tbo: Tampa Bay Online.
Saturday, Dec 15, 2018
  • Home

Socom tracking money that funds violent extremists

The issue of how violent extremist organizations get their money can’t get enough attention. Especially with the growing nexus between groups like the Iranian-backed Hizballah and drug trafficking organizations, who operate in the same shadowy spaces.

It is a nexus that includes not only drugs, but human trafficking, arms smuggling, wildlife products like ivory, industrial waste and, most worrisome, the potential transport of radiological or nuclear weapons.

It is a nexus that sucks up, according to The Combatting Terrorism Center at West Point, between $2 and $3 of every $10 spent globally.

And it’s a nexus with several local connections. They include the actual activity — like the sale of airplanes to cartels several years back, from here, that wound up full of cocaine in Mexico and were part of a fleet owned by a Hizballah-connected Venezuelan drug lord. And they include the interdiction of those efforts by U.S. Special Operations Command.

Those interdiction efforts are another example that not everything associated with Socom has to do with kicking in doors and killing bad guys.

Here in Tampa, one of the MacDill Air Force Base-headquartered command’s big jobs is old-fashioned gumshoe work, powered by the latest technology.

Following the money. Even when it’s virtual, like Bitcoins.

The command is “committed to disrupting financial transactions of all transnational threats as they are, whenever they present themselves,” says Army Col. Joshua Potter, the director of Socom’s J-36, known in English as the Transnational Threats Division.

While the J-36 is tracking mostly hard currency, they are also looking at, but to a far lesser extent, the so-called cryptocurrencies like Bitcoins and others that are hard to track and trace.

So far, says Potter, Bitcoins are a bit player. Especially when it comes to the Sunni insurgent group Islamic State.

Violent extremist organizations typically use traditional currency, says Potter. (I am using the term violent extremist organizations because the analysis includes, for instance, the Columbian group FARC, which is not a jihadi group).

That’s because, at present, the traditional currency is easier to use to purchase goods and services, says Potter.

But Potter says that the nature of cryptocurrency, which does not require passing through banks or exchange houses or other institutions that keep accessible records, has certainly put Bitcoins and other virtual money on Socom’s radar.

“Crypto is a different animal,” says Potter. “Crypto, or so-called virtual currency, is an electronic statement of value that is difficult to intercept and difficult to identify. It is an emerging technology that U.S. Special Operations Command is looking at very seriously.”

Socom, Potter points out, is on the tip of the Pentagon’s spear for tracking violent extremist financing, working with the FBI, the Department of Treasury and other organizations.

Still, as of last month, Islamic State has yet to embrace the Bitcoin, or any other crypto, says Potter.

“It is very minimal,” says Potter. “We have seen very few instances of cryptocurrency or digital currency being used in direct support of moving foreign fighters or financing the terrorist organization.”

There’s a good reason for that, says Potter.

Islamic State is a cash-based organization, semi-closed and isolated from the global economic system. It makes money by selling petroleum, through ransoms, looting antiquities and taxing the people in the land it’s captured. But having the wherewithal to transmit funds via cryptocurrency is difficult for the organization, says Potter.

“Anyone tied to ISIS is designated as a terrorist,” says Potter, using one of the many acronyms for the jihadi group. Socom and its partner agencies “have done a pretty good job identifying where those actors are and keeping them isolated. They only deal in cash in the territory they have virtual control over.”

So for now, says Potter, Islamic State is sticking to the tried and true — kidnapping, extortion, taxation, antiquities, oil.

Likewise, the drug trafficking organizations are also overwhelmingly sticking to traditional currency because of the difficulty at present of converting cryptocurrency into tangible assets, says Potter.

But the investigation into the Silk Road online network of illicit and licit goods, says Potter, shows the potential for trouble and highlights the reasons to keep a wary eye out.

“The threat networks tend to use fiat currency more than crypto by many more orders of magnitude,” he says. “But because it is a reasonably new branch of technology, we have to understand it and identify where the vulnerabilities are in our own financial system. And that’s where Socom and the (Pentagon) are stepping in to share as much information as possible with our multi-agency partners.”

So while certainly an emerging threat, potential, Bitcoins et al “are not a significant threat to our national interest,” says Potter.

❖ ❖ ❖

Cryptocurrency, even with all its potential for nefarious activities, is just a small piece of a larger mosaic in the nexus between drug traffickers and violent extremists, says Potter.

As proof, he pointed me to “Risky Business: The Global Threat Network and the Politics of Contraband” produced by The Combatting Terrorism Center at West Point.

The report, written by Scott Helfstein with John Solomon, does a great job of laying out the connectivity.

The study codifies something I have been arguing for years.

“The challenge of combating crime-terror connectivity in many places lies at the intersection between licit and illicit activity,” according to the report. “The illicit economy is estimated to be as large as 20 percent-30 percent of the global economy. That money is not put under mattresses or stashed in warehouses. And the line between the licit and illicit can be obscure in many contexts.”

The violent extremists, according to the report, are the connective tissue.

“By most measures of connectivity, terrorists are more central than almost all other types of criminals, second only to narcotics smugglers. The transnational nature of terrorist actors allows them to link disparate criminal groups.”

That’s amplified by the fact that it doesn’t appear that violent extremists “are shunned based on social norms or fear of inviting retribution from law enforcement, as many criminals seem willing to interact with terrorists,” according to the authors. “An empirical analysis of the network shows that 46 percent of terrorists’ connections are linked to actors involved in activities other than terrorism, while those involved in other illicit activities link to terrorists 35 percent of the time.”

(This point, for what it’s worth, diverges from the scenario described to me last fall by former CIA analyst Scott Schlimmer, a counter-threat finance expert who told me that the Mexican cartels, for instance, make far too much money doing what they do to mess around with violent extremists).

Regardless, the bottom line, according to the report, links back to the work taking place by Socom at MacDill, which is filling the highlighted gaps.

“Identifying financial irregularities is critical to tracking dirty money, questionable transactions and illicit actors,” the authors conclude. “Many government agencies are not training their analysts in the intelligence or defense communities to think about the convergence of commerce, economics and threats. This skill gap represents a challenge confronting law enforcement and national security authorities.”

❖ ❖ ❖

Please take a moment today and think about those who served in Vietnam. Today is the annual Welcome Home Vietnam Veterans Day, honoring Florida’s nearly 500,000 Vietnam veterans. According to Steve Murray, spokesman for the Florida Department of Veterans Affairs, more than 1,900 of the nearly 58,000 U.S. troops who were killed in Vietnam were from Florida and one in three veterans in Florida is a Vietnam-era veteran.

To those who served back then, you are why I do what I do.

❖ ❖ ❖

The Pentagon announced no new casualties in the ongoing operations in the U.S. Central Command region.

There have been three deaths in support of Operation Inherent Resolve and none in Operation Freedom’s Sentinel.

[email protected]

(813) 259-7629

Weather Center
Comments