Notes from “Counternetwork: Countering the Expansion of Transnational Criminal Networks”

Counternetwork: Countering the Expansion of Transnational Criminal Networks byby Angel Rabasa, Christopher M. Schnaubelt, Peter Chalk, Douglas Farah, Gregory Midgette, and Howard J. Shatz covers Africa, Border and Port Security, Central America, Colombia, Counterterrorism, Crime, FARC, Illegal Drug Trade, Mexico, Military Doctrine, and the United States Army

A fascinating read on the issues related to Networks and Transnational Criminal Organizations, I’ve posted below my “notes” from the text.

***Highlights from book***

The expansion of TCNs is a manifestation of what some authors label “deviant globalization.” This is that portion of the global economy that meets the demand for illegal goods and services in consumer countries by developing a supply chain from producer countries. These criminal organizations take root in supply areas and transportation nodes while usurping the host nations’ basic functioning capacities. Over time, the illicit economy grows and nonstate actors provide an increasing range of social goods and fill the security and political vacuum that emerges from the gradual erosion of state power, legitimacy, and capacity.

This leads to the emergence of security challenges that are some of the key themes of this study: the destabilization of states that are relevant to U.S. national security, the growth of areas outside of the control of central governments that become havens for criminal and terrorist groups, and the convergence of transnational organized crime and terrorism into more-dangerous hybrid threats.

Disrupting transnational criminal networks requires identifying the critical nodes in the organizations and determining where counter- TCN operations can achieve the greatest effect.

It is, therefore, important to understand the structure and operations of TCNs. These, how- ever, are not well understood. Accordingly, we have developed a TCN business model. These criminal networks are much like legitimate organizations in that they are driven by market forces and aim to make profits. To do so, they might consolidate markets when possible, diversify, and safeguard their supply chains.

TCNs mold their organizational structures in response to two related issues: supply chain links and transaction costs. The links are the connections between specific tasks. Networks can bridge those links on their own or by contracting out. Their choice will depend on the transaction cost.

Even where this convergence of terrorism or insurgency and crime has not occurred, there seems to be a feedback mechanism: In the areas where they establish a foothold, the activities of criminal groups displace state and government institutions, which are usually weak to begin with. This, is turn, creates greater social disorder that can be exploited by terrorists and insurgents.

Conclusions and Recommendations

For the U.S. Government and the U.S. Department of Defense

• Challenge the conventional thinking. To effectively address the emergent threat of hybrid illicit actors that combine aspects of criminal organizations, terrorist groups, and insurgencies, a reconsideration of the way in which we classify and address non- traditional security threats may be in order. Instead of defining these threats in traditional categories such as “terrorists,” “insurgents,” or “criminal organizations,” they could be defined as net- works that pose crosscutting threats to U.S. security interests. This would make it possible to prioritize the level of threat that they pose and the tools and resources that should be deployed against them. This approach could enable us to break down some of the barriers among counterterrorism, conternarcotics, and counter- networks that currently impede more-effective U.S. action and thus make possible a more streamlined approach to nontradi- tional security threats.
• Bring authorities and policy guidance in line with the strat- egy to combat transnational organized crime. It takes time for authorities and laws to “play catch up” with emerging trends.
• Improve interagency coordination.

The 9/11 attacks generated a sense of urgency and incentives to coordinate efforts against the threat of interna- tional terrorism, but no similar consensus has developed on the importance of countering TCNs. The agencies with the most- relevant capabilities for attacking illicit networks have other mis- sions and are reluctant to focus their resources on taking down these networks.

• Define DoD rolesinCTOC. TheOfficeoftheDeputyAssistant Secretary of Defense for Counternarcotics and Global Threats is in the process of updating DoD’s Counternarcotics and Global Threats Strategy. The new strategy could have an impact on ener- gizing efforts within DoD to counter TCNs if accompanied by adequate allocations of resources.
• Support counter–transnational network strategies and programs with adequate dedicated budgetary allocations.

The FY 2015 NDAA widened counternarcotics enforcement sup- port to include countering transnational criminal organizations, but no additional funds were appropriated for this mission.5 In a period of sequestration and budgetary austerity, it may be diffi- cult to secure a level of funding adequate to the task of seriously degrading TCNs.

 

• Develop joint doctrine for CTOC. The existing guidance for joint task force commanders and staffs is a 2011 U.S. Joint Forces Command publication,6 but there is no approved joint doctrine for CTOC or counternetworking more broadly defined. Given the rising profile of CTOC as a U.S. government and military priority, this guidance should be updated and supplemented with a doctrinal document.
• Address deep corruption and criminalized states. Criminal- ized states are hubs of transnational criminal activity. Deep, multilayered corruption vitiates efforts by the United States to engage partner nations constructively in efforts against TCNs, strengthen governance in weak states, and promote regional stability. The United States has tried to work around the problem of corruption in a partner country’s security agencies by working with vetted units within larger organizations. However, there are severe limitations to what can be achieved by working with these units, even if they could be kept corruption-free, if they operate in an environment of deeply entrenched corruption.

in countries where drug trafficking–related corruption is endemic, the most promising avenue to reduce corruption to a level that might permit the United States to work with these countries’ governments and militaries may be to sanction and isolate the high-level political and military elites involved in drug trafficking and target them with law enforcement tools. At a minimum, the United States should exercise caution to ensure that any political or military engagement with these countries does not help legitimize deeply corrupt regimes or prolong their grasp on power.

For the U.S. Army

There is a great deal that the Army is doing already in the domains of engagement with partner militaries, and support for counterterrorism and counternarcotics that contribute indirectly to the CTOC mission.

the Army has competencies and capabilities that can advance the U.S. government’s CTOC objectives without significantly drawing resources from its core missions. CTOC-specific activities would constitute a valuable expansion of the Army’s current efforts to build partner capacity, perform network analysis, and sup- port detection and monitoring, as well as provide training opportunities for Army personnel.

Consider developing an Army Doctrinal Reference Publica- tion for CTOC. As discussed, there is no approved joint doctrine on CTOC or even on countering networks more broadly. The Army could make a significant contribution by taking the lead in developing CTOC doctrine

CHAPTER ONE

In July 2011, President Barack Obama promulgated the Strategy to Combat Transnational Organized Crime. In the letter presenting the strategy, President Obama stated that the expanding size, scope, and influence of transnational organized crime and its impact on U.S. and international security and governance represent one of the most signifi- cant challenges of the 21st century. The President noted that criminal networks are not only expanding their operations, they are also diversi- fying their activities, resulting in a convergence of transnational threats that have evolved to become more complex, volatile, and destabilizing.1 These networks also threaten U.S. interests by forging alliances with corrupt elements of national governments and using the power and influence of those governments to further their criminal activities.2

During remarks before the Atlantic Council in May 2014, Gen- eral Martin Dempsey, then Chairman of the Joint Chiefs of Staff, pre- sented an overview of his “2-2-2-1” strategic concept—a mnemonic he used to outline the strategic threats to the United States. In sum:

• two heavyweights: Russia and China
• two middleweights: Iran and North Korea
• two networks: al-Qaeda and transnational organized crime in the Western Hemisphere
• one domain: Cyber

General Dempsey stated that the transnational organized criminal net- work that runs north and south in our hemisphere “doesn’t get as much prominence as I believe it deserves.” Expanding upon this assertion, he further said:

We tend to think of that as a drug trafficking network, but it’s equally capable and often found to be trafficking illegal immigrants [and] arms, laundering money. It’s extraordinarily capable. It’s extraordinarily wealthy. And it can move anything. It’ll go to the highest bidder. And so that network deserves more attention, not just because of the effect it has on the social fabric of our country but because of . . . the effect it could have—and is having, in my view—on the security of this nation.3

The same view was expressed by former Supreme Allied Commander Europe and U.S. Southern Command (SOUTHCOM) commander Admiral James G. Stavridis.

They have demonstrated an ability to adapt, diversify, and converge. They have achieved a degree of globalized outreach and collaboration via networks, as well as horizontal diversification. These criminal net- works have three principal enablers: first, the huge profits realized by transnational criminal operations; second, their ability to recruit talent and reorganize along lines historically limited to corporations and militaries; and third, their ability to operate in milieus normally considered the preserve of the state.

Central America and Mexico are important to the United States in terms of proximity, deep social and cultural ties, and growing eco- nomic integration. The effects of destabilization in the region, therefore, can be transmitted to the United States quickly, for instance, in shifts in migration trends.

in Mexico, the primary dynamic between the drug cartels and the state, and among the cartels themselves, has been armed confrontation. Drug trafficking–induced violence in Mexico has reached a level that some might say amounts to a criminal insurgency (although the term is controversial). In Central America, TCNs have more money than they can spend, launder, or invest, and now exercise unprecedented formal and informal power. Guatemala, Honduras, and El Salvador exhibit characteristics of failing states.

Countering TCNs requires identifying the critical nodes in the criminal organizations and determining where counter-TCN operations can achieve the greatest effect.

Effectively countering transnational criminal networks presents its own set of challenges. For one thing, there is a great deal of inertia and resistance to change in any large bureaucracy.9 Success in some agencies is measured by the amount of illegal drugs seized; there is no incentive for going after net- works. Some agencies are reluctant to share information and are sensi- tive about perceived encroachment by other agencies into their turf. There is broad agreement on the part of our U.S. government interviewees on the need to improve interagency coordination.

Many of our U.S. government interviewees, however, say they believe that the main problem is not lack of authorities, but lack of funding and resources and the relatively low priority that CCMDs have placed on CTOC—a nontraditional military mission that requires a whole-of-government approach.

Destabilizing Effects of Transnational Criminal Networks

The expansion of TCNs is a manifestation of what some authors label “deviant globalization.” This is an economic phenomenon that cannot be detached or separated from the broader process of globalization.17 It is that portion of the global economy that meets the demand for illegal goods and services in consumer countries by developing a supply chain from producer countries. These criminal organizations take root in supply areas and transportation nodes while usurping the host nations’ basic functioning capacity. Over time, the illicit economy grows and nonstate actors provide an increasing range of social goods and fill the security and political vacuum that emerges from the gradual erosion of state power, legitimacy, and capacity.18

A study by a Harvard University researcher argues that a significant proportion of Mexican migration to the United States, particularly from border towns, is in direct response to drug- related violence and organized crime activities.

Criminalized States and Criminal Insurgencies

The activities of criminal networks contribute to the emergence of criminalized states—states where the senior leadership is aware of transnational criminal enterprises and involved in them, either actively or through passive acquiescence; where these organizations are used as an instrument of statecraft; and where levers of state power are incorporated into the operational structure of one or more criminal organizations.

Two Mexican cartels, the Sinaloa and Gulf cartels, were said in 2009 to be capa- ble of fielding some 100,000 foot soldiers, nearly matching Mexico’s 130,000 armed forces.32 Some scholars have noted that the Mexican drug cartels have adopted strategies and tactics that correspond very closely to those employed by armed insurgent groups.

If insurgency is defined as the organized use of subversion and violence by a group or movement that seeks to over- throw or force change of a governing authority,34 then the violence of Mexican criminal organizations does not meet the definition, given that these groups do not pursue political aims, nor do they aim to replace the state with an alternative type of governance.

The U.S. Army’s Role in Combating Transnational Criminal Networks

According to the U.S. Army Operating Concept, transnational criminal organizations are one of the harbingers of future conflict.

Crimi-nal violence erodes state institutions and undermines governance. The threat from transnational organized crime highlights the need for Army special operations and regionally aligned forces to understand complex environments, operate with multiple part- ners, and conduct security force assistance.37

Similarly, the U.S. Army Vision states:

Over the next 10 years, it is likely the United States will face an unstable, unpredictable, increasingly complex global security environment that will be shaped by several key emergent trends: the rise of non-state actors; an increase in “hybrid threats;” state challenges to the international order; and expanding urbanization . . . Due in part to the breakdown in traditional state authority, hybrid threats—state or non-state actors that employ dynamic combinations of conventional, irregular, terrorist, and criminal capabilities—will proliferate, elevating the importance of the human dimension of warfare. State actors will increasingly utilize proxy forces, criminal organizations, orchestrated civil unrestand non-governmental networks of computer hackers in concert with their traditional war fighting capabilities to create instability, while complicating an opponent’s development and application of effective countermeasures.

CHAPTER TWO

A Model of the Transnational Criminal Network Value Chain

TCNs seek to maximize wealth through illicit activities carried out by actors with diverse capabilities and interests. Like multinational corpora- tions or syndicates of firms working together to bring goods and services to targeted markets, TCNs attempt to consolidate markets for profitable products, diversify across products and services to hedge against down- side risk in a single industry, and safeguard supply chains of products going to market. Unlike their licit analogs, TCNs must do so covertly to avoid interference from rival TCNs and from governments fighting illicit activity, or they must locate activities in or across regions where govern- ments are unwilling or unable to intercede.

Transnational Criminal Network Activities and Their Drivers

At their core, TCNs are driven by market forces and opportunity.

Although many analysts understand the core activity of the TCNs operating out of northern South America to be cocaine trafficking, an ancillary set of illicit activities includes weapons trading for defense of other trafficking operations, bribery, violence and kidnapping to exert influence on rivals or local governments, and money laundering required to return cash from street and wholesale transactions to TCN operators upstream.

In some instances, supply relationships or infrastructure built for drug trafficking may serve a second purpose. For example, drug mules may form the foundation for human trafficking and prostitution rings.

Organizational Form: Integration Across Tasks

Complete vertical integration—an arrangement of all activities required for production, distribution, sale, and oversight within a single organization—is difficult and rare in TCNs. Although there are trans- action costs to using people and organizations outside the primary net- work, as explained later, it may not be possible to bring outsiders in. The best talent might not be willing to join the organization, or there might not be enough work to integrate someone full time.

The Value Chain Approach to Transnational Criminal Network Structures

There can be no set formula to accurately describe the structures of all TCNs, but a description of the value chains for their products and ser- vices is useful for understanding why TCNs may choose to vertically integrate systems with direct oversight and a well-defined hierarchy or to rely on distributed network of affiliates. The ability to understand an organization’s structure may then lead to areas of vulnerability and possible intervention.

Latin American TCN operations mimic commercial supply chains in a few key ways. Indeed, several characteristics are common across multinational corporations and the criminal organizations discussed in the following chapters.4 Networks are secure, typically with significant defense capabilities and covert communications systems. In legal markets, these structures are to preserve trade secrets and intellectual property, while TCNs also defend against disruptions from state actors and rival networks.

TCNs are also redundant wherever feasible and resilient to disruption. Multiple suppliers and trafficking routes and methods are sought out, and transactions are made based on a calculus of trading off the potential payoff per shipment against the risk of a shipment being seized or destroyed. That is to say, where market-based insurance instruments exist to protect the value of shipments for legal firms, TCNs diversify risk by breaking up high-risk shipments over time and across multiple routes. Transactions occurring in criminalized states where the TCN faces little risk of disruption will be of much larger value and quantity than those where opposition exists.

Transaction Costs and the Economics of Organization

Transaction cost economics as a field of study seeks to explain how pro- duction is organized, from seed to sale, to provide goods and services based on the notion that each action along the supply chain has associated transaction costs. In this framework, the network of actors that make up a TCN supply chain can be viewed as structures that define the set of responsibilities of actors in the system to maximize profit and minimize conflict.5 Central to this pursuit, a version of the Coase Theorem can help explain the degree of integration of these systems in a TCN’s value chain:

Actors arrange as a firm when the transaction costs of coordinating production, trafficking, and sales are cheaper than doing so through market exchange.

Along each step of the process for a given good or service, a TCN may choose among a continuum of arrangements ranging from internalizing every step within a vertically integrated single firm to performing every step as a sequence of separate arm’s length transactions. Neither extreme on the continuum is likely to occur for international illicit activities, but the 1980s Colombian cocaine smuggling regime leaned more toward the former, and the current diffuse network of collaborators from Colombia, the Northern Triangle of Central American states (Guatemala, Honduras and El Salvador), Mexico, and others leans more toward the latter.Transaction cost economics may offer a way to understand why this shift occurred, as well as a lens through which to predict and intercede in future movements.

Transaction costs dictate when tasks are performed within a firm, and when they are performed through market exchange. Along the chain, numerous factors in transaction costs drive the specific develop- ment of TCNs. Williamson found that it is possible to infer a system’s arrangement, meaning whether a transaction is internalized or completed through market exchange, by considering the transaction along three dimensions: (1) asset specificity; (2) uncertainty; and (3) frequency.7

Specificity refers to the degree of need for specialized resources and covers the gamut of assets, including physical, human, site, dedicated, and temporal specificity assets. Highly specific assets require either internalization or strong incentives for external actors to remain aligned with the TCN. Uncertainty can be thought of as the need for and effectiveness of governance structures, where higher certainty requires less governance to ensure a task is performed. Finally, firms or TCNs are likely more willing to invest in specialized production techniques when the production supports high-frequency transactions than when the transactions are rare.8

Generally speaking, an organization should try to integrate a transaction when the expected payoff (gain in expected value) from increased certainty exceeds the cost of building capacity to carry out the transaction in-house.

In illicit markets, there is rarely (if ever) an external and impartial govern- ing body to enforce such a contract. One way that TCNs have tried to overcome the certainty problem and the lack of recourse to courts is through a popular method stemming from the premodern era: marriage alliances. As we will describe, several TCNs have used marriages to bond disparate groups into more-trusted allies.

Frequency refers to an organization’s ability to quickly recoup investments in the infrastructure, labor, and other necessities to inte- grate a transaction.9 Holding the value per transaction constant (as well as the degree of asset specificity), a TCN should choose to take on larger investments to perform a transaction in-house when the transac- tion will occur often.

A task absent competition may have no transaction cost, but conducting the same task in the face of competition could result in transaction costs. Therefore, understanding competition can also shed light on the way TCNs structure themselves.

Bridging Theory and Practice

TCNs are much like legitimate organizations in that they are driven by market forces and aim to make profits. To do so, they might consolidate markets when possible, diversify, and safeguard their supply chains. They face one challenge that legitimate organizations do not face, however, which is that they are operating illegally and conducting illegal activi- ties. As a result, they do not have legal protections for such things as con- tracts, for example, and they are at risk of being imprisoned or killed by police or military personnel in organized efforts to stop them.

The organizational realities of TCNs also point to their vulner- abilities. First, they are most vulnerable at links in their supply chains. Second, raising transaction costs can cause them to adopt suboptimal organization schemes, putting the organization at risk.

CHAPTER THREE

Source Countries and Supply Chains

Illegal Drug Infrastructure in Source Countries

Colombia accounts for the bulk of refined cocaine manufactured in South America and remains the principal supplier for both the United States and worldwide markets (90 and 80 percent, respectively).

In Colombia, the chief entity is the Fuerzas Armadas Revolucionarias de Colombia/Revolutionary Armed Forces of Colombia (FARC), which is estimated to earn any- where between $200 million and $300 million a year from the trade.

The chief beneficiary of any FARC withdrawal from the cocaine trade would be the groups referred to as bandas criminales (criminal bands), or BACRIM.9 The BACRIM are Colombia’s third-generation DTOs and are markedly different from their predecessors, the Medel- lín and Cali cartels, and the second-generation DTOs, the “baby car- tels” that tended to specialize in certain links in the drug trafficking chain. The BACRIM deliver cocaine destined for U.S. markets to the Mexican syndicates, usually in Central America.

BACRIM frequently work in coordination with other criminal groupings in Colombia, including pandillas (street gangs) and more- sophisticated groups euphemistically called oficinas de cobro (collection agencies). The latter entities have a dedicated money-laundering capa- bility and engage in a variety of supplemental services and activities that range from muggings, micro-extortion, and local drug dealing to contract killings and money laundering.

The success of Los Urabeños in overcoming rival groups can be attributed to three factors. First, because of their paramilitary roots, Los Urabeños aligned themselves with other groups that also had para- military capabilities and incorporated them into their structure. Los Rastrojos, by contrast, used a franchise model, exercising far less control than Los Urabeños, and allied themselves with urban groups that generally did not have the firepower needed in a turf war.

Second, Los Urabeños were better at utilizing their support network.

Third, Los Urabeños were a more cohesive organization. Los Rastrojos were a federation of different groups and more vulnerable to internal split than vertically integrated groups.

Faced with falling numbers and a failing guerrilla campaign, however, the group’s resistance to narco-sourced funds appears to be diminishing. By 2006, it was reported that the ELN was engaged in protecting cocaine laboratories and shipments, which brought in significant profits that were used to buy weapons and attract recruits. The group is said to have moved to make a strategic alliance with Los Rastrojos to run a production ring in Bolívar. The extent of this relation- ship became apparent in 2012 when Colombian police seized 857 kilo- grams (kg) of cocaine that had been manufactured in refining facilities protected by the ELN and was destined for export across the Venezu- elan border.22

According to a recent study, Shining Path is only a small piece of a larger dynamic. A large number of “family clans” make up the narcotics infrastructure in Peru. These family clans buy the coca leaf from local farmers, smuggle precursor chemicals to production sites, produce intermediate products and cocaine, arrange the trans- portation of those products, and manage details of the local operations and their security, with financing from external organizations that are the recipients of their products.

Venezuela: A Key Drug Transit Platform

A large part of the cocaine that transits the Central America supply chain on its way to the United States, as well as the vast majority of cocaine that is shipped to West Africa is exported from Venezuela. The country’s role in the Latin American drug trade has expanded con- siderably since late Venezuelan President Hugo Chávez’s expulsion of the DEA in 2005.

According to a Venezuelan expert, there are 116 clandestine airstrips in Apure and strategically outlined roads to carry the cargo in vehicles and subsequently load them in light aircraft.

Is Venezuela a Criminalized State?

In 2013, Venezuelan authorities reported seizing 46 MT of illegal drugs. While Venezuela reports the seizures, it did not systematically share the data or evidence needed to verify the destruction of the drugs. The Venezuelan government also published statistics on arrests and convictions for drug possession and trafficking, but it did not provide information on the nature or severity of the drug arrests or convictions.

One message found in Reyes’s computer files was from Márquez, the FARC’s liaison with Chávez. It describes the FARC’s plan to buy surface-to-air missiles, sniper rifles, and radios in Venezuela. Márquez wrote that the effort was facilitated by General Rangel Silva and former Minister Rodríguez Chacín.37 In July 2009, the Colombian military raided a FARC camp and confiscated five Swedish Saab AB AT-4 85-mm antitank weapons that had been previously sold by Sweden to the Venezuelan army.

According to the Spanish indictment, ETA instructors were accompanied to a FARC training site by an individual who wore a jacket with the emblem of the Military Intelligence Directorate and were escorted by Venezuelan military personnel.

In December 2014, Venezuelan Navy Commander Leamsy Salazar, former chief of security for the late President Chávez and National Assembly president Diosdado Cabello, defected to the United States. According to U.S. press reports, Salazar is expected to provide witness testimony at an investigation by the DEA and the U.S. Attorney for the Southern District of New York into links between the Venezuelan government and narco-trafficking. Salazar reportedly identified Cabello, regarded as the second-most-powerful man in the Venezuelan government, as the leader of the Cartel de los Soles.

Officials under investigation are reported to include former Interior Minister Tarek El Aissami, now governor of Aragua state; retired General Carvajal (“The Chicken”), a former director of the National Office Against Organized Crime and Financing of Terrorism (which suggests that the Venezuelan regime does have a sense of humor) and Military Intelligence; Major Gen- eral Nestor Reverol, commander of the National Guard; Minister of Industries Jose David Cabello, Diosdado Cabello’s brother; and Luis Motta Dominguez, a National Guard general in charge of central Venezuela.

There is more than sufficient evidence that officials at the highest levels of the Venezuelan government have been cooperating with the FARC in DTOs. This would place Venezuela in the category of “criminalized state,” defined above as states where the senior leadership is aware of and involved in transnational criminal enterprises—either actively or through passive acquiescence—where these organizations are used as an instrument of statecraft, and where levers of state power are incorporated into the operational structure of one or more criminal organizations.

CHAPTER FOUR

The Mexican Supply Chain

The more favored method, however, is to conceal shipments in go- fast boats. Constructed out of wood that is then overlaid with fiberglass, these vessels can carry up to 2 MT of cocaine. They lie low in the water and are powered by four 200-horsepower Yamaha outboard engines that give them a top speed approaching 70 miles per hour. Go-fasts put to sea off northern Colombia and “hopscotch” up the Pacific coast of Central America, hugging the shoreline the entire way to avoid patrols by the U.S. Coast Guard and regional navies.

Once inside the United States, cocaine shipments are moved to major consumption cities such as San Diego, Los Angeles, Seattle, San Francisco, Phoenix, Denver, Houston, Chicago, Atlanta, Washington, D.C., and New York. Mexican syndicates work with local street gangs to coordinate this aspect of the supply chain, subcontracting these entities as local distributors, enforcers, and debt collectors. Several organizations exist in the country,11 although two have elicited particular concern. The first is the Mexican Mafia, which is also known as La Eme (the Spanish phonetic for the letter “M”). The group initially consisted of convicted Mexican-American youths who organized in the California Department of Corrections during the 1950s. It was originally based in the eastern barrios (Spanish-speaking neighborhoods) of urban Los Angeles, but has since expanded to many other states and remains very active in the federal prison system. The second organization of concern is the third-generation Salvadoran Mara Salvatrucha-13 (MS-13),12 which was established by Salvadorans fleeing their country’s civil war in the 1980s.

Main Players

At the heart of the Mexican supply chain are nine established DTOs (including the six cartels listed in Table 4.2) that, to varying degrees, control virtually all nodes along the cocaine supply chain to the United States.

Apart from DTOs that have made no pretense to being anything other than criminal, profit-driven entities, there are also groups that have attempted to weave “spiritual” connotations into their activi- ties. Notable in this regard is La Familia Michoacana, which came to prominence in 2006 as a self-defined Christian movement dedicated to “defending citizens, merchants, businesses, and farmers” from all forms of crime and filling the security void left by the central govern- ment.29 However, the group gradually sidelined the veneer of a local self-defense force and systematically came to be involved in drug traf- ficking, as well as extortion and money laundering.

La Familia also developed a highly notorious reputation for car- rying out so-called “social work,” essentially beheading those who did not conform to the group’s “law enforcement” code.30 Despite success- fully extending its influence from Michoacán to cities in surround- ing states, La Familia’s ability to consolidate territory has been severely hampered by bitter internal divisions and power plays

Explaining the Sinaloa Cartel and Los Zetas’ Dominance Over the Contemporary Mexican Criminal Landscape

At a basic level, the various DTOs described above can be delineated into national organizations (Sinaloa Federation, Los Zetas, Gulf, BLO, Juárez, and Tijuana) and entities that are more regionally focused, albeit with aspirations for at least some geographic growth (La Familia, Caballeros Templarios, and CJNG). Another way of looking at the groups is to split them into two competing blocs that pitch the Sinalo- ans, Gulf, and La Familia against a loose pattern of shifting alliances among the remaining six cartels.

A curious feature of the growth of (and ensuing competition between) the Sinaloans and Los Zetas is that their successes stem from consideration of very different sets of factors. In the case of the former, an important geographic advantage has been access to key transportation hubs. Apart from numerous airfields (recognized and otherwise), Sinaloa has a modern port (Mazatlán) and an excellent network of roads and highways, all of which afford easy access to the cartel’s single most important market, the United States.38

More than this, however, has been a posture that is not merely aimed at maximizing profit but designed to ensure “marginal imprisonment risk.” The cartel’s leader, Guzmán, deliberately adopted a low- profile, austere lifestyle in the mountains of the Sierra Madre, conspicuously avoiding the type of reckless behavior that would attract the attention of the authorities.

The Sinaloans also assumed an organizational profile that was designed to insulate them from the type of decisive decapitation strike that had crippled hierarchical DTOs such as the Tijuana and Juárez cartels. Top commanders maintained operational security by rarely making calls, avoiding email, and limiting the number of people with whom they communicated. Structurally, a high degree of autonomy was given to peripheral lieutenants who carried out trafficking opera- tions in a compartmentalized, cellular “hub and spoke” manner. In addition, many specialized tasks, such as accounting, software design, and money laundering, were delegated to independent specialists, establishing a cadre of critical adjunct members who worked for the cartel but outside it. This horizontal, contractual configuration has been important in minimizing the disruptive effect that might otherwise have resulted from the capture of Guzmán and other ranking lieutenants.

To guard against internal splintering, a major weakness afflicting many Mexican DTOs, the Sinaloans revived and instituted the custom of dynastic marriage. Indeed, the organization is often referred to as an alianza de sangre (“alliance of blood”) because so many of its members are related as wives, husbands, cousins, or in-laws. These familial ties have functioned as an effective hedge against distrust, cementing the cartel as an organic collective where the whole is considered greater than the sum of the individual parts.

On a business front, the Sinaloans have avoided expanding beyond their core interest, retaining a single-minded focus on the pro- duction and trafficking of methamphetamine, marijuana, and cocaine. This has had two positive interrelated effects. First, it has allowed the group to devote the totality of its resources to refining, adapting, and improving trafficking techniques—something that is reflected in the exceptionally high degree of innovation that has come to characterize the cartel’s operational methods.42 Second, it has branded the Sinaloans as being “the best in the game,” a reputation that has given it a significant competitive advantage over other cartels, especially in terms of concluding deals for breaking into new markets.

Finally, there has been some speculation that the administration of former Mexican President Felipe de Jesús Calderón Hinojosa made a strategic calculation against targeting the Sinaloans and, instead, placed a priority on pursuing its more unpredictable and violent rivals. According to this thesis, authorities concluded they could not eliminate all the cartels in the country and, instead, picked a “favorite” in the conflict—the Sinaloans—in the hope that a more pragmatic and business-oriented monopoly might emerge and usher in some type of pax narcotica.

Impact on National Stability

The importation and trafficking of cocaine has had an insidious and pervasive impact on Mexico’s national stability, contributing to what amounts to the wholesale breakdown of order across large swaths of the country’s territory—something that has been especially evident in the northern states bordering California, Arizona, New Mexico, and Texas (Table 4.3). According to government statistics, more than 135,000 drug- related killings have occurred since 2007, with a further 22,322 “disap- pearances” still to be accounted for.

The most severely affected institution is the police, where pay as low as $500 per month and punitive intimidation have combined to literally “privatize” law enforcement.55 This is especially true at the local level, where poorly paid officers are routinely offered cash pay- ments to cooperate with DTOs and threatened with physical harm if bribes are not accepted.56 Known as “plata o plomo” (“silver or lead”— that is, take the bribe or die), problems of this sort are endemic across the country.

Is the Violence in Mexico a Criminal Insurgency?

Mexican criminal organizations deploy an impressive array of weap- onry nearly rivaling that of the Mexican military. Aside from auto- matic and semiautomatic rifles and machine guns, criminal organiza- tions have also deployed shoulder-launched RPG-7s that were likely diverted from Mexican and Central American military stockpiles, and have developed armored vehicles with gun turrets and battering rams known as “monsters” or “narco tanks.” Some of these vehicles were not appreciably different from the Mexican Federal Police armed vehi- cles known as “rhinoceros.” The groups are also able to produce their own weapons; a factory owned by the CJNG assembled untraceable AR-15 rifles from components.

Organized crime figures in Mexico have been described as “post- modern social bandits”61—a category of antistate actors with a long tradition in Latin America. Like insurgents, they provide social goods, construct narratives of power and rebellion, and seek to gain legitimacy in the territories that they control. Their message is delivered through symbolic acts of violence—including beheadings and corpse messaging (attaching a message to a corpse)—and information operations, includ- ing influencing the media and forging a “narco-culture” in which the criminal organizations are portrayed as challengers to a corrupt state and police.

The Caballeros Templarios have used mass media to communicate their message on numerous occasions. The group’s former leader, Servando Gómez (“La Tuta”), regularly gave media interviews and appeared in YouTube videos. In one of these videos, Gómez says his group has a “congress” and obeys the will of “the people,” adding that, “We don’t do what I order, we do what we believe is in the interest of the majority of the people.”

Robert J. Bunker argues that at some point in the recent past, the Mexican cartels (and some gangs) crossed a “firebreak” between our perceptions of what is “organized crime” or even “transnational organized crime”—a criminal threat and law enforcement concern— and what is “insurgency”—a military threat and national security or military concern (although law enforcement plays a partnership role with the military in responding to such a threat).

Essentially, he wrote, we are seeing criminal organizations in Mexico evolve into new war- making organizations.68 Insurgency-like tactics employed by Mexican criminal organizations include:

• operations ranging from guerrilla-style attacks with military- grade weapons to assassinations of members of the security forces
• psychological operations designed to wear down the government forces and to gain the support or acquiescence of the population (The cartels’ use of beheadings and other terror tactics are designed to achieve specific goals, including control of territory, punishment for betrayal, mitigation of the effectiveness of law enforcement, and intimidation of everyone from government officials to the general public.)
• systematic targeting of high-ranking counternarcotics officials, mayors, and judges.

While the concept of Mexico’s drug violence as a narco- insurgency raises intriguing questions, a contrary view holds that, to the extent that criminal organizations have a political agenda, attacks on police, military, and government officials are meant to pressure the state to move away from confrontation and to give the drug traffickers space in which to operate without interference. In this view, while the criminal organizations have assumed some governmental roles, they have done so not to establish alternative governance, as in the case of insurgencies, but to protect their operating spaces.

A reasonable conclusion is that the activities of the Mexican DTOs do not meet the classical definition of insurgency but that functionally, the cartels play the role of insurgents in that they seek to lever- age political control to gain freedom of action for their illegal activities.

the continued operation of autodefensaswithout government training and supervision could lead to the advent of a lawless society in some regions of Mexico.73

Weaknesses in Mexico’s Counternetwork Response

Mexico’s efforts to blunt the activities of criminal organizations have suffered from a range of shortfalls. One has been the overwhelming emphasis on using the military to combat the drug cartels.

Scant regard for the proportionate use of force led to a fivefold increase in the number of abuse complaints directed against Mexican security forces between 2006 (213) and 2013 (1,196).76 And the number of active cartels not only registered no meaningful decline, they actually proliferated, as groups moved to forge ties in an ever- changing environment of tactical alliances.

At its height Calderón Hinojosa’s Mérida Initiativeinvolved 96,000 combat troops—almost 40 percent of all active personnel—who were deployed to pursue a “kingpin” strategy aimed at dismantling criminal syndicates by killing or capturing their leaders.75

Although the policy was instrumental in eliminating several key drug lords and making some record cocaine seizures, it singularly failed to increase security.

Mexico’s counternarcotics drive has also been hampered by a severe lack of coordination among the various agencies and departments charged with confronting drug cartels. A plethora of forces exist in the country, all of which answer to separate mandates, command structures, and bureaucratic management systems. The gendarmerie will inject a new element of confusion to this Byzantine picture, especially given that it is meant to operate across all levels of governance— local, state, and national. Particular problems are liable to arise with the Federal Police, the organization charged with leading the fight against the drug cartels, particularly in terms of how they will share resources (including helicopters), delineate jurisdiction, and coordinate intelligence.

effective mitigation has been stymied by intelligence “black holes” born of stovepiping, interservice jealously, jurisdictional confusion, and, above all, a lack of trust due to the endemic cartel- related corruption that afflicts many state organs. As a result, generating accurate information that can be acted on quickly has not been a char- acteristic feature of Mexico’s overall counternarcotics response. Indeed, virtually all of the high-level arrests that have taken place over the past five years occurred because of U.S.–supplied data sourced from satel- lite imagery, communication intercepts, and DEA-run human assets.

CHAPTER FIVE

Central America: The Retreat of the State and the Expansion of Illicit Power Centers

The ability of TCNs to co-opt or influence local power structures at the local and national levels has significantly undermined governance and the rule of law and made Central America a key point of con- vergence where the activities of substate and extraregional actors present multiple, significant, and sustained threats to the security of the United States.

These criminal actors and their resources have overwhelmed these small states. Instead of having to focus on one larger state apparatus, as in Mexico or Colombia, Central American TCNs have six small and weak nations—which seldom act in concert or share information—to hollow out.1 One Honduran academic termed this phenomenon the “evaporating state,” where the state government essentially withdraws from carrying out most of its legitimate functions.

Although the presence of illicit actors in Central America is noth- ing new, the volume, sophistication, power, and impunity of the illicit activities and actors are fundamentally reshaping the region. This has led to the retreat of the state as a guarantor of an impartial and func- tioning judicial system, the rule of law, and control of national borders, and to a political process that increasingly represents little other than the investments of different TCNs in securing their interests. This leads to the cycle now under way in the northern tier of countries where, as Phil Williams notes, “States face two fundamental and interconnected challenges: They are often unable to meet the economic needs and expectations of their citizens, and they are unable to elicit the loyalty and allegiance of significant portions of these same citizens.”

As a 2012 United Nations study of TCNs in Central America noted, “The key driver of violence is not cocaine, but change: change in the negotiated power relations between and within groups, and with the state.”

Transportista Networks

Unlike the Mexican organizations, the transportistas are largely local and each of the Central American networks individually seldom controls more than a few towns or rural valleys.

they are local groups who have members on both sides of one specific border and control specific crossings.

While this limits their national reach, they are structures that are deeply rooted in the local community, creating control based on trust and on the ability of the network to inflict harm—not only on an offending individual, but likely on that individual’s extended family, as well. The alliances among transportista networks, particularly those in close proximity to each other, are often cemented through interfamily marriages.

Transportistas interviewed for this study say the greatest threat to their business transactions is seldom the police or military, which they are accustomed to dealing with. Rather, it is tumbadores, or other groups who steal the trafficked material, either in transit or from stash houses. Tumbes, as the thefts are called, are a favorite way for a group to announce its expansion into a new area. In the early days of their expansion into northern Guatemala, Los Zetas carried out a series of often-bloody tumbes, sometimes keeping the drugs, sometimes (in an effort to build alliances) allowing the transportista to buy the load back at a slight markup. The idea was not so much to make money as to establish Los Zetas as the dominant presence everyone else would have to deal with.

This culture of honor among the traditional transportista networks is violated by tumbes, especially if carried out by a rival group rather than a common thief. In the case of rival networks, tumbes are often wars to the death—not only for individuals, but for entire clans.

However, when the system works well, as it generally does, it makes the transportista networks impossible to track at ground level in real time. Investigations usually offer a snapshot of what has taken place rather than a moving picture of how they are evolving.

Political infiltration offers the opportunity to engen- der political and social support, while control of local projects offers the twin possibilities of generating and allocating formal jobs where they are scarce while simultaneously offering multiple avenues for launder- ing money.

While the Sinaloa cartel and other established Mexican groups continued to use the more traditional model of allying with local trans- portista networks in the region to acquire and move product, Los Zetas introduced a new methodology that has significantly altered TCN operations in the region—that of widespread territorial control.14

Rather than focusing on cocaine trafficking nodes and specific points of penetration to move their product (the transportista model), Los Zetas sought territorial dominion in which it could then tax all illicit activities that were carried out or moved through that terri- tory. This diversified the revenue stream of the organization by taxing prostitution, human smuggling, and all illicit activities in its areas of control.

In one innovation, the group has been stealing tanker trucks full of gasoline in Mexico from the state-run Pemex oil company to sell at discounted rates on the major highways along the Mexico-Guatemala border. One recent intelligence analysis in Guatemala estimated that 30 percent of the gasoline sold in Guatemala came from these Zeta thefts, yielding the group millions of dollars a month unrelated to the drug trade.

The shift also brought a significant “Mexicanization” of the criminal networks in the region, meaning an imitation of the habits and culture of the Mexican drug lords.

upon his return and arrest, Nicaragua’s Supreme Court president Alba Luz Ramos immediately came out to defend Fariñas publicly. Still, Fariñas was convicted of drug trafficking a few months later.

The investigation into Cabral’s murder has spanned at least four countries and involved investigators from six governments, including the United States, Colombia, Panama, Nicaragua, Costa Rica, and Guatemala.

Colombian police said the alleged mastermind of the killing is a Costa Rican named Alejandro Jimenez, who was reportedly trying to force Fariñas to sell one of the Elite franchises in Costa Rica.

According to police and judicial sources, as well as published reports, Ulloa Sibrián ran a network that moved cocaine, illegal immigrants, and millions of dollars in bulk cash while buying scores of properties in different countries and multiple legitimate businesses. Official estimates of the scope of his net- work demonstrate Ulloa Sibrián’s centrality to the local drug trade: Guatemalan and Salvadoran authorities calculated that he moved up to 16 tons of contraband through those two countries over the course of his career, the vast majority of it destined for the U.S. market.

In the immediate aftermath of the civil war, the nascent security forces, including the National Civil Police, were still in the process of reform and thus unable to deal with the crime wave in an effective manner. Some were even complicit in the violence. In addition to former soldiers and former insurgents with the Farabundo Martí National Liberation Front (FMLN), members of the police were all involved in organized crime. Essentially, belligerents were demobilized but never actually reintegrated back into society, leaving many with limited options. Gangs became an easy way to make money and provided ex-combatants with a sense of security. Total membership in El Salvador’s two main gangs ranges from 10,500 to 38,000. Even taking the more conservative figure still puts gang members somewhere around 60 percent of the size of the police force and at nearly the same size as the army.

Transnational Gangs

Transnational gangs, such as MS-13 and the Calle 18 active in Guate- mala, Honduras, and El Salvador, are by far the biggest groups.

Impact on National Stability

The impact of these networks has been profoundly damaging to the rule of law, political stability, and democratic processes under way since the end of the region’s armed conflicts in the early 1990s.

Particularly in the Northern Triangle, the significant political power acquired by these entities, coupled with growing corruption and the decline of the states’ ability to carry out basic functions has pushed the most-affected nations to the point of collapse.

Criminalized or Captured State Structures

The cumulative effect of the major actors driving the dynamics of drug trafficking and transnational organized crime in Central America— drug cartels, transportistas, gangs, and co-opted or criminalized state actors—has been destructive. However, with the possible exception of some gangs that have openly challenged the security forces, the activities of these groups are clearly not forms of criminal insurgency.

With criminalized state actors, the dynamic is exactly the opposite: not to overthrow the state, but to maintain control of the instruments of state power for as long as possible.

Transportista groups also do not seek to overthrow or replace the national government. Rather, they seek to corrupt and control power at a local level, without broader aspirations. They share some character- istics of John P. Sullivan’s notion of a “criminal insurgency,” where the “overarching political motive is to gain autonomous economic control over territory . . . Not all insurgents seek to take over the government or have an ideological foundation.

The gangs are undergoing a profound metamorphosis from groups with little or no political vision to formidable political blocs that, while having no inherent ideology, are capable of delivering hun- dreds of thousands of votes to a political party in exchange for specific benefits. The gangs deliver on the promises of votes by getting entire neighborhoods, under penalty of death or expulsion, to vote for the favored party. Thus the gangs control not just the votes of gang mem- bers but of their families and entire communities.

It has been widely reported that the FMLN negotiated with the gangs in the first round of the 2014 presidential elections, confident of achieving the majority of 50 percent plus one vote necessary to avoid a second round.

The jailed leadership of the MS-13 and Calle 18 gangs acknowledged in a joint statement that they had negotiated with the FMLN in the first round, and attributed their withdrawal of support to the closeness of the second round, feeling that the FMLN had betrayed their trust.

Gangs occupy significant amounts of territory, challenge and often defeat government forces in pitched battles, systematically target high-ranking police and judicial authorities, negotiate as equals with the government for specific benefits, carry out terror tactics to achieve the goal of intimidating any potential enemies, and are able to force the government to make concessions. All of these are hallmarks of a classical insurgency.

They also have a very clear idea of what their desired end state is, and it does not include taking over the government. It is primarily a vision of a truly autonomous, transnational entity: a society in which the gang could behave according to its own internal code, without being in permanent confrontation with the state. Being tattooed would not be a stigma, seeking to kill rival gang members would be a full- time occupation, women could be treated as sex slaves without consequence, and their internal structure would set the governing rules.In short, it would look very much like the prisons they occupy, but with- out the bars, gross overcrowding, and lack of amenities.

The Growing Role of the Gangs

While the transportista networks have a long history in the region and are an important part of its criminal, political, and social fabric, the role of gangs in the drug business is relatively new and evolving rapidly. These groups, if they continue on their current trajec- tory, have the greatest potential to displace traditional networks and greatly increase their already formidable social, political, and eco- nomic power.

The ongoing mutation of the gangs into political actors with growing ties to the drug trade cannot be understood outside the historic and controversial truce reached among the two main gangs and the government of El Salvador in March 2012. While there were other attempts at truces, this one provided the gangs with instruments to steadily gain political power and expand their territorial control. The truces, in essence, allowed the gangs to continue and expand their criminal activities, primarily extortion, kidnapping, protection, murder, and street- level drug dealing, in exchange for dropping the body count, or at least the bodies that were visible on the streets.45 Eventually it became clear that the gangs had been simply burying the bodies in clandestine cem- eteries rather than publicly displaying them. While there is a general consensus that the homicide rate dropped, with ebbs and flows, it has become clear that the decline since the truce was not nearly as dramatic as initially portrayed.

Evolution of Gangs and Transnational Criminal Networks

In addition to his growing ability to move large amounts of cocaine, Bercián has set up a series of businesses to help launder the proceeds of the cocaine sales while carefully cultivating political protection and a reputation for brutality.

Counternetwork Efforts in Central America

Numerous, fragile experiments are under way to deal with some of these issues. The United States is funding several interagency task forces (IATFs) established by regional governments in hopes of provid- ing a platform for a “whole of government” approach to reestablishing state authority in some areas while simultaneously combating drug traffickers.

These challenges are playing out against a backdrop of the desire by the region’s leaders, across political ideologies, to find a new paradigm outside the U.S.-led “war on drugs,” particularly as U.S. resources in the region have been severely curtailed. The search for a new paradigm includes calls for decriminalization. At the same time, there is a growing perception among the population that the violence generated by TCN activity is their primary concern, and that some sort of accommodation with those groups to end the bloodshed is the best and perhaps only way out of the current crisis.

“The issue of drug trafficking and consumption is not on the North American political agenda. The issue of drugs in the U.S. is very marginalized, while for Guatemala and the rest of Central America it’s very central,” he added.62

There are other psychological factors that play into the changing perceptions in the region, such as the growing belief that the U.S.- led interdiction efforts are not only part of the problem, but that they cannot succeed. “There are two dynamics at work,” said one regional analyst who monitors polling data and political trends. “One is the feeling that the governments can or will do little or nothing to solve people’s basic needs. The second is the feeling that people want to be on the winning side in any conflict, and the perception now is that the narcos have won, so they will adapt to that. Crossing that threshold to acceptance of the narco-state is huge, but already under way.”

Weakness in Central America’s Counternetwork Response

With the exception of the efforts to develop institutional capacity to fight criminal networks we have described here, Central America as a whole, and the Northern Triangle in particular, have not been successful in mitigating the pernicious effects of illegal criminal activity on the rule of law, the legal economy, and state power.

 

Among the significant multiple weaknesses of the Northern Tri- angle countries are the following:

• corruption and distrust among and within police forces that make joint actions across national boundaries virtually impossible—and even local actions difficult to carry out
• lack of political will to combat DTOs, coupled with and fed by growing government complicity in drug trafficking and money laundering
• highly politicized national intelligence structures that are often used to track the political opposition rather than strategic threats
• significant intelligence stovepipes that exist because of fears that drug corruption or political interests will thwart any real action against criminal groups
• porousborderswithalmostnoeffectivecontrolforstoppingcontraband, be it drugs, people, weapons, or bulk cash

• a lack of revenue and tax base from which to raise the necessary income for the state to implement anything more than the dys- functional systems currently in place
• the growing emphasis on the part of regional government on using the military to combat drug trafficking, although they do not have the training or institutional capacity to do so. (This is particularly true in Honduras, with the introduction in 2014 of the “military police,” a new branch of the military, responding to the military chain of command, but carrying out police func- tions. In El Salvador, tens of thousands of army troops have been deployed to support police operations but often take the lead or bypass the police completely.)66

 

CHAPTER SIX

The Trans-Atlantic Route: South America to West Africa

Over the past decade, drug cartels based in Latin America began to route cocaine shipments to Europe through West Africa. West African criminal networks are leading players in transporting and distributing the cocaine in Europe, often allied with associates of AQIM and other Sahel-based extremist groups. Lebanese Hezbollah is a major actor on both the Latin American and West African sides of the drug trade.

Figures about drug trafficking in Africa should be taken with a great deal of caution, however. The knowledge base of cocaine trafficking through West Africa remains thin and there is a clear need for a much better and finer-grained empirical understanding of how transnational drug trafficking in West Africa works. The data on drug movements through West Africa is based on documented shipments, largely seizures, but in the case of drug movements to the United States through Central America and the Caribbean, these data reflect only what we know. The United States has a robust intelligence capability in Latin America, but the relevant agencies have fewer sources and less direct awareness of the drug movements in Africa.

Until recently, Guinea-Bissau constituted the apex of smuggling activity. Under President Joâo Bernardo “Nino” Vieira (1994–1999 and 2005–2009), the country was considered to be the world’s first genuine narcostate, with the value of drugs passing through the polity rivaling that of its official gross domestic product. Complicity in the cocaine trade extended to the very highest levels of the military and governing civil bureaucracy.

In 2013, the head of Guinea-Bissau’s armed forces, General Antonio Indjai, was indicted in absentia by a New York court on cocaine and weapon trafficking charges that directly tied him to the criminal enterprises of the FARC.

Two weeks earlier, the former chief of the Navy, Rear Admiral José Américo Bubo Na Tchuto, was arrested in a DEA sting operation during which he told undercover federal agents that he could arrange for the storage and transfer of Colombian cocaine at a rate of $1 million for every 1,000 kg brought into the country.

Main Players

Nigerian criminal networks are at the forefront of cocaine trafficking from the Gulf of Guinea to Europe, as well as in secondary markets in sub-Saharan Africa. The involvement of individuals from the southeastern Igbo ethnic group—which has a particularly large and widespread diaspora—has been especially marked. These players have an established and prominent presence along all aspects of the supply chain from source countries (São Paulo constituting their main nerve center in Latin America), through transit hubs to main consumption countries (Britain, Spain, Italy, and Germany).

drug flows have impeded development by discouraging the types of foreign investment West African governments need to grow their economies. More specifically, the potentially huge short-term mon- etary gains that can be made from the cocaine trade have eclipsed the attractiveness of longer-term commitments to more-productive enterprises. Inevitably, this has resulted in a situation where a small number of people are becoming richer at the expense of a mass population base that is being rendered progressively poorer—driving already massive wealth inequalities and concomitant sources of social tension.

There is clear evidence that Gulf of Guinea transit hubs have steadily degenerated into consumption centers in their own right. Throughout the wider Gulf region, cocaine use has become increas- ingly endemic, fostering inner-city violence, fueling street crime, and straining already overburdened health and law enforcement systems. In this manner, the drug trade is detracting from human security, con- tributing to West Africa’s status as one of the most socially dislocated and dysfunctional parts of the world.

 

the U.S. Department of the Treasury designated Rear Admiral Tchuto, twice chief of staff of the navy, and General Ibraima Papa Camará, chief of staff of the air force, as drug king- pins

The two were linked to a notorious episode in July 2008 when a Gulfstream jet from Venezuela landed in Bissau loaded with 500 kg of cocaine. Police surrounded the plane and arrested the crew, who were reported to be members of El Chapo’s criminal organization, but the cocaine vanished. A later investigation determined that hundreds of boxes of cocaine had been unloaded from the plane by soldiers in uniform.

Counternetwork Efforts in West Africa

It focuses on building regional capacity to combat transnational crime, particularly narcotics trafficking. WACSI’s specific goals are to address corruption within the justice and security sectors and by government elites; support development of legal frameworks to combat transnational crime; strengthen law enforcement; promote the capacity to prosecute criminal activity; and engage African stakeholders in addressing the underlying socio- economic factors that facilitate crime.

In October 2011, the governments of Nigeria and Benin established a combined maritime patrol mechanism. Codenamed “Operation Prosperity,” the experimental bilateral cooperation was the first of its kind and has since been expanded to include the navies of Cameroon, Togo, Gabon, Equatorial Guinea, and São Tomé.

“Operation Prosperity” was instituted in tandem with an ongoing project overseen by the International Maritime Organization and the Maritime Organization of West and Central Africa to functionally align the maritime patrol forces of West Africa. In 2010, a memorandum of understanding was signed to establish a Sub-Regional Integrated Coast Guard Network to address the following areas: piracy and armed robbery against ships; offshore energy supply security; illegal migration; the trafficking of people, drugs, and weapons; search and rescue; and protection of the marine environment. Since then, the International Maritime Organization has been conducting capacity-building activities across the region under a modest program that includes tabletop exercises and simulations, national seminars, and maritime security–related training.

As of the end of 2014, Transnational Crime Units were fully operational in Liberia and Sierra Leone and were in the start-up phase in Guinea-Bissau.44 The European Union, which has a particular inter- est in securing energy supplies from West Africa, is contributing to capacity-building efforts in the region, in addition to acting as a bridge between the Anglophone and Francophone component elements of ECOWAS and ECCAS.

Weaknesses in the West African Counternetwork Response

A number of shortfalls beset the West African counternetwork response. Fragile state institutions, weak judicial systems vulnerable to manipu- lation, and high-level corruption impede effective action against crimi- nal networks. The report of the West African Commission on Drugs, an independent group of West African civil-society leaders chaired by former Nigerian President Olusegun Obasanjo, stated, “Transnational criminal networks largely control the [illegal drug] trade, facilitated by the fact that they are operating in a poor region affected by political instability, unemployment and corruption.” These networks, the report continues, often operate under the guise of legitimate businesses or with the protection or involvement, direct or indirect, of senior offi- cials, and tend to be highly resourceful and extremely difficult to monitor or infiltrate.

Most of the region’s security force personnel lack adequate training and are poorly equipped and underpaid. Land borders established in colonial times are artificial and porous. Cultural affinities unite ethnic groups in various countries in West Africa, transcending nationality, providing an impetus for legal and illegal cross-border trade.

both personnel and equipment to monitor their respective shorelines. Just as significantly, sensitivities over the demarcation of sovereign jurisdiction have hindered the institution of effective protocols for coordinating joint patrol, much less anything approaching a codified right of hot pursuit.48

Extremely weak intelligence capabilities have compounded matters.

CHAPTER SEVEN

Convergence of Organized Crime and Terrorism

The nexus or linkages between terrorist and insurgent groups and crime is a critical aspect of the whole problem of international terrorism because in many cases, terrorist groups cannot sustain them- selves and survive without the income and resources that they derive from criminal activity.

Crime and terrorism can be distinguished by motive. Criminals seek economic gain through illicit means, while terrorists and insurgents seek political power and use criminal means to achieve these ends. Nevertheless, the important fact is that these two sets of actors represent an intrusion on the state’s monopoly over the legitimate use of force.

In numerous cases, terrorists or insurgent groups develop opportunistic alliances with criminal networks. This convergence may be facilitated by similar logistical and operational requirements, synergies produced by sharing a common infrastructure (e.g., runways), logistical corridors, safe havens, financial and money laundering networks, and a common interest in weakening or evading government action. Even where this convergence of terrorism or insurgency and crime has not occurred, there seems to be a feedback mechanism, in that the activities of criminal groups displace state and government institutions, usually weak to begin with, in the areas where they establish a foot-hold. This, in turn, creates greater social disorder that can be exploited by terrorists and insurgents.

Iran’s Strategic Penetration of Latin America, by Humire and Berman, lists 173 individuals connected to Hezbollah and the Iranian Revolutionary Guards Corps that used Venezuelan passports to travel to other countries.

Lebanese financial institutions and exchange houses play a key role in facilitating money laundering. In January 2011, the U.S. Treasury Department’s Office of Foreign Assets Control designated two exchange houses in Lebanon and three in Benin for their role in Joumaa’s laun- dering of drug trafficking proceeds. Not long afterward, the Treasury’s Financial Crimes Enforcement Network issued a finding (called a 311 Action) that the Lebanese Canadian Bank SAL of Beirut, then Lebanon’s eighth-largest bank with assets of more than $5 billion as of 2009, was a financial institution of primary money laundering concern.

There is some controversy as to the extent of AQIM’s complicity in narcotrafficking. AQIM’s emir, Abdel Droukdel, has explicitly disavowed any such activity as haram (forbidden in Islam) and contrary to al-Qaeda’s ideological and religious principles.8 However, U.S. officials cite a New York trial of three men from Mali in 2013 to back their claim that the group is heavily involved in the trade.

During this period, they admitted to being associated with al-Qaeda and were secretly videotaped agreeing to facilitate the move- ment of cocaine shipments from the Gulf of Guinea to the Maghreb and then onward to Spain. After initially quoting a transportation fee of US$2,000/kg, the trio apparently increased their price to US$10,000 for all consignments of more than 500 kg.9 The DEA has taken the case as providing “definitive evidence that a direct link exists between AQIM and its affiliate terrorist organizations and international drug trafficking.”

The DEA believes profits derived from Latin American drug shipments bankrolled the Islamist takeover of northern Mali in 2014 as well as the subsequent abduction and murder of 54 western workers from an Algerian gas facility that same year (an action for which Belmokhtar claimed credit in al-Qaeda’s name).15 Further indications of the connection between Latin American drug networks and AQIM emerged in 2010 with reports of a “drug summit” held in Guinea- Bissau in late October at which AQIM was represented by the newly emerging figure Abdelkrim Targui (“The Tuareg”).

Hezbollah is a major actor in the West African drug trade. The organization relies on criminal specialists in West Africa with close ties to the drug trade for money laundering, document forgery, and other criminal activities. The group played a significant role in the blood diamond trade and collects substantial amounts in contributions from the Lebanese diaspora in West Africa.

According to numerous sources, cocaine traded through West Africa accounts for a large part of Hezbollah’s income. A witness at a U.S. House of Representatives hearing stated that there is documentary evidence that an average of US$180 million in cash per quarter was being transported from Togo to Ghana, where it was placed on commercial aircraft and flown directly to Beirut.

Interpol has confirmed that cocaine trafficking in West Africa has supported several Hezbollah operations in Lebanon since at least 2006. Profits from cocaine trafficking have allowed the Lebanese network to diversify its portfolio of illegal activities in West Africa. In Nigeria, for example, 80,000 barrels of oil a day are siphoned from illegally tapped pipelines.

Guinea-Bissau is a strategic hub for the Hezbollah- facilitated drug trafficking from South America to West Africa. The Lebanese network based in Guinea-Bissau does business directly with the FARC.

CHAPTER EIGHT

Combatant Command, Joint Task Force, and Army Service Component Command Counternetwork Activities

Using global footholds and myriad communication tools, TCO networks now span across all GCC AORs [geographic combatant command areas of responsibility].

TCO networks do not limit themselves to narcotics trafficking. They are global logistics enterprises with the ability to move any type of commodity into and out of the United States.

Summary of Army CTOC Activities in Support of NORTHCOM

While a few soldiers perform duty under the command of NORTHCOM, such as serving as members of Tactical Analysis Teams and planners within the headquarters, the bulk of Army support is pro- vided through JTF-N. Headquarters JTF-N has a small number of soldiers tasked to provide planning assistance to several federal law enforcement agencies aligned according to the major drug trafficking corridors. However, most of its counterdrug activities consist of units conducting training by performing counterdrug support missions within the JTF-N area of operations. Such units are assigned Exercise Tactical Control to JTF-N and only perform counterdrug activities that provide training directly related to the unit’s Mission Essential Task List

United States Southern Command

During interviews with RAND researchers, SOUTHCOM plan- ners stated that among the challenges they face in CTOC activities are changes in budgetary priorities.13 The environment is dynamic and the threat changes quickly, yet DoD budgets take much longer to adapt. Security cooperation activities are funded by the Department of State and managed by DoD. Planning for security cooperation is accomplished through the Security Cooperation Office and the country team. The use of Section 1004 funds requires a law enforcement request. This could be sent through the U.S. Embassy within the relevant country. Together, these processes slow down the ability of SOUTHCOM to respond to changes in the way that transnational criminal organizations conduct their business.

Three other limiting factors are: (1) the statutory mission of SOUTHCOM; (2) statutory priorities—for example, SOUTHCOM can use Section 1033 funding only in countries approved by Congress; and (3) restrictions due to political considerations—e.g., Honduras has a lethal shoot-down program; therefore, the United States does not provide Honduras access to JIATFS air flight data despite the fact that approximately 90 percent of the air drug traffic through Central America (15 percent of the overall drug traffic) flies over Honduras.

The Guatemalan IATF concept’s strongest supporter, President Molina, resigned and was subsequently arrested in September 2015 in the wake of a corruption scandal, which raises questions as to whether the successor government will have the political will to continue with IATF development.

Joint Interagency Task Force South

JIATFS has the lead for DoD’s detection and monitoring mission in the SOUTHCOM area of responsibility and covers part of the NORTHCOM area of responsibility, as well.

In terms of transportation, storage, and sales timing, the TCN business model is not well understood.

While focused on its primary mission of detection and monitoring of illicit traffic, JIATFS established counternetwork and counter-threat finance analysis cells to assist law enforcement agencies in dismantling the transnational criminal organizations responsible for the production and shipment of narcotics and for undermining the stability and security of the region.

United States Army South

ARSOUTH focuses CTOC activities on building partner capac- ity in four partner nations: Honduras, Guatemala, El Salvador, and Belize. The goals are to improve the capability and capacity of partner nations. Activities include police counterdrug labs training, basic riv- erine operations mobile training teams, small boat operations mobile training teams, intelligence officer courses, command and control and assessment, tactical response training teams, rotary-wing maintenance, ground interdiction support, fixed- and rotary-wing pilot training courses, maritime interdiction, intelligence against drug trafficking, CTOC operations, and planning for counternarcotics operations.

United States Africa Command

Although countering TCNs was not listed as a priority, this mission is inherent in the promotion of stability as General Rodriguez made clear in his statement, saying, “We built capacity and enabled our allies and partners to disrupt transnational terrorist and criminal networks, strengthen border security, and contribute to multinational peacekeep- ing operations.” Moreover, “The nexus between crime and terror is growing on the continent as terrorists and criminals increasingly utilize the same illicit pathways to move people, money, weapons, and other resources.”

General Rodriguez also highlighted the problem of corruption:

Corruption is a universal challenge that encourages the com- plicity of public servants in criminal and terrorist activities and destroys public trust in decision-making systems. To help our African partners address corruption, we must carefully tailor the conditions for military assistance. Where corruption perme- ates military institutions, its consequences can be deadly. When resources are diverted from military pay and sustainment, forces are less capable and more vulnerable on the battlefield. They are less effective at protecting civilians and may resort to predatory behavior. Corruption is corrosive to the foundation of trust and mutual responsibility on which enduring partnerships must be built.

CHAPTER NINE

Conclusions and Recommendations

In the introduction to this report, we documented the increased recog- nition on the part of the Obama administration, Congress, and U.S. military leaders of the importance of addressing the growing secu- rity threat posed by the expansion of TCNs. Yet, this raises the ques- tion: What are the roles of DoD, the military commands, and the U.S. Army?

U.S. Governmentwide–Level Conclusions and Recommendations

Challenge the Conventional Thinking

At a conceptual level, a major challenge in formulating adequate policy responses to the challenge posed by the emergent threat of TCNs and hybrid illicit actors that combine aspects of criminal organizations, terrorist groups, and insurgencies is the way in which the U.S. government and most analysts classify threats to national security—and the way in which this classification is reflected in national security legislation, department and agency missions, and budgetary decisions.

But some criminal organizations—as shown in the case of Mexico—combine elements of insurgency, and certainly terrorism. Entities such as the FARC, AQIM, Hezbollah, and many others combine terrorism, insurgency, and criminal activities. Prioritizing the threats that they pose to U.S. interests requires taking all of these facets of the groups’ activities into consideration.

how does the threat of al-Shabaab or AQIM compare with that of the Sinaloa Cartel? One solution might be to regard all of these groups as networks. We could then assess the threat level that they pose, regardless of how the group is classified, and deploy the tools and resources available to the U.S. government against them based on that threat assessment.

Bring Authorities and Policy Guidance in Line with the Strategy to Combat Transnational Organized Crime

It takes time for authorities and laws to “play catch up” with emerging trends. By and large, authorities to implement CTOC are nascent and the agencies charged with this mission draw on existing counternarcotics authorities.

Improve Interagency Coordination

A major structural obstacle to waging an effective counternetwork campaign is the lack of unified effort and command. Unlike in the counterterrorism area, where extensive interagency coordinating mechanisms were created after the terrorist attacks of 9/11, a mechanism for addressing the threat of TCNs is only now in the process of being developed.

The 9/11 attacks generated a sense of urgency and incentives to coordinate efforts against the threat of international terrorism, but no similar consensus has developed on the importance of countering TCNs. The agencies with the most-relevant capabilities for attacking illicit networks have other missions and are reluctant to focus their resources on taking down the networks.

Support Countering Transnational Network Strategies and Programs with Adequate Dedicated Budgetary Allocations

The FY 2015 NDAA widened counternarcotics enforcement support to include countering transnational criminal organizations, but no addi- tional funds were appropriated for this mission.

Address Deep Corruption and Criminalized States

Criminalized states are hubs of transnational criminal activity, and deep, multilayered corruption vitiates efforts by the United States to engage partner nations constructively in efforts against TCNs, strengthen governance in weak states, and promote regional stability. The United States has tried to work around the problem of corruption in a partner country’s security agencies by working with vetted units within larger organizations. However, there are severe limitations to what can be achieved by working with these units (even if they could be kept corruption-free), if they operate in an environment of deeply entrenched corruption.

in countries where drug trafficking– related corruption is endemic, the most promising avenue to reducing corruption to a level that might permit the United States to work with these countries’ governments and militaries may be to sanction and isolate the high-level political and military elites involved in drug traf- ficking and target them with law enforcement tools. At a minimum, the United States should exercise caution to ensure that any political or military engagement with these countries does not help to legitimize deeply corrupt regimes or prolong their grasp on power.

U.S. Army Roles in Countering Transnational Criminal Networks

the Army has competencies and capabili- ties that can advance the U.S. government’s CTOC objectives without significantly drawing resources from its core missions.

Should it choose to do so, the Army could:9

1. Help develop interagency and multinational strategies to more effectively counter TCNs and assist with planning to implement those strategies.
2. Consider increasing the efforts of senior Army leaders to encourage a greater number of units to take advantage of training opportunities with joint interagency task forces engaged in CTOC missions.
3. Facilitate the use of RAFs in CTOC or CTOC-related missions.

4. Consider developing an Army Doctrinal Reference Publication for CTOC.
5. Add CTOC to the Chief of Staff Army Strategic Studies Group research agenda, make it a priority for solution development by the Asymmetric Warfare Group, and add it to the U.S. Army War College Key Strategic Issues List.
6. Advocate for CTOC activities conducted by the ASCCs to be expanded from counterdrug operations to the full range of CTOC activities that address critical threats to U.S. national security.
7. Increase support to network analysis efforts within each of the ASCCs.
8. Increase Signals Intelligence and cyber support to each of the ASCCs.
9. Assist partner countries with intelligence collection and coordination.
10. Increase support to ASCCs to improve rapid mobility of partner country militaries.
11. Provide an unclassified version of Blue Force Tracker to partner militaries, as appropriate.
12. Work with partner nations and militaries to help them strengthen border control.
13. Partner with gendarmerie organizations.