Remarks by David T. Johnson

Assistant Secretary of State for the Bureau of International Narcotics and Law Enforcement Affairs

Washington Institute for Near East Policy

Good afternoon. I want to thank Dr. Robert Satloff for his invitation to speak to you today.

It is a pleasure to be here with this distinguished group, and to contribute to the Washington Institute series on

these important issues. I would also like to applaud the Stein Program on Counterterrorism and Intelligence for

advancing our understanding of the links between crime and terrorism and the risks those links can pose to

America’s national security interests.

Dangerous Alliances in the Crime-Terror Continuum

While our discussion today will focus on Middle Eastern terrorist groups’ links to criminal activity, it is

important to bear in mind that the threat of terror and the origins of terrorist groups spans beyond any single

region. Moreover, terrorist groups’ links to criminal activity is not a new phenomenon. In the ‘70s and ‘80s, for

example, groups like the Red Army Faction, the Red Brigades and the domestic Symbionese Liberation Army

financed violent terrorism with violent crimes like bank robbery.

In recent years, many of these groups have focused almost exclusively on using narcotics as a means to finance

their activities. As the international community clamped down on state-sponsored terrorism and pressured

governments from financially supporting terrorist organizations, many groups resorted to drug trafficking and

other illicit activities as sources of revenue. According to the U.S. Drug Enforcement Administration, 19 of the 44

groups that the U.S. Government has designated as Foreign Terrorist Organizations (FTOs) participate in the

illegal drug trade, and many also engage in financial and other forms of crime.

Today, we look at organizations as diverse as Hizballah, Al Qaeda, the Revolutionary Armed Forces of Colombia

(FARC), the Taliban in Afghanistan, the Kurdistan Worker’s Party (PKK), the Liberation Tigers of Tamil

Eelam (Sri Lanka), all of which engage or have engaged in criminal activities as a vehicle to finance their terrorist

(or violent political) activities.

In places like West Africa, we now see how increased drug flows from Latin America, kidnappings, and other

crimes produce opportunities for criminal groups that might sympathize with Al Qaeda to tap into the wealth

generated by narcotics trafficking and other illicit activities to fund their operations. Last month, for example, US

prosecutors in the Southern District of New York charged three men who claimed to be Al Qaeda associates with

conspiracy to smuggle cocaine through Africa. In Afghanistan, we have long known that among the Taliban’s

funding sources were informal taxes on heroin traffickers. Two years ago, U.S. and Colombian investigators were

able to dismantle an international cocaine-smuggling and money-laundering gang that funneled some of its

profits to Hizballah, a U.S.-designated Foreign Terrorist Organization. In the Horn of Africa, we are seeing illicit

routes established by criminal groups to smuggle immigrants, arms, narcotics and other contraband, and know

these illicit activities will create opportunities for terrorist groups to exploit.

We also remain concerned about the crime-terror links in an increasing number of ungoverned or insufficiently

governed spaces, such as Yemen and the Sahel belt, where insecurity and other destabilizing factors provide

opportunities for illicit networks to thrive and find safe haven—and [act] as possible staging platforms to project

their terror campaigns abroad. For example, in the tri-border area, along the loosely controlled region that borders

Paraguay, Brazil and Argentina, individuals with apparent connections to radical Islamic groups have been active

in drug trafficking, money laundering, intellectual property rights piracy, alien smuggling and arms trafficking.

These are very serious issues, but you may ask why these issues are becoming national security priorities for the

United States now.

Threats to U.S. National Security

Violent criminal and terrorist networks threaten the security, economic health and social fabric of all nations.

These transnational threat networks imperil public trust and core democratic and market values, especially in the

midst of the most serious global economic and financial crisis in decades. Criminal entrepreneurs who smuggle

billions of dollars of illegal goods across borders—drugs, arms, humans, natural resources and endangered wildlife

parts, counterfeit medicines and pirated software, as well as embezzled public funds—create insecurity, cost our

economies jobs and tax revenue, endanger the welfare and safety of our families and communities, and overwhelm

law enforcement countermeasures. Similarly, terrorist groups create great insecurity by the acts of cowardice and

the killing of thousands of innocent people to advance their political and ideological objectives. They do not

respect traditional borders or nation-states, and they exploit ungoverned and under-governed areas as places for

safe haven, as places to rest, to recruit, to train, and to plan their operations. In many places, these networks

become the de facto government.

Corruption, Crime, and Terrorism: The Unholy Trinity

Poor governance and corrupt officials in many parts of the world enable criminals, insurgents, and terrorists to

operate with impunity. Criminal syndicates have long supported terrorist groups—for both ideological and

economic reasons—by facilitating their trans-border movements [and] weapons smuggling and providing forged

documents. At the same time, terrorist groups also resort to organized crime to finance their activities, including

through drug dealing.

Such terrorist-criminal cooperation is of particular concern, especially because some of these criminal syndicates

have the organizational and financial wherewithal that could potentially allow them to acquire and sell radioactive

materials, chemical and biological weapons, or technologies used for weapons of mass destruction. This financial

strength makes it much more difficult for governments to shut off the spigot used to finance terrorism, at least

through traditional means that focus on deterring exploitation of the formal banking system. As terrorist groups

move toward mimicking the tactics of organized crime, our international response will need to incorporate more

creative law enforcement tools that go well beyond effective regulation of financial transactions.

The question is frequently raised as to why criminals would want to assist terrorist groups. While it is possible

that criminals may not want the extra attention from states’ national security institutions that will come from

associating with terrorists, some may nevertheless find the financial temptation too great. Others may not care

with whom they conspire, as long as they are paid for the increased risk of detection they assume when

cooperating with known terrorist groups. For example, reports indicate that some charge extra for dealing with

certain nationalities and others more for “special services.” And some criminals may have no idea who their clients

really are. These people are undoubtedly clever, but they may nevertheless be more greedy than smart.

A convergence of crime and corruption can also pave the road for terrorist organizations to finance their terror, as

was the case in Bali, Madrid and Mumbai. In particular, terrorist financiers are not only concealing their

financing assets through complex transactions in the formal banking system, but also harnessing centuries-old

money laundering tactics. They exploit informal value transfer mechanisms such as hawala or hundi and tradebased

money laundering, and use illegal cash couriers as bulk cash smugglers, particularly in countries with

nonexistent or weak anti–money laundering enforcement practices.

Winning the Peace: Smart Power and International Cooperation

So what is the U.S. Department of State doing to combat these transnational threat networks? The State

Department’s Bureau of International Narcotics and Law Enforcement Affairs (INL), which I lead, is responsible

for international counter- narcotics and counter-crime issues. We lead diplomatic efforts to raise awareness of the

destabilizing impact of transnational organized crime and illicit activities, and we strengthen global efforts to

combat these threats, including through enhanced law enforcement cooperation, where organized crime and

terrorism intersect. We are enhancing international cooperation to dismantle criminal networks and combat the

threats that they pose—not only through law enforcement efforts, but also by building up governance capacity,

supporting committed reformers, and strengthening the ability of citizens to monitor public functions and hold

leaders accountable for providing safety, effective public services, and efficient use of public resources.

In the Middle East and other parts of the world, the United States is working with partner governments to

develop effective, democratic, civilian-led and skilled law enforcement and justice sector institutions. Hamas and

Hizballah continue to finance their terrorist activities mostly through the state sponsors of terrorism, Iran and

Syria, and through various fundraising networks in Europe, the United States, and the Middle East. The funds

channeled to these organizations frequently pass through major international financial capitals such as Dubai,

Bahrain, Hong Kong, Zurich, London, or New York. Hizballah also continues to profit from the drug trafficking

groups in the Bekaa Valley of Lebanon.

In response, the United States is helping to strengthen the anti–money laundering and counter–terrorist

finance programs of partner countries that aim to detect, disrupt, and dismantle these illicit activities. In

Palestine and Gaza, besides being responsible for hundreds of rocket, mortar, and small arms attacks into Israel,

Hamas and other armed groups in Gaza engaged in tunneling activity, and smuggle weapons, cash, and other

contraband into the Gaza. In the West Bank, the United States helps to support the PA security forces (PASF) to

establish law and order and fight terrorist cells by helping to build capacity to administer criminal justice

institutions. The United States has also helped train thousands of Palestinian security forces at Jordan’s

International Police Training Center (JIPTC), who can then be deployed by the Palestinian Authority to

protect peace and stability in the West Bank. In Lebanon, a place I visited last week, we are partnering with the

Lebanese Government, and specifically with its Ministry of Interior, in an initiative to train the next generation

of Internal Security Forces officers. Our objective is clear: to support the development of professional institutions

under the Ministry of Interior which can provide security and vital services to the Lebanese people.

In Iraq, criminal insurgencies have profited from the illicit trade of siphoned oil. The United States is working to

target and dismantle these illicit networks as part of our broader counter-insurgency effort. We continue to

support reconstruction and stabilization by helping to develop an Iraqi criminal justice system that is sufficiently

fair and effective that the Iraqi people have confidence in that system and turn to it rather than extra-judicial

groups and militias to resolve disputes and seek justice. We also support rule of law programs that focus on judicial

security, capacity building for judges, prosecutors, investigators, and court administrators, and integration of the

various components of the justice system. We are also working with Iraq on legislation to reform their criminal

codes, and continue to support the FBI-led Major Crimes Task Force.

In Afghanistan, where we have long focused on combating narcotics trafficking and the revenue stream that

creates for the Taliban, we are also working with our military colleagues to develop criminal justice institutions by

giving Afghans the necessary training, equipment, infrastructure, institutional capacity and organizational

structure to provide the rule of law and combat crime.

In Yemen, we recently completed a judicial and law enforcement assessment. Based on that, we aim to undertake

targeted assistance to the Government of Yemen to strengthen its capacity to control the movement of people

and goods through and across Yemen’s borders.

In West Africa, over the next three years, INL aims to strengthen criminal justice institutions such as the police,

prosecutors and the courts to successfully investigate, prosecute and incarcerate transnational criminals, networks

and organizations. Right now, we are considering how best to support Kenya and other partner nations in the

Horn of Africa to prosecute and incarcerate those apprehended for piracy. At the same time, though, we and others

at the State Department are focused on the longer term solution to the piracy question—political stability,

restoring the rule of law, and supporting economic opportunity in the Horn of Africa.

In Indonesia, INL has worked closely and successfully with the National Police for many years, and our

investment is paying off. The first Police units that responded to the July 2009 attacks on the Marriot and Ritz-

Carlton Hotels in Jakarta were trained through INL programs. The unit that ultimately brought down the

mastermind behind those bombings, Noordin Top, was also trained and worked closely with us for many years.

Noordin had ties to Jemaah Islamiyah as well as to Al Qaeda.

The United States is also committed to working with others to strengthen law enforcement cooperation in

combating transnational threats, including dismantling illicit networks and prosecuting high-level corrupt

officials, to disrupt the convergence of various threat networks. On numerous occasions, President Barack Obama

and Secretary of State Hillary Clinton have highlighted the threat of high-level corruption, and we are working

to strengthen the tools we have to combat and deter corruption and to use those tools more effectively.

International legal and political cooperation is essential to prevent, investigate, prosecute and punish serious

crimes as well as to break up terrorist networks, to eliminate safe havens, and to disrupt those activities that

support terrorist organizations. Our efforts are aimed not only at the murderous acts terrorists perpetrate, but

also their funding, their travel, their communications, their recruitment, and their intelligence and information

collection.

With our international partners, we encourage others to implement the United Nations Convention against

Transnational Organized Crime (and its Protocols) and the United Nations Convention against Corruption

(UNCAC). These international instruments, built on the foundation of the three United Nations counter-drug

conventions, create a broad legal framework for mutual legal assistance, extradition and law enforcement

cooperation. Additionally, the United States supports implementation of UN Security Council (UNSC)

Resolution 1373, and other UNSC resolutions and UN legal instruments, to combat terrorism.

Dynamic Threat Mitigation: Fighting Networks with Networks

Beyond the United Nations, my colleagues and I in the Bureau of International Narcotics and Law Enforcement

Affairs also work through the G-8, the European Union, INTERPOL, the Financial Action Task Force (FATF)

and its regional sub-groups, APEC as well as other regional forums. Through these groups, we set international

counter-drug and anti-crime standards, take steps that close off safe havens to criminal and terrorist groups, pool

skills and resources, and improve cross-border cooperation. For example, at last year’s G-8 summit in L'Aquila,

Italy, leaders expressed concern about the converging threats of terrorism, drugs and organized crime, and agreed

to strengthen international cooperation and capacities to prevent international criminal networks, kleptocrats

and terrorists from corrupting public institutions to advance their goals. Additionally, the United States is

working with INTERPOL and other multilateral partners to strengthen inter-regional law enforcement efforts

to combat transnational threats in a coordinated manner across the Pacific and Atlantic.

As the world witnessed this past Christmas day when a terrorist attempted to blow up a commercial airliner, Al

Qaeda remains keen to harm Americans and others around the world. Our enemies will continue to use all

available means to sustain their agenda. As already noted, in places in Afghanistan, Southeast Asia, West Africa,

Somalia, and Yemen, illicit networks, trafficking in everything from weapons to drugs, are making it easier for Al

Qaeda and other terrorist groups to fund their campaigns. As a recently captured Taliban underscored: “Whether

it is by opium or by shooting, this is our common goal [to harm all infidels as part of jihad].”

Faced with these challenges, we must continue to take more effective steps to understand our adversaries and to

strengthen our capabilities to deter, disrupt and dismantle transnational threat networks, not only at the end of

their efforts, when they carry out acts of violence, but at every step along the way.

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