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The Links Between Drug Prohibition and Terrorism

How does prohibition help terrorists?

(For a more detailed explanation of the points discussed below, see "How Drug Prohibition Finances and Otherwise Enables Terrorism," Submission to the Senate of Canada Special Committee on Illegal Drugs, October 29, 2001).

                        -- Eugene Oscapella, Canadian Foundation for Drug Policy
Information Sources on Drugs and Terrorism

  • Terrorism and Transnational Organized Crime: Implications of Convergence by Neal A. Pollard, Director, Terrorism Research Center



    • Other links to information about drugs and terrorism, and about terrorism generally:



    Excerpts from Proceedings of the (Canadian)  Senate Special Committee on Illegal Drugs

    (Web site address for full transcript: http://www.parl.gc.ca/37/1/parlbus/commbus/senate/Com-e/ille-e/03eva-E.asp#Alain Labrousse)

    OTTAWA, Monday, May 28, 2001

    Mr. Alain Labrousse, chargé de mission, Observatoire français des drogues et des toxicomanies:

    After the fall of the Berlin Wall, we thought we were returning to an era of peace. Unfortunately, we have found that underlying these local conflicts [in places such as Afghanistan and Angola] were factors other than ideological factors: they involved identity, religion and nationalism. Yugoslavia is the classic example. Hence, conflicts broke out throughout the world, and this time, they were no longer supported by the major powers. So the war infractions had to find independent ways of financing these conflicts.

    What happened in Kosovo is a good example in this regard. The creation of the KLA was financed by intense heroin trafficking from Istanbul. The heroin was sold in Switzerland to buy Kalashnikovs and handguns. They were more or less freely available and were stored in the Albanian part of Macedonia.

    This was not the only means used, because there was income tax on the Kosovar diaspora, racketeering, and so on. However, drugs did play an important role - we demonstrated that at the Observatoire géopolitique des drogues - in preparing the uprising. Now that the war is over and the major powers are trying to disarm the war factions that did not the join the paramilitary forces, the KLA, in order to continue to grow, is involved in a great deal of drugs and labour trafficking in Italy. The Italian police and courts have often pointed out that the leaders of the Albanian KLA were involved very closely with Italian criminal organizations.


    Excerpts from

    Conflict, Drugs and Mafia Activities

    Contribution to the Preparatory Work for the Hague Peace Conference, May 11 - 16, 1999

    by Mr. Alain Labrousse, chargé de mission, Observatoire français des drogues et des toxicomanies

    March 1999

    This paper was also presented to Canada's Senate Special Committee on Illegal Drugs.
    (Click here for the complete paper.)

    . . .

    Drugs in Post-Bipolar Era Conflicts

    The end of the antagonism between the major blocks, a period during which the two superpowers confronted each other
    through their Third World allies, did not signal the end of local conflicts. It was discovered that their ideological grounds
    (fighting for socialism, national liberation, anticommunism) most often concealed confrontations over nationality, ethnicity or
    religion. Since the belligerents could no longer rely on funding from their powerful protectors, they were forced to find alternative resources in trafficking of all kinds, including drug trafficking. [emphasis added] Some of those conflicts, in Colombia, Afghanistan and Angola, were under way before the Cold War ended. The withdrawal of sister parties and powerful protectors not only made them less and less controllable, but also led some of the players to engage in mere predatory behaviour. In other cases, the collapse of Communist regimes caused new conflicts, in the former Yugoslavia, Azerbaidjan-Armenia, Georgia (Abkhazia, Ossetia), Chechnya and Tadjikistan. These conflicts, which resulted in a weakening, and in some instances dislocation, of states also led to the development of drug trafficking.

    . . .
     

    [At] the dawn of the third millennium, we can prepare a list of current or unfinished conflicts in which drugs are proven to be
    playing a role.
     

    Latin America: Colombia, Peru, Mexico (Chiapas and Guerrero)
    Asia: Afghanistan, Tadjikistan, India (Cashmir, northeastern states), Burma, Philippines, Azerbaidjan-Armenia, Chechnya, Georgia (Adjaria, Abkhazia)

    Europe: Yugoslavia (Kosovo), Turkey, Ireland

    Africa: Algeria, Egypt, Sudan, Senegal (Casamance), Guinee-Bissau, Liberia, Sierra Leone, Democratic Republic of the Congo (DRC), Congo, Chad, Uganda, Rwanda, Angola, Somalia, Comoros (Anjouan).
    (1) The analysis of the role of drugs in financing these conflicts excludes any judgment as to the motivations of the parties, the
    legitimacy of their struggle and other such questions.

     . . .

    Conclusions

    The drug trade involves producers and users and, between them, processors and marketing channels. Armed groups and those
    that fight them use all the links in this drug chain to finance their activities.

    The solution to drug-financed conflicts, the resources of which drawn from this production promote the endless continuation of
    those conflicts when their initial causes have disappeared, implies that the problems of illegal crops and drug use must first be
    solved.

    However, the development of conflicts and of the inherently related trafficking rings does not only follow local and autonomous
    logic. Explosive growth in the drug market also results from the fact that the rich countries are powerless to put an end to these
    local and regional conflicts in Asia, Africa and the Balkans. The lack of determination to isolate the Burma dictatorship, the
    indecision displayed in imposing a solution to the conflicts in the former Yugoslavia, the assertion that the conflicts in the
    Caucasus and Central Asia are solely Moscow's responsibility, indeed even an internal Russian matter and Western discretion
    regarding the Kurdish conflict are not without consequences for the development of drug trafficking and use in Europe. A study
    of the method whereby conflicts are financed through drugs must therefore include some consideration of the geopolitical
    failures of the major powers in relation to these problems.
     
     
     


    Excerpts from

    The Relationship Between Illegal Drugs and Firearms

    A Literature Review Conducted for the Department of Justice (Canada)

    by Eugene Oscapella (July 1998)

    To see the full report:  http://www.cfc-ccaf.gc.ca/en/research/publications/reports/1998/reports/dg_rpt.asp

    Note to reader:  This part of the study deals mainly with using drug profits to purchase weapons for local insurgent acitivites.  However, the profits from drug sales can just as easily be used to fund other activities, such as training and equipment purchases for international terrorist activities.

    Sometimes these direct exchanges [of weapons for drugs and drugs for weapons] take on even larger dimensions, such as when paramilitary or terrorist groups trade drugs for weapons. Thus, groups in drug source countries (Colombia, Thailand, Pakistan, among many others) might supply drugs to American criminals in exchange for weapons (the United States being a major manufacturer of weapons).

    In other cases, the exchange is not direct. Terrorist groups may themselves sell drugs for cash, or "tax" drug producers to get sufficient funds to buy weapons. Sometimes there are multiple steps between the drug transactions and the purchase of weapons. This type of indirect exchange may give the would-be purchasers a greater choice of weapons, since they would not be tied to any individual supplier of weapons. When drugs are exchanged directly for weapons, on the other hand, the choice of weapons might be more limited.

    One recent article about Canada and drug trafficking in the Americas describes variants of these drugs-for-guns arrangements:

    The "narco-guerrillas" are more politically oriented groups of guerillas that have become involved in the drug trade, for example, the Shining Path in Peru and the M-19 in Columbia. These groups are primarily motivated by political considerations, contrary to the "narco-terrorists." They are trying to overthrow the system and generally seek a fairer redistribution of income. Their involvement in the drug trade takes a number of forms: they may protect the local peasant populations from the "narco-terrorists" or the law enforcement agencies in exchange for a "war tax" that funds their guerrilla activities. They may also cooperate with the drug dealers in exchange for weapons or funds to finance their activities. 53
    An example of the potential complexity of the guns-for-drugs exchange comes from Somalia:
    [M]ost of Somalia’s annual frankincense crop, grown in an area under the control of the Somalia National Movement, is smuggled to the Arab Gulf states and sold at a profit enhanced further by the evasion of (now uncollectible) export duties. Some of the proceeds are brought back in cash dollars to be sold, at another healthy premium, for shillings on the local currency black market. The shillings are used to buy qat; and the qat in turn used as the currency with which to pay for militiamen and their weapons.

    Nor does it end there. For much of the food and fuel these armed gangs hijack or extort from international aid shipments is sold on the black markets of Kenya and Ethiopia from whence both qat and weapons are imported.54

    A 1995 study on covert commerce in the arms black market described the relationship between almost any form of contraband and weapons, arguing that these provide many ways for a guerrilla or paramilitary group to meet its logistical needs:
    Much of the world’s underground traffic in diamonds, rubies, emeralds, lapis lazuli, jade, ivory, teakwood and "recreational drugs" along with part of the traffic in looted antiquities is currently, if not actually controlled at source by this or that insurgent group, then at least taxed by them.

    Thus, just as the growth of the international underground economy greatly facilitates the physical process of arms supply, simultaneously it makes it easier for insurgent groups to find the means to pay for them - albeit in a wide variety of forms - provided the gun-runner is willing to cooperate.55

    The same author cites as an example the drugs-for-guns escapades of one errant capitalist:
    Hanafi Arslanian, an Armenian from Turkey . . . arranged for morphine base to be imported from Turkey and Syria into Italy to be resold to mafia heroin traffickers, and for the export back again to the Middle East, especially to Lebanon, of huge amounts of weaponry.

    . . .Caught by United States Drug Enforcement Administration in 1972, he [Arslanian] simply went on their payroll, while continuing to import morphine in wholesale lots; and he simultaneously cultivated close enough relations with the Italian secret services to assure an uninterrupted flow of material from the Italian arms industry to fill his return cargoes.56

    Similarly, some Israeli army veterans who had seen both service and fields of marijuana in Lebanon, bought 1800 kilos, hid it in a consignment of Italian furniture bound for Britain, and would have used the resulting cash to buy weapons for resale to the IRA - if they had not been caught.57

    The author concludes that drugs have become a natural commodity for guerilla groups to exploit for weapons:
    It is often asserted that one of the most important means of financing weapons, especially light ones, is to barter "recreational drugs" (morphine, heroin, cocaine, hashish oil and even bulk marijuana) directly against them. Given the massive production of drug raw material in precisely the areas where civil disturbance and insurgency abound, drugs would seem a natural export commodity for a guerrilla group to exploit. And given the wide spread between the export and landed prices of illicit drugs, the double profit from direct arms-drugs exchanges must be a big temptation for an arms dealer. 58

    Thus, double profits also mean double danger. And the notion of a guns-for-drugs swap requires three cautionary clarifications.

    One is that most direct swaps likely occur in servicing small-scale criminal rather than large-scale insurgent demand.

    The second is that even where wholesalers like Hanafi Arslanian operate in both commodities, rather than a swap it is a matter of selling drugs for cash and using cash to buy weapons - making the financial mechanics in principle no different from an oil-for-cash-for-arms arrangement like the British-Saudi Tornado deal.

    The third is that in most cases the insurgent group is organizationally (and ideologically) distinct from any geographically contiguous drug traffickers. The main link of most insurgent groups to drugs, if any, is their taxation of the traffic, along with everything else, in the areas under their control.59

    Nadelmann suggests that, among all Latin American countries, Stroessner’s Paraguay stood out for the blatant involvement of its officials in the contraband trade, including drug trafficking. Nadelmann cites one 1971 report that he considered typical of the reports of corruption in Paraguay. The report states:
    Since the early sixties the contraband traffic has replaced the public sector as the major source of finance for the purchase of equipment by the Paraguayan armed forces. Arms for the armoured divisions, which were previously paid for by syphoning funds from the state alcohol monopoly (AAL), are now financed out of the profits from the traffic in contraband cigarettes. . . . Traffic in Scotch whiskey has likewise replaced funds from the state water board (CORPOSANA) in the case of Stroessner’s own crack Regimento Escolta. And the traffic in heroin has replaced the customs department as the major financial support for the counter-insurgency Regiment group -- R114 -- whose chief . . . is one of the organizers of the heroin smuggling.60
    Veteran American journalist Hugh Downs argues that the enormous profits made available to criminal drug organizations because of the war on drugs has allowed them to create efficient, modern armies -- "in effect, creating departments of defense to protect themselves":
    Some of these organizations sprawl across national boundaries creating new political realities. In Burma, a drug general named Khun Sa commands an army of at least 20,000 soldiers. Khun Sa pays for this enormous military and political apparatus by exporting heroin . . ..

    Armed with profits [from drug sales] . . . drug organizations secure technically advanced weapons systems. . . . 61

    In a 1994 interview, Interpol's chief drugs officer, Iqbal Hussain Rizvi, told Reuters News Agency:
    The end of the Cold War had left global terrorism without financiers, prompting the groups to turn to the drug business, he said. . . . "Drugs have taken over as the chief means of financing terrorism. There are no more free gifts from the earlier patrons," Rizvi said. . . . He said a bloody Kurdish revolt in Turkey was largely financed by money from heroin trafficking. 62
    One author discusses the direct political assault by drug traffickers against political authority in Colombia. He concludes, however, that this is not the only threat that they pose to Colombia: "Cocaine trafficking revenue supports violent right-wing militias that terrorize the Colombian countryside and are responsible for a large fraction of Colombia’s murders." 63

    The Sunday Times (London) reported in January 1998 that Loyalist paramilitaries have established contacts with Scottish drug dealers to bring large quantities of cocaine and heroin into Northern Ireland to finance their terrorist activities. 64

    The Sunday Times article continues:

    In recent years senior figures within the UDA and UVF, the mainstream loyalist organisations, have clashed in a series of local disputes over drugs. They believe a sophisticated network could result in the organisations becoming totally self-financing, rather like terrorist groups in parts of South America.

    That would enable them to purchase large consignments of arms if their ceasefires end, or prepare them for a move into the more lucrative drugs scene in Britain if they hold.

    "In theory, these organisations could become self-financing in the foreseeable future. That would have serious implications because they would be in a position to buy weapons in much larger quantities," said a security source. [emphasis added]

    In April 1998, an Australian newspaper 65 reported that Australian guns are being swapped for drugs in a growing trade which is arming Papua New Guinean rebels and seeing high-grade cannabis flood the local Australian market:
    According to a Federal Police intelligence report, the outlawed weapons are being bought and swapped with Papua New Guineans and other islanders for large quantities of cannabis.

    Criminal syndicates in Australia then distribute the drugs along the eastern seaboard.

    Recent seizures included a .357 Magnum revolver, pump-action shotgun, pistols, SKK and SKS Chinese assault rifles and hundreds of kilos of cannabis.

    Endnotes
     

    [52]  6th session of the Commission on Crime Prevention and Criminal Justice, "United Nations International Study on Firearm Regulation (Draft)", (E/CN.15/1997/CRP.6, 25 April 1997) United Nations Office at Vienna 58.

    [53]  D. Berthiaume, H.P. Klepak and G. Aureano, "Hemispheric addiction: Canada and drug trafficking in the Americas", (1997) Canadian Foundation for the Americas: The Focal Papers 5 at 17.

    [54]  R.T. Taylor, "Loose cannons: Covert commerce and underground finance in the modern arms black market", (1995) 22 Crime, Law & Social Change 1 at 45.

    [55]  Ibid. at 42-43.

    [56]  Ibid. at 25.

    [57]  Ibid. at 46.

    [58]  Ibid. at 46.

    [59] Ibid. at 47.

    [60]  Supra note 28 at 273-74.

    [61]  Downs, H., "The Longest War", in Arnold Trebach et al., ed., The Pioneers of Reform: Reflections and Visions (Washington, D.C.: The Drug Policy Foundation Press, 1996) 85. This article was from Mr. Down’s series of radio perspectives, and was broadcast on August 28, 1995.

    [62]  Jawed Naqvi, Reuters (New Delhi), December 15, 1994.

    [63]  Supra note 29 at 155.

    [64]  Sunday, January 18, 1998.

    [65]  Daily Telegraph, April 2, 1998.


    Excerpts from

    U.S. General Accounting Office, No Information to Link Irish Terrorist Organizations to International Narcotics Trafficking (Correspondence, 09/29/2000, GAO/OSI-00-18R).  (Click here to see full report.)

    . . .

    According to Irish and British law enforcement officials and corroboration from other sources, all of the Irish terrorist organizations- Loyalist and Republican- are engaged in some type of criminal activity to support their organizations financially.

    . . .

    Although Irish and British law enforcement officials and other corroborating sources had no evidence to link Irish terrorist organizations and international narcotics trafficking, we learned that some Loyalist and Republican terrorist organizations are engaged in street- level narcotics dealing. The narcotics include such drugs as heroin, cocaine, ecstasy, and cannabis.

    According to Irish law enforcement officials, Loyalist terrorist organizations control most organized criminal activity, including street-level drug dealing, in the Protestant neighborhoods of Northern Ireland. The Loyalist groups are not as sophisticated as Republican terrorist organizations and do not have access to the same international network of terrorist and criminal connections.

    Also according to Irish law enforcement officials, Republican terrorists control organized criminal activity in Northern Ireland, except in the neighborhoods controlled by the Loyalist terrorists, and in parts of the Republic of Ireland. In these areas, narcotics traffickers can operate only with the acquiescence of the Republican terrorists.

    In addition, we learned that Direct Action Against Drugs, a cover name for the Provisional IRA, has publicly acknowledged killing and wounding drug dealers in Belfast and Dublin. That terrorist group initiated these actions ostensibly to support the Provisional IRA's anti- drug position. However, police officials believe that the drug dealers were shot because they had
    failed to pay "protection" money to the Provisional IRA. Further, counter to the Provisional IRA's official anti- drug position, individual members of the Provisional IRA, the Continuity IRA, and the Real IRA are known to engage in drug smuggling/ dealing activities. The Irish National Liberation Army also regularly engages in street- level drug dealing.


    Excerpts from

    Terrorism and Transnational Organized Crime: Implications of Convergence

    by Neal A. Pollard, Director, Terrorism Research Center (click here to see full report).
     

    Terrorist groups are currently interacting with transnational organized crime syndicates, especially narcotics cartels. Peruvian Shining Path and Colombian FARC guerrillas have provided mercenary security support  for narcotics production and trafficking lines in South America, and there is strong evidence that the Palestinian PFLP-GC has been using infrastructure in Lebanon to support drug trafficking. In return, these terrorist groups receive enormous amounts of money, more so than in “traditional” fund-raising operations such as kidnapping and bank robbery—operations that are far riskier than supporting narcotics trafficking.

    Furthermore, this interaction offers smuggling routes long established and tested by crime syndicates for drug and arms running, potentially providing terrorists with logistical infrastructure to clandestinely move people, arms and materiel.

    Taken to its logical end, there might be a natural partnership between some terrorist groups and transnational organized crime syndicates. Organized crime syndicates frequently have access to and influence with political leaders, making such syndicates beneficial to terrorist groups that would seek to influence and intimidate, rather than destroy, a government. In return, organized crime syndicates can exploit terrorist campaigns, for the power vacuum present in regional instability, as a paramilitary wing of the syndicate, or to further coerce a weak government to “look the other way.” As offshore banks and inner city laundromats were once notorious mob fronts, so may terrorist campaigns become operational fronts for organized crime. Such a trend would find a welcome home in many former Soviet republics whose governments are fertile grounds for corruption and organized crime—regimes which once depended upon the backing of the military for “legitimacy” and political survival will find themselves relying on warlords or crime lords for the same. Indeed, we may see the rise of superficial terrorist campaigns serving as “fronts” for regional organized crime syndicates, campaigns which do not truly seek a political objective save that of creating a climate of anarchy and fear in which it is impossible for local law enforcement to prosecute or even hinder organized crime operations.

    Currently, however, the objectives and methods of terrorist groups remain significantly different that those of transnational organized crime syndicates. Terrorist groups generally seek an overthrow of the status quo, using spectacular operations that seek to attract the attention of the world. Transnational criminal organizations derive their power through a low profile, working within the existing structure, seeking not to attract the attention of “legitimate” powers. However, criminal syndicates do work for money, and there is no clear reason, given the right price, that such syndicates would not lend their logistical, communications, and transportation infrastructures to support terrorist operations.

    This holds two important implications for US counter-terrorism strategy. Firstly, if terrorist groups increasingly interact with organized crime syndicates, they may evolve organizationally, to adapt to such interaction. Such an organizational evolution would require a re-thinking of infiltration and targeting strategies as terrorist organizations come to resemble more closely, for example, the narcotics cartels in South America.

    Secondly, there is a trend of increasing lethality of terrorist attacks. The logical end of this trend is, of course, terrorist use of WMD [weapons of mass destruction]. If terrorist interaction with transnational crime syndicates is successful enough—especially with narcotics traffickers—the infrastructures of these interactions might be robust enough to provide terrorists with real opportunities for WMD proliferation, including the introduction of a weapon of mass destruction into the United States. The implications of such an infrastructure are obvious.  [emphasis added]

    Statements on Drug Policy and Terrorism
    by Eugene Oscapella
    Canadian Foundation for Drug Policy
    before the (Canadian) Senate Special Committee on Illegal Drugs
    October 16, 2000.
    (See also "How Drug Prohibition Finances and Otherwise Enables Terrorism," by Eugene Oscapella, a presentation made on October, 29, 2001, to the Senate of Canada Special Committee on Illegal Drugs after the September 11, 2001 attacks.)

    Excerpts from Testimony (October 16, 2000)

    Terrorist groups in Colombia and in other parts of the world are using drug trafficking as a vehicle to get money to buy arms to continue their insurgencies. We are seeing it right now in Colombia, and we will see it elsewhere in the world. The former chief drugs officer of Interpol stated in 1994 that drugs have taken over as the chief means of financing terrorism since the end of Cold War because there is no longer the ideological support for terrorist groups around the world. Therefore, we are funding terrorism, and we are destroying the potential for democracy in some nascent democratic countries around the world.
    . . .
    We know that organized crime and terrorist groups make an enormous amount of money through the criminal prohibition of drugs. That is a given.
    . . .
     
    I would like to suggest that you look at this issue [drug policy] holistically. Your committee is looking at the broad picture, not just at the interests of physicians or the concerns of street workers in Vancouver. This committee is looking at broader issues, the impact of our drug policies on society, and what you must do is cobble together the concerns that various reformers have and suggest a mechanism that will address those concerns. That mechanism must address the interests of people who are concerned about civil liberties, the corruption of democratic institutions and the spread of terrorism.
    . . .
     
    The solutions that are proposed are often different, but people working in the same field quite often agree on the types of solutions. Amongst some groups, there is fairly widespread acceptance of the evil of prohibition, its impact on human rights and civil liberties, for example, and its impact on the spread of terrorism around the world. Therefore, my answer is no, there is no unanimity, but when you look at the whole of the picture you can actually form a sensible and rational policy by cobbling together the various needs and interests.
    Excerpt from

    Profiteers and Prohibition

    Notes for an address by Eugene Oscapella LL.M., of the Ontario Bar
    to the International Society for the Reform of Criminal Law Conference*
    "Drugs, Criminal Justice and Social Policy"
    St. Michael, Barbados
    August 11, 1998

    * Also submitted as a background paper to the Senate Special Committee on Illegal Drugs, October 16, 2000
     

    For those interested in fomenting a little terrorism in the world, look no further than the war on drugs. The war on drugs has created an enormously lucrative cash cow for terrorist and paramilitary groups -- from Northern Ireland to the Middle East, to Asia, to South America, to Africa. Terrorized, brutalized and murdered civilians end up as the "collateral damage" in these drug war skirmishes.
    Excerpt from

    Witch Hunts and Chemical McCarthyism: The Criminal Law and Twentieth Century Canadian Drug Policy

    Notes for a presentation by Eugene Oscapella, LL.M., of the Ontario Bar and a founding member of the
    Canadian Foundation for Drug Policy
    to the Senate Special Committee on Illegal Drugs
    October 16, 2000
     

    Instead of looking for policies that might minimize the harm flowing from the use of all psychoactive substances, Canada has arbitrarily created a black market for some. In so doing, it has poured billions of dollars into the hands of those willing to milk the prohibition cow and to use violence to do so. And Canada's active support for prohibition is helping to destabilize countries around the world by giving terrorist organizations a lucrative source of revenue.



    Terrorists get cash from drug trade: Trafficking prime source
    of funds for many groups

    Ottawa Citizen, September 14, 2001

    By Dan Gardner

    In response to this week's terrorist attacks in the United States, U.S.
    Secretary of State Colin Powell told a news conference Wednesday that "we
    have to make sure that we go after terrorism and get it by its branch and
    root."

    Mr. Powell meant his comment to be a warning to states that support
    terrorists. But the evil of terrorism has another root: money. Terrorist
    groups may be forged by people holding fanatical beliefs, but their
    operations still need material support. Weapons have to be bought, training
    financed, travel paid for, bribes offered and terrorists sheltered. Even
    zealots need cash.

    "It used to be that the terrorism was funded by nation states, particularly
    the old Soviet Union," said John Thompson of the Mackenzie Institute, a
    Canadian think tank studying terrorism and organized crime. "But as the
    Soviet Union weakened in the 1980s, more and more insurgent groups,
    terrorist groups, started to resort to organized criminal activities to pay
    their bills."

    There are still a few state sponsors left, Mr. Thompson notes, although today
    they try to hide that support. These include North Korea, Iraq and Syria.
    And in some countries, such as Pakistan and India, officials "within a
    state, without the state's knowledge, use their offices to fund terrorism."

    A very few wealthy individuals fund terrorism with their personal fortunes.
    Osama bin Laden, a prime suspect in Tuesday's attacks, is one such
    benefactor. His wealth comes from the construction industry and, although
    his assets were frozen a couple of years ago, Mr. Thompson believes he was
    able to spirit out "several tens of millions" of dollars.

    Another common source of cash for terrorists is money raised among
    expatriates. The Tamil Tigers of Sri Lanka are thought to derive much of
    their funding from donations by Tamils living elsewhere, including Canada.
    Sometimes those donations are voluntary, but often terrorist groups will
    raise funds through fake charities, or extort them by threat.

    But these sources of funding are not the bread and butter of terrorism, Mr.
    Thompson said. "The big money earner for most of them seems to be
    narcotics."

    Law enforcement agencies agree. In 1994, Interpol's chief drugs officer,
    Iqbal Hussain Rizvi, admitted that "drugs have taken over as the chief means
    of financing terrorism."

    After the fall of the Soviet Union, terrorists quickly moved into the
    business that offers bigger, faster profits than any other.
    In Northern Ireland, both Loyalist and Republican paramilitaries traffic
    drugs to pay for weapons.

    In Kosovo, "the creation of the KLA (Kosovo Liberation Army) was financed by
    intense heroin trafficking from Istanbul," Alain Labrousse, the head of
    Observatoire français des drogues et des toxicomanies, a French organization
    that studies drugs, recently testified before a Canadian Senate committee.
    "The heroin was sold in Switzerland to buy Kalashnikovs and handguns."
    In Peru and Colombia, leftist rebels have tapped into the illicit trade in
    cocaine and heroin to finance their activities. The leader of right-wing
    paramilitaries in Colombia recently admitted that they get 70 per cent of
    their funding from the illegal drug trade.

    In his presentation to the Senate committee, Mr. Labrousse presented a list
    of countries in which armed insurgents have been financed to some degree by
    the black market in drugs. There were 29 nations in all.

    Just how much of a group's financing comes from drugs varies widely, Mr.
    Thompson said. "With the Islamic fundamentalists, (it is) maybe 25 to 30 per
    cent. It's probably the single biggest money earner."

    The drugs trafficked by Islamic terrorists include marijuana from Lebanon,
    but more commonly they distribute heroin. Afghanistan is one of the largest
    growers of opium poppies, the source of heroin.

    Even Osama bin Laden may have his hands in the drug trade. According to a
    Russian report, Mr. bin Laden has bankrolled Chechen gunmen in Dagestan with
    funds generated from heroin trafficking.

    The importance of illegal drugs to the financing of terrorism raises an
    obvious question. If illegal drugs are the single largest source of funding
    for terrorism, can you hurt terrorism by legalizing drugs?
    "Probably," John Thompson said. "In fact I think you could hurt it
    considerably."

    Drug policy activists have long argued that by banning drugs and putting them
    into the black market, Western nations have fuelled mayhem.
    "We have to look at the ways that our drug policies are enriching terrorist
    organizations just the way that they're enriching organized crime," said
    Eugene Oscapella, an Ottawa lawyer and a founding member of the Canadian
    Foundation for Drug Policy.

    So far, that reconsideration hasn't happened. The G8 and the United Nations
    have discussed the problem of terrorist financing over the past several
    years, but they have never discussed drug prohibition in that light. The G8
    went so far as to explicitly refuse to talk about drug legalization.
    Instead, they have focused on fundraising among expatriate communities and
    other, lesser sources of financing.

    Yesterday, British Prime Minister Tony Blair insisted that in striking back
    at terrorism, the West would have to cut off the money that pays for
    terrorist atrocities.

    There's little question that the drive against terrorism will be sweeping,
    taking in all the "roots and branches," including financing. But Mr.
    Thompson doesn't expect world governments to seriously consider whether they
    might cut off much of the money flowing into terrorist hands by abolishing
    drug prohibition.

    "This is a sacred cow. It's going to be hard to kill." [emphasis added]
     


    Emergency Response & Research Institute (ERRI)

    05 Feb 2001

    AFGHANISTAN:

    Russians Charge That Taliban Support 30 Guerrilla Camps

    Russian security council secretary Sergei Ivanov told a conference of defense officials in Munich, Germany, on Sunday that the Taliban movement in Afghanistan was supporting about 30 terrorist camps aimed at training fighters as well as smuggling drugs and arms. Ivanov said: "According to our information, the Taliban fighters, supported by Pakistan, have set up in Afghanistan approximately 30 training camps for terrorist commandos from Central Asian, Arab and European countries."


    US House of Representatives Committee on the Judiciary, Subcommittee on Immigration and Claims

    Excerpts from remarks by

    John C. Thompson, Director of the Mackenzie Institute (Canada)

    26 January, 2000

    (For full text of remarks, click here.)

    A characteristic of terrorists and other insurgent groups in the 1990s is that most have had to become self-supporting, usually
    by participating in organized crime. Some groups, such as the Tamil Tigers or FARC in Colombia, have perfectly fused both
    activities into a single organization. Most of the terrorist groups that are present in Canada, are there to make money and garner support. Few international groups have ever directed violence against Canada itself. As an example, the Tamil Tigers in Canada engage in fraud, extortion (within the Tamil expatriate community), heroin trafficking and prostitution to fund their war effort in Sri Lanka. A handsome share of the profits of the cocaine market in Canada must be assumed to be in FARC’s pockets.

    The effects of this hybrid relationship between support for insurgency and organized crime cannot be understated. It is not a
    new phenomenon, but was largely absent in the Cold War Era. However, those groups that evolve into this pattern have the
    potential to become extremely powerful. The Tamil Tigers own their own merchant ships and FARC now controls some 40%
    of Colombia. Historical examples of insurgents who drifted into organized crime include the Mafia and the Chinese Triads –
    both of which may have more influence than is generally understood.

    Remarks by US president George W. Bush on the 2002 National Drug Control Strategy, February 12, 2002

    “Make no mistake about it, if you're buying illegal drugs in America, it is likely that money is going to end up in the hands of terrorists. . . . When we fight drugs, we fight the war on terror.”
    For audio clip of a statement by George W. Bush to the same effect, click here.

    Excerpts from

    United States General Accounting Office, Report to Congressional Requesters, Terrorist Financing: U.S. Agencies Should Systematically Assess Terrorists’ Use of Alternative Financing Mechanisms     (November 2003) GAO-04-163  For full report, click here.

    Note from Canadian Foundation for Drug Policy:  In part, this report discusses how illegal drugs are used to finance "terrorist" groups.  It describes drugs as the "most lucrative commodity illegally traded" (at page 11).  However, nowhere does the report explain why the trade is so lucrative; it fails completely to explain that laws prohibiting certain drugs create the lucrative illegal black market ("black market") in those drugs in the first place and that, if prohibition ended, the huge profits being made in the illegal drug market would cease.


    Excerpt:

    Globally, trafficking in illicit drugs and weapons is a profitable means for terrorists to earn assets. Terrorists have been reportedly involved in trafficking illicit drugs, the most lucrative commodity illegally traded, according to the U.S. State Department’s Bureau of International Narcotics and Law Enforcement Affairs.17 According to the U.S. State Department’s 2003 International Narcotics Control Strategy Report, this trade is valued in the billions and allows drug traffickers to corrupt government and law enforcement officials worldwide, particularly in countries with weakly enforced laws and regulations where officials are poorly paid. In East Asia, trafficking in drugs and weapons—as well as engaging in organized crime and official corruption—are serious international crimes that terrorist organizations have exploited to finance their operations.18 In South Asia, al Qaeda is reported to have trafficked heroin to support its operations and Osama bin Laden was reportedly involved.19 In Latin America, terrorists trafficked in drugs and arms to finance their activities. In some South American countries, international terrorist groups have established support bases that sustain their worldwide operations. For example, the triborder area where the borders of Argentina, Brazil, and Paraguay converge continues to be a safe haven for Hizballah and HAMAS, where the organizations raise funds to finance their operations through criminal enterprises. According to the DEA, terrorist operatives associated with Hizballah generate significant income from contraband, including drugs in several Latin American countries, to support their organization in Lebanon. (page 11)


    Footnotes:

    17 The estimated 100 metric tons of cocaine that the U.S. government seizes each year could be worth as much as $10 billion to the drug trade.
    18 U.S. General Accounting Office, Combating Terrorism: Interagency Framework and Agency Programs to Address the Overseas Threat, GAO-03-165 (Washington, D.C.: May 23, 2003).
    19 Southeast Asian terrorist organizations that have cells linked to al Qaeda were discovered in 2001 in Malaysia and Singapore, and their activities, movements, and connections traverse the entire region, but little information is available about their financing methods.



    Drug-for-missile suspects agree to U.S. extradition

    The Globe and Mail (Toronto)

     Tuesday, January 7, 2003 – Page A10

    Hong Kong -- Three men agreed to surrender to the United States on charges they conspired to trade drugs for antiaircraft missiles they allegedly wanted to sell to the al-Qaeda terror network. Surprising even their own lawyer, the two Pakistanis and a U.S. citizen said yesterday they would not fight an extradition battle that had been expected to carry on for weeks if not months. The men were caught in an FBI sting operation by undercover agents who alleged the three had agreed to provide hashish by the tonne and heroin by the kilo in exchange for four shoulder-fired Stinger missiles.

    American Drug Policy is UnAmerican and UnIsraeli

    Address by Arnold S. Trebach, former President, The Drug Policy Foundation
    and Professor, The American University, Washington, D.C.

    Symposium on Drug Policy, Institute of Criminology, Hebrew University, Jerusalem
    February 4, 1996

    Note: These remarks were made more than five years before the Sept. 11, 2001, attacks in the United States.
     

    For full text of remarks, click here.

    . . .

    In many countries, of course, there is no doubt that the greatest threat is the violence of terrorism. This is
    particularly true of Israel and, I would argue, of the United States as well. What is not generally recognized is that
    the skills and personnel most successful in enforcing prohibition are also the most effective in curbing terrorism.
    The greatest successes of the American Drug Enforcement Administration, for example, have come from good
    intelligence, long range planning and prediction, and dangerous undercover work. Thousands of brave, dedicated
    agents have risked their lives in antinarcotics work using these methods. These are the same skills that other agents
    have used to penetrate terror networks. It goes without saying that society is at greater risk from bombs than
    drugs. All of us thus would be infinitely safer if the courageous efforts of antidrug agents in the U.S., Israel, and
    other countries were focused on terrorists aimed at blowing up airliners and skyscrapers than at drug traffickers
    seeking to sell the passengers and office dwellers cocaine and marijuana. [emphasis added]
     
     

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