What is the nature of the terrorism-organized crime collaboration in each of the cases provided

Assignment 5

Purpose: Write a short critical essay in response to the assignment provided below. You will be graded on the quality of reasoning and not on whether you are right or wrong in your position/conclusion.

Structure: Your essay should follow the following structure:

Introduction: One or two paragraphs that state your main argument.
Background: Information necessary the reader to understand what you are talking about (usually taken from class readings and other explanatory material).
Lines of argument: Present your reasons in support of the argument in order of their importance – closely following the evidence that you find.
Conclusion: One or two paragraphs that summarize your argument and its implications.

Please consider the following composition guidelines:

Never assume the reader has any knowledge of the case or this course. This helps you to write clearly
Quality is more important than length. Focus on producing polished and concisely communicated ideas.
Papers should reflect your best effort inasmuch as you put thought, time, background reading, and organization into your written arguments. Copy-edit the text carefully. You should edit not only for grammar but also style. Academic writing should not be complicated, but it does need to have an element of formality. Your choice of words for an academic assignment should be more considered and careful.

Please note that I reserve the right to stop reading a written assignment after finding multiple grammar and style errors (typos, syntax, sentence structure, punctuation, logical sequence, etc.) that make the content of the essay unintelligible. In that case, the assignment will be sent back to you together with a referral to seek tutorial help from the Writing Center. A full letter grade deduction (e.g., from A to B) or more serious penalty for cases of exceptionally poor writing will be administered.

Format: Submit a short academic essay (1,000-1,500 words +/- 10% excluding references or appendices). All references must be formatted according to the APA Documentation Style

Read the three short texts below and write an essay in response to following questions:

What is the nature of the terrorism-organized crime collaboration in each of the cases provided and how has this relationship changed over time? In which case did the terrorist group initially engage in criminal activities exclusively to support its terrorist activities but later transformed into a predominantly profit-driven criminal enterprise? In what case was a criminal organization “outsourced” by a terrorist organization to raise money for terrorist activities? Finally, in what case did a criminal organization initially fulfill a “cash cow” function for a terrorist organization but gradually transformed into an organization actively supporting the terrorist cause?

Your response to these questions should be grounded on the existing literature on the nexus between criminal and terrorist organizations. Therefore, it is requested that your essay not only discusses the three case studies provided for the analysis but also incorporates a brief discussion of Makarenko’s crime-terror continuum and how each case fits into it.

The Barakat Clan

The tri-border area (TBA) of Brazil, Argentina, and Paraguay has been under scrutiny for more than two decades, as it is known to be a haven for a panoply of criminal groups and Islamic terrorist organizations, such as Hezbollah. Smugglers and organized criminals have mingled with terrorists and terrorist financiers of widely disparate ideologies amid one of the world’s largest black markets, in the TBA commercial district of Ciudad del Este.

The city has become a symbol for the nexus of organized crime and terrorism. Earlier RAND research, along with many experts, identified the TBA as the “most important center for financing Islamic terrorism outside the Middle East.” Years of terrorism investigations by U.S., British, German, and Israeli intelligence agencies culminated in June 2004, when the U.S. Department of the Treasury, Office of Foreign Assets Control (OFAC), named Assad Ahmad Barakat as a “Specially Designated Global Terrorist” for acting as the key financer for Hezbollah in Latin America.

“From counterfeiting to extortion,” OFAC officials explained in a press release, “this Hizballah sympathizer committed financial crimes and utilized front companies to underwrite terror.” Two years later, OFAC added nine of Barakat’s associates to the terror watch list. The associates are alleged to have continued providing financial and logistical support to Hezbollah while Barakat served out a six-year sentence in Paraguay for tax evasion. The cases bring a fresh perspective to Barakat and his network of associates in the TBA, demonstrating the link between Barakat’s terror-financing and a vast piracy operation. The total value of the enterprise is difficult to estimate, but according to intelligence agencies, Barakat provided, and perhaps still provides, a large part of the $20 million sent annually from the TBA to finance Hezbollah.

The TBA has been rife with smuggling and organized-crime activity since it was urbanized by the Stroessner regime in the 1950s as a free trade zone. By 1994, the TBA economy had peaked at $12 billion in cash transactions, and Ciudad del Este ranked third worldwide behind Hong Kong and Miami. Roughly 15,000 of the 630,000 residents of Ciudad del Este are of Lebanese origin. Most of them are Muslim and natives of Lebanon’s Bekaa Valley, a renowned drug-trafficking hub and the most important locus of Hezbollah’s criminal activity. The open sympathies of these Lebanese residents for Hezbollah’s cause are predictable and are thus a critical concern for intelligence agencies.

Assad Ahmad Barakat’s network, known locally as the Barakat Clan, is headquartered in Galeria Page, a five-story commercial building in downtown Ciudad del Este.30 Most of its 165 shops belong to wholesalers who supply goods to thousands of merchants. The mall is also a microcosm of the different forms of crime that flow through the TBA. Examples include counterfeit electronics and pirated goods, unlicensed money exchange and transfer facilities, and illegal cell-phone cloning stores, as well as fronts for suspected drug running and drug trafficking operations. The impact of Galeria Page is felt throughout Ciudad del Este, and it continues to be a hub for both licit and illicit activity. Pirates and counterfeiters effectively turned Paraguay’s intellectual-property system into an extortion mechanism. If merchants tried to sell products that had been “registered,” they were subject to extortion, and the police became the ultimate enforcers of this racket.

On October 3, 2001, Paraguayan police entered Galeria Page and searched one of Barakat’s businesses, Casa Apollo. The evidence they recovered included 60 hours of videotapes of Hezbollah propaganda and CD-ROMS that included instructions for training materials for suicide bombers. A file recovered on Barakat’s computer contained Hezbollah military orders for each town and village in southern Lebanon. A paper trail connected Barakat to Sheik Hassan Nasrallah, the Shi’a cleric then at the helm of the militant al Moqawamah (The Resistance) branch of Hezbollah. Police found receipts for money transfers to banks in Lebanon and a letter from Nasrallah to Barakat thanking him for his contributions to a charity called El Matir (The Martyr).

The D-Company Group

The case of Dawood Ibrahim, India’s godfather of criminal gangs from Bangkok to Dubai, demonstrates the blurring line between crime and terror around the globe. In his early years, Ibrahim’s gang, D-Company, pursued the standard crime-syndicate practices of extortion, smuggling, and contract killings. Since the 1980s, however, Ibrahim and his cohorts have been able to vertically integrate D-company throughout the Indian film and pirate industry, forging a clear pirate monopoly over competitors and launching a racket to control the master copies of pirated Bollywood and Hollywood films. In 1993, D-Company was transformed into a terrorist organization when it carried out the “Black Friday” Mumbai bombings, an attack that killed more than 257 people and injured an estimated 713. Later, D-Company developed ties to al Qaeda and the Kashmiri terrorist group, Lakshar-e-Taiyiba (LeT) while its leaders were exiled in Pakistan.

For all these reasons, in 2003, the U.S. Treasury Department Office of Foreign Assets Control (OFAC) added Ibrahim to its Ibrahim systematically recruited gangsters from all neighborhoods of Mumbai and built them into the city’s dominant criminal syndicate, the D-Company, which focused on three areas: smuggling goods (gold, silver, electronic products, and textiles), extorting protection money from local business industries (hotels, construction, iron, steel, grain, textiles, and diamond merchants), and vice (gambling and prostitution). By the end of the 1980s, Ibrahim was the undisputed underworld “kingpin” of Mumbai.

In 1992, India’s trade liberalization policies changed the economics of the gold and silver market and made smuggling less lucrative. To make up for the losses, Ibrahim sought to diversify his business lines, first taking on narcotics and arms trafficking, then moving his racketeering into the entertainment business. This afforded Ibrahim the double benefit of raising his social status and also enabling him to serve as a loan shark for dozens of producers who desperately needed his funds. Furthermore, D-Company’s power increased dramatically as it began to control more facets of the film production process, culminating with piracy.

Over a decade and a half, D-Company vertically integrated into every part of the Indian filmmaking industry. It began with loansharking in film production, then progressed into film distribution home-video manufacturing, and—a natural culmination of its rackets—film piracy. Amid the challenges D-Company endured in this critical period, from 1990 to the late 2000s, film enterprises withstood the test of time as a reliable illicit-revenue stream. Although India’s prolific film industry had been a profit center and cultural icon for decades, it was, surprisingly, not recognized by the government as a legitimate industry until 1998. This status barred legitimate financial institutions and private investors from financing films. Ibrahim tasked his brother Noora with stepping into this vacuum and providing debt financing to major Indian filmmakers. The terms assigned to these loans were clearly exploitative. The next step was moving into distribution. As the Indian diaspora grew, distribution rights became increasingly valuable: Ready audiences developed in the United States, the United Kingdom, and the Gulf States. D-company’s seat of power in Dubai allowed it to aggressively seek and control distribution rights for the Gulf countries and Pakistan. Customs data reveal that the company had a booming export business in Karachi, Pakistan, and for good reason: All Indian films distributed in Pakistan were pirated, and therefore more profitable, because importing Indian films was illegal. In the process, D-Company gained control of the SADAF Trading Company based in Karachi, which allowed the gang to better organize distribution in Pakistan and, more important, acquire the infrastructure to manufacture pirate VHS tapes and VCDs for sale all over the world. Still, SADAF’s biggest exports were to India, which, due to lax anti-piracy enforcement on the part of Indian authorities, remained an open channel. Bollywood and Hollywood products duplicated at SADAF’s plant were readily smuggled into the country via Nepal. Once D-Company’s control of the production, distribution, and manufacturing/piracy operations was in place, the gang was able to launch a racket to control the masters of most Bollywood and dubbed Hollywood films distributed in India. This powerful vertical integration provided D-Company a clear monopoly over other competitors. And with various methods of control—including the killing of renegade pirates—D-Company had the wherewithal to demand that pirates obey their terms and timelines of release, or else face retaliation. From start to finish, D-Company dominated every step of the Indian filmmaking process and so was able to control most of the region’s piracy.

IRA

Paramilitary groups in Northern Ireland, The Irish Republican Army (IRA), have fomented civil unrest and violence for more than 30 years. The conflict is said to have resulted in more than 3,500 deaths in clashes with military forces, as well as terrorist attacks on civilians in both Northern Ireland and the Republic. In 1998, however, the Belfast Agreement began a political process that ended the hostilities and led to the decommissioning of the major terrorist groups. Splinter groups remain, however, and pledge to continue their campaigns; the U.S. government has specified as terrorist organizations the Real IRA, Continuity IRA, the LVF, Orange Volunteers, Red Hand Defenders, and the Ulster Defence Association/Ulster Freedom Fighters (UDA/UFF). With the end of most of the political violence, Northern Ireland has seen a rise in organized crime, including counterfeiting, with former terrorists leveraging their expertise and networks to engage in crime full-time, as the following case demonstrates.

The issue came to the forefront in a report on the financing of terrorism issued by British House of Commons Northern Ireland Affairs Select Committee in 2002. Members sounded the alarm that terrorist fundraising in Northern Ireland was increasingly turning “to more complex and sophisticated forms of organised criminal activity such as fuel smuggling and counterfeiting.”

Since the 1970s, the porous border between the Republic and Northern Ireland has provided smugglers with dozens of routes to move goods to arm and finance both sides of the terrorist campaigns. In addition to a steady flow of arms and munitions, paramilitaries smuggled livestock grain, cattle and pigs, stolen cars, petroleum, cigarettes, and lighters. Having avoided paying proper value-added tax (VAT) or customs duties, the paramilitaries sold contraband items, especially cigarettes and fuel, at steep discounts. As late as 2005, authorities estimated that one-third of all cigarettes in Northern Ireland were smuggled, and half of the territory’s filling stations sold smuggled fuel, causing the government to lose more than $400 million in revenue each year. Counterfeiting, with its high profit margins, provided an attractive business opportunity that fit neatly with other illicit enterprises. The paramilitary piracy industry appears to have been around since the home video and personal computer markets took off in the late 1980s. The paramilitary groups were primarily interested in the manufacture and wholesaling of such goods, which is “where the profitability lies.”

The sale of pirated films, music, and computer games continued to grow over the decade, and the sourcing of master copies might well have been enhanced by strong republican ties to the United States. The trade proliferated on both sides when the ease of digital duplication arrived and as Internet piracy made masters of films and software more readily available. Seizures of pirate products from all groups reached a total of £3.5 million yearly at the turn of the century. The estimates are slippery, but in addition to the PIRA’s take from piracy, which was noted earlier, other groups’ operating costs and fundraising capacities. Furthermore, while the groups had relatively lean operating costs, the costs to governments to counter the paramilitary groups were exponentially higher. Experts have calculated that for every £1 raised by paramilitaries and spent in the terrorist campaign the governments of Britain and the Republic of Ireland spent an average of £130 on countering and repairing terrorist damage.

Once the digital revolution hit, republican and loyalist groups used the same infrastructure to burn movies and to duplicate propaganda videos intended to advance their ideological causes and recruit new members. The contents of these videos ranged from demonstrations of force to rallying cries from leaders. In a raid in Jonesborough, authorities found a propaganda collection of six volumes alongside pirated Hollywood films and pornography.

Despite significant progress made by law enforcement in decommissioning terrorist groups and policing organized crime, paramilitary involvement in piracy continued.

It should be noted, however, that the leadership of all of these organizations had attempted to persuade their members away from crime. The PIRA leadership specifically instructed its members in 2005 not to engage in criminal activity. But although crime is no longer sanctioned by the paramilitary organizations, the low-risk/high-profit model of counterfeiting remains appealing and evidently ingrained into the shadow economies of Northern Ireland.

On December 13, 2000, three Irish Customs and Excises officers searched a suspected fuel-laundering plant in Carrickaneena, just feet from the border between the Republic and Northern Ireland. A significant difference in diesel taxation between the two countries created a potentially lucrative black market, of which authorities maintained that the PIRA had taken full advantage. Red diesel, a rebated fuel designated for limited-use vehicles, is sometimes “laundered” by chemically removing the dye so that the fuel can be sold at a higher price. During the search, the Customs and Excises officers discovered a van full of what appeared to be counterfeit DVDs, CDs, and videogames. They summoned the Gardai (the police force of the Republic of Ireland), which has jurisdiction in cases of alleged counterfeiting. The Gardai found that the van contained some £100,000 worth of pirated films, CDs, and videogames, as well as DVD burners

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What is the nature of the terrorism-organized crime collaboration in each of the cases provided