal organizations are beginning to adopt more radical, if not more terrorist tactics. As we work through these security challenges, we must continue to raise the hard questions necessary to more effectively prosecute the global war on terror and to ensure that we understand better the things that we do not know (e.g., the “for hire” cesspool in the illicit underworld and the informal value transfer systems), develop strategic policies, coordinate resources more holistically, and strengthen international cooperation.

As one of my colleagues, John Cassara – in his recent study Afghanistan’s Drug Menace: Why Can’t We Follow the Money? was recently advised by a South Asian businessman with ties to the illicit underground: “Don’t you know that terrorists are moving money and value under your noses? But the West doesn’t see it? Your enemies are laughing at you.”

The global drug trade yields such a staggering amount of money that it is not hard to contemplate how some may illicitly flow into the coffers of some terrorists. But despite much success in seizing drug shipments and illicit proceeds and arresting traffickers and other criminals, these captures, drug seizures, and asset confiscations remain a small percentage of the overall volume of trafficked drugs, arms, cash, persons or the extent of actors/networks in the illicit underworld. There remains so much that we truly don't know and have yet to unearth and understand.

Penetrating the Web of Corruption and Criminality in the Terror Vortex

First, we need to face today’s geo-security realities with a healthy dose of frankness. As we continue to position ourselves more strategically to confront these threats, we must fine-tune our respective frames of reference, better understand the current threat environment, and transform the way we think about criminal and illicit threats. We cannot divine solutions if we fail to comprehend the full dimensions of a challenge, much less the interlinkages between narco-trafficking and terror finance, between arms trading and other illicit crimes or the connectivity among disparate parts and dissimilar actions. We need to stop looking for dirty money in many of the wrong places and focus more attention to opaque money and value trails in the crime-terror crossroads and in the informal sectors.

Second, we also need to be smart on how we can more effectively employ our capabilities and resources – diplomatic, informational/intelligence, military, and economic – to combat not only the battle against the drug cartels and transnational organized crime, but the manner in which we exploit and target the web of corruption and criminality in our strategies in the long war against terrorism. For example, using law enforcement tools and strategies strengthens our overall counter-terrorism efforts and helps to not only bring to justice criminals and terrorists alike but to disrupt the underlying infrastructure that supports the activities of both groups.

We need to optimize interagency and international synergy and synchronize more effectively our overall capabilities, assets, and strategies. We also need to simultaneously execute both of our campaigns against transnational crime and on the global war on terrorism to exploit vulnerabilities and overwhelm the enterprising ventures of illicit actors by shocking, disrupting, and dismantling their networks.

Third, we will need to redouble our collection abilities and obtain the necessary intelligence (gaps), evidence, and/or hard data to better understand the interconnectedness between disparate criminal and terrorist threats (often referred as “hybrid networks”). Many have argued that after 9/11, too many resources and assets were shifted to the counter-terrorism front and away from our efforts against transnational organized crime.

Fourth, fighting transnational crime must go hand in hand with fighting terrorists, if we want to ensure that we “surface them.” Already, we are seeing a growing trend of possible links in some regions, and, of equal concern, evidence that may show a more direct nexus between transnational organized criminal networks and terror organizations. We cannot make progress on terrorism unless we dismantle the illicit architecture that enables the financing of terror, facilitation of international terrorist travel and other criminal enterprises. Anticorruption, counterterrorist financing, anti-money laundering, border security, and other law enforcement tools will help expose terrorists from hiding and to identify any sleeper cells and support networks. Other anti-crime efforts can help us make inroads on many fronts, including enhancing intelligence collection and the dismantlement of illicit finance nodes.

Finally, we can gain a clearer picture of the criminal-terror nexus by focusing on the convergence of criminal activities by illicit actors at critical nodes – where illicit networks intersect, when corruption eases criminal transactions, and how the drug trade and other proceeds of crime are used to finance terrorist actions.

When criminal and terrorist networks converge, they expose their memberships and operating procedures to greater scrutiny, and potential vulnerability. At the intersection of illicit nodes, we can better follow the leads, track financial flows, uncover corrupt channels, and understand the interconnected links between organized crime and terrorism. In other words, by applying full spectrum capabilities in dismantling illicit networks, we will be equipped to finally unravel the web of criminality and corruption that often runs through the criminal-terror continuum.

Follow the Money in the Confluence of Illicit Networks

Although a criminal syndicate or network may specialize in one aspect of criminal behavior, they are often involved in related crimes. Transnational criminal networks supply a vast range of illicit goods and services, including the transshipment of drugs, arms, illegal or pirated contraband, trafficked women and children, laundered money, stolen goods, financial fraud, and counterfeiting. Behind the supply of each of these illicit goods and services is a web of secondary or related criminal activity. For example, an arms trafficker may be paid in diamonds/precious gems, drugs, or commodities/natural resources which are in turn sold and the proceeds laundered and channeled – seemingly legitimately – into the international financial system. The interwoven strands of such illicit and criminal transactions make it almost impossible to separate one from the other. It is virtually impossible for crime networks of any significance to operate independently, relying purely on their own resources and membership. As is the case in the legitimate economy, networking is required in order to maximize illicit business opportunities, and take advantage of specialized skills.

When criminals (including corrupt officials) and organized crime networks launder the proceeds of their crimes and insert them as legal funds into the stream of legitimate commerce and finance, they are not only secretly hiding their ongoing affairs but they are also tainting the international financial system and eroding public trust in its integrity. Although some of the funds used to finance terrorism have come from non-laundered sources, such as dual-purpose charities and non-profit organizations, the amount that has been blocked globally in the formal sector is less than $150 million dollars including the $35 million of U.S. blocked Taliban funds that were subsequently transferred to the Afghan Government. Networks also launder money and transfer value used to finance terrorism by exploiting international trade mechanisms.

Poor Democratic Governance, Rife Corruption and Ungoverned Spaces

Corruption fuels all crimes. International criminals have tremendous financial resources and they spare no expense to corrupt government and law enforcement officials, especially in regions of the world where governments have difficulty establishing control or are complicit in the corruption of the rule of law. A country’s border security apparatus can be rendered impotent through corruption. Through the use and exploitation of corruption, transnational organized criminal and terrorist networks have the ability to put down deep roots in various parts of the globe, and as Attorney General Mukasey has aptly stated: the so-called "iron triangles" continue to have a pernicious grip in our communities – corrupt business leaders, corrupt government officials, and organized criminals can work together to exert crippling influence over governments that can eventually lead to the criminalization of the state, or in instances where the criminal and terrorist activity are inseparable from the governance of the state. In the eyes of the people, this unholy trinity spirals downward to create an illegitimate state.

The Impact of Poor Political Will

A convergence of crime and corruption can pave the road for terrorist organizations to finance their terror. We are witnessing exactly this occurring in Venezuela, where several aides to Venezuelan President Hugo Chavez have been facilitating the sale of arms to the FARC in Colombia – a State Department-listed foreign terrorist organization. The Venezuelan Government’s continued inaction against a growing drug trafficking problem within and through its borders is a matter of increasing concern to the United States. Despite Venezuelan assurances that seizures have increased, the amount of drugs bound for the United States and Europe continues to grow. Much of this drug traffic through Venezuela and bound for Europe is transiting Western Africa, and the corrupting influence of this illicit wave threatens governance and economic stability in this region. Corrupt officials and organized crime within Venezuela have exploited the situation and a weak judicial system has failed effectively to prosecute these criminals.

The prevalence of poverty, famine, corruption, and disorder often provides the impetus for terrorist organizations to manipulate socio-economic conditions to influence power structures and to troll communities and recruit new indoctrinates. As jihadist-radicalism expands to all corners of the world, the poor and disillusioned in Latin America are very vulnerable and may easily be recruited as radical instruments of terrorist networks who are determined to harm the U.S. and allies committed to the global war on terrorism. We must also be vigilant of government proxies and terrorist organizations that support an increase of radicalization in the Americas.

We need to drain the swamp and illicit cesspools associated with crime, corruption and terrorism and replace them with a renewed hope, economic opportunities, the rule of law, and transformational freedoms so that communities who are saying “enough is enough” to criminals and terrorists can have a brighter, more secured future.

Drug-Terror Nexus

As discussed above, there is often is a close connection between terrorism and organized crime, including drug trafficking, especially in jurisdictions where corruption is rife and institutions are weak. This nexus takes many forms, ranging from facilitation -- protection, transportation, and taxation -- to direct trafficking by terrorist organizations themselves. Drug traffickers benefit from terrorists' military skills, weapons supply, and physical control over territory, in some cases. Terrorists gain a source of revenue and expertise in illicit transfer and laundering of money for their operations. Like traffickers and other organized crime groups, they make use of those countries and jurisdictions where banking regulations are weak. Drug traffickers may also gain considerable freedom of movement when they operate in conjunction with terrorists who control large amounts of territories even in states with relatively stable functioning governments such as the Philippines, for example.

The Criminal-Terror Convergence: The Means Justify the Ends

Terrorists will always have a need for the services and expertise of organized criminal networks to raise operating funds, help obtain and smuggle weapons, forge documents, and clandestinely move their people. This is especially true with the decline of state sponsors to fund the activities of many terrorist groups, and as a direct consequence, more terrorist groups resort to illicit enterprise as a source of financial support. Since 9/11, Al Qaeda and other groups have resorted to illicit activities to finance their terror including through drug dealing (Madrid bombings, 2004), credit card theft, and insurance scams. Numerous reports have shown that terrorist attacks since 9/11 (from Bali to Amman to Madrid to London) have become progressively cheaper. Further reports seem to suggest that terrorists will opportunistically engage in any crimes necessary to achieve their objectives, including arms and narcotics smuggling, commodity smuggling, goods smuggling, migrant smuggling, document fraud, trafficking in persons, extortion, kidnapping, intellectual property theft, counterfeiting, fraud, credit theft, armed robbery, and money laundering. Recent investigations have shown that the costs of various terrorist attacks were financed with relatively small amounts of cash.

The Americas

As we are all aware, terrorism, illegal drugs and other forms of organized crime can converge in many parts of the world to cause great security harm, and the Western Hemisphere is no exception. According to DEA Chief of Operations and Assistant Administrator Michael Braun, 19 of the 44 groups that the U.S. Government has designated as Foreign Terrorist Organizations (FTOs) participate in the illegal drug trade and many also engage in financial and other forms of crime. Four of these are in the Western Hemisphere: the FARC, the ELN, the AUC, and Sendero Luminoso. These terrorist organizations have facilitated narcotrafficking by protecting illicit cultivation, processing and trafficking, corrupting officials, taxing growers in exchange for protection, and smuggling narcotics across borders to finance their violence. The tri-border area of South America, where the borders of Argentina, Brazil, Paraguay meet, remains one of the busiest contraband and smuggling hubs for terrorist groups such as Hamas and Hizballah – which are generating tens of millions of dollars through arms trafficking, drug smuggling, counterfeiting, intellectual property-rights violations, and other crimes. Moreover, as the drug cartels create and extend their channels and routes to West Africa and the Pacific Islands, these illicit networks enhance the ability of terrorist groups to leverage such infrastructure to move their people and materiel to advance their activities.

Mexican Violent Cartels – Chaos and Insecurity Can Embolden Terrorists

General lawlessness can abet crime and terrorist activities alike. More recently, we can see this first hand in Mexico where the Mexican-based drug trafficking organizations are causing havoc on the stability and security of the country. In response to Mexican President Felipe Calderon’s 21-month-old campaign against drug trafficking, cartels are employing terrorist tactics against the state to enforce their drug trafficking monopolies on both sides of the U.S.-Mexico border. Some of these groups – such as the Zetas, the enforcement arm of the Gulf Cartel that operates along the Southwest border of the United States – have inflicted unprecedented violence, claiming the lives of hundreds of civilians, police officers, and other public officials in recent years. Mexican drug cartels have also expanded into other forms of transnational organized crime. For instance, they have moved into migrant smuggling, either directly or indirectly by taking tribute from less violent human smuggling organizations.

This explosion of violence is the most visible and dramatic manifestation of the damage these criminal organizations inflict on free and democratic societies. But even more far-reaching and subversive is the underlying corruption these syndicates promote, wherever they operate and the potential to prime the insecurity climate for terrorists to thrive and plot against U.S. interests. The erosion of government institutions through corruption in its many forms, bribery, and intimidation can ultimately pose just as great a threat to democratic governments and the rule of law as the violence on which we focus today. Organized crime syndicates exploit and subvert weaker governments in order to guarantee themselves a secure operating environment.

Mexico has long been a close partner in our counternarcotics efforts. This partnership has been deepened and strengthened under the Calderon Administration and is an example of how strong political will can help overcome our battle against numerous illicit threats.

The congressionally approved, multiyear Mérida Initiative provides a quantum step up in our counternarcotics and law enforcement programs. The overall objectives of the Initiative are to break the power and impunity of criminal organizations; to strengthen border, air, and maritime controls; to improve the capacity of justice systems in the region; to curtail gang activity; and to reduce demand for drugs throughout the region

Gangs

Gangs in Central America such as the Mara Salvatrucha (MS-13) are also becoming major players in the illicit power structures in the region. In addition to engaging in extortion, theft and other crime rackets, these gangs are sometimes involved in helping to protect narcotics smuggling shipments and actively involved in the trafficking of persons into Mexico and the United States. Armed to the teeth, thanks to the Central American civil wars of the 1980s, and continued arms trafficking from the United States, these gangs are now carving out illicit fiefdoms, where undermanned and under-equipped law enforcement agencies have de facto ceded power. Where authorities make arrests under “heavy hand” authority, inadequate prosecution or lack of evidence means many are released; those convicted go to prisons that are run by the gangs. Of high concern is also the radicalization of gangs in prison.

Although links between these transnational gangs in Central America and foreign terrorist groups have yet to be systematically proven, it doesn’t take that much stretching of the imagination to give pause to the prospect that these loosely connected, networked gangs could align with similarly loosely connected, networked terrorist groups. Law enforcement officials have noted trends towards more organized gangs, “muting” of gang characteristics such as tattoos, radicalization, and infiltration of justice sector institutions,gangs could align with similarly loosely connected, networked terrorist groups.

A Brewing Perfect Storm for Terrorist Mobility

In examining the recent history throughout Latin America, political and economic upheaval is exacerbated by the growing threat posed by non-state actors. Institutional weakness, corruption, poverty, and higher levels of unrest are helping to fuel the violence and insecurity in many parts of the region. In the midst of some of this chaos, terrorist groups could leverage this insecurity to potentially stage their activities in the United States and to strengthen their operations in the region. This is particularly worrisome in countries that do not have the capacity or resources to counter these threats nor the will to enforce the rule of law. Going one step further, the ability of organized criminal networks to smuggle undetected drugs, illicit commodities and illegal immigrants through their routes and infrastructure (e.g., underground tunnels in Mexico) may be attractive for terrorist groups to come into the United States, and possibly even smuggled WMDs. The latter possibility can never be ruled out.

While it is true that organized criminals do not want to disrupt the free market conditions that enable them to thrive and profit from and they definitely do not want the extra attention from law enforcement in associating with terrorists, there are those who will always remain cavalier and enterprising. As terrorist in-house travel facilitators and fraudulent document producers are captured or killed, terrorist organizations like Al-Qaeda turn more and more to established criminal smuggling networks and organizations. Many of these organizations can move terrorists either wittingly or unwittingly. Smugglers are businessmen who provide a service – many do not care who they move as long as they are paid. Others charge extra for certain nationalities, and for other special services. Indirectly or not, travel facilitators are supporting extremist and terrorist causes.

Simultaneity and Depth – Targeting Illicit Network’s Centers of Gravity

Prosecuting the battle against a converging force is not an easy endeavor – we must take the fight directly to these threats. It will require a constant evaluation of the types of illicit threats that will confront the United States and our partners in the years to come. With a canny ability to adapt, we too must adapt to these threats. We cannot continue to view the wars against organized crime and the global war on terrorism as two distinct campaigns.

Instead, we need to bring greater convergence and jointness and unify capabilities to defeat these illicit and criminal actors. We can achieve this by identifying and examining in greater depth the critical illicit nodes at the intersections of transnational criminality, terror, and related illicit networks. In this way, we will be able to exploit network vulnerabilities, degrade their ability to continue to effectively engage in illicit activities, and ultimately dismantle their operations. We must also spur innovation through public-private partnerships to develop leap-ahead technologies and panoramic systems that can help develop unified and integrated networks across all communities to confront today’s asymmetrical and non-linear threats and to decisively dismantle transnational illicit networks and related corruption nodes.

Effective Anti-crime Programs, Law Enforcement andInternational Cooperation

Transnational criminal organizations and illicit terrorist networks operating throughout the world pose great threats to U.S. national security and equal challenges to the international community. The U.S. cannot combat transnational criminal and illicit threats alone nor can we make progress without the assistance of other governments. None of us should underestimate the task at hand of combating corruption and defeating these global criminal/terror networks. At stake here is our joint security, the stability of entire communities and economies, and future progress against erosions of public trust and core democratic values. But the reality of course is that many countries in the region are ill-equipped to confront these threats and the increasing security challenges.

To make headway against these groups, we need to enhance our international cooperation to dismantle criminal networks and combat the threats that they pose. We also need to help other governments and their ability to address their own crime challenges before they extend beyond their borders by increasing their enforcement and security capabilities to investigate, prosecute, and punish criminals, kleptocrats, and terrorist organizations. Strengthening both the political will and capacity-building of our government partners enhances their capabilities to safeguard their institutions from corruption, the integrity of their borders from smugglers, their financial systems from abuse by terrorist financiers and criminals, and helps to strengthen their legal, regulatory, financial intelligence, law enforcement, and prosecutorial entities to effectively combat crime and terrorism.

While the Bureau of International Narcotics and Law Enforcement Affairs (INL) does not have the lead in the war on terrorism, it does help lead efforts to combat corruption, money laundering and other cross-border crimes through its counter-narcotics and anti-crime programs that promote the modernization of criminal justice systems worldwide and of law enforcement agencies charged with the counter-terrorism mission. Since September 2001, INL has been working with the Departments of Justice, Treasury, Defense, and Homeland Security, and with cooperating governments, to focus on counter-drug and anti-crime programs that also have an impact on counter-terrorism.

INL’s anticorruption initiatives are an integral component in our national security toolbox to combat transnational crime and terrorism. As a global leader in fighting corruption, INL programs help to: (1) establish shared global anticorruption standards, for example, the United Nations Convention Against Corruption, subscribed to by 126 countries; (2) strengthen global political will to fight corruption and to implement multilateral anticorruption commitments; and (3) increase international cooperation to: (a) prosecute corruption, (b) identify and prevent access by kleptocrats to financial systems, (c) deny safe haven to corrupt officials, and (d) identify, recover and return proceeds of corruption; and (4) provide anticorruption assistance that strengthens legal frameworks and builds capacity of critical law enforcement and rule of law institutions, such as police, investigators, prosecutors, judges, ethics offices, auditors, inspectors general, and other oversight, regulatory and law enforcement officials. Through these diplomatic initiatives, and support for implementation through regional initiatives, monitoring, and technical assistance, we are seeing new anticorruption strategies and action plans; new anticorruption laws; new and stronger anticorruption bodies; and greater oversight, enforcement, and accountability – an environment in which it is harder for terrorist organizations to generate, operate and thrive.

INL also works with our interagency and international partners to combat cross-border crimes including to interdict and halt alien smuggling as far from our borders as possible. INL efforts focus on attacking criminal smuggling organizations at all points of their organizational structure, especially those that could be utilized by terrorists. INL also helps to coordinate the activities of the interagency anti-smuggling community in their efforts to disrupt and dismantle major alien smuggling rings which operate both domestically and overseas. INL border security program provides law enforcement training to recipient governments in developing countries on ways to combat international migrant smuggling and illegal migration. INL assistance courses that focus cooperation on cross-border crimes provide technical, legal, and managerial training to enhance the participating foreign officials’ ability to implement border security professionally and effectively. In response to the migrant smuggling, trafficking and terrorist mobility challenges and to further our anti-alien smuggling objectives, INL helps support the work of the inter-agency Human Smuggling and Trafficking Center (HSTC) – which brings together federal agency representatives from the policy, law enforcement, intelligence, and diplomatic arenas to work together on a full-time basis to achieve increased progress in addressing human smuggling, human trafficking, and smuggler support of clandestine terrorist travel, particularly in terms of converting intelligence into effective enforcement, diplomatic and assistance actions.

With respect to the Merida Initiative, it will focus on three areas: Counternarcotics, Counterterrorism, and Border Security; Public Security and Law Enforcement; and Institution Building and the Rule of Law.

The Merida Initiative demonstrates the United States’ commitment to partner with governments in Mexico and Central America to confront criminal organizations whose actions plague the region and spill over into the United States.

The criminal organizations, under great pressure by law enforcement agencies, are behaving in increasingly violent ways. Our partners in the region are confronting transnational gangs and criminal organizations at great personal and financial costs. In recent months, Mexican criminal organizations have assassinated several high ranking government and police officials in an attempt to intimidate the government to back down from its increased law enforcement operations. The Merida Initiative complements ongoing U.S. domestic efforts to reduce drug demand, to stop the flow of arms and weapons moving south and to confront gangs and cross-border criminal organizations

The Merida Initiative will provide:

• Non-intrusive inspection equipment, ion scanners and canine units for Mexico and Central America to interdict trafficked drugs, arms, cash and persons.
  
• Technologies to improve and secure communications systems that collect criminal information in Mexico.
  
• Technical advice and training to strengthen the institutions of justice – vetting for the new police force, case management software to track investigations through the system, new offices of citizen complaints and professional responsibility, and witness protection programs to Mexico.
  
• Helicopters and surveillance aircraft to support interdiction activities and rapid response of law enforcement agencies to Mexico.
  
• Equipment and assets to support counterpart security agencies inspecting and interdicting drugs, trafficked goods, people and other contraband as well as equipment, training and community action programs in Central American countries to implement anti-gang measures and expand the reach of these measures in the region.

Working with organizations such as the FATF, the Group of Eight (G-8), and with the European Union and with other countries throughout the world, INL has sought new diplomatic approaches to overcome longstanding barriers to closer law enforcement cooperation and to assist other countries in their ability to implement UN Security Council Resolution 1373 to combat terrorism, and other important international instruments to combat transnational crime and corruption including the UN Conventions against Transnational Organized Crime and Corruption.