September 3, 2020

Transnational Organized Crime: What Makes It An American National Security Interest?  

  photo courtesy of Global Financial Integrity

Introduction

The expanding size, scope, and influence of transnational organized crime and its impact on U.S. and international security and governance represents one of the most important challenges to nearly every country. During the past 20 years, technological innovation and globalization have proven to be an overwhelming force for good. However, transnational criminal organizations have taken advantage of our increasingly interconnected world to expand their illicit enterprises.

Threat Risks From Transnational Organized Crime

• Penetration of Foreign Government Institutions, Corruption, and Threats to Their Governance. Developing countries with weak rule of law can be particularly susceptible to Transnational Organized Crime (TOC) penetration. TOC penetration of states is deepening, leading to co-option in a few cases and further weakening of governance in many others. The apparent growing nexus in some states among TOC groups and elements of government—including intelligence services—and high-level business figures represents a significant threat to economic growth and democratic institutions.

• Threats to the Economy, U.S. Competitiveness, and Strategic Markets. Transnational Organized Crime threatens U.S. economic interests and can cause significant damage to the world financial system through its subversion, exploitation, and distortion of legitimate markets and economic activity. U.S. business leaders worry that U.S. firms are being put at a competitive disadvantage by Transnational Organized Crime and corruption, particularly in emerging markets where many perceive that rule of law is less reliable. The World Bank estimates over $1 trillion is spent each year to bribe public officials, causing an array of economic distortions and damage to legitimate economic activity. The price of doing business in countries affected by Transnational Organized Crime is also rising as companies budget for additional security costs, adversely impacting foreign direct investment in many parts of the world.

• Crime-Terror-Insurgency Nexus. Terrorists and insurgents increasingly are turning to Transnational Organized Crime to generate funding and acquire logistical support to carry out their violent acts. The Department of Justice maintains a classified report known as the Consolidated Priority Organization Targets (CPOT) list. The last time CPOT was declassified via a FOIA request was 2015.  That edition of the CPOT listed a total of 63 organizations, 29 of which, are significant international drug trafficking organizations (DTOs) that threaten the United States, AND have links to terrorist groups. Involvement in the drug trade by the Taliban and the Revolutionary Armed Forces of Colombia (FARC) has been critical to the ability of these groups to fund terrorist activity. The U.S. Law Enforcement and  Intelligence Community is concerned about Hezbollah’s drug and criminal activities, as well as indications of links between al-Qaeda in the Lands of the Islamic Maghreb and the drug trade. Further, the terrorist organization al-Shabaab has engaged in criminal activities such as kidnapping for ransom and extortion, and may derive limited fees from extortion or protection of pirates to generate funding for its operations.  ISIS has also been very active in the TOC arena.

• Expansion of Drug Trafficking. Despite demonstrable counter-drug successes in the past 8-9 years, particularly against the cocaine trade, illicit drugs remain a serious threat to the health, safety, security, and financial well-being of Americans. The demand for illicit drugs, both in the United States and abroad, fuels the power, impunity, and violence of criminal organizations around the globe. Mexican DTOs have escalated their violence to consolidate their market share in the Western Hemisphere, protect their operations in Mexico, and expand their reach into the United States. In West Africa, Latin American cartels are exploiting local criminal organizations to move cocaine to Western Europe and the Middle East. Kenya, in Eastern Africa, has become a major distribution hub for heroin coming from Afghan DTOs to Europe and the United States. Many of the well-established organized criminal groups that had not been involved in drug trafficking—including those in Russia, China, Italy, and the Balkans—have now established ties to drug producers to develop their own distribution networks and markets.

• Human Smuggling/Trafficking. Human smuggling is the facilitation, transportation, attempted transportation, or illegal entry of a person or persons across an international border, in violation of one or more country’s laws, either clandestinely or through deception, whether with the use of fraudulent documents or through the evasion of legitimate border controls. It is a criminal commercial transaction between willing parties who go their separate ways once they have procured illegal entry into a country. The vast majority of people who are assisted in illegally entering the United States and other countries are smuggled, rather than trafficked. International human smuggling networks are linked to other transnational crimes including drug trafficking and the corruption of government officials.  In the past few years trafficking in children has begun to pick-up.

• Weapons Trafficking. Criminal networks and illicit arms dealers also play important roles in the black markets from which terrorists and drug traffickers procure some of their weapons. As detailed in the 2010 UN Organization on Drugs & Crime report, The Globalization of Crime (Note: this report was a massive undertaking and cannot be replicated yearly, however a new one was in preparation for 2020 before the COVID-19 Pandemic, so it is unlikely to be published this year), the value of the documented global authorized trade in small arms (i.e.; handguns, rifles, shotguns, machine guns) has been estimated at approximately $2.08 billion in 2010, with unrecorded but legal transactions making up another $120 million or so. The most commonly cited estimate for the size of the illicit market is approximately 20% of the legal market. According to the head of UNODC, these “illicit arms fuel the violence that undermines security, development and justice” worldwide. U.S. Federal law enforcement agencies have intercepted large numbers of weapons or related items being smuggled to China, Russia, Mexico, the Philippines, Somalia, Myanmar, Mali, Somalia, Turkmenistan, Syria and Yemen.  It is important to note this discussion does NOT include heavier weaponry, such as: Rocket Propelled Grenades, anti-tank rockets, heavy barrel machine guns (like the U.S. M2 .50 caliber machine gun, for example), fragmentation grenades, 40mm grenade launchers, mortars & field artillery.

• Intellectual Property Theft. TOC networks are engaged in the theft of critical U.S. intellectual property, including through intrusions into corporate and proprietary computer networks. Theft of intellectual property ranges from movies, music, and video games to imitations of popular and trusted brand names, to proprietary designs of high-tech devices and manufacturing processes. This intellectual property theft causes significant business losses, erodes U.S. competitiveness in the world marketplace, and in many cases threatens public health and safety. Between FY 2003 and FY 2010, the yearly domestic value of customs seizures at U.S. port and mail facilities related to intellectual property right (IPR) violations leaped from $94 million to $188 million. Products originating in China accounted for 66% of these IPR seizures in FY 2010.  Estimates for 2020 are in excess of $450 million, and China still leads the pack.

• Cybercrime. TOC networks are now significantly involved in cybercrime, as it has become increasingly difficult to launder money, and/or defeat institutional security systems which are controlled by networked computer systems.  Cybercrime costs consumers tens of billions of dollars annually, threatens sensitive corporate and government computer networks, and undermines worldwide confidence in the international financial system. Through cybercrime, transnational criminal organizations pose a significant threat to financial and trust systems—banking, stock markets, e-currency, and value and credit card services—on which the world economy depends. For example, some estimates indicate that online frauds perpetrated by Central European cybercrime networks have defrauded U.S. citizens or entities of more than $1 billion in a single year. According to the U.S. Secret Service, which investigates cybercrimes through its 31 Electronic Crimes Task Forces, financial crimes facilitated by anonymous online criminal elements, result in billions of dollars in losses to the Nation’s financial infrastructure. The National Cyber Investigative Joint Task Force, led by the Federal Bureau of Investigation (FBI), functions as a domestic focal point for 18 federal departments or agencies to coordinate, integrate, and share information related to cyber threat investigations, as well as make the Internet safer by pursuing terrorists, spies, and criminals who seek to exploit U.S. system.

• Information Warfare. The 2016 Presidential Election demonstrated that shadowy foreign government agencies, in concert with private TOC groups, have a significant capability of committing Information Warfare by exploiting America’s open society and means of mass communication.  Common social media platforms, such as YouTube, Twitter, Instagram, TikTok, SnapChat, Facebook, Google, and others, have been infiltrated to influence public thinking.  Other aspects of criminal information warfare include developing misleading documents, such as the now debunked dossier procured by the Democratic National Committee that attempted to implicate the Trump Campaign in colluding with Russia to rig the election.  This dossier was actually used as evidence by the FBI to get a warrant to tap the phones of a Trump Campaign staffer.  We are seeing just the tip of the iceberg in TOC involvement in information warfare.  The allure of adversary governments using TOCs for these activities is simple:  TOCs are adept at working in the shadows, below the radar, because getting caught is not as big of a problem as losing tens or even hundreds of millions of dollars in the process.  TOCs could care less about their operatives going to jail; they are not happy about losing money.  Adversary governments and terrorist groups are more than willing to pay for access to a TOCs well-developed network of money launderers, cyber criminals, black bag experts, etc.  At this juncture, no one really knows how much money TOCs are pulling-in to facilitate information warfare projects.  It now appears that some of these same shadowy TOCs are acting as conduits for money, planning and organizing insurrection and subversive activities in the U.S.

Ciao,

Steve Miller, IAPWE – Certified & Member
Managing Editor
The Report on National Security Kinetics™
Seattle, WA. USA
vietvetsteve@millermgmtsys.com