Terrorism, Inc Read online

  Kidnapping for Ransom (KFR)

  Kidnapping for ransom, or KFR, is a criminal tactic adopted by terrorist and insurgent groups for its dual purpose of simultaneously terrorizing the population while having the added benefit of funding these groups’ activities. For decades, groups have relied on KFR as a method of raising funds. Today, groups like the Afghan Taliban, the Haqqani Network, Al-Qaida, and a range of criminal groups in Mexico all rely on KFR as a primary pillar of the dark economy.37 In Southeast Asia, kidnapping for ransom by Abu Sayyaf Group (ASG) and the Moro Islamic Liberation Front (MILF) are further evidence of the blurred lines between criminality and terrorism.38 In Colombia, both the FARC and the Ejercito de Liberaicion Nacional (National Liberation Army [ELN]) have relied on kidnapping, and in Central Asia, the Islamic Movement of Uzbekistan (IMU) has earned significant funding from this practice. Other groups have taken notice, as Chechen rebels and insurgents in Iraq also adopted the practice.39

  Kidnapping can reap large sums of money. Examples of KFR payments that were particularly lucrative include the following:40

  Amir Aftab Malik, the son-in-law of a retired four-star army general and former chairman of Pakistan’s Joint Chiefs of Staff, was freed after a ransom of approximately USD $3 million was paid to his captors, thought to be Lashkar-e-Jhangvi in North Waziristan.41

  In 2006, the Italian government reportedly paid the Taliban nearly $5 million to secure the release of two of its citizens kidnapped in Afghanistan.42

  A bus full of missionaries from South Korea was held captive in July 2007 in Ghazni province, Afghanistan. The Taliban reportedly received USD $5 million from Seoul to secure the release of the missionaries.43

  Johan Freckhaus, a French contractor working in Afghanistan, was kidnapped in June 2008 by the Taliban and released after French authorities paid roughly USD $1.5 million.44

  In February 2008, Pakistan’s Ambassador to Afghanistan, Tariq Azizuddin was kidnapped. The Pakistani government allegedly released 55 militants from and paid USD $2.5 million to secure his release.45

  More recently the Tehrik-i-Taliban Pakistan has extended its activities to major Pakistani cities, including Karachi, focusing largely on abductions of businessmen and entrepreneurs. Moreover, those businessmen who are not kidnapped might instead become victims of extortion, paying protection fees to avoid being abducted.

  In 2007, more than 50 percent of the approximately 7,500 kidnappings worldwide occurred in Latin America.46 As a crime, KFR is low risk, low cost, and high reward, making it the ideal criminal activity for terrorist groups.47 In places like Iraq and Afghanistan, it should come as little surprise that insurgents and terrorists are engaged in KFR. Indeed, as Phil Williams notes, “with kidnapping gangs and insurgent and jihadi groups operating in the same space, some kind of relationship was inevitable.”48 Throughout the Middle East and North Africa, many Western tourists have been kidnapped over the past decade, with some national governments paying millions to save their citizens.49 The risk is particularly high in conflict zones, including Afghanistan, Iraq, Syria, Somalia, Yemen and other failed states with large swaths of ungoverned territory. And while groups like Hezbollah do kidnap in order to use hostages as a bartering chip for possible future prisoner exchanges, the majority of kidnappings are driven by the desire for profit.50

  Armed Robbery and Theft

  Armed robbery and theft is one of the most basic forms of criminality used to obtain money. Robbing banks, businesses, and individuals can be a quick and reliable method of garnering a much-needed infusion of funds. Of course, there are risks of arrest, prosecution, or even death when engaging in such criminality. Both the PIRA and the LTTE earned a reputation for ruthless efficiency in armed robbery. That insurgents and terrorists engage in this type of activity should come as no surprise, especially if one thinks of organized crime as a lucrative fund-raising method. Indeed, according to Phil Williams, the defining characteristic of groups that commit such acts is not the activity itself, but the purpose of the group. In this sense, organized crime is an instrumental activity, and can be understood merely as a method or set of activities that groups employ to obtain funds. Like insurgents, these groups can have political ends, and may turn to organized crime methodologies to fund their political agendas.51 (This includes funding the attacks and violence that may be instrumental in helping them further these ends and agendas.)

  Smuggling, Trafficking, and Counterfeiting

  The literature on transnational organized crime often uses the terms smuggling and trafficking interchangeably, except for human trafficking and human smuggling, where the first is a crime against the person and the second is a crime against the state. For the sake of clarity and precision, this research proceeds from the notion that smuggling is about the crossing of borders while trafficking refers to the broader process of moving illicit goods. Counterfeiting, while tangentially related to trafficking and smuggling, is clearly a separate category. The range of commodities that can be trafficked, smuggled, and/or counterfeited is broad. However, the most commonly smuggled and trafficked commodities are arms (weapons), drugs, humans, and natural resources. More recently, there have been reports that insurgents have profited from the smuggling of less traditional “commodities” like antiquities, human organs, and endangered animals. To be sure, legal commodities like cigarettes are also commonly smuggled, primarily to evade taxes in one state or country and obtain profits by evading these taxes by selling the cigarettes somewhere else.

  With the end of the Cold War, weaponry flooded the global arms market. AK-47s, rocket-propelled grenades, mines, and even nuclear components were bought and sold illicitly.52 With the collapse of the Soviet Union, Eastern Bloc countries flooded the market with everything from small arms to missiles. Over time, different cities throughout the world have grown renowned for open air arms and weapons bazaars.53 The Bakara Market in Mogadishu has been one of the world’s busiest bazaars for the exchange in arms, weapons, and ammunition for more than two decades. Other cities include Bangkok in Thailand and Peshawar in Pakistan, during the 1970s and 1980s, respectively. In Colombia, post-Cold War arms stockpiles (along with demilitarized zones and state interference) contributed directly to the influx of arms into the country.54

  During the brutal wars in West Africa during the 1990s, international arms traffickers from the former Soviet Union, Israel, and South Africa mingled with warlords, diamond merchants, and mercenaries. Due in part to ineffective arms embargos and regulations, as well as a growing black market, a large percentage of the population in this region has been heavily armed. Around this same time, the disintegration of the Federal Republic of Yugoslavia was driving demand on the global arms market. Reverting to its role as a clearinghouse for trafficked weapons during the Iran-Iraq War (1980–1988), the Balkans once again became a crossroads for smuggled weaponry, including assault rifles, machineguns, small-arms rounds, antitank weapons, antitank rounds, mortar rounds, grenades, landmines, and an array of equipment, from boots to medical supplies and flak jackets.55 Old networks were reinvigorated in an attempt to satisfy market shortages.56 Weapons and ammunition were smuggled into the region using both traditional means, such as tunnels, and more ingenious methods, including empty metal cylinders of oxygen and in false bottoms of humanitarian aid containers.57

  Due to high pecuniary value and the low volume to value ratio of smuggling and trafficking illicit narcotics (cocaine, ecstasy, heroin, hashish, marijuana, methamphetamine, opiates, etc.) and the chemical precursors required to manufacture some of these drugs, this criminal activity is an attractive one for criminals and terrorists.58 In addition to money, the narcotics trade in drug-producing countries has the potential to provide terrorists with recruits and sympathizers among “impoverished, neglected, isolated farmers” who can help cultivate drug crops while also serving as a bulwark against pro-government groups and anti-drug campaigns.59

  Involvement in the narcotics trade can bring together insurgent groups and drug cart
els.60 Furthermore, the demise of the latter could present opportunities for insurgents to fill the void, as in Colombia when FARC took over some of the territory previously controlled by the Medellin and Cali cartels in the 1990s. Other times, as with the PKK’s drug trafficking activities in Europe, rather than cooperate with traditional criminal enterprises, insurgent groups seek to drive them out of the market to supplant them themselves.61 Finally, as we have seen with the relationship between drug traffickers and Sendero Luminoso in Peru, the dominant party in the relationship can change over time. In the 1990s, a powerful (and brutal) Sendero held sway, while more recently, especially in the Valley of the Apurimac and Ene River (VRAE), the insurgents have been keen to play a more secondary role.62

  Narcotics remain both the most common and most lucrative form of organized crime used by terrorist groups, including well-known traffickers like the Kosovo Liberation Army (KLA),63 Basque Homeland and Liberty or ETA in Spain, and the IMU.64 Profits derived from drug trafficking have enabled groups like FARC to obtain sophisticated weapons and communications technology.65 More recently, an investigation in Australia uncovered 40 separate money laundering operations in that country, one of which delivered proceeds from drug trafficking to Hezbollah.66 The cultivation of illicit crops like poppy or coca is labor-intensive and provides employment to hundreds of thousands to millions of people in particular countries, including Afghanistan and Colombia, respectively.67 Producer countries are often the least profitable part of the process; the lion’s share of earnings is garnered by those who refine and market the drugs.68

  Humans

  Each year, hundreds of thousands of women and children are trafficked and forced into prostitution, many of them traveling along the “pipeline of people and contraband” coming from Eastern Europe, Central Asia, the Middle East, Russia, and North Africa destined for Western Europe.69 Indeed, prominent human trafficking routes from China and Nigeria into Europe are a cause for serious concern.70 Human trafficking can include alien smuggling and it should be noted that although the global sex trade is a major driver in this regard, humans are trafficked for many reasons, include labor exploitation, which is increasingly common in agriculture, construction and forced domestic servitude.71 The trafficking of humans not only provides funding for criminal and terrorist organizations, but also fuels worries of lone wolves and sleeper cells infiltrating states undetected and blending into everyday society before attacking. With the collapse of Libya during the Arab Spring, the countries flanking Europe’s southern borders remain on high alert, especially Italy.

  Natural Resources, Gems, and Precious Metals

  In what have come to be known as resource insurgencies, insurgents do not seek so much to win control of the state or establish their own government as they fight to eliminate state interference with their exploitation of natural resources (e.g., diamonds, timber). During the brutal civil wars in West Africa throughout the 1990s, the Revolutionary United Front (RUF) acquired weapons either by raiding Sierra Leonean army forward supply posts or by trading diamonds with Liberian warlord Charles Taylor. As a border sanctuary, the insurgents relied on a forested boundary enclave near the Liberian side, which provided them with an ungoverned area to smuggle diamonds and engage in illegal logging.72 Where precious gems or stones are unavailable, like in Somalia, non-state actors fighting to control territory throughout the Horn of Africa, including the Al-Qaida linked Al-Shabaab militant group, rely on a range of other criminal activities linked to the exploitation of natural resources, from the illicit ivory trade to the booming market for smuggled charcoal.73

  Extortion and Protection Payments

  Extortion is defined as “obtaining property from another due to future threats of physical injury, property damage, or exposure to ridicule or criminal charges.”74 Long a favored technique of organized crime, extortionists run protection rackets, which are payments made by victims in return for not being assaulted (or worse) or having their homes, businesses, or families threatened. Insurgents, terrorists, and criminals from Russia to Indonesia to Somalia have all employed extortion as a means of funding their campaigns of violence. For those non-state actors seeking to maintain the popular support of their constituencies, there is a fine line between protecting and preying on the local population.

  Just as with violent criminals who rob drug dealers, terrorists and insurgents prey upon narcotics traffickers as a frequent source of extortion, since they are unable to go to law enforcement authorities. Sometimes, this can be a slippery slope toward trafficking themselves, while other times it can be a way for those who want little to do with trafficking narcotics, but still want to profit from the trade overall.

  External State Support

  During the Cold War, what would likely have been considered crime or mere banditry became imbued with political significance as the United States and the Soviet Union provided financial and military resources to their respective proxies in places like Angola, Afghanistan, and Nicaragua. With the end of the Cold War, many developing nations accustomed to the largesse from their superpower patrons were attenuated and were once again vulnerable to small-scale acts of criminal violence and banditry. At the same time, the end of superpower subsidies to insurgents made them turn to criminality for resources, which was made easier with the new influx of readily accessible small arms and light weapons. The withdrawal of superpower sponsorship also degraded the ideological coherence of many movements. And conflicts that might have before been viewed through a Cold War “political” lens instead became seen as criminal conflicts, especially in places like West Africa and the Balkans, where at times violence bordered on anomie. To be sure, many insurgents rely on criminality for financing, and it is this fact that explains much of the apparent rise in criminal violence—with the dissolution of the Soviet Union, superpower financing of proxies was withdrawn, making states weaker and more susceptible to attack. Criminal and insurgent groups that previously relied on state financing were forced to either become criminals or fade away.

  External state support can take any number of forms: training, safe haven and transit, intelligence, financing, direct military support, political support, and propaganda, and so on. As Seth Jones and Patrick Johnston have concluded, “insurgencies that receive outside support are substantially more likely to outlast counterinsurgency efforts and ultimately overthrow incumbent regimes or force concessions than those without a foreign patron.”75 Groups like Hezbollah, which receives hundreds of millions of dollars from Iran, have been able to transition from terrorist group to insurgent organization to full-on hybrid politico-military powerhouse. Several scholars have found that terrorist organizations with more allies, especially external states, tend to be more lethal.76

  WHAT ARE OPERATIONAL CAPABILITIES?

  “Insurgent groups are more likely to negotiate if they believe they have little chance of success on the battlefield,” concludes Byman.77 Insurgent groups’ chances of success on the battlefield are directly linked to the ability of the insurgents to wage successful attacks on their adversaries. The operational capacity of an insurgent organization is comprised of the activities that allow the insurgents to sustain a series of successful attacks.78 These operational tools include: weapons, sanctuary/safe haven, intelligence, training, and financing/funding. For those insurgents receiving outside assistance, I include the factors external weapons and direct military support as sub-elements of the weapons category. Sanctuary also takes into account the factor operational space, which is the time and space to plan, train for, and execute attacks.79 As part of intelligence, I assess operational security (OPSEC) and where relevant, deception skills. For training, I consider any forms of technical expertise provided to the insurgents. Financing is fairly straightforward and examines all sources of insurgent funding, including both licit and illicit.

  Weapons

  Like money, weaponry is another category which seems fairly self-evident as a necessity to insurgents. Insurgency is a form of irregul
ar warfare that matches the weak against the strong. Since terrorism is a primary component of most insurgencies, small arms and light weapons (SALW) are common. For the entrepreneurial insurgent, a wide range of ingredients can be used to fashion explosives, from the crude to the sophisticated. Weapons used by insurgents include: explosives, small arms, shoulder fired missiles, mortars, and in the former Soviet Union, Grad rocket launchers. African insurgencies have mostly featured small arms like AK-47s, while insurgencies in the Balkans, Caucasus, and Central Asia benefited from the availability of former Soviet stockpiles, including tanks and artillery. In Chechnya, insurgents used heavy-caliber machine guns and rocket-propelled grenades (RPGs) with great skill during an impressive military display against Russian COIN forces on numerous occasions.80 A decade before the Chechen conflict, Afghan mujahedin used Stinger missiles supplied by the Central Intelligence Agency (CIA) to shoot down Soviet helicopters.

  When insurgents are unable to obtain the weaponry necessary to challenge the COIN force, they often seek the assistance of an external sponsor. In Northern Ireland, the PIRA established a steady pipeline with Libya. Qaddafi supplied the PIRA with hundreds of small arms as well as over 2,500 kg of Semtex.81 PIRA bomb makers crafted highly lethal explosive devices with the Libyan-supplied, Czech-made explosives. During the Cold War, the United States and the Soviet Union respectively supplied weapons to insurgents fighting proxy wars in places like Angola, El Salvador, and Afghanistan.