Financial Sense Home l Broadcast l WrapUp l Storm Watch l About Us l Contact Us
ESCALATING
THE WAR ON TERROR
by Joseph D.
Douglass, Jr.
August 22, 2003
Called a "Vital Interdiction of Criminal Terrorist Organizations Act of 2003", short title "Victory Act," the bill extends the terrorist war to the narcotics trafficking side of terrorists. Its logic is simple: a war on terrorism is incomplete without a parallel war on narcotics trafficking and associated money laundering. All that is still missing is a war on organized crime. Money laundering cannot be seriously attacked without understanding its connection to organized crime. Thus the absence of organized crime from the bill suggests a serious flaw in the sponsoring agencies understanding of the nature of the problem, which has been the case since 1969.
The four—terrorism, narcotics trafficking, money laundering, and organized crime—are all interconnected and have been for over twenty-five years. They are connected in the planning, organization, implementation, and strategy. They serve complementary functions and work together.
Narcotics traffickers use terrorists for protection. They often pay the terrorists for their services with drugs. This is how terrorists first became drug traffickers. Today it is hard to find a terrorist group or terrorist government that is not into drug trafficking or a drug trafficking organization that does not have its own terrorist enforcement arm.
One of the major elements in the post 9-11 war on terror that has been repeatedly stressed by President Bush is a war on the terrorist's financing, which implicitly means a war on drugs and money laundering. Of what use is it to seize $140 million in Al Qaeda financing when the amount they reportedly earned from drug trafficking was in excess of $2 billion a year. Neither drug trafficking nor terrorism could have grown the way they have without insider-organized money laundering, which is used to move the all-important money around.
Sooner or later, organized crime has to be brought in as well. Drug trafficking is responsible for an estimated 30 to 40 percent of organized crime revenues. The money laundering apparatus that serves drug traffickers also serves organized crime. Indeed, in the hierarchy, organized crime is above narcotics trafficking and money laundering, which is the heart of organized crime and tied directly into organized crime.
Another "business" of organized crime is illegal arms transfer. Their biggest clients are terrorists and terrorist states. Organized crime has been involved in the proliferation of weapons of mass destruction to terrorist and terrorist states, including weapons grade uranium, which is a top concern in the war on terror.
Combating organized crime and money laundering—again, the two are interconnected and inseparable—raises very serious complications: political, police, intelligence, legal, and business corruption at the highest levels. The importance and implications of this corruption (and compromise) on strategy and tactics for fighting the war on drugs and now on terrorism has rarely, if ever, been clearly stated. This is another serious flaw in the bill sponsor's strategic understanding of the problem. The clearest statement in official documents in recent times is the U.S. interagency International Crime Threat Assessment of December 15, 2000. In this assessment, the magnitude of the money laundering is estimated at a minimum $900 billion a year and a maximum that exceeds $2 trillion per year. Two previous estimates by the World Bank and the United Nations several years earlier placed the total revenues at 1.3 and 1.6 trillion dollars.
This massive crime has been going on for twenty years. It was a major growth industry in the 1990s. Its massive growth was fueled by the growth in drug trafficking in the 1970s and 1980s and associated corruption. Organized crime and narcotics trafficking are able to operate and grow the way they have for one and only one reason: they are politically protected, a direct consequence of the corruption. The manner in which this corruption works is also laid out quite nicely in the above cited Threat Assessment. Two trillion dollars a year can buy a lot of corruption and a lot of political elections, and once corrupted or compromised the people who make it possible become part of the protection apparatus. This is another important point that most people neglect to consider, including (evidently) the sponsors of the Victory Act bill.
The various interconnections are quite evident and easy to understand once you recognize that these all grew up over the past fifty years as state sponsored operations. This is another simple fact that the government does not want to understand and, indeed, goes out of its way to deny. The consequence of the reality is the need to wage a serious war on narcotics trafficking, money laundering, and organized crime as well as on terrorism. While the United States has been combating all four "international crimes" to some extent over the past thirty years, only the war on terror has been serious, and even there only in the past two years and within the limits that result from not recognizing the interconnections and strategic origins of the operations. War on narcotics trafficking, organized crime, and money laundering has never been serious, and this is unlikely to change because none of the political departments in the government want to recognize the reality. There are two major reasons why and these reasons apply to the United States as well as every other nation around the globe.
First, there is the enormous amount of money involved and associated political, policy, intelligence, legal, and business corruption. This is not just the low-level corruption that has plagued every major federal agency in the so-called war on drugs and police departments across the country but top-level officials. When the banks and top officials get caught, which is only an embarrassment to all, there is no serious prosecution or efforts to understand what is happening (a rare example being the BCCI, and only then because of a key New York City official, certainly not Congress which started the investigation and then got bought out). All there is is a minor slap on the wrist.
Another farce is all the talk about "bank secrecy" and the need to safeguard depositor's rights of privacy, including various intelligence services. What is ignored in the process is another simple reality and consequence of the massive size of the money laundering business. When it comes to the top-level crooks knowledge of who is involved, there is no such thing as "bank secrecy." The top bankers and their top legal firms are all part of a very deliberate and witting money laundering apparatus. Their cut of the booty is estimated at 15 to 20 percent, which translates to one or two hundred billion dollars a year. As explained to me by a former top Communist official with top-level insider access, the Communist intelligence services who were instrumental in the growth of narcotics trafficking, terrorism, organized crime, and money laundering were very well informed about the secret bank accounts of hundreds of top politicians, heads of state, and intelligence services around the world. One example he told me about was Ferdinand Marcos.
Second, there has been an unwritten law going back over seventy years not to throw the spotlight of bad publicity on the activities of the major Communist and former Communist countries. This reality was explicitly raised in a study following the collapse of the Soviet Union of the crimes of Communism by six French scholars, The Black Book of Communism (Harvard University Press, 1999), as follows: "The revelations concerning Communist crimes cause barely a stir. Why is there such an awkward silence from politicians? Why such a deafening silence from the academic world regarding the Communist catastrophe, which touched the lives of about one third of humanity on four continents during a period spanning eighty years?" Especially notable in this "silence" has been the major news media and the government intelligence! services and, most important, heads of state.
The tie-in between this global policy of silence respecting the crimes of Communists and waging war on terrorism, narcotics trafficking, organized crime, and money laundering is the major, if not dominant, role of the Russian and Chinese intelligence services in organizing as official state operations all four of these international crimes. This is not well known, because of the policy of silence, but it is been well documented. See Red Cocaine: The Drugging of America and the West (Edward Harle, 1999).
Since President Bush declared war on terrorism, there has been little mention of the leading role of Russia as the granddaddy of international terrorism, particularly Arab/Muslem terrorism, going back to the late 1950s when they first recruited Yasser Arafat and began forming the PLO. Another fact that has been ignored is the very successful efforts of the Russian intelligence services in penetrating the top echelons of the major religions. What is particularly important in today's war on terrorism is another simple reality. The religion the Russian intelligence service was most effective in penetrating was Islam.
Beginning in 1955, Russia's KGB also turned organized crime into a strategic intelligence operation. By 1960, they had penetrated most organized crime operations (they had infiltrated 60 intelligence operatives into the Italian Mafia alone) and with the help of their East European surrogates were beginning their own operations around the world. The people who worked with the KGB to organize global money laundering in 1965 were all highly respected officials in international finance.
The question, then, is can effective wars on these four international crimes, each of which is horrendous (Far more damage is done annually by foreign intelligence-directed drug trafficking against the United States—over 50,000 deaths, over 200,000 casualties, and over $250 billion in direct costs—than was done by the 9-11 attacks.) and all of which truly do need to be eradicated, be waged without breaking a lot of political eggs and facing up to the horrendous crimes of the Communist nations and the activities of their intelligence services? If the nature of these international crimes is not considered in planning a war, how can the war end up being anything other than an embarrassing failure as has been the case in the war on drugs since 1970?
These are critical questions facing John Ashcroft, Tom Ridge, and members of the U.S. Congress as the Victory Act comes up for consideration this fall. Unfortunately, there is no indication that those who drafted the bill understand the strategic nature of the crimes being addressed. The result is legislation directed at the tactical level, the minor street level criminals, rather than at the strategic level that has to be attacked if the problems are to be solved. What is there in the Victory Act bill that suggests it is going to change the nature of the war on drugs, which has been politically protected since President Nixon made it a major policy initiative? I see nothing that would suggest the present sponsor is any more serious than those of the past.
The problem is not money laundering at the $10,000 level or drug traffickers outside the school playgrounds. It is a massive international business with trillions of money laundered dollars and terrorist, drugs, and crime operations run as sophisticated politically protected covert intelligence operations masked under the cover of indigenous non-state players.
Indeed, one might suspect that if there were serious interest in combating these crimes—as well there should be—what would be needed would be the determination and courage to take on the enemy, as was partially done on the terrorist front after 9-11, rather than submit a naive bill with such a foolish title to Congress. The reality is that the strategic motivations behind the narcotics trafficking and organized crime as built by the Russian and Chinese intelligence services is the same as international terrorism: they are all direct attacks on our nation (and other people's countries as well) designed to undermine our society, institutions, and government and they all complement one another by design.
© 2003 Joseph D. Douglass, Jr.
Editorial Archive
Joseph D. Douglass, Jr., Ph.D., is a defense analyst, author of The Soviet Theater Nuclear Offensive and co-author of CBW: The Poor Man’s Atomic Bomb and America the Vulnerable: The Threat of Chemical and Biological Warfare. His most recent books are Red Cocaine: The Drugging of America and Betrayed: The Story of America’s Missing POWs.
