1. Chapter 3 Babette Protz University of South Carolina Lancaster THE ORGANIZATION AND FINANCING OF TERRORISM

2.  Summarize rural, urban, and insurgent models of terrorism.  Trace the evolution of terrorist organizational structures.  Discuss the challenges involved in leading a terrorist group.  Describe the issues involved in terrorist financing.  Describe legal and illegal sources of income. LEARNING OBJECTIVES: CHAPTER 3 2

3.  Explain the ways funds are disbursed in an underground economy.  Describe the hawala system.  Summarize views on the political economy of terrorism.  Outline the manners in which drugs and terrorism overlap. LEARNING OBJECTIVES: CHAPTER 3 3

4.  Three models represent general trends from 1945 to the present: (1) Rural, (2) Urban (3) Insurrection  Models help to explain the evolution and practice of contemporary terrorism  They embody the philosophy behind particular types of terrorist movements MODELS OF TERRORISM 4

5.  The Cuban Revolution popularized guerrilla warfare throughout the world  Guerrilla revolutions based on the Cuban experience are typified by three phases  Phase one begins with isolated groups  Phase two merges groups into guerrilla columns  Phase three brings columns together in a conventional army. GUERRILLA WARFARE 5

6.  http://www.youtube.com/watch?v=Qb_mhiRJ Bcc&feature=related http://www.youtube.com/watch?v=Qb_mhiRJ Bcc&feature=related Discussion:  This video looked at U.S. Army Special Forces. Do you agree with the premise that guerilla warfare will become the face of modern war? Support your position.  What was your overall view of the video? GUERRILLA WARFARE 6

7.  The model for modern urban terrorism was intellectually championed by Frantz Fanon  He produced two works as a result of his Algerian experiences:  The Wretched of the Earth (1982)  A Dying Colonialism (1965) URBAN TERRORISM 7

8.  Western powers have dehumanized non- Western people by destroying their cultures and replacing them with Western values  Decolonization was destined to be a violent process  Achieving freedom was inherently violent FRANTZ FANON 8

9.  Guerrilla warfare and individual acts of terrorism as tools of revolution  Fanon argued that terrorism should not be used against the native population in general  His proposed two targets for terrorism:  White settlers  Native middle class FRANTZ FANON 9

10.  Brazilian legislator  Nationalistic Communist Party leader  Revolutionary terrorist  Designed practical guides for terrorism that have been employed for more than 40 years  Wanted to move violence from the countryside to the city CARLOS MARIGHELLA 10

11.  Focus on insurgency due to a small group of officers who began looking at military failures during the Vietnam War  Impossible to fight insurgencies with military tactics designed for terrorism or guerilla war INSURGENCY 11

12.  At the end of the Cold War, various insurgencies began growing in the vacuums left by the superpowers  Technology and weapons helped many insurgencies grow  New political atmosphere made the rise of organizations like al Qaeda possible INSURGENCY 12

13.  Top of the pyramid  Group responsible for command  Second level  Active cadre or the people responsible for carrying out the mission of the organization  Third level  Active supporters; critical to terrorist campaigns  Last level  Passive supports; difficult to identify and characterize THE EVOLUTION OF CELLS 13

14.  The Cell  Composed of four to six people  Usually has a specialty; may be a tactical unit or an intelligence section  The Column  Semiautonomous conglomerations of cells with a variety of specialties and a single command structure THE EVOLUTION OF CELLS 14

15.  Several small pyramids gather under a sheltering group that manages supplies, obtains resources, creates support structures, and gathers intelligence  Northern Ireland Unionists & Republicans  Maintain legitimate political organizations  Violent paramilitary groups have operated under the umbrella of legitimate organizations UMBRELLA ORGANIZATIONS 15

16.  http://www.youtube.com/watch?v=6KYIpuBSn9E - Part I http://www.youtube.com/watch?v=6KYIpuBSn9E  http://www.youtube.com/watch?NR=1&v=IgJq8XkoR OY&feature=endscreen - Part II http://www.youtube.com/watch?NR=1&v=IgJq8XkoR OY&feature=endscreen Discussion Questions:  How did the videos impact your understanding of modern piracy?  Are piracy and terrorist acts on land comparable? How so?  What are the international ramifications of piracy? NATO CHRONICLES – HORN OF AFRICA: PIRACY 16

17.  Today’s pirates are armed with global positioning systems, satellite phones, machine guns, rockets, and grenades  Horn of Africa  Gripped by internal and external struggles  Piracy caused by the multifaceted conflict in Somalia accompanied by the breakup of legal authority and social systems MODERN PIRACY 17

18.  http://www.marad.dot.gov/news_room_landing_page/horn_ of_africa_piracy/horn_of_africa_piracy.htm - Horn of Africa Piracy http://www.marad.dot.gov/news_room_landing_page/horn_ of_africa_piracy/horn_of_africa_piracy.htm  http://topics.nytimes.com/top/reference/timestopics/subje cts/p/piracy_at_sea/index.html - Piracy at Sea http://topics.nytimes.com/top/reference/timestopics/subje cts/p/piracy_at_sea/index.html MODERN PIRACY 18

19.  It is possible to chart the structure of any organization  Terrorist leaders have special organizational problems  Terrorism demands secrecy  Secrecy prevents effective communication MANAGING TERRORIST ORGANIZATIONS 19

20.  Decentralization offers relative security  Very few people know many other members of the organization.  Decentralization paves the way for potential splintering or misunderstandings MANAGING TERRORIST ORGANIZATIONS 20

21.  Another problem of terrorist management is that of gaining immediate tactical support for operations.  There is a need for active supporters  Consequently, the majority of time is spent creating networks of active supporters, not launching headline- grabbing operations. MANAGING TERRORIST ORGANIZATIONS 21

22.  The size of a terrorist organization affects its ability to operate over time.  Large groups last longer than small ones.  Terrorists need to create a large following to conduct a lengthy campaign.  However, terrorism almost always involves violence from an unpopular political fringe movement  Terrorists are often unable to form a large constituency to support the campaign. GROUP SIZE AND LENGTH OF CAMPAIGN 22

23.  A terrorist campaign promises the greatest opportunity for success  Political revolutionary and radical groups, however, do not have the popular appeal needed to gain support for their activities  Results in many terrorist activities remaining isolated – never growing into a campaign GROUP SIZE AND LENGTH OF CAMPAIGN 23

24.  Criminal enterprises  Drug trade  Conducting illegal business activities under a legal cover  Smuggling money  Identity theft  Security fraud  Extortion  Charitable contributions  Nongovernmental organizations  Banks  Wire transfers  Normal employment FINANCING MODERN TERRORISM 24

25.  FBI estimates that the underground economy produces $500 billion per year  Terrorists not only move funds but also smuggle stolen goods and contraband  Gglobalization terrorism has created opportunities for profits in diamond trade NETWORKS AND SYSTEMS 25

26.  Black Market Peso Exchange  Drug dealers sell their products in the US and accumulate large amounts of US currency  The drug dealers end up with “clean” Colombian pesos, and the US currency accumulated from illegal drug sales is hidden from formal audits HIDDEN TRANSFERS 26

27.  Hawala System  Caravan leaders would visit merchants and pay for goods with a promissory note  When the caravan reached its destination, the leader sold goods and the distributors would pay the caravan leader with promissory notes  The leader returned home, presented the note, and the local chit dealer paid the debt HIDDEN TRANSFERS 27

28.  New economy of terrorism produced after the fall of the Soviet Union and subsequent globalization  ETA tried to gain control of the economy  They forced Spanish businesses out of the Basque areas of northern Spain  Basque region became a failed state  ETA established an illegitimate economy in a shell state POLITICAL ECONOMY OF TERRORISM 28

29.  Terrorists using either terrorist tactics to support drug operations or drug-trade profits to finance terrorism  Terrorists are involved in the international production and distribution of drugs  Narcotics trade is one of their primary sources of money NARCOTERRORISM 29

30.  Hezbollah and Hamas use the Latin American drug trade to raise funds  Islamic groups get most of their money through the drug trade in central and Southeast Asia  Seven drug trafficking organizations dominate the political landscape in Northern Mexico  Los Zetas uses Hezbollah to launder drug profits while Hezbollah uses the payoffs from Los Zetas to finance terrorist operations DRUGS AND TERRORISM 30

31.  Critics say combining drug problem with terrorism confuses two different issues  The 9/11 Commission dismisses that drugs were linked to al Qaeda’s attack  Saudi money can be traced to violence; spread of militant Islam is not about drugs  al Qaeda’s use of heroin to finance the jihad ranges from believable to fantastic NARCOTERRORISM CONTROVERSIES 31

32.  http://www.youtube.com/watch?v=zJaxpreK0 DE http://www.youtube.com/watch?v=zJaxpreK0 DE Discussion Questions:  Considering the controversies addressed in the text and the testimony in this video what is your opinion on narcoterrorism? Support your position. NARCOTERRORISM 32

33.  Terrorist organizations are as complex as any other social organization designed to accomplish a mission.  They are hampered in their effectiveness due to the secret nature of their operations.  Most organizations are designed to either support guerrilla movements or to operate as a terrorist movement. CHAPTER TAKE AWAYS 33

34.  The former organizations use terrorism selectively while terrorist groups simply terrorize as a strategy.  All groups require funding.  This caused some analyst to focus on the fiscal aspects of terrorism, believing that terrorists used money in the same way as other organized criminals. CHAPTER TAKE AWAYS 34

35.  Investigations revealed that the money trail in terrorism differs from the flow of funds in other criminal enterprises because special structure of terrorist operations.  It is important to understand the financing of terrorism because it is an important intelligence tool. CHAPTER TAKE AWAYS 35