ch3

1. Chapter 3
Babette Protz
University of
South
Carolina
Lancaster
THE ORGANIZATION AND
FINANCING OF TERRORISM

2. LEARNING OBJECTIVES: CHAPTER 3
 Summarize rural, urban, and insurgent models of
terrorism.
 Trace the evolution of terrorist organizational
structures.
 Discuss the challenges involved in leading a
terrorist group.
 Describe the issues involved in terrorist financing.
 Describe legal and illegal sources of income.
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3. LEARNING OBJECTIVES: CHAPTER 3
 Explain the ways funds are disbursed in an
underground economy.
 Describe the hawala system.
 Summarize views on the political economy of
terrorism.
 Outline the manners in which drugs and terrorism
overlap.
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4. MODELS OF TERRORISM
 Three models represent general trends from 1945
to the present: (1) Rural, (2) Urban (3) Insurrection
 Models help to explain the evolution and practice of
contemporary terrorism
 They embody the philosophy behind particular types
of terrorist movements
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5. GUERRILLA WARFARE
 The Cuban Revolution popularized guerrilla warfare
throughout the world
 Guerrilla revolutions based on the Cuban
experience are typified by three phases
 Phase one begins with isolated groups
 Phase two merges groups into guerrilla columns
 Phase three brings columns together in a conventional
army.
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6. GUERRILLA WARFARE
 http://www.youtube.com/watch?
v=Qb_mhiRJBcc&feature=related
Discussion:
 This video looked at U.S. Army Special Forces. Do you
agree with the premise that guerilla warfare will become
the face of modern war? Support your position.
 What was your overall view of the video?
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7. URBAN TERRORISM
 The model for modern urban terrorism was
intellectually championed by Frantz Fanon
 He produced two works as a result of his Algerian
experiences:
 The Wretched of the Earth (1982)
 A Dying Colonialism (1965)
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8. FRANTZ FANON
 Western powers have dehumanized non-Western
people by destroying their cultures and replacing
them with Western values
 Decolonization was destined to be a violent process
 Achieving freedom was inherently violent
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9. FRANTZ FANON
 Guerrilla warfare and individual acts of terrorism as
tools of revolution
 Fanon argued that terrorism should not be used
against the native population in general
 His proposed two targets for terrorism:
 White settlers
 Native middle class
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10. CARLOS MARIGHELLA
 Brazilian legislator
 Nationalistic Communist Party leader
 Revolutionary terrorist
 Designed practical guides for terrorism that have
been employed for more than 40 years
 Wanted to move violence from the countryside to
the city
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11. INSURGENCY
 Focus on insurgency due to a small group of officers
who began looking at military failures during the
Vietnam War
 Impossible to fight insurgencies with military tactics
designed for terrorism or guerilla war
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12. INSURGENCY
 At the end of the Cold War, various insurgencies
began growing in the vacuums left by the
superpowers
 Technology and weapons helped many insurgencies
grow
 New political atmosphere made the rise of
organizations like al Qaeda possible
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13. THE EVOLUTION OF CELLS
 Top of the pyramid
 Group responsible for command
 Second level
 Active cadre or the people responsible for carrying out the
mission of the organization
 Third level
 Active supporters; critical to terrorist campaigns
 Last level
 Passive supports; difficult to identify and characterize
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14. THE EVOLUTION OF CELLS
 The Cell
 Composed of four to six people
 Usually has a specialty; may be a tactical unit or an
intelligence section
 The Column
 Semiautonomous conglomerations of cells with a variety
of specialties and a single command structure
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15. UMBRELLA ORGANIZATIONS
 Several small pyramids gather under a sheltering
group that manages supplies, obtains resources,
creates support structures, and gathers intelligence
 Northern Ireland Unionists & Republicans
 Maintain legitimate political organizations
 Violent paramilitary groups have operated under the
umbrella of legitimate organizations
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16. NATO CHRONICLES – HORN OF AFRICA:
PIRACY
 http://www.youtube.com/watch?v=6KYIpuBSn9E - Part I
 http://www.youtube.com/watch?
NR=1&v=IgJq8XkoROY&feature=endscreen - Part II
Discussion Questions:
 How did the videos impact your understanding of modern
piracy?
 Are piracy and terrorist acts on land comparable? How so?
 What are the international ramifications of piracy?
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17. MODERN PIRACY
 Today’s pirates are armed with global positioning
systems, satellite phones, machine guns, rockets,
and grenades
 Horn of Africa
 Gripped by internal and external struggles
 Piracy caused by the multifaceted conflict in Somalia
accompanied by the breakup of legal authority and social
systems
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18. MODERN PIRACY
 http://www.marad.dot.gov/news_room_landing_page/horn_of_africa_pi
racy/horn_of_africa_piracy.htm - Horn of Africa Piracy
 http://topics.nytimes.com/top/reference/timestopics/subjects/p/piracy
_at_sea/index.html - Piracy at Sea
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19. MANAGING TERRORIST ORGANIZATIONS
 It is possible to chart the structure of any
organization
 Terrorist leaders have special organizational
problems
 Terrorism demands secrecy
 Secrecy prevents effective communication
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20. MANAGING TERRORIST ORGANIZATIONS
 Decentralization offers relative security
 Very few people know many other members of the
organization.
 Decentralization paves the way for potential splintering
or misunderstandings
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21. MANAGING TERRORIST ORGANIZATIONS
 Another problem of terrorist management is that of
gaining immediate tactical support for operations.
 There is a need for active supporters
 Consequently, the majority of time is spent creating networks of
active supporters, not launching headline-grabbing operations.
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22. GROUP SIZE AND LENGTH OF CAMPAIGN
 The size of a terrorist organization affects its ability
to operate over time.
 Large groups last longer than small ones.
 Terrorists need to create a large following to
conduct a lengthy campaign.
 However, terrorism almost always involves violence from
an unpopular political fringe movement
 Terrorists are often unable to form a large constituency to support
the campaign.
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23. GROUP SIZE AND LENGTH OF CAMPAIGN
 A terrorist campaign promises the greatest
opportunity for success
 Political revolutionary and radical groups, however,
do not have the popular appeal needed to gain
support for their activities
 Results in many terrorist activities remaining isolated –
never growing into a campaign
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24. FINANCING MODERN TERRORISM
Criminal enterprises
Drug trade
Conducting illegal
business activities
under a legal cover
Smuggling money
Identity theft
Security fraud
Extortion
Charitable
contributions
Nongovernmental
organizations
Banks
Wire transfers
Normal employment
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25. NETWORKS AND SYSTEMS
 FBI estimates that the underground economy
produces $500 billion per year
 Terrorists not only move funds but also smuggle
stolen goods and contraband
 Gglobalization terrorism has created opportunities
for profits in diamond trade
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26. HIDDEN TRANSFERS
 Black Market Peso Exchange
 Drug dealers sell their products in the US and accumulate
large amounts of US currency
 The drug dealers end up with “clean” Colombian pesos,
and the US currency accumulated from illegal drug sales
is hidden from formal audits
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27. HIDDEN TRANSFERS
 Hawala System
 Caravan leaders would visit merchants and pay for goods
with a promissory note
 When the caravan reached its destination, the leader sold
goods and the distributors would pay the caravan leader
with promissory notes
 The leader returned home, presented the note, and the
local chit dealer paid the debt
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28. POLITICAL ECONOMY OF TERRORISM
 New economy of terrorism produced after the fall of
the Soviet Union and subsequent globalization
 ETA tried to gain control of the economy
 They forced Spanish businesses out of the Basque areas
of northern Spain
 Basque region became a failed state
 ETA established an illegitimate economy in a shell state
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29. NARCOTERRORISM
 Terrorists using either terrorist tactics to support
drug operations or drug-trade profits to finance
terrorism
 Terrorists are involved in the international
production and distribution of drugs
 Narcotics trade is one of their primary sources of
money
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30. DRUGS AND TERRORISM
 Hezbollah and Hamas use the Latin American drug
trade to raise funds
 Islamic groups get most of their money through the drug
trade in central and Southeast Asia
 Seven drug trafficking organizations dominate the
political landscape in Northern Mexico
 Los Zetas uses Hezbollah to launder drug profits while
Hezbollah uses the payoffs from Los Zetas to finance
terrorist operations
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31. NARCOTERRORISM CONTROVERSIES
 Critics say combining drug problem with terrorism
confuses two different issues
 The 9/11 Commission dismisses that drugs were
linked to al Qaeda’s attack
 Saudi money can be traced to violence; spread of
militant Islam is not about drugs
 al Qaeda’s use of heroin to finance the jihad ranges
from believable to fantastic
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32. NARCOTERRORISM
 http://www.youtube.com/watch?v=zJaxpreK0DE
Discussion Questions:
 Considering the controversies addressed in the text and
the testimony in this video what is your opinion on
narcoterrorism? Support your position.
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33. CHAPTER TAKE AWAYS
 Terrorist organizations are as complex as any other
social organization designed to accomplish a
mission.
 They are hampered in their effectiveness due to the
secret nature of their operations.
 Most organizations are designed to either support
guerrilla movements or to operate as a terrorist
movement.
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34. CHAPTER TAKE AWAYS
 The former organizations use terrorism selectively
while terrorist groups simply terrorize as a strategy.
 All groups require funding.
 This caused some analyst to focus on the fiscal
aspects of terrorism, believing that terrorists used
money in the same way as other organized
criminals.
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35. CHAPTER TAKE AWAYS
 Investigations revealed that the money trail in
terrorism differs from the flow of funds in other
criminal enterprises because special structure of
terrorist operations.
 It is important to understand the financing of terrorism
because it is an important intelligence tool.
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