Llad Phillips 1 Terrorism, Skyjacking & Embezzlement Foreign and Domestic

Llad Phillips 2 Points About Terrorism  Definition: The killing and injuring of innocent civilians for political purposes  The perceived threat from foreign terrorists to the USA (at home) is relatively new (since 9/11)  Earlier skyjackings in the US were not by terrorists  Terrorism has been a threat since World War II in Europe, much of it connected to the Middle East  We can learn from comparing the US reaction to skyjacking, and attempts to control it

Llad Phillips 3 La Terreur  The Reign of Terror (5 September July 1794) (the latter is date 10 Thermidor, year II of the French Revolutionary Calendar),[1] also known simply as The Terror (French: la Terreur), was a period of violence that occurred after the onset of the French Revolution, incited by conflict between rival political factions, the Girondins and the Jacobins, and marked by mass executions of "enemies of the revolution." The death toll ranged in the tens of thousands, with 16,594 executed by guillotine (2,639 in Paris),[2] and another 25,000 in summary executions across France.[3]The guillotine (called the "National Razor") became the symbol of the revolutionary cause, strengthened by a string of executions: Marie Antoinette, King Louis XVI, the Girondins, Philippe Égalité (Louis Philippe II, Duke of Orléans) and Madame Roland, as well as many others, such as pioneering chemist Antoine Lavoisier, lost their lives under its blade.

Llad Phillips 4 The history of terrorism is a history of well-known and historically significant individuals, entities, and incidents associated, whether rightly or wrongly, with terrorism. Scholars agree that terrorism is a disputed term, and very few of those labelled terrorists describe themselves as such. It is common for opponents in a violent conflict to describe the other side as terrorists Those called terrorists can often be referred to as militants, paramilitaries, guerrillas, resistance movements or freedom fighters. However, they are united in the range of tactics they commonly employ which involves non-systemic covert or semi-covert warfare, driven by an ideological basis often political religious or socially based. They often seek to use propaganda of the deed to cause a psychological impact alongside the actions themselves to drive the aspired change.

Llad Phillips 5 Current Terrorism Issues In the News   Are terrorists criminals or military combatants?   Should terrorists be tried in criminal or military courts?

Llad Phillips 6 Motives of Terrorist

Llad Phillips 7 Assaulter’s Income Victim’s Income Total or Social Income Motivation for Violence: Antagonism Assaulters Iso-preference Lines High Low Terrorist’s Tastes

Llad Phillips 8 Timelines

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10 Timeline

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12 Imad Mugniyah: Newsweek Feb 25, ‘08

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17 Post 9-11  Attack –what –how –where –when –why? Why don’t our enemies love us?  Defense (focus) –what –how –where –when –why were we not prepared for the attack?

Llad Phillips 18 US Wars  Domestic (over here) –independence –1812 –Civil  Foreign (over there) over thereover there –Mexico: Halls of Moctezuma –Spanish: San Juan Hill & Manila Bay –WWI: France –WWII: North Africa, Europe, Pacific –Korea –Vietnam –Gulf: Desert Storm –Afghanistan and Iraq

Llad Phillips 19 Why were we not Prepared? Theme #1: “Over there… “ “ Chorus Over there, over there, Send the word, send the word over there - That the Yanks are coming, The Yanks are coming, The drums rum-tumming Ev'rywhere. So prepare, say a pray'r, Send the word, send the word to beware. We'll be over, we're coming over, And we won't come back till it's over Over there.

Llad Phillips 20 America’s Best Known World War I Song  “Over there, over there, send the word, send the word over there, that the yanks are coming, ….

Llad Phillips 21 Terrorism in the USA  Home grown  Foreign imports  Remedies

Llad Phillips 22 Over There  There have not been very many politically motivated attacks by foreign terrorists on the domestic USA until 9-11 –World Trade Center ( Feb. 26, 1993)

Llad Phillips 23 Learning from History  Skyjacking in the USA –first in the USA was 1961 –in contrast to skyjackings abroad, at most one skyjacking at home was, maybe, politically motivated by a someone with connections to the Balkans

Llad Phillips 24 Learning from Economics  Thwarting embezzlement –inspection, I. E. audit

Llad Phillips Recent History of US Terrorism  Bombings –World Trade Center, New York (Feb. 26, 1993)  6 killed, injureed –Murtaugh Federal Building, Oklahoma City –Black Churches April 19, 1995 _

Llad Phillips 26 WTC 1993 Blackhawk Down 1993 Saudi Arabia 1996 Africa 1998

Llad Phillips Do You See a pattern? Blackhawk Down Oct. 3-4,1993Mogadishu,Somalia

Llad Phillips US Embassy Bombing In Nairobi, August 7, 1998

Llad Phillips 29 USS Cole /11

Llad Phillips USS Cole attacked by speedboat in Yemen October 12, 2000

Reward: $2,000,000

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35 Total International Terrorist Attacks Office of the Coordinator for Counter-Terrorism Patterns of Global Terrorism

Llad Phillips 36 Note: The Small # of Attacks in NorthAmerica

Llad Phillips 37 Shock value Of 9/11 Few attacks In North America, but ManyCasualties

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Llad Phillips 41 Skyjackings  The first skyjacking was a Peruvian carrier in February 1931  The first skyjacking of a US carrier was a National Airlines flight destined for Key West Florida on May 1, 1961

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45 The Legend of D. B. Cooper

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47 US Response to Domestic Skyjackings  Armed Federal Marshals on Flights –mostly on flights on the Eastern seaboard corridor  Congress Passes the US Civil Aviation Security Program in 1973

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54 Terrorism Foreign Skyjackings US Skyjackings Model of US Skyjackings and Bomb Threats Bomb Threats to US Aircraft Inspection 2 Year Lag

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57 Borch Model of Inspection  Two actors –employee(embezzler) & firm –skyjacker & airport security  Two sets of values or payoffs to the outcomes  No dominant strategy for either actor  Need to keep your adversary guessing  Embezzler’s expected outcome: break even  Firm’s expected outcome: dead-weight cost of inspection

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59 Defense Against Embezzlement and Skyjacking I. Options for choice: States of the world Firm Employee Audit No Embezzle Not E  A E  Â Ê  A Ê  Â

Llad Phillips 60 Defense Against Embezzlement and Skyjacking II. Valuation of the options, i.e. choices A. Payoffs to the employee Audit Embezzle Not 00 No -  G B. Payoffs to the firm Audit Embezzle Not - C - L - C 0 No

Llad Phillips 61 Circular Contest  Best outcome for the employee –embezzle and no audit  Best outcome for the firm –no embezzling and no audit  Worst outcome for the employee –embezzle and get audited  Worst outcome for the firm –don’t audit and get embezzled

Llad Phillips 62 Payoff to the Firm + - Payoff to the Employee +- Ê  Â

Llad Phillips 63 Payoff to the Firm + - Payoff to the Employee +- Ê  Â Ê  A - C

Llad Phillips 64 Payoff to the Firm + - Payoff to the Employee +- Ê  Â Ê  A - C E  A - 

Llad Phillips 65 Payoff to the Firm + - Payoff to the Employee +- Ê  Â Ê  A - C E  A -  - L G E  Â

Llad Phillips 66 Payoff to the Firm + - Payoff to the Employee +- Ê  Â Ê  A - C E  A -  - L G E  Â Probability of Audit = 0 Probability of audit = 1

Llad Phillips 67 Firm Can Choose A Probability Of Audit Between 0 and 1  If P A = 1, then employee loses -   If P A = 0, then employee gains G  How about a probability between 0 and 1 like G/(  + G)

Llad Phillips 68 Payoff to the Firm + - Payoff to the Employee +- Ê  Â Ê  A - C E  A -  - L G E  Â Probability of Audit = 0 Probability of audit = 1

Llad Phillips 69 Defense Against Embezzlement and Skyjacking Keep Your Adversary Guessing Keep Your Adversary Guessing Expected Payoff to the employee Audit: P A Embezzle: P E Not: 1- P E 00 No: 1 - P A -  G P E P A (-  ) + P E (1 - P A ) G = 0 = No Incentive P A (-  ) + P A (- G) + G = 0 = P A (  + G) - G P A = G / (  + G)

Llad Phillips 70 PEPEPEPE PAPAPAPA 1.0 G/(  + G) Reaction Curve of the Employee to the Firm

Llad Phillips 71 PEPEPEPE PAPAPAPA 1.0 G/(  + G) Reaction Curve of the Employee to the Firm

Llad Phillips 72 PEPEPEPE PAPAPAPA 1.0 G/(  + G) Reaction Curve of the Employee to the Firm

Llad Phillips 73 Reaction Curve of the Firm to the Employee V F = P E P A (-C) +(1-P E )P A (-C) + P E (1-P V F = P E P A (-C) +(1-P E )P A (-C) + P E (1-P A )(-L) PEPEPEPE PAPAPAPA C/L

Llad Phillips 74 Reaction Curve of the Firm to the Employee V F = P E P A (-C) +(1-P E )P A (-C) + P E (1-P V F = P E P A (-C) +(1-P E )P A (-C) + P E (1-P A )(-L) PEPEPEPE PAPAPAPA C/L G/(G+ 

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76 Post 9-11  Attack –what –how –where –when –why? Why don’t our enemies love us?  Defense (focus) –what –how –where –when –why were we not prepared for the attack?

Llad Phillips 77 Defense Against Terrorists  Inspection: works against Mom and Pop skyjackers (take the incentive away); but not against terrorists ( willing to die for their cause)  Our second line of defense: Intelligence

Llad Phillips 78 How are we doing on Strategic Intelligence?  9/11 was a surprise: strike one  No WMD in Iraq: strike two  Did not anticipate revolts in Tunisia, Egypt, Libya, etc.: strike three

Llad Phillips 79 References  State Department: Counterterrorism Office – –Patterns of Global Terrorism 2003  Appendix G –Country Reports on Terrorism 2004  FBI – –The FBI’s Counterterrorism Program Since 2001

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83 Dorothy: “ Toto, I've a feeling we're not in Kansas anymore. “

Llad Phillips 84 See Ya (March 15)

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