Illicit Networks, Political Instability, and Criminal Violence

Workshop in Washington, DC

May 21, 2013

This workshop was cosponsored by the Council on Foreign Relations (CFR) Center for Preventive Action

and the International Institutions and Global Governance program, and was made possible by the generous

support of Carnegie Corporation.

Rapporteur: Amelia M. Wolf, Research Associate, Center for Preventive Action

In recent years, transnational criminal networks have evolved. Criminal networks are no longer rigid,

fixed, hierarchical organizations, but have become increasingly fluid and recombinant. These trends

have resulted in a new form of relations between criminal organizations and the state as well as a

comingling of licit and illicit activities. Although the threats that criminal violence and illicit networks

pose to political stability have been a longstanding concern for policymakers, international responses

have been insufficient. Evolving criminal networks will pose new challenges and require innovative

policies and cooperation across disciplines including law enforcement, the criminal justice system, and

other functions of government.

In an effort to analyze trends in transnational criminal networks, examine the latest developments in

the field, and identify gaps and challenges in U.S. and multilateral responses to criminal violence,

CFRs Center for Preventive Action and International Institutions and Global Governance program

convened a workshop on Illicit Networks, Political Instability, and Criminal Violence. This meeting,

which took place on Tuesday, May 21, 2013, at CFRs office in Washington, DC, brought together

experts in the field of transnational crime from government, academia, the nonprofit world, and the

private sector.

The relationship between the state and criminal organizations is far more complex than previously

understood. Criminal organizations are moving from the periphery of society to the core, where they

play an active role in both domestic politics and international relations. Currently, there are two

models to explain the relationship between states and criminal organizations, and it is essential that

policymakers differentiate between them. The first is a state penetrated by transnational criminal

organizations that benefit from particular areas of government. The relationship has traditionally

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been viewed through this model. The second is a criminalized state in which criminal organizations

become instruments of state policy.

The criminalized state is rapidly becoming a more prominent model of state-criminal relationships.

The primary objective of criminal organizations is to comingle licit and illicit activities. Over time,

illicit networks have evolved to incorporate characteristics once unique to the state. To achieve this,

criminal organizations sometimes seek sponsorship from a foreign government that will protect them

from the local government; form their own sovereign principalities to gain control of a territory; or

adopt a warlord strategy. Criminal organizations are gaining increased geopolitical importance and at

times taking on sovereign characteristics and capabilities, including through land acquisition. In some

cases, criminal organizations also use terror methods to counter the state and pressure the

government to change public policy to favor the interests of the group.

An additional concern is how to interpret the perceived association between decreased violence and

decreased criminal activity. In circumstances where criminal organizations control territory, the result

may be a false sense of security when, in reality, the criminal entity has become an alternative to the

state. Interestingly, for citizens of a weak state not directly involved in illicit activities, governance by a

criminal organization can often provide greater benefits than the legitimate government. Moreover,

for citizens of a failed state, it may be the only form of government they experience. This is because a

gray economy that combines licit and illicit activities often offers more sources of monetary wealth

and greater liquidity than a legal economy. This influx of economic wealth then serves as a coping

mechanism for citizens and provides them with social benefits that were previously limited or

unavailable. Subsequently, individuals not involved directly in illicit activities may choose to support a

narco-state because the economic benefits outweigh the costs of a democratic transition, which may

include decreased income or unemployment for individuals involved in illicit activities, a period of

decreased social benefits, and the need to adjust to new (or newly enforced) regulations.

Despite these potential benefits, governance by criminal networks is detrimental. Territorial control

gives criminal organizations the power to impose taxes and administer justice at their own discretion.

Rule of law administered on a transactional basis poses a clear threat to accountability and a strong

justice system, and has not yet been tackled by international policymakers.

Recent trends in transnational organized crime also reveal a degeneration of norms. Violence has

become a primary strategy, purpose, and tool of some criminal organizations, rather than solely an

instrument to support illicit trade. Unfortunately, the expansion of criminal organizations from

family-run to quasi-national actors has resulted in a wider range of targets for violence by criminal

organizations, as the number of players has multiplied. In addition, the use of violence has become

indiscriminate in some settings, with little regard for the identity of specific targets and continued

exploitation of the unfortunate social and economic circumstances of others for personal benefit.

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At times, analysts have emphasized the danger of threat convergence, both among different groups

of criminals and between criminals and terrorists. In reality, cooperation among criminal

organizations tends to be short term and expedient, occurring in situations where there is a mutual

benefit that cannot otherwise be achieved. Similarly, cooperation between criminal and terror

organizations is typically short term, and also infrequent. Relationships between criminal and terror

organizations can be rife with suspicion, and actors often do not make actual contact. Because

terrorists often plan their own criminal schemes to control the end result, there is little incentive to

cooperate with organized criminal syndicates.

Transnational Crime and U.S. Policy Options

Workshop participants identified three major gaps in the current U.S. strategy to combat

transnational organized crime. First, inflated threats and misunderstood realities of transnational

crime pose a barrier to deeper understanding of the relationship between criminal organizations and

states, a necessary component to combating newly emerging trends in illicit networks. Second, there is

a lack of interagency collaboration and information sharing within the U.S. government that inhibits

effectiveness, efficiency, and the establishment of best practices. Finally, there is a failure to engage

external actors including civil society, media, and the private sector, as well as regional and multilateral

actors, resulting in a gap in information and tools available to policymakers.

Newly emerging threats require global governance mechanisms to address challenges posed by

transnational crime. A failure to do so could have direct negative implications for U.S. interests.

Inflated Threats and Misunderstood Realities

U.S. policymakers require unique and adaptable strategies to combat transnational crime. The political

and social motivations, strategies, and goals of transnational criminal organizations must be taken

seriously to develop effective policies to prevent the proliferation of narco-states. Political strategies

must be generated on a case-by-case basis, as there is no one-size-fits-all solution.

Barriers to effective U.S. policy responses are wide ranging and include a failure to recognize

transnational organized crime as an inherent threat to American society; a lack of engagement and

information sharing among government agencies as well as between government, civil society,

academia, and the private sector; a lack of resources and budget restrictions; and the absence of

innovative policies.

The specific threats that transnational criminal organizations pose to U.S. national security must be

highlighted in order to galvanize the American public. Often, the public do not attribute threats that

affect them directly, such as malware or identity theft, to transnational criminal organizations. By

raising awareness, policymakers can gain support from the American public to counter transnational

criminal networks abroad and protect U.S. territory from threats of illicit networks and criminal

violence.

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Lack of Interagency Collaboration and Information Sharing

For the U.S. government, combating transnational crime requires interagency collaboration and

whole-of-government approaches, including military, law enforcement, judicial, and social

strategies. Although intelligence is the first line of defense for protecting U.S. interests, there is often a

lack of information sharing among bureaucracies. In an attempt to address this problem, the Strategy

to Combat Transnational Organized Crime created a Threat Mitigation Working Group to foster

interagency cooperation. Unfortunately, budget reductions have limited the groups effectiveness.

While scarce resources could in theory foster cross-departmental collaboration (as actors seek to

utilize resources most effectively), this does not appear to be occurring. Government agencies must

take all steps necessary for collaboration, information sharing, and cooperation.

Failure to Engage External Actors

Outside of government, multilateral and regional cooperation is necessary, particularly in Latin

America. The United States should enter into partnerships with nations to develop comprehensive

capacity-building programs, rather than disjointed ones that separately address law enforcement,

justice, economics, and other sectors.

In an increasingly globalized world, civil society and the media play a large role in international affairs,

but are frequently not engaged by policymakers. Civil society organizations, media, and academia can

undertake studies and provide intelligence and information that would otherwise be unavailable to

government agencies. Additionally, the role of free press and investigative journalism are vital

components of a comprehensive approach to understanding the dynamics, motivations, and frequent

changes that occur within transnational criminal organizations. U.S. policymakers should make an

effort to collaborate with these external actors.

Private sector actors often lose sight of the fact that they are a vital component to combating

transnational organized crime, despite the fact that transnational crime negatively affects the business

environment in which they function. Private sector actors also hold political power and possess

valuable intelligence, such as a greater understanding of illicit trade and economic loopholes, which

can be harnessed by U.S. policymakers.