Transnational Organized Crime (TOC)...NATIONAL INTELLIGENCE COUNCIL 2 This briefing is intended to stimulate discussion about the national security implications of the threat posed

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Transnational Organized Crime (TOC):

A Perspective from the Intelligence Community

NATIONAL INTELLIGENCE COUNCIL 2

This briefing is intended to stimulate discussion

about the national security implications of the

threat posed by Transnational Organized Crime.

It does not reflect a coordinated position of

either the United States Government or the

Intelligence Community

NATIONAL INTELLIGENCE COUNCIL

International Concerns about TOC Not New

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“… An increasingly and undeniably global problem…

…internationalization of criminal activities…Organized criminal groups are,

among other things:

• taking advantage of weaknesses in national regulatory schemes;

• resorting to flexible and rapid transfers and movement of assets across

national boundaries;

• exploiting the diversity of business regulations within and between

national systems… concealing the origin of funds, ownership and control;

… Demonstrating the global nature of the phenomenon”

UN Conference Results June 1994


“A shift in U.S. Intelligence collection

priorities since September 11, 2001

attacks left significant gaps in TOC-

related Intelligence…

… Meanwhile, the TOC threat has

worsened and grown over the past 15

years.”

July 2011:Increasing the Focus on TOC

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OVERVIEW

• Context – why Transnational

Organized Crime is unique

• Glimpses of the Problem

• Understanding TOC through

the prism of globalization

– How TOC-related problems

play themselves out

• How will we know if we’re

making progress?

• Conclusions

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Mafia States: Organized Crime Takes Office

“…The analytic frameworks that

governments are currently applying to the

problem are primitive, based on outdated

understandings about organized crime.”

Moises Naim

Gangster’s Paradise: The Untold History of

the United States and International Crime

“… cross border crime not new…panicked

discourse and frenzied law enforcement

policies that define Washington’s current

approach are an alarmist overreaction”

Peter Andreas

The Uniqueness of TOC

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• Broad national security threats…

• …Exacerbated by illicit

TOC activities…$

• … That all come

down to money

Tactical and Strategic

Implications


Tactical Challenge: Whac-a-Mole

• TOC motivation: money

to be made

• Taking bad people off

the street is great…

• … but there will always

be someone else to

replace them.

• Demand will ensure

supply

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Strategic Challenge: “Balloon Effect”

• And if sustained pressure

finally takes its toll on the

“moles”…

• .. The entire enterprise

simply moves somewhere

less inhospitable:

• Profit motive at work– Often cited for drugs

– Equally true for other illicit items

being trafficked

– Applicable to money laundering

• Demand and supply at work

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Open Source Reflections of the TOC Problem(illustrative only… NGO/think tank/gov’t/press sources… data often uncorroborated)

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What does the

Globalization of

TOC look like?


Open Source Reflections of the TOC Problem (con’t)

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Drug Cartels

• 50-70K people killed in

drug violence

• Sinaloa expanding

presence around globe



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Drugs

• “El Chapo” Guzman, “Public

Enemy #1” in Chicago

• Mexican DTOs operate in

1286 U.S. cities/towns



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Illicit Cargo Transport

• Growing use of container

ships for drugs

• Hide in global commerce



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Fake Pharmaceuticals

• WHO: $430 Billion

• 30-50% of the market in

parts of the world

• Hundreds of thousands of

deaths



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Cybercrime:

• 200 Billion spam

messages/day

• 46 malicious codes

developed/second



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Intellectual Property Theft

• China based entities

acquiring trade secrets from

US corporations

• Loss estimates in the

$Billions



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Syndicate Operations

• Crime considered a “national

emergency” in Italy and MAFIA

the #1 bank

• A TOC-related “bourgeoisie of

lawyers, notaries, accountants

and entrepreneurs”



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IIlegal Gambling

• Singapore based

syndicate tied to

fixing 680 soccer

matches globally



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Criminal Facilitation of Terror

•US Terror suspect acquires

Belize birth certificate, passport,

and drivers license… used for

travel to Mexico



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Trafficking in Persons

• Indian NGO: 90,000

children reported missing

last year

• Up to 10X that number

allegedly trafficked



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Environmental:

• Illegal logging

• Dumping pollutants,

exploiting energy subsidies

• Animal trafficking



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Enabled by:

Petty Corruption

• 90% of Kenyans

view their Country

as “corrupt or

extremely corrupt”



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Enabled by

Corruption: Illicit Money Flows

• $50 Billion illegally sent abroad

from Russia in 2012

• GFI: > $750 Billion of

inflow/outflow over 18 years



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Enabled by:

Porosity of Borders

• Nigeria has 84 official

border crossing sites…

• … 1500+ illegal ones



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Changing Threat

Perceptions

54% of Brazilians view

Organized Crime as the

#1 security threat


In the Shoes of a TOC Analyst

• First the big picture: TOC as a downside of

globalization…

• … Then the practical issues:

– Diminished relevance of borders (money

laundering)

– “Cesspool” aspect (Illicit TOC activities are

rarely discrete problems)

– A data intensive/granular problem (movement

of people)

– A nuanced issue that defies bumper stickers

(“convergence” of crime and terror)

– Information sharing challenges

• And finally… how do we assess “progress”?

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Assuming these

glimpses are

illustrative, what

are the

implications for

the Intelligence

Community?

Information

Overload

• Press

• Academia

• Think Tank

Info

Info

Info

Foreign

Domestic

Complex

Problems

TOC as a

Downside of

Globalization

Functional TOC

Threats

Political

Econ

Governmental

Framework

Priorities and Departmental

Prerogatives

“Cylinders of Excellence”

Post 9/11 TOC

lower priority

Tactical may

equal strategic

Individual bad

actors

empowered

Low barriers

to entry

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Global Challenge

• Money laundering straddles the

foreign/domestic divide– Lebanese Canadian Bank an

illustrative success story

• Illicit can hide in massive licit

flows of money

• Beyond trade based schemes…

even more sophisticated

techniques…– Use of Online payment systems

• …Techniques limited by the

launderers’ imagination.

• … International enforcement

varies

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Money

diverted

to Hizb

support

TOC in Context: The Complexity ChallengeIllicit Activities Rarely Single Threaded

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A Huge Integration Challenge

corruption

narcotics

arms trafficking

cigarette smuggling

money laundering

ethno sectarian

violence

terrorism

kidnapping/TIP

TOC in West Africa

“Transnational organized crime poses a

direct security threat to peace and stability

in West Africa…”

West Africa Commission on Drugs


DI Design Center/MPG 463961ID/900786AI/900787AI/900788AI 7-12

Data Granularity Issues:

The Challenge of Tracking People


• Countless smugglers,

some ad hoc…. some

networked together…

• All conveyances

• Eventually arriving at San

Ysidro or other Port of Entry

to the U.S.

• May cross 10+

international borders

• rarely possessing legitimate

documents…

• … often no documents

• Benign… or otherwise

• Goes on all over the world

DI Design Center/MPG 463961ID/900789AI 7-12

Smuggling/Trafficking of People

(continued)

Over the Course

of 1-2 Months…

Importance of Nuance: Terror/Crime “Convergence”

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Terrorists using

Crime

Criminals using

Terrorism

Fellow Travelers

ASG…AQIM…Hizballah

Arbabsiar…

Funding Stream:

• In support of specific

operations

• More systematic

Facilitation/logistics

Intimidation:

• DTO beheadingsArrangements of Convenience

Shabaab/Pirates

“Convergence” bumper sticker could suggest a single narrative that may

not adequately/accurately depict what’s going on.


Information Access/Sharing Challenges(to connect TOC “dots”)

• As a global problem

TOC has no regard

for foreign, domestic

distinctions…

• … and information

sharing practices

haven’t kept pace

with that reality

• What is the “good

government”

solution?

Open Source

Dots

Classified

But

releasable

Dots

NOFORN

Dots

Operational

Dots

Privacy

Dots

Legal

Dots

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Private Sector

Dots


Metrics: How to Assess Progress?

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TIP: 20-27

million people

trafficked

Drug Trade

exceeds

$350…$500

Billion annually

Laundered money:

$800 million to $2.2

trillion… or $1.3 to

$3.3 trillion

annually

Cybercrime

costs a trillion

dollars

annually

Lots of

Very Big,

Very

Squishy

numbers


Trafficking in Persons

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ROW

“International Labor Standards:

Quality of Information and

Measures of Combating Forced

Labor”

Kevin Bales 2004

21-27 Million Individuals

Trafficked Worldwide

India

18-22 Million

22,410 girls/

women

missing in

Karnataka past

3 years

24 school girls in

Araria kidnapped

“Baby Falak”5000-7000

Nepalese girls

age 10-14

Children/women

to Middle East

177,600

children

reported

missing

in 2 years

• Undoubtedly a huge number in India/internationally

• Definitional issues, non standard data, low quality

data, lack of data… all plague TIP estimates

• ILO, others working to refine estimates

• True across the TOC arena

• Meaningful metrics to assess trends and measure

progress will be a significant challenge going forward

• 2009: Indian Home Minister

claims 100 million people• Definitional and data

issues involved

• India a source, transit,

destination country

• 450K cases reported,

3394 convictions


Conclusions

• TOC is an age-old problem… with a 21st century spin

• Attributes of globalization enable increased agility for

TOC actors– Cross jurisdictional challenges

– Partnerships required between/among the private sector, governments,

international institutions

• Generally a law enforcement lead…

• … But guiding principles for intelligence support:– Focus on highest priority threats

– Promote information sharing

– Accurately characterize the whac-a-mole and balloon effect phenomena

– Help develop meaningful metrics

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QUESTIONS?

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Documents

Transnational Organized Crime (TOC)...NATIONAL INTELLIGENCE COUNCIL 2 This briefing is intended to stimulate discussion about the national security implications of the threat posed