Understanding Illicit Networks

We all know that, in recent decades, businesses have internationalized their operations like never before, but a less well-known result of globalization is that transnational criminal enterprises have also benefited enormously. Sophisticated illicit networks have emerged around the world, adept at exploiting the disjunction between global economic integration and the persistence of sovereign states. Global commerce now relies on countless shipping containers, which are rarely checked for contraband. The liberalization of capital movements and the ubiquity of information technology enables money laundering at the push of a button. Law enforcement authorities, trapped within national borders and independent jurisdictions, are running in place as illicit actors hopscotch across sovereign frontiers and exploit asymmetries in the policing of trade in narcotics, humans, weapons, and other illicit commodities.

To better understand how information technology both facilitates transnational crime and might also be harnessed to combat it, Google Ideas and CFR have launched a new roundtable series on Illicit Networks. The first joint workshop, on March 21 (“Illicit Actors: Mapping Networks, Assessing Tactics”), convened twenty prominent experts to discuss the evolving landscape of transnational crime. The wide-ranging discussion (summarized more fully here) produced several important insights.

• The biggest gap in combating illicit actors is solid data. Statistics on the scope of transnational crime are notoriously unreliable. Even the best databases, such as those maintained by the UN Office of Drugs and Crime (UNODC), depend on inputs from national governments, who have been known for political or resource motives to either downplay or exaggerate the scale of illegal activities in their country. Beyond reliable data sets and statistics, law enforcement actors lack case-specific ethnographic studies and market awareness to accurately map the supply, demand, and transit of illicit commodities. Without trustworthy data on critical price points, societal norms, and relationships among criminals, efforts to fight transnational crime will remain disadvantaged. Especially in an era of budget cuts and constrained resources, better data would help the United States and its partners understand where resources would be most useful—rather than just throwing money at the problem.
• The relationship between criminals and states is variable and dynamic: As I point out in my book Weak Links, the conventional image of the honest nation-state besieged by illicit actors is simplistic. Criminals are naturally drawn to states—or territories of states—where corruption is rife, the rule of law absent or imperfectly applied, and gaps in public services or economic opportunity provide openings for illicit actors. In some egregious (though hardly isolated) cases, the state itself becomes a fully-fledged criminal enterprise. Charles Taylor’s Liberia, for example, relied on illicit trade in diamonds, timber, and gold. Slobodan Milosevic’s Serbia similarly profited from illicit trade. The acclaimed journalist Moises Naim nicely describes this “mafia state” phenomenon in the forthcoming May/June issue of Foreign Affairs.
• Terrorists and criminals are both illicit—but very different—actors. Particularly since 9/11, national security officials have worried that occasional partnerships between transnational terrorists and criminals might become a full-blown “nexus.” This remains unlikely. To be sure, the two groups will continue to appropriate each others’ methodologies. Mexican drug cartels have used gruesome tactics to terrorize would-be snitches, rival gangs, and law enforcement, just as jihadists have used kidnapping and engaged in (or taxed) drug trafficking to secure resources.  At the same time, there are inherent limits to any strategic partnership, given the fundamentally divergent motivations of criminals, who seek financial gain, and terrorists, preoccupied with political (and in some cases religious) objectives.
• When it comes to the illicit, the impact of technology cuts both ways: The revolution in information and communications technology has opened new vistas for transnational criminality. The internet, cell phones, and computer systems provide illicit networks with new tools to traffic in illegal goods and launder the proceeds around the world. And yet state authorities can in principle exploit many of those same technologies, albeit with frequent legal restrictions, for instance by wire-tapping phone conversations, monitoring email communications, or using video surveillance technology. From a global governance standpoint, the challenge for governments is to harmonize law enforcement approaches, nurture the capacity of well-intentioned but struggling nations, and sanction noncooperative jurisdictions.
• For local populations, what is formally illegal may not seem illicit. Efforts by political authorities and law enforcement agencies to combat transnational criminal activities must consider local perceptions. In some areas, particularly impoverished regions lacking effective state presence (or where the state is historically mistrusted), criminal networks may provide impoverished populations not only with employment opportunities but also essential social services—and thus enjoy a “Robin Hood” halo. (And as one workshop participant noted, “George Washington was as dependent on the illicit arms trade to equip his Continental army as African warlords are today.”) Particularly when linked to insurgency movements, illicit networks can nurture an alternative form of governance that Vanda Felbab-Brown of Brookings labels “protostates.” In sum, the fight against illicit networks is often a competition between states and criminals for the allegiance of the population—one that the state can win only by delivering basic services, including human security. Such theories clearly hold implications for U.S. foreign policy priorities—like the “war on drugs” in Colombia and Mexico, and the war in Afghanistan, where the Taliban is deeply involved in the opium trade.
• The label “organized crime” fails to capture the diversity of today’s criminal networks: When we think of organized crime, we still imagine hierarchical, mafia-like structures that might be countered by eliminating their leadership. In fact, the landscape of illicit actors is far more diverse and fluid, dominated by decentralized, horizontal networks of varying size. Some focus intently on local markets and controlling of local territory. But other networks forge strategic partnerships across countries, and (like corporations) shift product lines and distribution channels in response to law enforcement efforts and changing input costs. Once a “pipeline” is established, they use the same conduit for new illicit commodities, often with the assistance of brokers like the infamous arms traders Leonard Minin and Viktor Bout.