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Crime, Law & Social Change 37: 311–355, 2002. © 2002 Kluwer Academic Publishers. Printed in the Netherlands. 311 Anticipating organized and transnational crime PHIL WILLIAMS & ROY GODSON University of Pittsburgh, The Matthew B. Ridway Center for International Security Studies, 4G23 Forbes Quadrangle, PA 15260, Pittsburgh, U.S.A. Abstract. This paper seeks to identify ways in which governments and law enforcement agencies might enhance the effectiveness of their efforts to anticipate organized crime. It starts by defining what is meant by anticipation, and differentiating it from the much more difficult task of prediction. The analysis then identifies some of the methods and models that are generally accepted as part of the existing knowledge base on organized crime and highlights how these can be used to anticipate future developments and to develop warnings about how criminal organizations might evolve and behave in the future. The knowledge base includes political, economic, sociological, strategic, and composite models and shows how they provide a foundation for anticipating future developments in organized crime. The models are either models about the kind of environment in which organized crime flourishes or models about the ways in which organized crime behaves. What we do, in effect, is to identify and elucidate ‘models’ in ways that provide propositions about the kinds of developments, innovations or changes we might see in organized crime (both domestic and transnational) in the future. Underlying indicators provide warning about future manifestations of organized crime. Anticipating these manifestations provides a basis for appropriate preventive, defensive or mitigating strategies. Finally, the article provides some examples of specific techniques of information collection and intelligence analysis that might assist in this task of anticipation. Introduction Organized crime has reached levels in the post-Cold War world that have surprised even close observers. Many criminal organizations have not only become transnational in scope but also exhibit a degree of flexibility and adaptability in methods and modes that poses considerable challenges for intelligence, law enforcement agencies, and society at large. Unfortunately, there is no quick and simple methodology for anticipating the major activities of criminal organizations, operational methods for moving various forms of contraband, innovations in money laundering, the development of new mar- kets, or the measures taken by criminal organizations to counter law enforce- ment. Many criminal organizations are adept at concealment and disguise, at presenting a moving and evasive target for both law enforcement agencies and rivals in the criminal world. This is hardly surprising; if they fail in these areas then they often go out of business. What this means, however, is that the task of anticipating organized crime is particularly difficult.

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Page 1: Anticipating organized and transnational crime · PDF fileAnticipating organized and transnational crime PHIL WILLIAMS & ROY GODSON ... is striking about strategy to counter organized

Crime, Law & Social Change 37: 311–355, 2002.© 2002 Kluwer Academic Publishers. Printed in the Netherlands.

311

Anticipating organized and transnational crime

PHIL WILLIAMS & ROY GODSONUniversity of Pittsburgh, The Matthew B. Ridway Center for International Security Studies,4G23 Forbes Quadrangle, PA 15260, Pittsburgh, U.S.A.

Abstract. This paper seeks to identify ways in which governments and law enforcementagencies might enhance the effectiveness of their efforts to anticipate organized crime. Itstarts by defining what is meant by anticipation, and differentiating it from the much moredifficult task of prediction. The analysis then identifies some of the methods and modelsthat are generally accepted as part of the existing knowledge base on organized crime andhighlights how these can be used to anticipate future developments and to develop warningsabout how criminal organizations might evolve and behave in the future. The knowledgebase includes political, economic, sociological, strategic, and composite models and showshow they provide a foundation for anticipating future developments in organized crime. Themodels are either models about the kind of environment in which organized crime flourishes ormodels about the ways in which organized crime behaves. What we do, in effect, is to identifyand elucidate ‘models’ in ways that provide propositions about the kinds of developments,innovations or changes we might see in organized crime (both domestic and transnational)in the future. Underlying indicators provide warning about future manifestations of organizedcrime. Anticipating these manifestations provides a basis for appropriate preventive, defensiveor mitigating strategies. Finally, the article provides some examples of specific techniques ofinformation collection and intelligence analysis that might assist in this task of anticipation.

Introduction

Organized crime has reached levels in the post-Cold War world that havesurprised even close observers. Many criminal organizations have not onlybecome transnational in scope but also exhibit a degree of flexibility andadaptability in methods and modes that poses considerable challenges forintelligence, law enforcement agencies, and society at large. Unfortunately,there is no quick and simple methodology for anticipating the major activitiesof criminal organizations, operational methods for moving various forms ofcontraband, innovations in money laundering, the development of new mar-kets, or the measures taken by criminal organizations to counter law enforce-ment. Many criminal organizations are adept at concealment and disguise, atpresenting a moving and evasive target for both law enforcement agenciesand rivals in the criminal world. This is hardly surprising; if they fail in theseareas then they often go out of business. What this means, however, is thatthe task of anticipating organized crime is particularly difficult.

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It is in this area that social science and academic analysis can provideassistance to governments and the private sector, especially at the intelligenceand strategic planning levels but also at the operational level. There is a tend-ency particularly among government officials to regard the term academicas a synonym (or euphemism) for “theoretical,” “abstract,” “irrelevant,” or“impractical.” The argument, here, however, is that social science theories,concepts and models, if used judiciously and with an awareness of their lim-itations, have significant utility. They can help to inform policy making andfacilitate the development of strategies that are also more pro-active than isoften the case in law enforcement. In effect, the earlier the warning the less thepolicy and law enforcement response has to be a scramble to catch up, and thegreater the prospect that effective and coherent strategies can be developed.Among the developments it is important to anticipate are the following:

• The overall level and scope of organized crime within countries, withinparticular regions, and at the global level. As a subset of this, it is ne-cessary to be concerned with possible redistribution of criminal activityfrom one region to another, perhaps because the opportunities are greaterand the risks are lower.

• A continued increase in the level of transnational organized crime, i.e.crimes that involve the crossing of border by the criminals themselves,the products that they are supplying, or the proceeds of their activities.

• The relationships between criminal organizations and government of-ficials which can be instigated by either party but are established andmaintained for the benefit of both. Symbiotic relations of this kind –sometimes termed the political-criminal nexus – have been important inthe rise of organized crime in a number of countries and are also one ofthe biggest obstacles to effective action against organized crime.

• Changes in the pattern of criminal activities, both domestic and transna-tional, including the development of new illicit market niches or thesupply of new products and services.

• Strategies that transnational criminal organizations use in their efforts tocounter law enforcement and to manage the risks they face as a result oflaw enforcement activities. These include efforts by organized crime toinfiltrate government and law enforcement both directly and through thecreation and cultivation of corruption networks.

• Efforts by organized crime to infiltrate businesses and financial insti-tutions. Which businesses are particularly vulnerable and what are thecharacteristics that make them so? What are the critical entry points intobusiness that need to be protected?1

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• Cooperative relationships among local, regional, and global criminal or-ganizations that provide multiplier effects for criminals and make thetask of law enforcement even more formidable.

• The rise and fall of criminal organizations. There is a constant dynamicto the criminal world with some groups in decline and others emer-ging. This can have important implications for the kind of expertise thatlaw enforcement needs in terms of languages, cultural understanding,diversity of recruits etc.

• The results of success. What might be the unintended results of success-ful counter strategies? Are there ways in which we might be worse offas a result of our successes, keeping in mind the “pillow” or “ballooneffect” increasingly familiar in the drug trafficking business?

This is not intended as an exhaustive list; it serves merely to identify someof the dynamics of organized crime, operating both domestically and at atransnational level, that require greater illumination and, where possible, an-ticipation.

This paper starts by defining what is meant by anticipation, and differen-tiating it from the more difficult task of prediction. The paper then identifiessome of the methods and “models” that are generally accepted as part ofthe existing knowledge base on organized crime and highlights how thesecan be used to anticipate future developments and to develop warnings abouthow criminal organizations might evolve and behave in the future. The know-ledge base includes political, economic, sociological, strategic, and compos-ite models and shows how they provide a foundation for anticipating futuredevelopments in organized crime. The paper identifies and elucidates under-lying conditions that provide propositions about developments, innovations,or changes in organized crime, and future manifestations of organized crime.Anticipating these manifestations provides a basis for appropriate preventive,defensive or mitigating strategies. Finally, the paper provides some examplesof specific techniques of collecting information and intelligence that mightassist in this task of anticipation.

What is meant by anticipation

The Oxford English Dictionary defines the verb anticipate as: to seize or takepossession of beforehand; to use in advance; to spend (money) before it is atone’s disposal; to take up or deal with (a thing) or perform (an action) beforeanother person or agent has had time to act, so as to gain an advantage; todeal with beforehand, forestall (an action); to be before (another) in acting, toforestall; to observe or practise in advance of the due date; to cause to happenearlier, accelerate; to occur earlier, to advance in time; to take into consid-eration before the appropriate or due time; to realize beforehand (a certain

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future event). Anticipation is, of course, related to these various meanings ofanticipate, but is also defined as intuitive preconception, a priori knowledge,precognition, and presentiment.

The notion of anticipation that we are emphasizing here involves develop-ing information and analysis that enables governments and non-state agenciesto be prepared for new directions in organized crime, and in so doing to havean enhanced capacity to take precautionary or defensive measures in order togain an advantage and in some cases to forestall or pre-empt these new dir-ections or initiatives. Effective anticipation requires an effective knowledgebase, makes good use of underlying warning indicators, and requires intelli-gence that is both timely and actionable. While this might seem obvious, whatis striking about strategy to counter organized crime in the past is that it hasrarely succeeded in moving beyond the reactive. Usually, it has been runningto catch up with the criminals. There are good reasons for this – including thereluctance in law to take action until a crime is committed and the difficultyof justifying action against future challenges when there are already manyexisting problems, challenges and cases to deal with. Nevertheless, thereare also some less positive reasons, including the focus on individual casesrather than the overall phenomenon under investigation, a clear disdain forstrategy in some government circles, and a reluctance to blur or cross thetraditional distinctions between social science research, intelligence, and lawenforcement.

Difficulties of anticipating organized crime

Anticipation, whether of nature, or man-made initiatives is inherently prob-lematic. When trying to anticipate organized crime and transnational organ-ized crime, the problems are compounded by the capacity of criminal organ-izations to conceal their activities within a variety of licit transactions, to actrapidly in order to exploit new opportunities, and to reconfigure and recon-stitute organizational structures in response to law enforcement successes.Consequently, our propositions about future behavior are conditional or con-tingent rather than scientific laws. We are not offering a crystal ball that can beused for predicting new criminal organizations, new modalities of organizedcrime, or new strategies implemented by criminal enterprises. Nor is thereany suggestion that we can develop absolute predictions based on the identi-fication of necessary and sufficient conditions for a particular development tooccur. Social phenomena are often too complex for social science to emulatethe natural sciences. However, careful use of models and extrapolations frompast experiences enable us to contend that if certain conditions are presentthen there is a serious probability that particular kinds of developments willoccur. By taking existing knowledge about organized and transnational crime

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– much of which is encapsulated in so-called models – and using this as aframework for thinking systematically and imaginatively about the future itis possible to make contingent propositions about the further evolution oforganized crime.

Models and their implications

In recent years there have been critical failures in anticipating the expansionof organized criminal activities in many places such as Mexico, Russia, andChina. Yet such failures encourage the development of both more knowledgeand more refined models that, if used with care and judiciousness, can providea significant starting point for extrapolation and successful anticipation offuture developments. Accordingly, this section identifies models of organizedcrime and then extrapolates from them contingent propositions about futurebehavior. There are various ways of classifying the existing models or frame-works at the national and transnational levels. Here they are organized underfive major headings: political, economic, social, strategic, and composite orhybrid models. Variants of each model also are discussed. The models areof two kinds: models of conditions – political, economic, and social, – thatare conducive to the expansion of organized crime, and models about howorganized crime operates. In effect, they cover both the attributes of the en-vironment and the attributes of the actors. Some are well-established; othersmore recent. We have chosen them, however, on the basis of their utility inhelping us anticipate future developments in organized crime.2 In each case,we provide a succinct summary of the central ideas and hypotheses embed-ded in particular models or approaches and a series of propositions regardingfuture directions and activities of criminal organizations that stem from thesemodels.

Political models

Weak statesPolitical models revolve around the nature of the state and political institu-tions. Critical dimensions appear to be the strength or weakness of the state,the extent to which its government is authoritarian or democratic, and thedegree of its institutionalization of the rule of law.3 Strength and legitimacyof the state are among the most important determinants in the work of severalauthors. These include Francisco Thoumi who argues that Colombia becamecorporate headquarters of the cocaine trade because the weaknesses of thestate gave Colombian drug traffickers an important competitive advantageover their counterparts in Peru and Bolivia.4 Colombia had an extremely

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polarized political system that was characterized by a high level of viol-ence. The low level of effectiveness and legitimacy of the state meant thatdrug trafficking organizations could operate with a high level of impunity.During the 1990s, in particular, the lack of financial support for electioncampaigns provided a perfect way for drug trafficking and organized crimegroups to obtain access to the political elite and to develop and perpetuatepolitical-criminal symbiotic relationships.

Another perspective on the weakness theme was provided in the analysisby Diego Gambetta to explain the rise of the Mafia in Sicily.5 He suggests thatmafias come into existence in order to provide private protection and contractenforcement. They arise where the state itself is incapable of providing suchprotection and, in this sense, are a necessary evil. The Mafia in Sicily, inhis view, came to monopolize the business of providing private protectionand contract enforcement, filling the vacuum and offering services that inmost other countries were provided by the state. Organized crime evolvedfrom there, and in the period after the Second World War developed a sym-biotic relationship with the Christian Democratic party that was based in parton Mafia help in mobilizing votes during elections. The political-criminalnexus in Italy was a major factor in allowing the Mafia not only to remain adeeply entrenched part of Italian social, economic and political life but alsoto operate with a high degree of impunity – at least until the 1980s.

Strong regimes becoming weakWhile weak states have long been associated with the rise of organized crime,there kas been a more recent recognition that strong authoritarian regimes canalso act as incubators for organized crime. These regimes are generally char-acterized by one-party rule, a lack of oversight of the ruling elite, an absenceof checks and balances and civil society, and the prevalence of patron-clientrelations. The conditions for corruption – described by one analyst as “mono-poly plus discretion minus accountability” – are almost always present inauthoritarian states and exploited by officials who often extend their corruptactivities into links with criminal organizations.6 In effect, this kind of stateencourages the development of organized crime – but within limits that areestablished, defined, and maintained by state authorities. Criminals tend to beat the service of the political establishment rather than a threat to it. Tradi-tionally, Mexico and the former Soviet Union approximated this situation.7

Both had organized crime, but it was muted rather than overt, its realm of op-erations circumscribed by the power and authority of states with strong socialcontrol mechanisms. There were collusive relationships between criminalsand state or party officials – but they were under the control of the officialsrather than the criminals.

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With the transition from authoritarian to more democratic forms of gov-ernment in the 1990s, however, not only was the existing pattern fundament-ally altered but also this controlled equilibrium was destroyed. The trigger tothe upsurge of organized crime was a weakening of state structures that seemsto be an inevitable accompaniment to the transition process. In the Russiancase, the collapse of the Soviet state with its well-established mechanismsfor social and political control, and the moves towards democratic structuresand procedures, changed the power relationship between officials and thecriminals. Without a strong enforcement apparatus to ensure the criminalswere kept within existing boundaries, organized crime was able to expand thescope of its activities in ways that were unprecedented. Symbiotic or collusiverelationships remained, but the establishment was no longer the dominantpartner. The change was reflected in patterns of corruption – which wereno longer intended primarily to enrich the nomenklatura but to ensure thecriminals were able to act with impunity. The result, of course, was a majorexpansion of organized crime in Russia and other Newly Independent States.

The process was accelerated by hyper-inflation, unemployment and a gen-eral decline in economic conditions which provided both incentives and pres-sures for criminal activity as a means of survival and advancement in a neweconomic environment. Indeed, the distinctive feature of the post-Soviet stateswas their “dual transition” – from authoritarianism to democracy and from acentrally-controlled economy to freer markets. With political change accom-panied by economic reform the absence of legal and regulatory frameworksfor new businesses provided major opportunities for organized crime to ex-pand the domain of its activities. The result – and this is where there is aninteresting parallel with the Sicilian experience – is that criminal organiza-tions in Russia and elsewhere in the Newly Independent States helped fillthe regulatory vacuum. The need for protection, debt collection, and con-tract enforcement for business provided a whole new set of opportunities andfunctions for Russian criminal organizations. With the state failing to providewhat was needed, organized crime came to play a significant role in the Rus-sian economy. At the same time, the lack of safeguards in the privatizationprocess ensured that criminals and officials were the major beneficiaries.

There are variations on this theme in Mexico. Political corruption and thesystem of bribery and corruption have been present at least since Spanish rule.These conditions continued in the 20th Century, during most of which the PRIhad a virtual monopoly of power. Politics and society during this period werebased on patron-client relations and the relationship between government andorganized crime accorded with this general pattern. Leaders of the govern-ment and ruling party used organized crime for personal enrichment and toprovide funding for the social control apparatus. In turn, they allowed organ-

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ized crime to operate with a high degree of immunity. Lupsha and Pimentelhave termed this the Elite-Exploitative model – a term that could be appliedequally well to authoritarian regimes.8 However, in Mexico and elsewherethis situation has broken down. As the PRI dominance of both political andeconomic sectors eroded, so did its control over organized crime. As a result,organized crime in Mexico – helped also by links with Colombian drug traf-fickers and proximity to United States markets – expanded. In an interestingcontrast with the Russian (and Italian) case, local extortion in Mexico hasbeen far less pervasive. Organized crime in Mexico has taken the form pre-dominantly of trafficking in drugs, people, motor vehicles and various otherforms of contraband. This is not entirely surprising. The proximity of the USmarket as well as a long tradition of smuggling across the common bordermeant that organized crime focused its activities predominantly in this area.Such variations notwithstanding, both cases are examples of the weakening ofauthoritarian states, with far-reaching implications for the level of organizedcrime.

Even some parts of pluralistic democratic systems can be so strong thatthey encourage or facilitate criminal activities. In New York, for example, theeffective licensing and regulatory practices, in effect, very strong state mech-anisms with little real accountability, transparency, or rule of law, apparentlyhad some of the characteristics and incentives to criminality seen in a numberof authoritarian systems. The US Cosa Nostra was able to benefit from thesearrangements for many decades, dominating a variety of industrial sectorsand the construction industry in particular. In the 1990s, however, changes inaccountability and the development of more effective rule of law mechanismsat the state, federal, as well as New York City levels, apparently led to thediminution of Mafia control.9

Weak states characterized by ethnic conflict or terrorist activityFertile soil for the growth of organized crime is also found in states that, ineffect, implode or disintegrate. The low level of legitimacy of some states cantake the form either of ethnic secession movements or an attempt to obtaincontrol of the state apparatus by force and exclude competing factions. Wherethis results in the disintegration of the state, as in the former Yugoslavia, thereis likely to be an increase in criminal activities for several reasons.• The collapse of central authority is likely to be accompanied by a col-

lapse of the criminal justice system and the removal of constraints onbehavior. War crimes and organized crimes sometimes have the sameperpetrators.

• Competing factions or separatists often resort to criminal behavior tofund their political struggle. This was evident, for example, with the

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Kosovo Liberation Army which reportedly used profits accrued throughthe involvement of Kosovo Albanians in heroin trafficking in severalcountries in Western Europe.10 During the last several years of the 1990s,the number of Kosovo Albanians arrested in Europe for drug traffickinghas increased significantly. The US and many Latin American govern-ments also claim similar developments occurred in Peru in the 1980s(e.g., Sendero Luminoso), and with the Colombian FARC, ELN, and“paramilitaries” in the 1990s.

• Conditions of chaos provide a fertile ground for criminal entrepreneur-ship and a lucrative payoff for the supply of even legal goods that arein high demand but low supply. Those who can supply goods that arenot readily available reap large rewards. Ironically, the opportunities forcriminal profiteering in regions of ethnic conflict are increased signific-antly by the imposition of international embargoes which create illegalmarkets such as those in the Balkans. During the war in Bosnia, for ex-ample, the Serb paramilitary leader Arkan (formerly a contract killer forthe Yugoslav Communist party, and wanted for armed robberies in theNetherlands and Sweden) gained control of gasoline and other productsand, according to the UN War Crimes Tribunal, became wealthy as aresult.11

• The cessation of conflict can also lead to an upsurge of organized crimeas former combatants use their expertise in violence in furtherance ofcriminal activities. The end of the war in Bosnia, for example, was asso-ciated with the spread of organized crime from the Balkans into Centraland Western Europe. Criminal groups from the Balkans have not onlybecome active in Austria and elsewhere, but are also extremely violent.A major study of organized crime in the Netherlands noted that “out-side the circles of Dutch criminal groups, it is mainly former Yugoslavgangs that repeatedly exhibit a willingness to use violence against policeofficers.”12 This is hardly surprising given the number of specialists inviolence who had graduated from military to criminal activities.

None of this is to claim that all domestic conflicts, whether based on ethnichatred, ideological differences, or religious intolerance, have an organizedcrime spin-off. There are cases in which this has not occurred. Nevertheless,these should not obscure the fact that in an era when conflicts over identityand political power have become ubiquitous – and funding from other stateshas become far more tenuous than during the Cold War – one of the mostimportant means of obtaining the funding for political and military struggleis through criminal activities, a development that typically results in “fighters-turned-felons.”13

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Similar dynamics are evident in countries in which unsatisfied demandsfor self-government among a significant minority of the population have gen-erated terrorist campaigns. In some of these terrorist groups engage in crim-inal activity to fund their political activities. The Basque ETA, for example,has a subordinate organization called KAS that typically committed crimefor profit on its behalf, collected “revolutionary taxes,” and had control overJarrai, a youth group which is heavily involved in street violence and providesan important source of recruitment.14 Similarly during the 1980s surprisingnumbers of Tamils were arrested in Europe for drug trafficking. Even theIRA, which obtained much of its financing from voluntary contributions,helped to finance its armed struggle through a variety of criminal activitiesranging from video piracy and Eurofraud to bank robberies, extortion of smallbusinesses and the theft and sale of construction equipment from Britain.15

One possibility for the future – and this is speculative – is that someterrorist groups will transform themselves into criminal organizations primar-ily focusing their activities on illegal profit-making activities. For example,where a political settlement removes the political rationale for continued vi-olence or where some members of terrorist organizations are so hooked onthe lifestyle and so attracted by the profits, they are tempted to continue theillegal profit-making – for mercenary rather than political reasons. In North-ern Ireland, for example, some terrorists, instead of reverting to law-abidingcitizens, have become full-time criminal entrepreneurs. There are precedentsfor this. Perhaps the most notable of which is the transformation of ChineseTriads from political to criminal organizations. Initially established in the17th Century to oppose the Qing dynasty, the many Triads were bereft oftheir cause by the collapse of the Qing and the establishment of the Republicof China in 1912. While some members entered politics, “those who werenot absorbed by the political machine returned to the well-established Triadorganizations for power and status. However, without a patriotic cause to pur-sue, the secretive and anti-establishment nature of the organizations helpedtransform them into criminal groups.”16 This kind of transformation frompolitical activism or terrorism to organized crime is not pre-ordained, but is adistinct possibility that needs to be considered.

Democratic states with high legitimacy as crime resistant statesIdentifying the conditions under which organized crime can flourish is alsosuggestive of conditions which it finds inhospitable. Well-functioning demo-cracies with a high level of political legitimacy, a strong and deeply en-trenched culture of legality, rule of law, structures for accountability andoversight, and high levels of transparency inhibit the emergence of organizedcrime. If these characteristics are present, it is more difficult for organized

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crime to develop a symbiotic relationship with the political and administrativeelites and to come into the mainstream of political life in the country.

Resulting propositions about the political environment and organized crimeFrom all this it is possible to formulate several propositions about the setsof conditions under which criminal organizations develop and flourish – andconversely do not develop – in particular states:

• States that are weak provide a congenial home base for criminal organiz-ations. Operating from this home base criminal groups can extend theiroperations elsewhere, especially if they have products (whether drugs,women, or arms) which are in demand elsewhere.

• Strong states act as incubators for criminal organizations but generallysucceed in circumscribing and containing these activities. The weaken-ing of these states, either gradually or suddenly, as part of a transitionfrom one form of political and/or economic system to another, facilit-ates the expansion of criminal activities well beyond the previous limits.Although the political-criminal nexus that developed in the previous re-gime will tend to survive the change, the power relationship within thenexus is likely to move in favor of the criminals. Similarly, corruptionwhich in the old system was used to benefit the political elites nowbecomes a major instrument used by organized crime to protect itself.These developments tend to perpetuate the weakness of the state andhinder the prospects for a successful transformation to the rule of lawand to a functioning and vibrant democracy.

• States in which there is not only a political transition but also transitionfrom a command economy to a free market will experience not only asignificant increase in the level of organized crime but also more per-vasive forms of organized crime. In such economic transformations, or-ganized crime is likely to go well beyond the supply of illicit goods andservices to become deeply entrenched in the economy. Criminal groupswill exert control over many business enterprises, especially those inthe export sector, will have a significant influence on financial institu-tions such as banks, and will also demand protection money from largeand small businesses alike. Extortion will become one of the staplesof organized crime in transition economies as criminal groups developparasitical relationships with new enterprises. The converse is that instates in which the transition is only political, organized crime will notdevelop in these directions to anything like the same extent.

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• States in which there are ethnic conflicts or terrorist movements are alsolikely to see an increase in organized criminal activity, as are neighbor-ing states, especially in weak or ungovemable regions.

• Peace agreements in ethnic conflicts, civil wars, or states in which terror-ist groups have been active sometimes generate an increase in organizedcrime if former members of military or para-military organizations turntheir attention to crime for mercenary or personal, rather than political,reasons.

Although the proposition about the transformation from a command economyto the free market suggests that it might be possible to anticipate, in broadterms, the form that criminal activities will take in certain kinds of transition,for the most part the political models help us to understand the scale of or-ganized crime and the conditions that lead to its increase. The various modelsare encapsulated in Table 1:

Other models provide opportunities to anticipate in more detail the activit-ies and strategies of criminal organizations at both the domestic and transna-tional levels.

Economic models

There are two closely related economic models that provide a basis for anti-cipating future trends in organized crime. The first is about market demandand the nature of criminal markets; the second is about the way criminalenterprises behave in criminal markets. Both models emphasize the profitmotive and economic considerations as opposed to political conditions. Bothalso provide insights into the kinds of organized crime behavior that it mightbe possible to anticipate.

The market modelThe first model focuses on the dynamics of supply and demand in illegalmarkets whether local or global. An illegal market has been defined as “aplace or situation in which there is a constant exchange of goods and ser-vices, whose production, marketing and consumption are legally forbiddenor severely restricted by the majority of states. Moreover, the activities ofthat illegal market are socially and institutionally condemned as an inherentthreat to human dignity and the public good. Typical markets of this kind . . .

include hard drugs, illicit arms sales, trade in economic and sexual slavery,capital originating from criminal activity, and deals involving secret informa-tion and intelligence.”17 At least four different kinds of products are the focusof criminal markets: prohibited goods such as drugs; regulated goods such asfauna and flora or antiquities; stolen (and counterfeit) goods such as cars; andproducts that are differentially taxed in different jurisdictions and are often

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Table 1.

Political conditions Implications Result to anticipate

Weak state Opportunities for organized Organized crime can flourish

crime to develop with little and use the state as a home

interference; base

Role of organized crime as

substitute for protective and

regulatory functions of the

state

Strong state becoming Initial incubation then States in transition particularly

weak expansion of power of vulnerable to organized crime

organized crime as state loses inhibiting progress toward

power democracy, rule of law, and

the free market

States characterized by Factions use criminal activities Increase in organized crime,

ethnic conflict, insurgency to fund their political struggle; including violence, within the

or terrorism and use embargoes as state and its neighbors.

opportunity for trafficking and End of conflict may lead to

profiteering transformation of terrorist

organizations into primarily

criminal organizations

Strong democratie states Constant struggle between Organized crime provides

with high levels of organized crime and law illicit goods and seeks

legitimacy, transparency, enforcement vulnerable economic sectors

rule of law but largely on the defensive

smuggled from the low tax jurisdiction to the one with higher taxes. Researchand analysis of illicit markets suggests that they are often disorganized, ratherthan highly organized, with multiple participants who cooperate and competein complex and unpredictable ways.18 Indeed, one proponent of this approachis highly skeptical about the role of hierarchical criminal organizations inillicit entrepreneurship, contending instead that organization is merely a formof govemance in, or regulation and enforcement, in the criminal world.19 Theargument is that it is individuals or small groups of members of a criminalorganization rather than the organization per se who meet the demand forillicit products.

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The critical dimension in this view is not criminal organizations, but thedynamics of illegal markets. Prohibition regimes (which simply reduce sup-ply but not demand and therefore push up price) generally encourage an influxof suppliers, varying greatly in size and power. These markets are rarelydominated by a small number of large syndicates. A good example is thetrafficking of women for commercial sex – an area of activity that is generallyregarded as being controlled by organized crime. In fact, although criminalorganizations are the single most important kind of player in this market, thereis a wide range of participants in the trade, including: brokers and agencieswho recruit the women, often using false promises of employment; corruptofficials who assist in provision of passports, visas, work permits, and anyother documentation; brothel owners and criminal groups who pay the sup-pliers and put the women to work; and corrupt policemen and politicianswho take payoffs – in money or in kind – for turning a blind eye to prosti-tution in their jurisdiction. Moreover, although some criminal organizationsare directly engaged in the trafficking, others simply facilitate the process andprotect, or “tax” the agencies and entrepreneurs involved. The implication ofall this is that the much touted monopoly control over markets is much moreelusive (except perhaps at the local level) than many traditional accounts oforganized crime imply.

The enterprise modelThe second economic model starts from the notion that organized crimegroups are essentially enterprises with the emphasis on the business dimen-sion rather than the criminal.20 There is a continuum of business enterprisesfrom licit firms which engage solely in licit businesses, through licit firmswhich sometimes act in illicit ways, to illicit firms which operate in illegalmarkets and provide prohibited or highly regulated goods and services. Thisis not to ignore the characteristics of criminal enterprises that differentiatethem from their licit counterparts – the need to conceal their activities, theimportance of security precautions, the use of violence and the use of corrup-tion. Important as these differences are, though, they should not obscure thecommonalities, the most important of which is the desire for profit. Indeed,wherever enterprises fall on the licit-illicit continuum they behave in essen-tially similar ways: they typically scan their environment for opportunities,seek to make rational judgments about opportunities and dangers, and seek tomaximize their profits where this does not involve unacceptably high levelsof risk. Not all criminal organizations engage in a formal planning process;nevertheless their thinking, intuitively or deliberately, will reflect standardbusiness needs and take into account such factors as new product opportunit-

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ies, product dominance, profit margin, market needs and opportunities, degreeof competition, risk management, retirement strategy, and the like.

Resulting propositionsAlthough there are differences among these two economic models, they bothplace considerable emphasis on the market and the opportunities it provides.They see criminals as rational actors constantly seeking new opportunitiesto maximize their profits. Furthermore, even if one accepts the argumentthat criminal entrepreneurs are usually a few individuals or small groupsand that criminal markets are not dominated by large-scale hierarchical or-ganizations, the implication is not to reject parallels with licit business. Inboth the licit business world and the world of criminal enterprises, thereare enormous variations in size and structure of the “firms.” Acknowledgingthat much criminal enterprise is run by small businesses rather than largeconglomerates simply reflects this diversity. Consequently, these two modelscan, in effect, be lumped together to suggest the following propositions aboutcriminal operations and the kinds of developments that can be anticipated:

• Criminal organizations will constantly seek new geographic markets andif these markets are lucrative will not usually be deterred unless met byoverwhelming countervailing power or cultural resistance. This helpsto explain why a growing number of criminal organizations have in-creasingly become transnational in their operations. Globalization hasoffered new opportunities and provided new imperatives for licit busi-nesses seeking to be competitive. It has had the same effect in the crim-inal world, encouraging criminal organizations to meet (or create) mar-ket demand well beyond their home state. In effect, criminal organiza-tions go where the rewards are greatest, exploiting disparities in price,as well as differential laws and regulations and culture. The implicationof this is that even states that have well-established criminal justice sys-tems that in some ways are resistant to organized crime find themselvesattracting criminal organizations that see them as a lucrative venue forbusiness. Not surprisingly, therefore, the United States has become ahost or target state for transnational criminal organizations with homebases in other states. The search for new markets also explains why,since the end of apartheid, South Africa, with its open borders, weakcriminal justice system, well-developed infrastructure and – by Africanstandards at least – high level of wealth – has become a major target forAfrican criminal organizations as well as those from elsewhere. Nigeriancriminals have transformed the South African drug market through large-scale imports of cocaine, while Chinese, Russian Moroccan, and Italiancriminals are also active in the country.21 In a similar vein, Colombian

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drug trafficking organizations, through the 1990s, developed major newmarkets in Western Europe and the former Soviet Union. This is evidentin the increasingly large seizures of cocaine in the Newly IndependentStates.

• In terms of products, the enterprise model suggests that some criminalorganizations will increasingly diversify their activities into a range ofillicit products. Among the illicit markets that have taken on new dimen-sions in recent years are commercial sex and the trafficking of womenand children, CFCs, automobile theft, and illegal trafficking in faunaand flora. Furthermore, we should expect to see both product specializ-ation and the rise of poly-commodity trafficking organizations. There isevidence of the latter in the Florida-Puerto Rico, California-Baja chan-nels which are used for bringing drugs and people to the United Statesfrom Central and South America and for taking motor vehicles fromthe United States to Central and South America. Among the criminalenterprises that are operating simultaneously in a variety of illegal mar-kets are Mexican, US, Chinese, Nigerian, and Turkish groups. Chinesecriminal enterprises engage in a wide variety of activities ranging fromthe smuggling of illegal aliens to large-scale intellectual property theftand counterfeiting; Turkish entrepreneurs traffic in heroin, people, an-tiquities, and, in some cases, nuclear materials; while Nigerian groupsin a section of Johannesburg operate both drugs and prostitution. Thispattern of diversification is likely to be replicated elsewhere.

• Just like licit enterprises seeking to minimize their tax burdens, crim-inal enterprises seek to protect their profits. They often use offshorefinancial centers and bank secrecy jurisdictions to protect their money.It would not be surprising if, in the future, they also make increasinguse of smart cards and e-money to break the audit or investigative trail.In order to keep ahead of efforts to clamp down on money launderingthrough more stringent regulation of the banking sector even in offshorefinancial centers, they have an incentive to use other mechanisms such astrusts, international business corporations, and new financial instrumentssuch as options and derivatives that protect the identity of the beneficialowner. As new offshore financial centers open up, so criminal entrepren-eurs use them, tentatively at first, and more fully as they become moreconfident of the protection they provide.

• Just as licit enterprises engage in cooperative as well as competitive be-havior, criminal organizations are likely to collaborate with one anotheragainst common adversaries, particularly law enforcement. The collab-oration may take diverse forms ranging from strategic alliances and jointventures at the most ambitious level through tactical alliances, contract

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relationships, supplier customer relations, to spot sales at the most basiclevel. Cooperation will be particularly attractive when well-establishedcriminal enterprises have saturated the existing market but are facingobstacles in their efforts to break into new markets. A local partner cangreatly facilitate such an entry and by exploiting existing distributionchannels and corruption networks can ensure the rapid development ofthe market.22

• Where cooperation has resulted in the development of major competit-ors with a large market share, criminal enterprises will seek to developalternative allies, to re-establish their market position and to diversifyinto new markets. This suggests that not only will some Colombian drugtrafficking organizations seek alternative partners to Mexican traffickingorganizations (as they seem to have done with the Dominicans) but theywill use routes that do not go through Mexico and develop new marketswhere Mexican organizations are not major players.

• To operate effectively in markets that are diffused or “disorganized”and contain multiple players, criminal enterprises will seek to developpatterns of cooperation with participants in the licit world who play acritical role in supplying the commodity (parents of villagers who selltheir daughters; officials at chemical manufacturing plants willing to di-vert precursors), in moving the commodity (customs and immigrationofficials who have to be bribed) or in selling the commodity (art andauction houses who sell antiques that do not have proven provenance).In short, any criminal enterprise seeking to develop an effective marketniche will develop significantly collusive linkages with the licit world.

• Criminal enterprises will seek to penetrate legitimate business to protecttheir funds, to provide apparent legitimacy for wealth, and, in a few casesto provide an option for a transition to licit business or retirement fromcriminal activities. Licit business enterprises also can be excellent coversfor various kinds of trafficking activities. In order to diversify and protecttheir profits, criminal enterprises will move into the licit business world,exploiting vulnerable points of entry into particular firms or industries.This was done in the garbage disposal and construction industries inthe United States, hazardous waste disposal in ltaly, and, more recently,the commodities, aluminum, banking, and export industries in Russia.Criminal organizations will not only use these licit enterprises as a coverfor illicit activities, and possibly as a further source of profit, but also,over the medium and long term, as a means of legitimization.

Whereas the political models were useful primarily for anticipating changesin the magnitude and type of organized crime, the enterprise and marketmodels provide more insight into the business opportunities and incentives

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Table 2.

Economic model Implications Result to anticipate

Market dynamics Organized crime responds to Criminal organizations will

market dynamics and exploits become major participants in a

demand for its goods and variety of criminal markets,

services especially where there but will not have monopoly

are prohibition regimes control over these markets

Enterprise model Criminal organizations will Criminal enterprises will seek

act in ways similar to licit to diversify markets and

enterprises and will seek out products, to protect profits (for

new business opportunities, example, by using offshore

structures, and strategies to financial centers), and will

maximize profits cooperate with other criminal

organizations and will collude

with various individuals,

institutions and agencies in the

licit world

that are available and the kinds of strategies that particular groups are likelyto adopt to maximize their profits. Understanding the dynamics of illegalmarkets and the business strategies pursued by criminal enterprises to shouldenable governments and private enterprises to anticipate new departures incriminal activity. This is summarized in Table 2.

Anticipation of criminal initiatives, however, requires that analysts under-stand the specific perspectives and perceptions of the criminal organizationsand understand their logic, their assessment of risks and opportunities and theconsiderations that will determine their ultimate policy choices. This themeis discussed further below.

Social models

Although the political and economic models of organized crime are amongthe most compelling, they are certainly not the only significant models. Socialmodels emphasize such factors as the cultural basis for organized crime, theidea of criminal networks as a social system, and the importance of trust andbonding mechanisms as the basis for criminal organization. Whereas politicalmodels focus on the opportunities available in particular kinds of govern-mental arrangements and enterprise models focus on the market opportunities

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and how they might be exploited, social models focus on the grass-roots level,the cultural conditions that encourage and facilitate criminality, as well as theway in which crime is actually organized.

The cultural modelOrganized crime is facilitated by particular cultural and subcultural factorssuch as patron-client relations, ties of family and kinship, suspicion of out-siders, and informal exchange networks.23 Communities where social organ-ization has these characteristics generally are characterized by the absenceof an effective rule of law system and the expectation of a culture of law-lessness. Often they also are characterized by the emergence of secret societ-ies engaged in criminal activities. In Sicily, for example, where there was apowerful tradition of clientelism in which success was believed to depend onconnections with those with power, the Mafia structure itself is territorial and“family” based. Loyalty to the local crime “family” (cosu) was reinforced byoaths and rituals designed to encourage omerta “silence before the law.”24

Indeed, the creation and maintenance of loyalty and allegiance, achievedthrough rituals and oaths and backed up by penalties for defections, wassimultaneously a sub-cultural norm and a fundamental defense mechanismagainst the power of the ruling class and its repressive legal techniques.

Traditional Chinese organized crime had similar cultural underpinnings.As one observer has noted, “In the development of Chinese crime groups,the values and norms of the Triad subculture have been paramount.”25 Ini-tially, the Triads were politically motivated secret societies and although theydegenerated into criminal organizations, their character and many of theirfunctions continued to be influenced by their origin. The criminal Triads,for example, continued to use oaths and rituals to induct new members. Inmany respects, these resembled the oaths and rituals of the Sicilian Mafia andwere similarly intended to instill a high sense of loyalty and an enormousfear of disloyalty. Indeed, the Triad emphasis on loyalty, “brotherhood” andsecrecy although not “intrinsically criminal” provided an important basis forcriminal activities.26 Yet, there has also been some dilution of this compon-ent of Chinese organized crime and the formal Triad structure and Triadnorms have become less important. As the groups “replaced their patrioticor benevolent causes with criminal activities,” other changes also occurred.27

“Membership was granted to almost anybody who wanted to join, and leaderslost track of and control over their followers. Members became interested inenhancing their individual gains. Nowadays, the Triad values of patriotism,brotherhood, righteousness, and loyalty remain only in proclamations.”28 Forsome observers, however, there is still an important cultural underpinning forChinese organized crime. This is the notion of guanxi or reciprocal obligation

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which treats family obligation as an imperative even if its spans generationsand continents. Although guanxi relationships are not as tightly enmeshed asthose of traditional Triad ties, some observers believe they provide a basis forthe global activities of Chinese criminals. Guanxi provides a basis for trustand therefore facilitates a great deal of criminal activity in the same way thatit facilitates much licit business.29

It is also arguable that cultures in which the culture of lawlessness andcorruption is endemic provide an important incubator for the developmentof indigenous organized crime and an attractive target for transnational or-ganized crime looking for new opportunities. In Nigeria, for example, thepolitical system is based largely on what has been termed “prebendalism,”that is “a pattern of political behavior in which individuals compete for publicoffices in order to use them for the personal benefit of the office-holder andhis faction.”30 Closely related to this are patronage and clientelism, patterns ofbehavior that place much more emphasis on contacts and favors as a meansof getting ahead and accumulating wealth than on norms, standards of be-havior, or the rule of law. Such a cultural climate easily condones criminalactivities so long as they are successful in the acquisition of resources. Whencoupled with authoritarian military rule that characterized Nigerian politicsfor several decades, this cultural factor helps to explain the rise of Nigerianorganized crime. High levels of education, mobility, and well-establishedtrading patterns, as well as the link to Britain, all help to explain why Nigeriancrime has become ubiquitous at the global level. Indeed, the cultural model issometimes incorporated – implicitly or explicitly – into the next model whichfocuses on ethnic networks.

The ethnic network modelEthnic and diaspora networks have been significant, particularly in the devel-opment of transnational organized crime. As one component of the broaderprocess of globalization, transnational ethnic networks transcend nationalborders and often facilitate transnational criminal activities. Even though mostimmigrants are law-abiding citizens who are more likely to be the victimsrather than the perpetrators of crimes, the Sicilian diaspora helped to bringMafia-like organized crime to the United States in the late nineteenth andfirst half of the twentieth century. In the second half of the twentieth centurythis process was extended to, among other places, Australia and Venezuela.Similarly, the Chinese diaspora brought the Chinese variant to many parts ofthe Pacific and other regions, such as the United States, Western Europe, andeven Russia. For its part, the Nigerian diaspora has allowed Nigerian criminalgroups to pose problems for law enforcement in countries as diverse as Bri-tain, South Africa, the United States, Russia, Italy, and Brazil. Colombians

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in the United States, Turks in Western Europe, and Russians in Israel havegreatly facilitated the creation of network structures for criminal activities.Indeed, ethnic communities can be an important resource for transnationalcriminal enterprises, providing recruitment opportunities, cover and support.

Recruitment based on ethnic loyalties is facilitated when immigrant groupsare alienated rather than integrated into their adopted society. As one analystobserved: “Many immigrant groups have been totally marginalized in Europe,some live in cultural ghettos. They readily provide some of the personnel forinternational organized crime.”31 Low status and poor conditions mean thatthe rewards offered for assistance in smuggling or other illegal activities arerelatively attractive in spite of the risks. Even casual participation or involve-ment on the margins can yield greater rewards than can be obtained throughthe licit economy. Furthermore, ethnically-based criminal networks are alsodifficult to penetrate since they have inbuilt defense mechanisms provided bytheir language and culture. These barriers are often strengthened by ties ofkinship, and inherent suspicion of authority. A further consideration is thevulnerability of their relatives at home to punishment should the migrantsdecide to collaborate with law enforcement in their new home country. Just astransnational corporations have their local subsidiaries, transnational criminalorganizations often have their ethnically based criminal groups and networkswithin immigrant communities.

The social network modelA third social model of organized crime is sufficiently broad to encompassboth the cultural and ethnic network models while also extending beyondthem. This can be termed the social network model. Part of the impetus forthis came from dissatisfaction with descriptions of the Mafia in the UnitedStates as simple hierarchies. Joseph Albini’s work, for example, revealed thateven Italian organized crime in the United States could best be understoodthrough patron-client relations rather than formal hierarchies.32 A similarconclusion emerged from a historical study of organized crime in New York,in which Alan Block concluded that not only was organized crime morefragmented and chaotic than believed, but also it involved “webs of influ-ence” linking criminals with those in positions of power in the political andeconomic world. These patterns of affiliation and influence were far moreimportant than any formal structure and allowed criminals to maximize op-portunities. In a similar vein, Francis Ianni highlighted the importance ofnetworks in African-American and Puerto Rican criminal activities in NewYork.33 In some quarters, however, there is still a tendency to regard tradi-tional hierarchical models such as the Cosa Nostra in the United States, as“real” organized crime, to equate hierarchy with organization, and to dismiss

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networks as disorganized crime. Such assumptions are misleading and masksignificant anticipated organized crime behavior.

This is even more apparent from the recognition given to networks as aneffective organizational form for innovation whether in business or in politics.Society has developed through various stages, each characterized by variousorganizational or institutional patterns. It has evolved through tribes, institu-tions, and markets, with networks, it is argued, now becoming a dominantorganizational form.34 At each stage a new organizational pattern does notreplace old ones, but surpasses them in efficiency and effectiveness for atleast some tasks. In the business context, the search for affiliates, allies, andpartners, and the formation of transnational business networks has becomecritical in enabling firms to compete effectively on the global level. In effect,there has been widespread adoption of the keiretsu model that was long seenas a critical ingredient in the competitiveness and efficiency of many Japanesecompanies. The internal counterpart of this has been the tendency in somefirms to seek skillful management, innovation, and enhanced productivitythrough largely horizontal network based structures rather than the traditionalpyramids or hierarchies.

The same tendency is visible in organized crime. Gary Potter, for example,has suggested that organized crime in the United States can best be under-stood in network terms, while Finckenauer and Waring, in a study on Russianemigre criminals in the United States concluded that they operate largelythrough network structures.35 Nor is reliance on networks confined to theUnited States. As one data-rich report on organized crime in the Netherlandsnoted in reference to the Dutch drug trade: “There is no evidence of one bigorganic identity at the command of one leader with various echelons function-ing quasi-automatically within it. The world of the Dutch wholesale tradingdrugs can better be described as an extensive network where thousands ofindividuals, often in cliques and groups, are linked by formal or informalrelations, or where these relations are easy to establish through ‘friends offriends’ if business so requires. Intersections can be discemed in the network,and individuals and groups with more power than others.”36 The authors alsoemphasize the dynamic quality of these networks: they contend that althoughmany of the relationships are not particularly stable, clashes among them aregenerally followed by the creation of new action sets to implement specificcriminal activities or more long-term coalitions.37

This is not surprising: networks are sophisticated organizational structuresthat are well suited for criminal activities. Among the major characteristicsof criminal networks are the following:

• They are flexible and adaptable, able to respond quickly to market oppor-tunities and to the efforts of law enforcement to disrupt their activities.

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• They are highly resistant to disruption and even when they have beendegraded have a significant capacity for reconstitution.

• They are capable of considerable expansion through recruitment of newmembers, whether individuals or organizations.

• They have a capacity to extend across national borders either throughethnic linkages or through simple business linkages that enable them toexploit new opportunities.

• They can extend in ways that allow them to cross boundaries of demarc-ation such as that between the licit and illicit sectors of the economy andsociety.

• Networks seek to defend themselves through expansion into the “upper-world” and recruitment of politicians, bureaucrats, judges, and law en-forcement agents who are susceptible to coercion or bribery.

• Criminal networks develop safeguards against infiltration and damage.In particular, they develop mechanisms to insulate the central figureswho are responsible for organizing the core of the network and directingthe networks activities. In addition, they will develop a high degree ofredundancy and duplication, something that in licit business is regardedas wasteful and unnecessary. For criminal networks, in contrast, suchredundancy is essential. It makes them highly resilient to disruption andprovides a significant capacity for reconstitution in the event that theyare damaged by law enforcement.

In view of these characteristics, networks are an ideal vehicle for execut-ing transnational criminal activities such as drug trafficking and other formsof smuggling.38 Understanding their characteristics therefore, should enableanalysts to anticipate certain kinds of criminal behavior. Indeed, each of thesesocial models yields certain insights that can be used to anticipate some of theactivities of criminal organizations.

Resulting propositionsThese various social models yield propositions about the evolution of organ-ized crime that have implications for prevention and enforcement efforts andtheir likely degree of success:• Where patron-client relations are a key component of a national culture,

criminals will seek high level patronage and protection from the politicalestablishment. In return, they will provide either monetary or politicalfavors, or some mixture of both. This overlaps with one of the politicalmodels but whereas that model emphasizes the opportunities that comefrom weak oversight and transparency, the emphasis here is on the cul-tural conditions that transform patronage, clientelism, and culture intocriminal-political relationships.39

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• Since defections are a fundamental challenge to criminal organizationsrooted in sub-cultural norms, cooperation with the authorities will invari-ably result in attempted retribution against the defectors and their famil-ies. This can be understood partly in terms of simple revenge. Yet, suchkillings also represent an effort by criminal organizations to re-establishand re-impose norms that are not only essential to their operations butthat are critical to their sense of identity. In other words, traditionalcriminal organizations will seek to maintain or restore their sub-culturaltraditions and norms even if this requires extensive violence.

• Diaspora communities can become a base from which certain criminalorganizations operate. As a country’s population becomes more diverseso will its criminal organizations. Moreover, different criminal organiz-ations tend to develop different styles of operation. Nigerian groups forexample, typically exploit targets of convenience whether the social wel-fare system in Britain, or credit cards in the United States and Canada, orthe demand for heroin in any number of countries. Consequently, whereimmigrant communities are growing, law enforcement should expectmanifestations of organized crime to emerge from within them and tospread well beyond them. Once again this points to the need for a greaterunderstanding of the diverse forms that organized crime can take.

• Criminal networks will seek to expand and co-opt a whole set of sup-port players who provide entry points to the licit worlds of government,finance and business. Organized crime-corruption networks will becomeincreasingly pervasive and make use of the “upperworld” – professionalssuch as lawyers and accountants for services such as money laundering,of government officials for network protection and support, and lawenforcement officers for counterintelligence.

• Once established, criminal networks will not be easily defeated. Unlessthe nodes and connections that are identified and eliminated are criticalto the functioning of the network, criminal networks will simply usealternative nodes and connections. The redundancies they create as de-fense mechanisms mean that it is difficult to degrade them. Moreover,even if they are seriously impaired they will often display a remarkablecapacity to reconstitute and regenerate themselves in a short time period.Indeed, the remnants of one criminal network can continue to functioneven in truncated form. In Colombia, for example, the destruction ofthe Cali cartel meant that Colombian organizations became part of aless-concentrated trafficking network which has continued to supply theUnited States and other drug markets. The possibility for regeneration issomething that crime prevention and law enforcement practitioners canmonitor in order to minimize the prospect of being taken by surprise.

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Table 3.

Social models Implications Result to anticipate

Cultural and sub-cultural Loyalty is not to state but to Criminal organizations will

model based on patron-client family, kin or ethnic group. not only flourish but will

relations, ties of family and Personal exchange penetrate government, creating

kinship or on patterns of relationships are more crime-corruption networks

corruption important than the rule of law. that are difficult to eradicate.

Ethnic network model based Transnational ethnic networks In many cases diasporas will

on ethnic ties in immigrant and immigrant communities be followed by the growth of

communities that are marginalized provide organized criminality. For host

cover and recruitment for societies this means that

criminal organizations and are organized crime will become

difficult for law enforcement more diverse.

to penetrate

Social network model based Organized crime can best be Network organizations will

on the notion that networks understood in terms of extend into the licit political

are not “disorganized” but network structures that are and economic world and will

are highly sophisticated characterized by high levels of also extend across national

organizational forms flexibility, redundancy, and borders. Networks will prove

resilience as well as a capacity highly resistant to traditional

to cross boundaries. law enforcement attacks.

If the political models help us to understand the level of organized crime andthe enterprise and market models to understand their business strategy, the so-cial models highlight yet other dimensions. Recognizing the cultural originsof particular groups, the importance of ethnic networks as a facilitator forforms of organized crime that are novel to the host countries, the propensityof criminal networks to expand across borders and into the licit world, and thecapacity of these networks to defend and even regenerate themselves providesopportunities to anticipate developments. These models are encapsulated inTable 3.

The strategic or risk management model

Another model that has not been fully developed in the organized crime lit-erature, but that recognizes that criminal organizations are in an adversarialrelationship with government and law enforcement agencies, as well as eachother, is what can be termed the strategic or risk management model. This

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model is based partly on the proposition that criminal organizations seek notonly to maintain their survival and maximize profits, but also to minimize the“law enforcement risk.”40 It is also based on the recognition that in adversarialrelationships each side tries to anticipate the behavior of the other and actaccordingly.

While analogies such as American football or chess are over-simplisticsince they depend heavily on rules, the essence of the competitive structureis similar in that criminal organizations and government agencies are intenton outwitting each other, anticipating each other’s initiatives, and taking ap-propriate countermeasures. In some respects, of course, this overlaps with themodel of organized crime as criminal enterprise, which also recognizes thatcriminal organizations face risks from government and rival groups. It expli-citly acknowledges that criminal organizations have to operate not only in acompetitive environment, in which force becomes the arbiter of competition,but also an environment in which governments and law enforcement agenciesare, in effect, trying to put them out of business. Consequently, criminal en-terprises face a distinct form of risk which has implications for their structureand behavior. Hence, criminal enterprises are risk management entities parexcellence.41 Their risk management strategies can range from simple effortsto separate the organization (or its leaders) and the crime, or they can be muchmore elaborate and extensive.

Indeed, it is possible to identify three kinds of measures that are or can begenerally incorporated into risk management strategies:

• Initiatives designed for risk prevention whether through passive avoid-ance or more proactive measures designed to shape the environment inwhich criminal organizations operate. Criminal groups function mosteffectively when focused on entrepreneurial initiatives rather than coun-tering law enforcement. Consequently, they seek to ensure the safety ofthe leaders, the continued viability of the organizations and the immunityof their proceeds from seizure through the creation of a low-risk envir-onment and the exploitation of safe havens. The proceeds of crime inthe face of aggressive law enforcement will typically be sent to offshorefinancial centers and bank secrecy havens where they are relatively safefrom forfeiture and seizure laws.

• Defensive measures and tactics that attempt to control the risks that haveto be incurred even in a relatively benign environment. Even thoughCali drug trafficking organizations had tried to co-opt major parts ofthe Colombian government, its leaders developed extensive counter-in-telligence methods and acquired state of the art-technology to obtain ad-equate warning of law enforcement and intelligence initiatives directedagainst them.42

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• Measures designed to mitigate damage and ensure that the organizationexhibits a high degree of resilience even in a hostile environment inwhich defensive measures have proved inadequate.

Although there is some overlap among the three strategies, they are comple-mentary. The optimum strategy is to reduce risk through creating a congenialenvironment for the leadership and its activities; as in other forms of business,however, it is impossible to avoid risk altogether. Consequently, the secondcomponent of risk management consists of measures taken to defend againstor control risks. Although this can go a long way to avoiding the impositionof costs by law enforcement or rivals, almost invariably some costs will be in-flicted on the organization. It is essential, therefore, for criminal organizationsto make preparations to mitigate the damage (including, as suggested above,a reliance on network structures that can be reconstituted). Some risks can beanticipated and costs avoided; other risks and costs can be limited, containedor controlled; but some simply have to be accepted as part of the price ofengaging in a continuing criminal enterprise. The crucial thing therefore is toensure that inescapable risks and costs do not become overwhelming.

Risk management strategies developed by criminal leaders are multi-di-mensional and multi-purpose. This is not surprising. The risks they confrontare both varied and pervasive: they include risks that their illegal products willbe seized, that the proceeds of their crimes will be forfeited, that their person-nel will be killed, arrested or defect to law enforcement, that the integrity ofthe criminal network will be compromised by infiltration, and that the enter-prise will be disrupted or destroyed. Consequently, considerable energy, time,and resources are devoted to managing these risks. The strategies that resultare designed to protect a variety of things including the leadership, organiz-ational integrity, financial assets (most of which represent the accrued profitsfrom criminal activities), operational personnel, and the products of the crim-inal organization. Not all these things have the same importance, however,and both products and operational personnel will generally be regarded asless important and more dispensable than leaders and profits.

Resulting propositionsThe strategic and risk management model has significant implications formuch of the behavior of criminal enterprises. Among the kinds of strategiesand tactics that can be anticipated are the following:• Criminal leaders will be intent on creating or maintaining a safe haven,

sanctuary, or retirement strategy. One way is to take steps to ensure thattheir home base, at least, remains a congenial environment or sanctuaryfrom which they can operate with relative impunity. One of the most im-portant ways to do this is through the use of systemic or institutionalized

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corruption whereby the criminal enterprise obtains allies and protectorsat high levels in the state apparatus and the community at large. The pro-position is that this strategy is likely to become even more widespreadand that regions in which organized crime develops will face a realproblem from systemic corruption that will prove enormously difficultto reverse and eradicate.

• As part of their defensive strategy, criminal organizations will operatesecretly, denying information to outsiders, and try to learn the secrets ofrival organizations and law enforcement agencies. They will also seek topenetrate or infiltrate governments, law enforcement bodies, and privatesector security, thereby obtaining not only intimate knowledge of theirtactics and techniques, but also advance notice of any operations. Thereare many cases of this, including some in Chicago where members ofsome of the larger and more powerful street gangs became policemen.43

In other cases, drug trafficking organizations, for example in Colom-bia, used their lawyers to learn about the methods the government wasadopting against them. In yet others, groups such as the Hell’s An-gels have used bribery to corrupt policemen and thereby obtain criticalcounter-intelligence that enabled them to undermine investigations.44

The proposition here is that such activities, far from being aberrations,are increasingly likely to be the norm as organized crime, both domesticand transnational, becomes the subject of increasing pressure from lawenforcement.

• Criminal organizations concerned to protect themselves will make in-creasing use of proxies and contractors at the operational level, allowingthe proxies to incur the risks of detection and apprehension. Nigeriancriminal organizations have become particularly adept at this, using arange of couriers – from US military personnel to middle aged white wo-men – who do not fit the profile of typical drug traffickers developed bycustoms organizations worldwide. This has a dual pay-off: it increasesthe chances that the drugs will reach the market and it minimizes therisks to the Nigerian criminals who have, in effect, graduated from aservice role to a managerial position.

• Criminal organizations will become increasingly adept at disguise andconcealment of their products and will use technology, the capacity toembed illicit products in licit, and the availability of multiple traffickingroutes in an effort to circumvent the efforts of law enforcement. Oftencriminals will choose the route of least resistance, a calculation whichexplains why radioactive material trafficking had shifted from Austriaand Germany in the mid-1990s to the Caucasus, Turkey and Central Asiain the late 1990s.45

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• Criminal organizations will increasingly exploit technological develop-ments, including information technologies as a means to enhance andimprove their risk management efforts. The most obvious case in pointis encryption which has been appearing increasingly in criminal casesand offers opportunities to neutralize electronic surveillance which, inthe last few decades, has been one of the most potent law enforcementweapons against organized crime. Encryption of communications andcomputer systems will make it difficult for law enforcement to obtainadvanced warning of criminal activities, to disrupt criminal operations,and to provide evidence of criminal activities that can be used in courtcases.

If some of the earlier models help us to anticipate the extent of organizedcrime or the kinds of business strategies pursued by criminal organizations,the strategy and risk management model has very obvious practical implic-ations. Anticipating risk management strategies and the way they are imple-mented should enable law enforcement to exploit the vulnerabilities of thecriminal organizations and to impose substantial costs upon them. An assess-ment of the risk management strategies adopted by a criminal enterprise, forexample, can reveal the priorities for protection and, by implication, the majorvulnerabilities of the enterprise. This, in turn, could enable law enforcementto deploy its own efforts and resources more effectively in pursuit of highvalue targets. Furthermore, identifying the kinds of precautionary actions thata criminal organization is taking (such as contracting out for money launder-ing) provides opportunities to exploit these actions (through the creation ofmoney laundering fronts) and thereby damage and dislocate the organization.The risk management model is summarized in Table 4.

Table 4.

Risk management model Implications Result to anticipate

Risk management model is Criminal organizations will Organized crime will seek safe

based on the idea that develop a comprehensive havens from which to operate

criminal organizations are in range of measures aimed at and will look to neutralize

adversarial relationships in the prevention, control, and governments and law

which strategy is critical mitigation of the risks they enforcement agencies through

face from law enforcement corruption, counter-

and rivals intelligence and security

practices, including making

greater use of information

technologies.

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Hybrid or composite models

A fifth set of approaches to anticipating organized crime lacks the analyticalpurity of other models. It is useful nonetheless, not least because it em-phasizes the dynamic nature of organized crime. Such approaches can bedescribed as composite models. They combine, political, economic, socialand strategy factors at both the domestic and international levels. The firstexample of a composite model might be termed the transnational model. Itseeks to understand the rise of transnational criminal organizations in termsof a particular confluence of opportunities, motivations (both incentives andpressures), and resources that help to determine which groups will be suc-cessful and which will not.46 These three categories – opportunities, motiv-ations, and resources – are explored at the global and national levels. Theframework incorporates, to one degree or another, some aspects of the othermodels discussed above. The idea of weak states, for example, can be under-stood as offering opportunities, while the economic pressures from transitionsprovide incentives and pressures for entry into the criminal economy as theopportunities in the licit economy are, for the vast majority of people, verylimited. Ethnic networks are an important resource that have made it mucheasier for some criminal organizations to operate on a transnational basis withconsiderable success.

Opportunities at the global level, of course, stem from long term seculartrends in global politics and economics that have encouraged the develop-ment of a myriad of transnational organizations. The emergence of a “globalvillage” has fundamentally altered the environment in which both legitim-ate and illegitimate businesses operate. The global financial system, the freetrade system, and the emphasis on open borders, global communications andinformation systems have opened up unprecedented opportunities for transna-tional crime. At the national level, criminal organizations with the capacityfor cross border activities have flourished where the state has been weak,acquiescent, corrupt or collusive.

If global motivations for the rise of transnational criminal organizationsare diverse, the most important is the demand for a variety of illicit productsthat transnational criminal organizations are able and willing to supply –at considerable profit. For example, just as people migrate from the liciteconomy to the licit, they also try to migrate to countries where economicopportunities are greater. Immigration restrictions in some of these countriesdo not stem the flow of immigrants; they just push them into the hands ofthose, such as Chinese snakeheads, who are able to circumvent the restric-tions and move illegal migrants to their destination. The people-smugglingbusiness has become extremely lucrative and involves not only Chinese andMexican groups but also Turkish and Albanian criminal organizations.

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Similarly, in terms of pressures, continued global inequalities among na-tions and the biases of the international trade system against developing statesmake drug production in many developing countries a more attractive optionthan the cultivation of other agricultural products. At the national level, eco-nomic collapse or dislocation is an important underlying cause of the rise ofcriminal organizations. Economic depression in licit industries can lead tothose involved moving into illicit industries – and bringing with them all theskills of the traditional entrepreneur. It can also provide the trigger that takesan organization into a new phase of activity. Moreover, economic disruptionalmost certainly adds to the recruitment pool for criminal organizations, andprovides conditions in which these organizations can very easily appear as apositive rather than negative force.

Seizing opportunities and responding to pressures and incentives, how-ever, is only possible if those involved possess and are able to exploit somecritical resources. Resources can be understood in terms of skills or capab-ilities that have been built up over time. At the international level, ethnicnetworks – as suggested in the section on social models – can be under-stood as a vitally important resource for criminal organizations. It is possible,for example, that the Yakuza has become less transnational in scope thanother criminal organizations, because Japanese migrant networks overseasare far smaller and less well-entrenched than are Italian, Chinese or Nigeriannetworks.

At the domestic level resources include an entrepreneurial culture andtradition, cultural norms that encourage upward mobility by whatever meansare available and impose no social stigma for activities that are outside thelaw, a high tolerance for the use of violence, experience in smuggling and afamiliarity with corruption.

The three factors – opportunities, pressures and incentives, and resources– provide a “package” that helps to explain the rise of transnational criminalorganizations, especially when combined with some kind of trigger mechan-isms – that is, abrupt developments that bring about a change in the oppor-tunity structure, the pressures and incentives, or the availability of resourcesand that result in a shift in the level, status, pattern of activity, or strategyof organized crime. These triggers can be political (a change in the natureof the state – for example, from strong to weak), economic, (disruption andthe sudden constriction of opportunities in the licit economy) or social (forexample, the dislocation and breakdown of social norms or the flaring up ofethnic tensions). They can operate at the global or the national level. Thecrucial point about triggers, however, is that they are often very sudden, in-volve considerable dislocation, and catalyze underlying conditions in waysthat profoundly change the situation. A good example is provided by the

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upsurge of Nigerian organized crime and drug trafficking. Nigerians grewup in an atmosphere – stemming from its days as a British colony – fosteringtrade and international travel and communications. The oil boom of the 1970sexpanded Nigeria’s reach into countries throughout the world. With the col-lapse of oil prices a portion of Nigeria’s young, aggressive and experiencedentrepreneurs and traders shifted to criminal activities. Much of the energyand resourcefulness that had been dedicated to licit business activities wastransferred to fraudulent business activities and other activities such as heroinand cocaine smuggling.

A second example of this composite approach could be termed the trans-shipment model. Developed by Shona Morrison, an Australian criminal intel-ligence analyst, it seeks to explain why particular states become transit pointsfor drug trafficking orgamzations.47 Building on Richard Friman’s analysiswhich argues that states become transshipment points if they provide accessto the target or destination state for trafficking organizations and are opento easy and relatively safe transit, Morrison distinguishes between vulnerablestates and sensitive states.48 She suggests that both types of state are generallycoastal and the source of a large volume of imports to the target country.Vulnerable states are also characterized by corruption or instability or somecombination of the two. Sensitive states lack this quality but are characterizedby a “one-product economy” or a “transitional economy” or a “clean reputa-tion” (which, of course, has the advantage that incoming commodities areunlikely to be carefully scrutinized). An increase in corruption or a decline instability would, of course, move sensitive states into the vulnerable category.Morrison uses these combinations of characteristics for a country by coun-try analysis of potential transit points to Australia, but her approach couldequally well be useful to other states concerned about becoming either a finaldestination or a transshipment point for drugs and other illicit commodities.

Resulting propositionsThe composite model suggests a number of important propositions:

• As a result of globalization and both the opportunities and pressuresthat accompany it, there will be a growing tendency for organized crimeto become transnational in scope. Although purely domestic criminalorganizations can be both successful and wealthy, the power and successof criminal enterprises could depend increasingly on their capacity to acttransnationally. This will certainly be the case if the impulse to exploitglobalization is as compelling in the world of criminal enterprise as it isfor legal businesses. The corollary is that existing criminal organizationswhich are already transnational in scope will expand their operationsin the search for new markets. This has certainly been the case with

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Colombian drug trafficking organizations which have increasingly sup-plied markets in Western Europe, the former Soviet Union, and SouthAfrica.

• Transnational criminal organizations will increasingly exploit licit trans-national business to disguise their illicit activities. Specific cases of thiswill continue to include manipulation of import and export prices toprovide a cover for money laundering and the use of containers for drugtrafficking and other contraband smuggling, including – often with tragicconsequences – the trafficking of illegal aliens.

• Using the transshipment model, it is possible to look at existing andemerging markets for drugs and other illicit products and then to identifyspecific countries that are likely to be used for transshipment – especiallyas governments try to inhibit or contain existing transshipment efforts.In this connection, Brazil is likely to become particularly important fortransshipment as increased efforts are made to combat drug trafficking tothe United States through Mexico and the Caribbean. In addition, Brazil,which scores high in terms of opportunities, motivations and resourcescould emerge as an increasingly important player in the transnationalcrime world with a role going well beyond drug transshipment.49 Amongthe factors that suggest this are: a capacity for drug cultivation; a weakcentral state which not only lacks control over large portions of thecountry outside the major cities but also tolerates no-go areas in someof these cities; a clientelist political system with well-established pat-terns of corruption; a sophisticated infrastructure that is already usedto facilitate transportation of illicit products and to launder proceeds ofcrime; extensive trade patterns that could be used as cover for variousproducts, and existing criminal organizations which, although largelylocalized, are well entrenched and, given the highly cosmopolitan natureof Brazilian society, are likely to develop links with criminal groupsfrom elsewhere. The mix is suggestive of a state that at the very leastneeds to be watched carefully.

• We will see the emergence of several other countries as home states formajor transnational criminal organizations. Even if there is some levelof organized crime associated with these states at the moment, thereare likely to be far-reaching shifts in the power, wealth and level ofactivity of existing groups as well as the development of new criminalorganizations. A prime candidate for this is China, which has extensivecorruption networks, large disparities in wealth, a central governmentthat finds it difficult to exert control over rural provinces, the develop-ment of people-smuggling enterprises and counterfeiting in its southerncoastal regions, large ethnic networks overseas held together in large

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part by the concept of guanxi, and the potential for a transition from acommunist political system to something else. Hong Kong potentiallyprovides an important outlet for illicit as well as licit commercial activ-ities. The triads that traditionally operated from Hong Kong, Macao andTaiwan still exist and are forging cooperative relationships with groupsfrom the mainland. Among the possible triggers that would help to gen-erate a significant increase in the power and reach of Chinese organizedcrime are a change in the system to explicit rather than tacit capitalism,a loosening of political controls (which at the moment, are imperfectlyapplied but still impose some degree of restraint on criminal groups),some kind of economic crisis that halts or reverses the rapid economicgrowth that has been achieved in recent years and precipitates large-scalemigration from the licit economy to the illicit, and the expected massivemovement of peoples from rural to urban areas.

• In the same vein, Cuba will become both home and host state for crim-inal organizations. Cuba has in place extensive corruption networks andthe substantial informal economy or black market that almost invari-ably accompanies a political and economic system that is notoriouslyinefficient. There are also high levels of poverty and limited economicopportunities in the licit economy. The transnational linkages betweenCubans in Cuba and Cubans in the United States provides an importantresource that could very easily be exploited by Cuban criminal organiz-ations. The main trigger would be the collapse of the communist stateand the resulting transition. As Cuba follows other communist statesand rejects the principles and precepts of the past four decades in favorof capitalism, this is likely to have several implications for organizedcrime. A Cuba in transition would have the ingredients for becominga home state for criminal organizations: weak central authority, at leastfor a few years, as the post-communist government establishes itself; theremoval of social safety nets coupled with limited opportunities in thelicit economy; traditions of smuggling and contraband; and links witha very substantial Cuban emigre community that could provide bothrecruitment and cover for Cuban criminal activities in the United States.Even more important, it would appear that Cuba is likely to become botha host state for organized crime – as it was for the American Mafia duringthe Batista years – and a transshipment state for drug trafficking. Theopening up of Cuba once again would make it very attractive for transna-tional criminal organizations operating in Central or South America andthe United States. Similarly, as former Soviet officials built up contactswith criminal elements during the dual transition in the 1980s and 1990s,Cuban and Russian officials will be able to build on the Russian-Cuban

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contacts established during the Cold War. As far as its potential rolein transshipment is concerned, this could be enormous, dwarfing anyinvolvement in drug trafficking to the United States during the Castroera. With trade between Cuba and the United States restored, it would bemuch easier for drug traffickers to embed drugs within licit exports com-ing to the United States. Given Cuba’s location close to Florida, it couldalso become an important transshipment state for alien trafficking to theUnited States. An additional incentive for organized crime involvementis the commercial sex trade. The market for commercial sex in Castro’sCuba is currently driven by imperatives of subsistence rather than theenrichment of criminal enterprises. Nevertheless, the existence of sucha market makes Cuba very attractive for criminal organizations desiringto reap the benefits of what is already a very lucrative trade and onethat will become even more profitable when Cuba is once again a touristdestination for United States citizens. The resurgence of prostitution inCuba during the 1990s is a potential magnet for organized crime whichwill seek to control the market for commercial sex as it did prior tothe Castro era. Another attraction is the large tourist industry which hasmany cash businesses that are perfect for laundering money. A relatedpossibility is that Cuba will become an offshore financial center andbank secrecy haven, something for which there are already many suc-cessful models in the Caribbean. In order to be competitive in a world ofderegulation, Cuba is likely to adopt a permissive approach to offshorefinance, especially in the early years as it tries to establish itself as aviable alternative to Antigua, the Cayman Islands and other jurisdictions.For organized crime this will offer a major opportunity to infiltrate anoffshore financial center from the bottom up – an attractive option forany criminal enterprise looking for avenues for money laundering. Inshort, the post-Communist transition in Cuba has the capacity to cre-ate some real opportunities and advantages for transnational organizedcrime groups including Russian, Sicilian, Mexican, Colombian and USgroups.

• Another very real possibility for the future is that at least some Africannations will become much more heavily involved in transnational organ-ized crime, following what could, in effect, be described as the Nigerianmodel. Indeed, one component of this is likely to be an increase in levelsof criminal activity by Nigerian groups themselves. Nigeria could wellface an increasingly inhospitable economic environment as continuedpopulation growth requires an ever increasing percentage of Nigerianoil supplies to be used for domestic consumption rather than availablefor export earnings. At some point this is likely to result in economic

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shocks that, in turn, create far-reaching social and economic disloca-tion. In these circumstances, the pressure to emulate those – that iscriminals – who remain relatively shielded from economic downturnscould become even more widespread. New criminals can build on theexpertise that already exists, on the Nigerian diaspora, and on the high-level corruption and collusion that, at least until the end of the Abacharegime, made Nigeria a very congenial home base. If a further increasein Nigerian criminal activities is one aspect of growing African involve-ment in transnational crime, others include a growing number of statesbecoming home to groups that try to emulate Nigerian organizations.Indeed, the phenomenon of Nigerian organized crime has already broad-eried into a West African phenomenon and it is only a matter of timebefore it spreads further. Many African governments have very weakstates with inadequate criminal justice systems, limited opportunitiesin the licit economy and traditions of corruption. Border controls inmany countries in Africa are weak or non-existent and provide idealopportunities for smuggling a wide variety of illicit products. Much ofthe contraband trade will increasingly go into and through South Africawhich has excellent transportation and financial systems, important tradeand travel links with the rest of the world, and highly porous borders. Forits part, South Africa could well provide a case study that accords almostcompletely with the Morrison model of transshipment states. lt clearlymeets the prerequisites of ease of transit, and access to a variety of targetstates and markets.50 Should there also be an increase in corruption orinstability – and there is certainly evidence of a growth in corruption inSouth Africa – then it would move from a state sensitive to transship-ment to fit very neatly into Morrison’s category of states that are highlyvulnerable to becoming transshipment states.51

The broad propositions enshrined in the two composite models are summar-ized in Table 5, while Table 6 encapsulates the arguments about specific coun-tries that are likely to witness a major increase in organized crime activity andpower.

Indeed, the conditions likely to generate a major increase in organizedcrime in certain countries are summarized in Table 6 which identifies under-lying conditions, possible triggers, and likely results.

All five sets of models of organized crime provide insights that are usefulin anticipating levels of organized crime, the emergence of particular coun-tries as home bases of major criminal organizations, the patterns of activitiesof transnational criminal organizations and the strategies these organizationsadopt. In using them, however, it is important to acknowledge that they aredynamic rather than static, reflecting the learning capacity of organized crime

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Table 5.

Composite models Implications Result to anticipate

Transnational organized Transnational criminal Transnational criminal

crime model organizations will operate organizations will not only

from a safe home base take control of much of the

characterized by weak domestic economy of certain

government, economic states but will operate in a

dislocation, social upheaval variety of host states where

and integration into the global there are lucrative markets and

economy ethnic networks

Transshipment model Organized crime will identify Coastal states which not only

and exploit states where there have a large volume of exports

is ease of transit and access to to consumer countries but are

the final destination for the also characterized by

transshipment of illicit goods corruption or instability will

be major targets for

transshipment of drugs and

other illicit goods

groups as well as their opportunistic nature, and their adversarial relationshipwith law enforcement. They also need to be combined with some specifictechniques of information and intelligence gathering that will enhance thecapacity for anticipation.

Specific research and data collection techniques

The problems of anticipation remain formidable. If governments and civilsociety are to respond effectively to criminal organizations and criminal mar-kets, however, it is essential that more systematic efforts be made in thisdirection. In this connection there are several techniques or methods that haveproven useful in efforts to anticipate more traditional national security threatsand that could profitably be used to enhance the prospects for anticipation inthe area of organized crime:

The “red team” approach. This typically involves putting oneself in theplace of the adversary and looking at the world from his perspective andwhere possible, with his value system. Following the business logic of or-ganized crime which presumes that criminal enterprises constantly scan their

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Table 6.

Country Underlying Possible triggers Likely resultsconditions

Brazil Patron-client Economic crisis Increased importancerelations; weak Pressure on Mexico as a transshipmentgovernment; “no-go” state and possibleareas in cities; emergence ofextensive rural areas indigenous Brazilianwhere state is weak; organizations as majorexisting use for players in drugtransshipment; trafficking and otherextensive trade organizedpatterns; absence of crimeculture of lawfulness

China Existing corruption Transition from a Cooperation betweennetworks; lack of communist political indigenous Chinesecontrol over rural system to a more criminal organizationsprovinces; people- uncertain rule of law and Hong Kong andsmuggling enterprises, and reformist Macau based triads aslarge ethnic networks government which well as increase inoverseas; concept of removes or eases Chinese organizedguanxi, integration of some social controls. crime in thoseHong Kong, Macau countries where thereand special enterprise is a large Chinesezones; absence of immigrant communityculture of lawfulness

Cuba Patterns of corruption; Collapse of Develop somepoverty; international Communist regime indigenous organizedisolation encourage perhaps on death of crime but become asmuggling of various Castro major host to Russiankinds; networks with and Sicilian criminalCubans in United organizations,States; absence of traditional organizedculture of lawfulness crime groups in the

United States, andMexican andColombian drugtraffickers. Alsobecome an offshorefinancial centerattracting dirt money.

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Table 6. Continued

Country Underlying Possible triggers Likely resultsSome African Weak government; Democratization See increase instates patterns of corruption; process offers new indigenous and foreign

economic pressures; opportunities for organized crime inlarge informal diffusion of many African states aseconomies; weak corruption and entry Nigeria becomesborder controls; of transnational model to emulate andNigerian model; criminal organizations organized crime inabsence of culture of which could provide South Africa becomeslawfulne financial support for deeply entrenched.

elections

environment for new opportunities which are then exploited, it is possible touse a red team approach to understand the logic of criminal enterprises, theassessment of risks and opportunities, and the kinds of considerations thatwill determine ultimate policy choices. For example, criminal organizationsoften seek to infiltrate licit businesses targets that are not only lucrative butalso highly vulnerable. If some industries are protected and others are not,then those that are not will tend to become the next victims. Consequently,by engaging in red team analysis and examining the opportunities, obstaclesand constraints from the perspective of the criminal organizations themselves,it might be possible more effectively to anticipate both methods and targets.This could easily result in some false positives, but this would be a price worthpaying if it also encouraged protective measures that would make the licitbusiness world as a whole much more resistant to penetration by organizedcrime.

More extensive use of intelligente sources. Increased use can be made ofintelligence, i.e., the combination of information from open and clandestinesources. Much broader data collection and analysis than has traditionallybeen undertaken by law enforcement and intelligence agencies is facilitatedby the ready availability of open sources through on-line databases and newjournals. Other fruitful sources that have been underutilized are convictedprisoners, collaborating witnesses and defectors, (including professionals –lawyers, accountants and bankers – who are hired by criminal organizationsto launder and manage the proceeds of crime). Current information that is ob-tained from interviews with defectors or prisoners often provided the basis forgovernment offensives against criminal organizations. Once the immediateoffensives have been completed, more extensive, systematic interviewing can

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be undertaken and the results disseminated, thereby enabling other agenciesin other countries to benefit from the knowledge that has been obtained.

Traffic and travel analysis. Another technique that can be brought fromthe intelligence world is traffic analysis. This focuses not on the content ofinformation flows among criminals but on the volume and direction of mes-sages exchanged, i.e., the “traffic.” This might help for example, in identifyingpotential new ventures by criminal organizations, their spread into differentlocalities or even different nations. In this area, it should be possible to buildon telephone toll analysis, and seek not just to establish specific connec-tions among individuals but to look at changing patterns of activity by andamong criminal organizations. In other words, toll analysis can be used forstrategic as well as tactical purposes. In addition, it should be possible toextend these techniques to look at travel patterns of criminals, somethingthat is increasingly important as criminal organizations from different coun-tries increasingly establish cooperative links that provide major new marketopportunities and generally enhance their power and reach.

Vulnerability assessments. Efforts can be made to examine particular indus-tries, businesses or government agencies to identify why they might appearattractive to organized crime and how criminal organizations might try to in-filtrate them, the points of vulnerability, points of entry, and the methods thatmight be used. This has been done, for example, by Hong Kong’s IndependentCommission against Corruption (ICAC). The natural concomitant is strategicanalyses of protective measures that might be initiated to reduce these vul-nerabilities. Even more ambitious, but along the same lines are vulnerabilityassessments of particular countries looking at political, economic and socialtrends and conditions and attempting to tease out how these might impact onthe prospects for organized crime. National indicators would help to revealif particular states are becoming weaker or more corrupt and, in some cases,will highlight the need to look at patterns of interaction between criminalorganizations and politicians.

Anomalies and early warning. It is important to have some capacity forgoing beyond a particular industry, national, or regional focus. Governmentscould usefully include small groups which are set up to look for anomalies(i.e. events and activities that do not fit established patterns or models) and toidentify new trends as has been done by sophisticated intelligence analysts.They can obtain information from a wide range of sources and should notbe bound by existing models or frameworks. This is not intended as a sub-stitute for the other methods of anticipation outlined above, but simply as acomplementary effort.52

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Knowledge fusion. The availability of information does not in itself guar-antee good analysis. Perhaps even more important in anticipating new trendsand developments in organized crime is the combination of novel forms of ex-pertise – specialists on organized crime and business and industry specialistsor regional or national specialists. While all source data fusion is a familiarbuzz phrase in intelligence matters, what we are referring to here could bedescribed more appropriately as knowledge fusion. Fusion of this kind isessential if we are to have any real success in anticipating new trends anddevelopments in organized crime. In effect, it requires matching informationwith the models, seeing where it fits and where it does not, and if necessaryrefining the models.

These techniques used in conjunction with the models and projections out-lined above could enhance the capacity to anticipate developments in organ-ized crime. They are neither foolproof nor are they a panacea. Nevertheless,they provide a stronger basis than currently exists for both intelligence-ledlaw enforcement and for the development of far more effective long-termstrategies against organized crime than currently exist.

Concluding observations

In 1997 an important study on warning and response in international relationsnoted that “early warning indicators typically do not speak for themselves;they require analysis and interpretation. But the kinds of knowledge andtheories needed for this purpose may be in short supply.”53 The discussionhere is an attempt to increase this supply in relation to organized crime andat least identify developments and trends that could prove significant. At thesame time, there is a clear recognition here that there is no “silver bullet” inanticipating organized crime, whether domestic or transnational. Understand-ing the cultures and sub-cultures that facilitate organized crime can providean important basis for planning. So too can an enhanced awareness of thepolitical and economic incubators for criminal enterprises. Similarly, anticip-ating the risk management strategies of criminal enterprises can facilitate thedevelopment of appropriate precautions or counter-measures by law enforce-ment agencies. If successful anticipation can be a powerful tool, however, itdoes not follow that it will always lead to successful policies or strategies.Warning is contingent and cannot always be turned into effective response.This is as true in the area of combating organized crime as it is in other policyareas such as military security.

There are several reasons for this gap between adequate warning and ap-propriate response. If trends are caught early, before they have fully matured,for example, they might not be compelling enough to demand decisive ac-

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tion, especially if this requires difficult or unpalatable decisions or a signific-ant allocation of scarce resources.54 This is particularly true in governmentand even private security agencies, where there is a natural and inevitablepreoccupation with existing cases and problems. Law enforcement is pre-dominantly and inherently reactive. Moving to a pro-active stance requiresa fundamental change in deeply embedded attitudes and a willingness torecognize that combating organized crime requires efforts to reduce the samepolitical, social and economic vulnerabilities that criminal organizations seekto exploit. Anticipation allows societies to do this. When done with careand effort it can significantly reduce the opportunities for organized crimeto develop to a point where the criminals can not only develop new marketsbut also coopt political and economic elites, neutralize government and lawenforcement initiatives and generally act with impunity.

Unfortunately, even if anticipation is successful and there is a deliberateand unequivocal response this might not be commensurate with the devel-oping challenge. Alternatively, even adequate warning and a response thatis entirely appropriate in terms of both its focus and the level of resourcesinvolved, are still no guarantee of success in preventing untoward devel-opments. Organized crime is not only deeply rooted in conditions that areenormously difficult to change but also exploits secular trends that in mostother respects are very positive in their impact. The implication is that ifmaximum benefit is to be derived from successful anticipation this has tobe followed by the formulation and implementation of broadly based policiesand strategies which not only attack the criminal organizations but also at-tempt to make the environment in which they operate far less congenial. Justas law enforcement agencies cannot deal exclusively with organized crimethrough its traditional focus on cases, governments cannot deal with organ-ized crime through an exclusive focus on law enforcement. Anticipating theactivities of criminal organizations, whether operating domestically or acrossborders, requires not only law enforcement and regulatory efforts. It alsorequires education, cultural change, and public-private partnerships. Seen inthis way, it is clear that effective anticipation is not the last word in combatingorganized crime but merely an essential first step.

Notes

1. For a discussion of this issue see Jay Albanese, “Where Organized and White CollarCrime Meet: Predicting the Infiltration of Legitimate Business,” in Jay Albanese (ed.),Contemporary Issues in Organized Crime (Monsey, New York: Willow Tree Press, 1995)pp. 35–60.

2. The question could still be asked, of course, about why we have chosen these five setsof models rather than any other. The answer concerns their utility in anticipating both

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future developments likely to impinge on organized crime, and the future behavior ofcriminal organizations. An alternative and useful conceptualization of organized crimethat also categorizes models can be found in Boronia Halstead, “The Use of Models inthe Analysis of Organized Crime and Development of Policy,” Transnational OrganizedCrime Spring 1998 (4:1), 1–24.

3. This reflects work done on the Political-Criminal Nexus by Roy Godson and the NationalStrategy Information Center. See, for example, Trends in Organized Crime Spring 1999(4:3) and Fall 2000 (5:1).

4. Francisco E. Thoumi, Political Economy and Illegal Drugs in Colombia (Boulder: LynneReinner, 1995).

5. Diego Gambetta, The Sicilian Mafia: The Business of Private Protection (CambridgeMass.: Harvard University Press, 1995).

6. This formula was developed by Robert Klitgaard. See, for example, his “InternationalCooperation Against Corruption,” Finance & Development March 1998 (35:1), 3–7.

7. See Stanley Pimentel, “The Nexus of Organized Crime and Politics in Mexico,” andLouise Shelley, “The Political-Criminal Nexus: Russian-Ukrainian Case Studies,” in Trendsin Organized Crime, Transaction Periodicals Consortium Spring 1999 (4:3).

8. Stanley Pimentel, “The Nexus of Organized Crime and Politics: Mexico,” Trends in Or-ganized Crime Spring 1999 (4:3).

9. See Robert Kelly, “The Political-Criminal Nexus in the United States,” in Trends in Or-ganized Crime, Transaction Periodicals Consortium Fall 2000 (5:1). Also, James J. Jacobset al., Gotham Unbound: How New York was Liberated from the Grip of Organized Crime(New York: New York University Press, 1999).

10. Buckovic, “Heroin for Kalashnikovs,” Belgrade Borba in Serbo-Croatian 17 Jun 1998 p.6. The involvement of the Kosovo Albanians in drug trafficking became a much morefrequent item in press reports during the Kosovo crisis in March and April 1999.

11. CNN/Time Impact: Interview Transcript “Cherif Bassiouni on Arkan and ethnic cleans-ing,” <http://cgi.cnn.com/CNN/Programs/impact>.

12. Cyrille Fijnaut, Frank Bovenkerk, Gerben Bruinsma, and Henk van de Bunt, OrganizedCrime in the Netherlands (The Hague: Kluwer Law International, 1998) p. 194.

13. Charles Hanley, “Increasingly, Guerrillas Financed by Drugs,” Toronto Star December 29,1994, p. A19. R. Thomas Naylor, “The Insurgent Economy: Black Market Operations ofGuerilla Organizations,” Crime, Law and Social Change 1993 (20), 13–51.

14. Soledad Alameda, “Floren Aoiz,” El Pais Dec 13, 1992 (95), 14–27. We are grateful forthis reference to Magdalena Hindie and have drawn on her unpublished paper, “Terrorin Spain” Graduate School of Public and International Affairs, University of Pittsburgh(January 1998).

15. Paul K. Clare, Racketeering in Northern Ireland – A New Version of the Patriot Game(Chicago: Office of International Criminal Justice at the University of Illinois at Chicago,1989).

16. Ko-lin Chin, Chinese Subculture and Criminality: Non-traditional Crime Groups in Amer-ica (New York: Greenwood Press, 1990) p. 9.

17. Pino Arlacchi, “Large Scale Crime and World Illegal Markets,” in Organized Crime:International Strategies Report of the International Seminar on Policies and Strategiesto Combat Organized Crime held under the auspices of the United Nations and the Uni-versity of New Mexico, Albuquerque, New Mexico (December 8–11, 1987) pp. 47–61 atp. 49.

18. See Peter Reuter, The Organization of Illegal Markets: An Economic Analysis (Washing-ton DC.: National Institute of Justice, 1985) and R. Thomas Naylor, “From Cold War to

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Crime War: The Search for a New National Security Threat,” Transnational OrganizedCrime 1995 (1:4), 37–56.

19. See Naylor, Ibid. This theme is also developed in the same author’s “Mafias, Myths andMarkets: On the Theory and Practice of Enterprise Crime” in Transnational OrganizedCrime 1997 (3:3), 1–45.

20. This view of organized crime is most clearly associated with Dwight C. Smith. See, forexample, his “Paragons, Pariahs, and Pirates: a Spectrum Based Theory of Enterprise,”in Crime and Delinquency July 1982 (26), 358–386. The analysis here also draws onremarks by Ambassador David Miller at an NSIC workshop on transnational organizedcrime held Nov 17–18 1994.

21. Peter Gastrow, Organized Crime in South Africa (Johannesburg: Institute for SecurityStudies, 1998).

22. It is also worth noting that the converse of this can also occur with criminal organizationsproviding information to law enforcement regarding their competitors. Members of theMedellin and Cali drug trafficking organizations routinely did this as part of their struggleduring the late 1980s and early 1990s.

23. One of the best statements and illustrations of this argument is Letizia Paoli, The Pledge toSecrecy: Culture, Structure and Action of Mafia Associations, Unpublished Ph.D. thesis,European University Institute Firenze, June 1997.

24. Jane Schneider, Trends in Organized Crime Winter 1998 (4:1).25. Ko-lin Chin, Chinese Subculture and Criminality: Non-traditional Crime Groups in Amer-

ica (New York: Greenwood Press, 1990) p. 9.26. Ibid. p. 19.27. Ibid. p. 11.28. Ibid.29. For the criteria and rituals of traditional Triad membership see W.P. Morgan, Triad So-

cieties in Hong Kong (Hong Kong: Government Printer, 1960), which was used in HongKong courts to identify Triad members. For a discussion of guanxi see M. Cordell Hart,“ ‘Guanxi’: an Important Concept for the Law Enforcement Officer,” Trends in OrganizedCrime 1996 (2:2). Some believe the concept is too broad to serve as an effective indicatorof criminal association.

30. R. Sandbrook, Politics of Africa’s Economic Recovery (Cambridge: Cambridge Univer-sity Press 1999) p. 28 quoted in Rachel Flanary, “The State in Africa: Implications forDemocratic Reform,” Crime, Law and Social Change 1998 (29:2–3), 179–196 in endnote4 at p. 193.

31. Frank Bovenkerk, “Crime and the Multi-ethnic Society: a View from Europe,” Crime,Law and Social Change 1993 (19), 271–280 at p. 279.

32. See Joseph Albini, The American Mafia: Genesis of a Legend (New York: Appleton,Crofts, 1971) and Francis J. Ianni, Black Mafia: Ethnic Succession in Organized Crime(New York: Simon and Schuster, 1974).

33. Alan Block, East Side-West Side: Organizing Crime in New York 1939–1959 (SwanseaUK.: Christopher Davis, 1979).

34. See David Ronfeldt, Tribes, Institutions, Markets, Networks: a Framework about SocietalEvolution (Santa Monica: RAND P-7967, 1996).

35. Gary Potter, Criminal Organizations: Vice Racketeering and Politics in an AmericanCity (Prospect Heights Ill.: Waveland Press, 1993) and James O. Finckenauer and ElinJ. Waring, Russian Mafia in America (Boston: Northeastern University Press, 1998).

36. Fijnaut et al., Organized Crime in the Netherlands p. 74.37. Ibid.

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38. For a fuller analysis see Phil Williams, “The Nature of Drug Trafficking Networks,”Current History April 1998, 154–159.

39. The most documented case is that of the Sicilian Cosa Nostra. On the relationship betweenorganized crime and politics in Mexico, see John Bailey and Roy Godson (eds.), Organ-ized Crime and Democratic Governability: Mexico and the U.S. Mexican Borderlands(Pittsburgh Pa.: University of Pittsburgh Press, 2001).

40. See Ernesto U. Savona, Harmonising Policies for Reducing The Transnational OrganisedCrime Risk Transcrime (University of Trento) Working Paper No. 2 (June 1995).

41. The following analysis is based on a chapter by Phil Williams entitled “Risk Manage-ment by Transnational Criminal Organizations: Threat or Opportunity for Law Enforce-ment?,” in Gina Pattagulan (ed.), Transnational Organized Crime in the Asia-Pacific Re-gion (forthcoming).

42. The most extensive and detailed published discussion of the strategic interaction betweenthe Cali and Medellin cartels, and the US and Colombian governments, can be found inRobert J. Nieves, Colombian Cocaine Cartels: Lessons from the Front US Working Groupon Organized Crime (Washington: National Strategy Information Center, April 1997).

43. Lawrence B. Sulc, Law Enforcement Counter Intelligence (Kansas City: Varro Press,1996) pp. 65–67.

44. Yves Lavigne, Hell’s Angels (Toronto: Carol Publishing Group, 1996) pp. 133–143.45. This emerges clearly from the chronology of nuclear material smuggling incidents de-

veloped by Paul N. Woessner at the Ridgway Center for International Security Studies,University of Pittsburgh. An earlier version was published as “Chronology of Radio-active and Nuclear Materials Smuggling Incidents July 1991–June 1997,” TransnationalOrganized Crime Spring 1997 (3:1), 114–209.

46. Phil Williams and Carl Florez, “Transnational Criminal Organizations and Drug Traffick-ing,” Bulletin of Narcotics 1994 (46:2), 9–24.

47. Shona Morrison, “The Dynamics of Illicit Drugs Shipments and Potential Transit Pointsfor Australia,” Transnational Organized Crime Spring 1997 (3:1), 1–22.

48. Richard Friman, “Just Passing Through: Transit States and the Dynamics of Illicit Trans-shipment,” Transnational Organized Crime 1995 (1:1), 65–83.

49. Maria Velez de Berliner and Kristin Lado, “Brazil: The Emerging Drug Superpower,”Transnational Organized Crime 1995 (1:2), 239–260.

50. Richard Friman, “Just Passing Through: Transit States and the Dynamics of Illicit Trans-shipment,” Transnational Organized Crime 1995 (1:1), 65–83.

51. Shona Morrison, “The Dynamics of Illicit Drugs Shipments and Potential Transit Pointsfor Australia,” Transnational Organized Crime 1997 (3:1), 1–22.

52. See Roy Godson, Dirty Tricks or Trump Cards (Rutgers, NJ: Transaction, 2000) pp. 196–198.

53. Alexander L. George and Jane E. Holl, The Warning-Response Problems and Missed Op-portunities in Preventive Diplomacy, A Report to the Carnegie Commission on PreventingDeadly Conflict (New York: Carnegie Corporation, May 1997) p. 11. The following para-graphs adapt several of the arguments put forward by George and Holl to the subject beingconsidered here.

54. Ibid. p. 5.

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