20

TRANSNATIONAL ORGANIZED CRIME

~~ila~lpC~ia plnquirer,23 March I995, and William Ehart, 'Burglars Loot Cape ATMs' The
an ic 1ty ress, 26 May 1995
71. William Sherman and Dan. 1 G id~ b 'Al .
' Transnational Organized Crime versus the
Th M v 0 k p le o iar ' baman Gangs Breaking into the Big Leagues' 1
e ew • r ost, II January 1996 ' Nation-State
· ~ointt ~adakeby author at the Nationai Law Enforcement and Intelligence Unit Conference
72
ues pe er (Ft. Lauderdale: 15 May 1996). '

PETER A. LUPSHA

In the fall of 1995 President Clinton spoke before the United Nations calling
for global cooperation against transnational organized crime. Later that year
he issued a Presidential Decision Directive specifically focused on
international organized crime. Then in February 1996, when President
Clinton placed his updated National Security Strategy before Congress, it
continued to note the administration's concerns and, for the first time,
recognized 'Fighting International Organized Crime' as a national security
issue facing the United States. 2 An even broader consensus was confirmed a
month later, when the report of the Brown/Rudman Commission on 'The
Roles and Capabilities of the United States Intelligence Community' was
released. It dedicated an entire chapter, 'The Need for a Coordinated
Response to Global Crime' to a discussion of this threat. 3 All of these high-
level policy documents commit the National Command Authority to
responding to transnational organized crime as a new national security threat.
Now the broad outlines of the US policy response are beginning to take shape
in the increased presence and growing influence of the FBI abroad. Yet, just
how this policy will be orchestrated with the intelligence community,
Department of State, Justice, Defense, and other foreign policy priorities
remains to be seen.
Even the terminology, 'International Organized Crime', 'Global
Organized Crime', Transnational Organized Crime', 'Multinational Crime',
calls for clarification. This analyst prefers the capstone term, 'Transnational
Organized Crime', which not only stresses the cross-national jurisdictional
and 'organized' nature of modern crime groups, but also the transnational
character of their activities.
The President used 'International Organized Crime', a term the FBI
appears. to prefer. The Brown/Rudman Commission report refers to 'Global
Crime', which could include any form of criminal activity around the world.
Other efforts have referred to 'Gray Area Phenomena (GAP) - i.e. 'threats to
the stability of nation-states by Non-state actors and processes' to include
such crimes as well as other threats like pandemics. 4 The key variable here is
that the actor or process must be a threat to the stability of the state. Other

Transnational Organized Crime. Vol.2. No.I, Spring 1996. pp.21-48

PUBLISHED BY FRANK CASS, LONDON
 22 TRANSNATIONAL ORGANIZED CRIME
crimes would fall outside this standard. Still other scholars, have used the
term Multinational Systemic Crime - 'that is crimes by various kinds of
organizations that operate across national boundaries in two or more countries
simultaneously' .5 Such a definition, however, would have to include non-
criminal organizations like intelligence agencies whose job it is to steal
secrets in other nations, as well as other processes far removed from
organized crime. Obviously, more work is needed here.
The 'Organized' Nature of Transnational Organized Crime
At present most transnational organized crime groups have a single ethnic
character or national identity root, with cells inserted into nation-states where
aspects of their criminal enterprises· take place. Today, the groups appear, for
example •. to be Colombian, Italian, Russian. But, as any good analyst knows,
~hey are m fact Cali, North Valle, Coasta, Medellin, etc. i.e. regionally rooted
m the Colombian case; Sicilian, Camorra, 'Ndrangheta, etc. i.e. regional and
organizationally rooted in the Italian; and Chechen, Georgian, Russian, Azeri,
Abkhazi etc. i.e. rooted in ethnic and language identity in the Russian. It is
lik~l~ that other ~roups, like the Nigerians, are also bonded by tribal, regional,
rehg10us, or family-clan ties, although this has not yet been developed in any
research about them. In short, in terms of bonding and solidarity, these
networks of affiliation, are rooted in empirically understandable and
recognizable national and sub-national family, clan, ethnic, dialect, cohort and
cultural variables.
Indeed, it is the traditional bounded village culture and familial blood ties
that provide the organizational glue for many organized crime groups. But, a~
they spread their networks of affiliation across far-flung countries and cities
~ou~~ the gl~be, it is their capital, use of high technology, access to multiple
identities, .rapid transporta~ion, and increasing ease of cross border mobility
that permit them to remam connected to the 'center' (i.e. Cali, Palermo,
Moscow, etc.) yet to operate as compartmentalized cells far from it. Ties
within a matrix of individual obligation and skill specialization are further
bonded by intermarriage, use of family 'hostages', and terminal sanction for
inadequate task performance, as well as great rewards (status and financial)
for success.
It has been estimated that for every 'made' member of Italian-American
organized crime there are seven to ten 'non-member associates'. In outlaw
motorcycle gangs, this number increases to fifteen or more. In transnational
organized crime, it must be understood, the nets of affiliation between the
inner core group of clan, family, village bonded members, and the outer core
of non-member other nationality associates, can expand even further, and may
TOC VERSUS THE NATION-STATE
23
change with the structure of criminal opportunities. On occasion, it may be
operationally specific to 'short line', or one ti~e associ~tions, with linkage
and associational recombination at some other time or cnme.
This makes the analyst's task in understanding the 'organization' more
difficult and requires the creation of a variety of new conceptual models going
far beyond the Cressey, 'Bureaucratic-Structural', or th_e Ianni/Al~ini,
'Patron-Client' models. 6 Another factor affecting transnational orgamzed
crime is it frequently enters a market driven by a desire or demand for its
products, skills, and services. . .. . .
It is international demand that promotes such activities as drug traffickmg,
arms trafficking, human trafficking, money laundering, counterfeiting, illicit
trade in metals, stones, jewelry and art, stolen cars, boats, aircraft,
pornography, murder for hire, terror, electronic computer crimes and frauds,
crimes that increasingly are transnational in character. In situations where the
demand is low, organized criminals have learned the tricks of the
merchandising and advertising to create markets and hook consumers. Free
samples, underselling the competition, or eliminating it, and p.roduct. n~mes
and 'quality' logos, are all part of the sales program when orgamzed cnm~nals
need to promote demand. The United States is witnessing such promot10ns,
as 'suppliers' seek to develop and expand demand in heroin and
methamphetamine markets.
It is also true, that loose cross-group alliances and 'marriages of
convenience' are increasingly occurring between different nationally rooted
organized crime groups. For example, Colombians, Italians, Nigerians and
Russians, associate in drug enterprises. And thus, while we are seeing a partial
internationalization of organized crime, for security and structural reasons, as
well as cultural, linguistic and temporal ones, the full blossoming of
internationalized organized crime is still·more a future state than a present
one. Until then, it will be important to understand the networks of affiliation
and separate inner core groups and cells from non-member associates and
affiliates.
Transnational organized crime is not a new phenomenon. Cross-national
organized crime and contraband have existed since time immemorial along
adjacent borders. What is new is the scale of the activity and the fact that
organized crime now possesses tools once reserved for nation-states. It is that
the dispersion of technology access, global mobility, expertise skills for hire,
cheap easily acquired weapons of mass lethality, and the vast illicit ca~ital and
financial resources of modern organized crime permit it to threaten, nval, and
undermine the stability of nation-states, and to corrupt civil society in many
parts of the world. ..
In many nations, organized crime today has become a key poht1cal actor,
 24 TRANSNATIONAL ORGANIZED CRIME
an interest group, a sectoral player that must be taken into account by the
legitimate political system. This criminal element and its activities frequently
provide needed hard foreign currency, employment, and the economic well-
being needed for national stability as well as the enrichment of the often
corrupted political power holders, especially in poor underdeveloped, newly
emergent, weak, or 'failed' nation-states. This means that to understand
transnational organized crime and its political linkages, we must also study
and understand political corruption. For, historically, corruption provides the
air that organized crime needs for survival. We must also develop new
theoretical paradigms such as those used in epidemiology and disease theory
to understand the nature, configurations, spread, and 'tipping points' when
political and criminal systems interact and how the process of destabilization,
demoralization, and the loss of civil society begins.
For powerful nation-state actors possessing diversified economic and civil
societal strength, like the United States and the countries of the European
Union, this is less of a direct threat. But they, and the United Nations, are
recognizing that the destabilizing nature of the transnational organized crime
threat to weaker nations, also threatens global free trade and fair economic
competition, while creating great social, economic, and political costs at home
and in international relations. For the United States and other strong economic
global leaders, the key questions that must be asked are quite sophisticated
ones. Not how to react, but how to anticipate? How to define the threat and to
develop a set of policies for minimizing it both at our border and most
ii_nportantly beyond it? How to provide intelligence and insights to assist and
aid weaker states, our allies and trading partners? The goal here is not 'war'
or conquest; it is prevention and threat reduction. It can be considered 'disease
prevention, control and management' and requires tool creation, such as the
development of legal, diplomatic, and policy programs of containment that
can reduce transnational organized crime to being a law enforcement
problem, instead of a national security one. . working with Chinese Triad groups to establish franchises for cocaine
Yet, before such a set of strategies can be initiated, we must first
th?roughly understa~d the issue and the nature of transnational organized
cnme versus the nation-state. To do this let us begin with some of the better
known and more studied exemplars.
Italian-related Organized Crime Activities
Italy's leading postwar statesman, former Premier Giulio Andreotti has been
brought to the bar of justice for consorting with the Mafia. 7 Yet until the end
of the Cold yYa~, ~his association was simply another dirty little secret, a
means of mamt~mmg .Italy's Christian Democrat party in money, votes and
power, for Italy s Mafia was preferred over its Communists by the Western
roe VERSUS THE NATION-STATE 25
powers. In similar fashion, the United States seeking Asian stability after
World War II, facilitated ties between Japan's Boryokudan, or Yakuza, and
Japan's Liberal-Democratic Party as an antidote to socialism. 8
The cost for both nations was high. It forced them into what would
become a symbiotic relationship with organized crime, and resulting
corruption. This complicity has marked and shadowed their recent political
histories. Today both Italy and Japan are'still reaping the costs of these unholy
ties: tens of billion in national treasu?e lost, contract fraud, public corruption,
faulty construction of housing, inflated costs for public works and
government projects, corporate extortion, as well as public and private bank
failures. And, let us not forget, assassination, murder, intimidation and fear.
Even more critically, the end result of this policy has been the incalculable
loss of regime legitimacy and public trust which is the bedrock of civil
society.
Today, with the globalization of organized crime and the emergence of
transnational networks of organized criminal affiliation, not only is the
internal stability of a single nation, such as Italy or Japan threatened, but the
quality of political, civil, and economic interactions across the entire global
community of nations is at risk.
Italian Mafia members and Colombian drug lords met in Aruba in the late
1980s to follow up on discussions and arrangements made in Spain, some
years earlier franchising cocaine distribution and money laundering in
Europe. 9 Russian and Italian mafia groups met in Prague in 1992. Now they
are said to share ownership in a commercial bank in Yekaterinburg in the
Urals. 10 Colombians, Russians and Italians are rumored to be holding 'summit
meetings', including one on a yacht off Monte Carlo in July 1993, where
Colombian drug traffickers, Chinese Triad members, American La Cosa
Nostra (LCN), and Israeli criminals were all reported to be present. 11 The
Colombian Cali drug 'cartel' is said to have representatives in Hong Kong
distribution in the Pacific rim. 12 Mexican organized crime groups have
become the silent and dominant partners over US Outlaw Motorcycle gangs
in the methamphetamine and precursor chemicals markets.
While the above may sound like a plot for a 'B' movie, it is not new.
Meyer Lansky and Italian-American LCN helped develop Havana, Cuba into
a Mob paradise in the early 1950s. 13 Italian-American La Cosa Nostra, leader,
Santos Trafficante, traveled to Bangkok, Hong Kong and Saigon in 1966, in
the midst of the Vietnam War, seeking Chinese Triad society heroin
connections. 14 What is new, is that these groups today - either alone or in
combination - possess the means to destabilize nation-states.
 26
TRANSNATIONAL ORGANIZED CRIME
The Global Generation of Illicit Capital
The power and potential of transnational organized crime, is rooted in the vast
amounts of illicit capital raised by drug and arms trafficking and other forms
of smuggling, as well as penetration of legitimate economic sectors via money
laundering. This base is enhanced by the revolution in technologies that
permits capital and people to move around the planet with ease.
At the same time, the globalization of capital and capital markets has
occurred. For example, foreign trading in US securities in 1983 was 134
billion dollars; by 1993 it reached 617 billion dollars. At the same time US
trading 15in foreign securities markets went froml6 billion dollars to 555 billion
dollars. Most of this is legitimate capital movement.
Illicit money movement is estimated at 300 to 500 billion dollars annually,
with 100 billion dollars laundered in the United States. 16 The BCCI bank
scandal is but one model of a possible future when legitimate and illegitimate
11
capital blend. A further impact of the globalization of capital can be seen in
dollarization of many less developed economies particularly where drugs,
corruption and organized crime come together in Asia, South America, the
Middle East and the Commonwealth of Independent States (CIS). This can
also be seen in the growth of US currency counterfeiting detected abroad.
According to the US Treasury, counterfeiting of US tender increased 300
percent from 1992 to 1993. 18 Regrettably, dollarization is supported by many
within the US Treasury Department. When one recalls our continuing
problems with drugs, money laundering and counterfeiting, rooted in large
part in dollarization, in Panama, it would a wise policy for Treasury not to
promote dollarization of the globe.
Technology has also affected the movement of people. Russian contract
killers can fly to Brooklyn, New York, commit murder and return to Moscow
19
in less than 72 hours. The US Immigration and Naturalization Service
estimates that over 100,000 Chinese illegally enter the United States each year
via routes that range from South American cities in Bolivia, Panama,
Paraguay, and Brazil, as well as through Russia and Eastern Europe, and
direct, via ships landed on Mexican or North American shores.
Such Chinese movement not only affects the United States. A review of
trade association statistics shows that Germany had some 900 Chinese
restaurants in 1991. One year later over 3,000 Chinese restaurants were listed.
Such an increase suggests that either a) poor data collection, or b) human
smuggling occurred, or c) there was a dramatic change in food preferences, or
d)a giant leap in immigration quotas. 20 As the last did not occur, therefore we
can evaluate the other options in terms our understanding of German eating
habits and data methods. If this increase is accurate, then from the organized
TOC VERSUS THE NATION-STATE 27
crime analyst's perspective, crimes like drugs traf~icking, money laun~erin~,
Chinese Triads, and indentured servitude are also hkely elements contamed m
this finding, as are human migration issues. . . .
In Southern Italy, Chinese Triad groups sold Chmese illegal migrants to
the Italian Camorra where they were indentured to Naples sweat-shop~. And,
in another case, which illustrates even more clearly the global conn~ctions of
orgamz · ed cri"me, the Chinese illegals in Naples produced counterfeit
. French
.
fume in bottles made in Spain, with faux Chanel perfume made m Mexico,
per . d. B . 21
and covered in gold wrappings and labels pnnte m e1gmm. .
Organized crime has always prospered where internat~onal. boundanes
meet, but any nation whose standard of living is hi~her ~han its neighbor mu~t
recognize this threat. In any border or port situat10n where economic
inequities at the point of entry or the adjacent countri_es are extreme, ~uch as
the borders between the United States and Mexic~, or Colo.mbrn ~nd
Venezuela, one has a natural incubator in which transnat10nal ?rgamzed cnme
can grow and prosper. And, in situations like the Eur?p~an Umon (EU), wh~re
agreements lead to border controls _being eased_ o~ ehmmated, the o~portu?ity
structure for organized crime obv10usly multiphes. Former Swedish Pm~e
Minister Carl Bildt, recognized this when speaking at the World Econo~ic
Forum i~ Davos, Switzerland. He noted, organized crime is an 'explodmg
problem' and 'We must get on top of it, or it will get on top of us'. 22
Terrorism, Ethnic-, Weapons-, and Narcotics- Related Crime
Terrorism, ethnic-religious-nationalistic wars, weapons. smuggling and
conventional and nuclear arms proliferation are other growmg threats today.
Less obvious but deeper infections, can be seen in societal breakdown aro~nd
the globe. Increasingly in weak or 'failed' states, criminal g_an~s are takmg
over the functions of the state. 23 In Somalia, we have seen cnmmal warlor~s
or drug gangs take over the streets and shantytowns. In Rio de Janeiro.' Brazil,
drug gangs have taken over the provision of some g?vern~ental, funct10ns a~d
services. In Peru, drug traffickers, such as Chachique Rivera s. gr~up, pa~d
teachers and other local civil servants 100 dollars a month to mamtam pubhc
services in jungle drug towns and supplement their meager go~ernment
salaries. Throughout the Andean drug production areas Colombi_a~ d~ug
traffickers fund satellite dishes, electric generators, wate~ pun~icat10n
systems, soccer equipment, widen and improve roads for landmg stnps, .and
pay salaries to buy local cooperation and supp~r_i. ~hes~ are. obv10us
24
examples, and they could be increased tenfold, citmg situ~t10ns m South
Africa, Uganda, Ireland, Mexico, India, the Central Asian s~ates, and
elsewhere. Less obvious are the many situations of war and conflict around
 28
TRANSNATIONAL ORGANIZED CRIME
the globe,. th~t frequently simply cloak organized criminal endeavors.
.somalia ts a case study in organized crime, conflict, and warlordism in
which drug tr~ffo~king of Khat is an intimate part. In Lebanon, the reality of
m~ch of the f1ghtmg around the 'Green Line' was over drug warehouses and
opm?1 and ~ashish shipments, as well as religious faith and difference. The
Ta~l guernllas of Sri Lanka have financed their war, in part, by trafficking
herom to Europe. The Colombian FARC and ELN guerrillas, like the
Burmese Communist Party in Myanmar, have increasingly become drug
lords, rather than warlords or revolutionaries. In Peru, Sendero Luminoso's
Huallaga :'alley Front and MRTA are today little more than camp followers
and secunty forces for the drug traffickers. 25 In Pakistan, the violence and
ur.ban a~m:chy frequently combine organized crime drug and arms trafficking
with rehg10n. and ethnicity. In El Salvador, street gang criminals deported
from. the _Dmted ~tates h~ve established Los Angeles style gangs, and are
fo~ng tie~ to maJor Mexican drug trafficking groups, such as the Arellano-
Fehx orgamzation of Tijuana. 26
~est Afri~an street gangs fly to Paris to commit robberies, while Yugoslav
orgamzed cnme groups there are considered among the most violent in
27
France. According to the FBI, Russian criminal computer hackers called
'crackers_', and operating from Eastern Europe stole an estimated 5 biiiion US
dollars via the In~ernet. In Bulgaria, it is reported that there is an academy
28
that teaches hackmg and computer viruses. 29
. Nigerian organized crime groups did 25 million dollars in credit card fraud
m D~llas Texas in 1994. Nigerian organized crime groups, some Jinked to
30
Russians ~nd Colombians in Brazil, move cocaine to Africa, Europe, and
South Afnca, as well as heroin from Thailand to Europe and the USA. And
frequently, .they recruit or coerce 'innocents', foreign students or young
female tourists of. other races and nationalities to be one-time drug 'mules•.
They are also settling other West Africans in Western Europe and Scandinavia
to run their distribution networks.
I~ is. important to understand that transnational organized crime groups are
not.limited to one enterprise, such as drug trafficking, as their only market or
busmess: ~hatever makes a profit they will engage in, for they are at heart,
career cnmm~ls. The ~ussians, for example, are expert in business scams and
frauds, the Chmese Tnads at credit card counterfeiting and human smuggl ·
th~ ~olombians at currency counterfeiting and pickpocketing, and ~i!
1
N1gena.ns at bank and credit card fraud. All of these groups are good at arms
t~afficking, ca: theft, money and human movement, identity falsification, and
v10lence for htre, as well as the old reliable trade of drug trafficking.
TOC VERSUS THE NATION-STATE 29
The Nation-State and the Monopoly of Power
Confronting this mobile planetary criminal force we have the nation-state.
The concept of the European state system developed out of the Peace of
Westphalia in 1648. Its distinguishing feature is 'the existenc~ of a num~er of
states of substantially equal strength', that are locked reciprocally mto a
system of law and relationships based on a balan~ing of p.owe~ a~ong them. 11
Over time, the nation-state has become the paradigm, basic bmldmg block, as
well as the unit of analysis on which all international relations rest. It provides
the framework and institutional structure within which national political
systems and the rule of law and civil society, as we know it, operate and locks
in the jurisdictional mind-set of most policy makers.
The rock on which the foundation of the modern state system rests, as Max
Weber tells us, is 'compulsory association which organizes domination' by
having 'successfully monopolized the legitimate use of physical force within
a territory' .32 Other elements of the state are territory, population, sense of
common antecedents, history, culture, language, ethnicity, identity, etc. Law
and the emergence of civil society have tamed and balanced rights and
privilege, secular and sacred, within the state. Yet, the bottom line i~ power.
Force and the ability, successfully and legitimately, to use force (v10lence),
remain fundamental to the essence and essential concept of the state.
When states challenge states and the equilibrium of the state system
fractures, diplomacy, alliance systems, and war have been the traditional
responses or outcomes. Within states systems, law and law enforcement are
the traditional tools of maintaining order and civility within the polity. Today,
however, nation-states are challenged by non-state actors, such as
transnational organized crime groups, which have the ability to rival and
compete with nation-states in terms of their monopoly over the use of f~rce.
And, in many areas of the world, non-state actors, frequently orgamzed
criminals, control large portions of the nation-state's population and
territory. 33
Martin Van Creveld wrote in his The Transformation of War, 'As the
second millennium AD. is coming to an end, the state's attempt to
monopolize violence in its own hands is faltering' .34 He goes on to note the
following:
Once the legal monopoly of armed force, long claimed by the state, is
wrested out of its hands, existing distinctions between war and crime
will break down .... Often crime will be disguised as war, whereas in
other cases war itself will be treated as if waging it were ... crime. 35
Today, there are many challenges to the state's monopoly over the means, if
not the legitimate use, of force and violence. Technology, perhaps the most

30 TRANSNATIONAL ORGANIZED CRIME
obvious, mocks the sanctity of national boundaries and legal jurisdictions, as
capital and corporations fly flags of convenience, becoming increasingly
transnational, and trillions of dollars move electronically around the globe
each day following and creating profit. People move almost as easily and
quickly. Technology and mass production have also provided cheap tools of
mass destruction. The ability to produce mass violence, firepower and
lethality which once were only the province of the state, is increasingly
available to citizen, cult, criminal terrorist, or organized crime groups, who
can destroy New York's World Trade Center or poison Tokyo's subways.
Pablo Escobar asked the Cubans for Sam-7 ground to air missiles. Kuhn
Sa, the Thai warlord and heroin trafficker, is said to have had a number of
Sam and Stinger missiles. The Cali cartel purchased several 500 pound bombs
from Nicaragua to use on Escobar. They also obtained state of the art
telecommunications surveillance equipment from Israeli experts and were
able to tap 2 million phones in Colombia including US Embassy and
Colombian Intelligence. Perhaps most threatening of all, in the CIS, military
equipment and fissile (nuclear) materials appear to be leaking into non-state
actor hands. 36 This frightening incident dossier clearly illustrates how
transnational crime's capacities have grown and rival and, in many cases,
surpass those of nation-states seeking to counter them.
Thus, a critical question for our age is can the nation-state still function
within and respond to these non-state actor challenges? Or, is the nation-state
concept increasingly ineffective and obsolete? Can the nation-state, bound by
centuries old traditions of sovereignty and law, national identity and
independence, locked in precedent and bureaucracy, become more
transnational? Can it learn to function transnationally with the speed, agility
and flexibility of its opponents? Can it work to form new organizational
mechanisms (bilateral or multilateral) that will match the organizational
adaptability of global organized crime?
The Development of Organized Crime
In order to understand transnational organized crime it is useful to examine
how organized crime evolves. There are several useful paradigms for
explaining the emergence of organized crime. In this analyst's opinion the
phases, or stage-evolutionary model is one of the best for explaining the
emergence of most organized crime groups, including many that have
achieved transnational significance. The model involves predatory,
parasitical, and symbiotic stages described below. 37
TOC VERSUS THE NATION-STATE 31
The Predatory Stage
In the predatory stage, the criminal group is b~sically a str~et gang ~r gro~p
rooted in a particular area, neighborhood or temtory. Occasionally, ~his ~urf is
occupational, such as the port, as witnessed by d~ck labor ~ang~ i~ Sidney,
Marseilles, Shanghai, Hong Kong, or New York City. Sometimes it is a small
up of age cohorts; in other cases it has thousands of members, such as t~e
gro h . . . 1 . 1 is
Gangster Disciples of Chicago. In the predatory p ase its cr~mma vio_en_ce
most frequently defensive, to maintain dominance over temtory, t~ e~immate
enemies, and to create a monopoly over the illicit use of force. Cnmmal acts
tend to be directed at immediate rewards and satisfactions rather than long
range plans or goals. . . .
Once neighborhood, territorial or ethnic enclave dommance is established,
the predatory gang gains recognition among. legitimate power brokers, loc~
political notables and economic influentials wh.o can use the gangs
organization and skills at impersonal violenc~ for the.i~ own .ends, such as de?t
collection, turning out the vote, or eliminatmg political nvals or economic
competitors. In the predatory stage the criminal. g~ng. is the servant of t~e
political and economic sectors and can easily be disciplmed by them and their
agencies of law and order.
The Parasitical Stage
Criminal gangs emerge from the predatory stage into the parasitical as they
develop a corruptive interaction with the legitimate power sectors, and ~~I~
their control of a territorial base with the power broker's need for dhcit
services. For the criminal gang to blossom fully into the parasitical phase,
however, there needs to be a 'window of opportunity' through which the gang
can pass to emerge fully fledged as an organized crim~ group.. ,
In the United States, for Italian-American organized cnme, La Cosa
Nostra', that window was the black market economy created by a!c??ol
prohibition. For the Colombians, the blackmarket created by th~ prohibition
of drugs (marijuana, cocaine and heroin) provided the oppo~u~ity s~ructure.
For other groups, war, conflict, historical alienation and ~thmc identity, have
created either black market opportunities, or allowed (m anarchy and the
breakdown of civil society), criminal gangs, as in Bosnia, to emerge as po.wer
brokers and/or nationalist spokesmen. These individuals can exploit the
predatory gang's organizational skills, networks, and skills in viol~nce to
create monopolies over the provision of illicit or sc~e.goods.a~~ services.
Political corruption, which accompanies the provis10n of dhcit goods and
services, provides the essential glue bindingtogethe~ th~ legitimate sect~r~ of
the community and the underworld criminal orgamzat10n. In the parasitical

32 TRANSNATIONAL ORGANIZED CRIME
stage, the organized criminal group has opportunities to cloak itself in a patina
of legitimacy as it interacts with the upperworld, and as it amasses resources
(capital, information, organizational skills) and extends its networks into the
legitimate business and economic sectors of society. Increasingly, organized
crime extends its influence over entire cities and regions and becomes an
equal of, rather than servant to, the state.
The Symbiotic Stage
The third phase in organized crime's evolution is the symbiotic stage. Here
the separate but equal parasitical bond between organized crime and the
political system, becomes one of mutuality. The host, the legitimate political
and economic sectors, now become dependent upon the parasite, the
monopolies and networks of organized crime to sustain itself. The control of
the Fulton Fish market or the construction industry and private carting
(garbage collection) via key site control, (points of loading and unloading) or
through mob unions and trade associations in New York City is one example.
The Cali drug cartel's control of the Valle de Cauca, and influence over
Colombia's legislative and judicial system is another.
In Italy, the forty year relationship between the Christian Democrats and
the Mafia, and Japan's symbiotic ties to its Yakuza in real estate, construction,
and corporate fraud and extortion are nation-state level examples of this
paradigm. When organized crime reaches the symbiotic stage it is critical that
policy makers recognize and understand that it is no longer a law enforcement
problem, but a problem of public policy. The traditional tools of the state to
enforce law will no longer work, for organized crime has become a part of the
state; a state within the state.
Other Paradigms for Organized Crime Evolution
The events in the former Soviet states and Eastern Europe provide other
models for the emergence of organized crime. McGill University economist
R. T. Naylor, has argued that the former Soviet Union and Eastern Europe can
be seen as an inversion of the stages paradigm. 38 The totalitarian state and its
criminal apparatus of authoritarian party, intelligence organs, military and
bureaucratic nomenklatura bound together state and organized crime in
symbiotic Stalinist embrace. 39 This symbiotic unit devolved after World War
II and with perestroika into increasingly parasitical understandings, and after
the fragmentation of the former Soviet Union, into a predatory stage of gangs,
extortion and mafia capitalism.
One can say, without doubt, that developments in the former Soviet Union
and Eastern Europe offer a dramatic example of what happens when
privatization and market capitalism are implanted in a system lacking
TOC VERSUS THE NATION-STATE
33
institutions and instruments of civil society and the rule of law. If we have
learned anything, from this, it should be that civil society and its institutions,
must contain regular consensual (not necessarily democratic 'free elections')
government, a free press, an open ed~cational .system, the rule of law, and t~e
means and justice system to support it. Most important, as we have found m
the CIS, all these things must be in place and functioning before the market
forces of privatization and free enterprise capitalism are unleashed. For
without such civil restraints and balance, market capitalism rapidly
degenerates into mafia capitalism. 40
Toward a Global Organized Crime Typology
Once one has an understanding of the basic evolutionary parameters for the
emergence of organized crime, we can seek to construct frameworks for
understanding its global evolution. One such typology can be constructed
along a continuum based on the degree of symbiotic consolidation and
incorporation into the culture of the nation-state in which groups are rooted.
First, there are groups that are structurally and symbolically deeply
embedded within the political and economic systems of a nation. In these
situations, transnational organized crime has such vast capital resources and
skills reserves and systemic penetrations that, should they chose, or be forced
to, they can confront the nation-state as equals, or within geographic regions
or specific economic sectors or industries, or in weak, failed or troubled
states, as superiors. These groups, I would label, 'Consolidated or
Corporatized'.
A second set of transnational organized crime groups have a number of
symbiotic ties to the state, yet at the same time frequently appear to be subject
to the will and power structures of the state. In many senses they appear to be
employees or franchised by dominant state institutions (police, military,
interior, intelligence, judicial) which use them tq their ends and taxes them
remorselessly. Countries where this pattern appears to occur include Taiwan,
Mexico, the PRC, Nigeria, Pakistan, Syria, Lebanon, and at times, Israel.
These groups I would label as 'Transitional or Linked organizations'.
A third set of transnational organized crime groups I call 'In-Flux:
Emergent'. These are groups which have either emerged out of the absence of
civil society, as in the former Soviet Union and Eastern Europe, or, out of
insurgency and conflict, as in Sri Lanka, Burma, Afghanistan, India, Turkey,
and elsewhere, or out of both sets of condiditons. Often these organized
criminal groups are linked prior institutions of the state, such as the old organs
of intelligence, the military or former totalitarian bureaucracy and economy.
When the West rushed East, with neo-liberal privatization economic activities
before the establishement of any agreed upon democratic rule of law or civil
 34 TRANSNATIONAL ORGANIZED CRIME
society, the 'mafiya capitalism' that resulted in these economies, led to a
blending of the prior state organs, with old and new criminal groupings. For
example, the Russian transnational criminal elements move billions of dollars
in goods, capital, and criminal operatives around the globe from Israel to
Belgium, Germany, Cyprus, Prague, New York and Los Angeles in the USA.
But it is difficult (at this time) fully to sort out what is criminally rooted
organized crime from what is a criminal state. The various warring factions in
the former Yugoslavia, Muslim, Serb and Croat, present a similar indistinct
pattern to the world.
As was noted in the symbiotic stage paradigm of organized crime,
evolving ties betwee~ organized crime and the polity create public policy
problems, rather than simply law enforcement ones. Similarly, this
transnational crime typology, as it illustrates different sets on a continuum,
suggests different types of policy actions, counters, and strategies may be
called for.
The Goals, Business Advantages and Evolution of Organized Crime
The goals of organized crime are typical of those of any rational actor in
market systems, the maximization of wealth, influence and power and the
minimization of risk.
Unlike legitimate market capitalists, however, organized criminals possess
what Meyer Lansky referred to as 'The Edge' in all their legitimate business
penetrations (see Figure 1). This business edge involves the ability to spend
large amounts of money to corrupt, undercut, or intimidate the opposition in
an environment with no jurisdictional restrictions or legal limits. Along with
an emerging global network of contacts and connections for business and the
criminal trade, and or the collection of information, transnational organized
crime possesses two other characteristics that enhance 'The Edge'. First, career
organized criminals possess a culture, a worldview, a mind set, that enhances
the edge. They view the legitimate upper-world capitalists as 'working stiffs',
'straights' and 'suckers'. Only they the 'wiseguys' see the world clearly. It is
a dog-eat-dog Darwinian universe, shrouded in lies, corruption and hypocrisy,
where only the killers, the strong, survive. 41 Indeed, often having taken, or
successfully ordered the taking of, human life with impunity, many organized
criminals, socio-paths that they are, see themselves as godlike and invincible.
Second, given the extent of planetary avarice, transnational organized
criminals do not have to be geniuses, for smart, supposedly legitimate,
businessmen and entrepreneurs beat a path to their door with new ideas,
technologies, techniques, and investment opportunities to enrich themselves
while furthering the business of transnational organized crime.
TOC VERSUS THE NATION-STATE 35
In addition, thanks to modern transportation and commun~cation
h logies this subculture of organized crime, has now been raised to
tee no ' h d · t' fo t
1 b 1 levels of identification and attachment, to e oms ic com r ,
0
; ;h~stication, and materiali~t r~w~ds, which work circularly to reinforce the
mindset of corruption and cnmmahty.
FIGURE I
'THE EDGE'
THE COMPETITIVE ADVANTAGE OF ORGANIZED CRIME
I. 'Deep Pockets: Vast sums of cash (capital) to:
a) Undercut and undersell competition
b) Purchase expertise
2. No jurisdictional, bureaucratic, or legal limits on actions or
decision-making
3. Corruption: The ability to acquire information, take actions,
acquire influence, access to rulemakers and rule enforcers,
and to penetrate opponents and targets of interest
4. The threat and use of violence to obtain ends
5. Organizational (bureaucratic) flexibility and quick (rapid)
decisional responsiveness
6. Terminal sanction to remove organizational inefficiencies and
organizational 'dead wood'
7. An emerging global network of contacts and associations and
marriages of convenience
8. Organizational secrecy and covertness
As one reviews the corporate attributes of organized crime, .it becomes
obvious that the legitimate busine~sman operates at a se:ere disadvant.age
when confronted by the organized criminal who wants a piece of the act.10n.
Today, we can probably multiply these competitive advantages o.f orgamz~d
crime by ten, for as it moves globally and forms strat~gic .alhances with
criminal groups around the planet, sharing skills and capital m networks of
36 TRANSNATIONAL ORGANIZED CRIME TOC VERSUS THE NATION-STATE 37

affiliation, to control and influence not businessmen but nation-states, its FIGURE 2
EVOLVING PATTERNS AND TRENDS IN ORGANIZED CRIME
corporate power multiplies. 42
The pattern of evolution of organized crime illustrated in Figure 2 (on Organized Evolution To ......
Traditional
page 37) shows how far organized crime has come. 43 It still engages in Illegal Towards Strategic
Tactical
traditional tactical crimes, but, as it has gone transnational, it has evolved into Criminal Penetrations Monopolistic
Crimes
parasitical and symbiotic relationships around the globe, with strategic and Enterprises Of Legitimate Takeovers
monopolistic operations in the world of multinational business and Business
government (with its deep pockets of cash and contacts). Transnational Restaurants Entertainment
Assault Gambling
organized crime today possesses the capital and connections to operate fully Sports
and totally at the far right side of this chart. Today, global organized crime can
do that on just the billions earned from the blackmarket of drugs and money Prostitution Bars Hotels-Motels-
Briebery
laundering. But, to put this in perspective, let us travel down memory lane to Night Clubs Resorts
when the first of LCN's black markets became licit and illustrate how this was
done in the past. Robbery Narcotics Vending Machines Labor Unions
Meyer Lansky and associates took the illicit profits of Italian American
LCN, and their penetration of legitimate sectors, such as the Central States Murder Protection Rackets Waste Collections Banking
Teamsters Union pension fund, and legitimized their money by turning illicit
gaming into licit Las Vegas gambling and then turned the illicit 'skim' from Hijacking Fencing Factoring Insurance
'hidden mattress monies' into legitimate loans via international banks via
what we now call 'money laundering'. Today, through organized crime's Burglary Bankruptcy Garment Real Estate
linkages to corporate capitalism, such simple beginnings have turned casino Frauds Manufacturing
gambling into major capital market players in the United States. Indeed,
perhaps the most creative move in Lansky's career was to see his well Counterfeiting Automobile Securities
buffered Bahamian interests, recreated through a series of front companies Agencies
-from Delafield Corporation, into Mary Carter Paints, and finally into a
'clean' Resorts International Inc. which legitimized his holdings there. 44 Junk Yards, Chop Shops
When the state of New Jersey 'chose' to open itself to casino gambling via Recycling
Resorts International Inc., Lansky fronts placed casino gaming on the
stockmarket. Once legitimized on the stock market, casino gambling became Trade Computer
a legal part of the US capitalist system and Congressional investigations into Associations Crime
organized crime in gaming ceased. Now almost every major casino gaming
enterprise in the United States is supported by citizen investments via the Liquor Credit Cards
stock market or mutual funds, and any organized crime taint is so well Distribution
buffered by squeaky clean frontmen it is nearly impossible to untangle. 45
Today, the relatively small scale operations of Meyer Lansky pale besides Security Guard Energy and
the global operations, reach and billions of the global mafias. Today, hundreds Services Energy
of millions in cocaine or heroin profits are laundered, often electronically in Related
micro-seconds, round the globe. But the Commonwealth of Independent
states (CIS) is particularly attractive to transnational organized crime for
there, in the absence of civil society, its profits can be laundered, multiplied
and returned West as real wealth (art objects, nickel, titanium, platinum, gold,

L
38 TRANSNATIONAL ORGANIZED CRIME roe VERSUS THE NATION-STATE 39

or oil), and sold for even greater profits through a variety of legitimate currently elected officials are willing to give for policy outcomes ~o take
multinational corporate fronts. Regrettably, many legitimate businesses and effect. This is another reason why we need new approach~s and ~arad1gms to
corporations knowingly, or with a wink and a buffer, participate in the prove the case for an effective transnational orgamzed cnme policy.
profiteering organized crime helps create.
In order for the nation-state to begin coping with and combating global
organized crime, it is critical for law enforcement to recognize and FIGURE 3
NARCO BUSINESS ELEMENTS
concentrate on criminal organizations and enterprise crimes, rather than
being narrowly focused on arresting and prosecuting individuals. To do this
the nation state must not only have RICO laws and a top-notch national
criminal intelligence service, its leaders must also recognize that organized
crime is a business, and business and enterprise models are a useful way to
conceptualize it. Furthermore, they must recognize that jurisdictional and
bureaucratic turfrivalries must be moderated for the greater good, and aspects
of the intelligence and law enforcement communities must be blended. To its
credit the United Nations has recognized the fundamental need for change and
is taking steps to assist this international process. 46 Mixed Ollgoplles
'So-Called Cartels'
A Modem Exemplar Part I: The Cocaine Industry
Figure 3 presents the basic elements of one transnational organized crime
enterprise: the cocaine industry. It shows the basic elements of this business,
from leaf to nose. It is a double-funnel chart designed to emphasize the
numerous small-time actors, cultivators on one side, street retailers on the
rans-National Linkage
other at the wide free enterprise ends of the chart. The narrow center shows l111u1nnc11
the elements and vulnerabilities that the successful 'Kingpin Strategy' Chemicals
exploited in the case of the Cali Cartel. All too often, however, policy makers
and law enforcement actions are concentrated at the two wide free market
ends of the funnel where the targets are easy, but enforcement is likely to be
effective only from an internal budgetary perspective. The wide ends
comprise a situation of nested non-zero sum games, in which every player is
easily replaced or appears to win something sometimes, but the basic problem
remains unsolved.
It was only from 1992-95 that because of a coordinated focus and effort
on the narrow central nodes of vulnerability, we had some brief and limited
strategic successes. More often law enforcement still engages in surge or
single limited time efforts. Interestingly the driver here as in most public
policy is budget and budgetary constraints, not strategy or goals. But we need
what we saw in the Cali operations. We need to develop and refine more
coordinated approaches, where simultaneous parallel strikes at all of the key
nodes take place and continue on a regularized basis and in a harmonized
pattern of enforcement. It is only with such a strategy that we can be truly
effective; and even then it will take time, more time, unfortunately than most

l

40 TRANSNATIONAL ORGANIZED CRIME
A Modern Exemplar Part II: The Evolution of the Cali Cartel
The changes in the operational approaches and product lines of the Cali Cartel
are illustrative of the evolution of one modem transnational organjzed crime
group. In the period from 1972 to 1974, the Cali Cartel was primarily
involved in kidnappings, acting as 'mules' carrying drugs from Peru to Cali
for more experienced traffickers, working as hired guns, and starting to send
shipments of marijuana to New. York City. The members expanded their
operations and invested their capital and learning into coca paste/base
movement to Colombian laboratories and into the shipment of finished
cocaine to New York City. At the same time, (1978-1981), they sought to
develop cells and networks for wholesaling and distribution and money
laundering in Chicago, Houston, and Los Angeles. At home they invested in
legitimate businesses, and began to develop a political base that would protect
them in the years to come.
From 1981 to 1984, the cartel expanded and then dominated markets in
Los Angeles and Houston, while in New York City it developed ties to
Dominican organizations that were introducing a cheap new product that
would greatly expand sales, 'crack cocaine'. During this period it was still
allied with Medellin in opening up the European market through Spain in
association with the Italian mafia which had outposts in Venezuela, Brazil and
Spain. At this time the cartel also established a position in Panama via
investments and bank ownership.
From 1984 to 1988, after the break with Medellin over the retaliation
killings of public officials, the Cali group expanded its US and European
operations including money laundering, and created major Venezuelan
maritime routes and product concealment techniques. During this period
earlier footholds in Central America and Mexico were expanded into
regularized corporate relations, and dominance over the Peruvian processing
established.
By 1990, Cali had dominance over global cocaine distribution and had
developed a public business profile and a symbiotic relationship with the
governing elites at home. By 1992-1993, it had diversified into heroin and
liquid marijuana, and sought to develop coca production independence within
Colombia while still exploiting Peruvian and Bolivian production for US and
newer Eastern European markets.
A year later, the leaders gave permission for Peruvian production of
finished crystal cocaine, as they had done earlier in Bolivia. The
methodologies had changed. Now there were multi-ton load deliveries to
Mexico, the franchising of money laundering to affiliates, risk avoidance and
buffering where possible. The year of 1994 also saw an effort further to
legitimize status through the removal of criminal and evidentiary taint, and by
41
roe VERSUS THE NATION-STATE
· privatization efforts large political contributions, and the
investments m , . 1 b" p C t 1
·h t of influence over governments m Co om ta, anama, en ra
estabhs men
America and Mexico. . f
What the Cali Cartel did not realize, was that years of effort and a mi.x o
many long term failures had finally resulted m a
small successes and · d
d" ted interagency attack on them by the government of the Umte
coor mad "ts law enforcement and intelligence agencies. At the same time,
States an i . · r 1
the careful training, cultivation, and promot10n of Colom~ian e i.te ~w
ent gr oups and personnel now paid off in trust and sohd working ties
~~~ f . 1 .
at the operational level. Indeed, disgust at the depth .of mte~a coi:up~10n
within the Colombian polity, often pushed C~lombians of mtegnty mto
cooperative associations with the US. Thus, Cab's days w~re numbered and
by mid-1995 the key leaders, after seeking a negotiated settlement,
surrendered, with the best deals they cou~d ma~e: . . .
B this time they had established their families, relatives and childre~ m
positrons of influence in real estate, financ~, com~.unication, co~struction,
agriculture, bank directorships, and other maJOr legitimate econo~ic sectors.
Their activities, wealth, and investments had also helped Col?mbia ~eather
the economic debt crises that brought most other Latin American nations to
near fiscal ruin in the 1980s. Now their legacy is passing to other players,
lesser known Cali figures and their associates in Medellin,.the c?ast, Amazon,
and abroad. These players are forming new ties and relationships, as well. as
moving in new dir.ections, to promote the continued operations of Colombian
transnational organized crime.
A Modern Exemplar Part III: The Colombian Nation-State
The above illustrates some of the ways in which a single organi~ed cr~me
entity worked to obtain power and then legitimate and reinte~rate itself mto
its own society while expanding and diversifying prod.ucts and mve~tments on
a planetary basis as a transnational crime group. It 1s also essential for our
purposes here, however, to examine the nation-state.
The dilemma for the Colombian government for the last two decades, as
well as for other drug producing and transit nations around. th~ globe.' has been
how to balance the tension between the costs and benefits 1t received from
ignoring transnational organized crime groups like the. C~li Cartel. The hard
dollar foreign exchange income, an estimated 3 to 7 ~ilho~ dollars ~~nually
in the Colombian case, helped stabilize the country m a time of cnsis. The
economic growth and increase in jobs and financial investment, as ~~ll as the
informal taxation (i.e. corruption payoffs) that comes from perrmttmg drug
trafficking to exist, also enriched large sectors of the population', .
Then there are the costs, the negative effects. The 'narcos are said to

42
TRANSNATIONAL ORGANIZED CRIME
control. over. one-third of Colombia's best agricultural land. Governmental
corrupt10n, v10lence, and social disorder and potential political destabilization
that always accompanies organized crime and its enterprises have caused the
dea.t~s of thousands of Colombians and threatened the delegitimation of the
pohtt~al system. Colombia has also suffered internationally, as it is viewed as
a p~iah .state by. ~an~ and suffers the anger of the US Congress and
Presidential decerttficat10n. Closer to home, in the year since the fall of the
cartel, unemployment in Cali has increased by 33 percent, 210 businesses
have cl~~ed: and the once booming construction industry has declined by 20
percent. . Si?1ultaneously, in the Colombian cocaine and heroin laboratory
and cultivation areas, more than 2,500 campesinos have lost their narco-
employment and incomes. 48 These are all real costs to Colombia.
The C?lombian regime~ have, since the 1970s, tried a variety of tactics
from a~mdance, t~ collus.10n, to repression, in attempting to deal with
transnat10n~l. orgamzed cnme. The one policy that worked, extradition,
p~ov~d pohtic~ly unpalatable. It was such strong medicine that thousands
died m nru:co-v10lence and narco-terrorism against the government, its agents,
and the ehte. The. ~cope of the violence threatened to throw the country into
cha?s, a~d ~x~adition was ended. Other tactics included selective repression
agamst .mdividual traffickers who were too visible, or went too far in
threatenmg the state. This was often accomplished with the collusion of other
traffickers and organizations, as in the case of Carlos Lehder Rivas and did
not affect the problem. It did, however, greatly increase interac,tion and
corruption.
. Recent govern~ents have sought a 'balanced' approach to limit the
~10le~ce and terronsm that come from corruption, organized crime enterprise
nvalne~ and competition, and to control the pressure from the outside to sto~
trafficking at the so.urce. In sho~, they tried to make a show of attempting to
pleas~ everyone, failed, and agam corruption flourished.
Figure 4. shows. the ~~y major issues that were important to Colombia's
government m. pubhc ~pm10n ~olls, elite interviews, and an editorial analysis
oft?e Colom.b~an ?1edia. In bnef, it shows the country's perception of the key
social destabihzatton problems during the years of the Cali cartel's evolution.
FIGURE 4
THE COLOMBIAN GOVERNMENT'S PERCEPTION OF ITS FOUR
SCOURGES
1. Narco-Terror and Violence
2. 'La Delicuencia' Street Crime and Violence
3. Corruption and Illegal Enrichment
4. Insurgency and Guerilla Actions and Violence
l
43
roe VERSUS THE NATION-STATE
The key point to note is that drug trafficking does not appear here. Pablo
Escobar and the Medellin 'Extraditables' were not hunted down as drug
traffickers, but as narco-terrorists. Narco-violence ~nd the terroristic attac~s
by the Medellin carte~ on the agents. and agenci.es of t?e state and its
institutions of civil society (press, media, courts, ehte pubhcs) are what the
coiombian state responded to, not drug trafficking. This difference in
problem perception ~nd de~nition caused. ~o e~d of difficulties be~ween US
and Colombian officials. It illustrates a cntical issue that every pohcy maker
dealing with transnational organized crime in different cultures must study.
On the other hand, the Alice in Wonderland-like antics and outright
mockery oflaw and civil society reflected in the posturing, handwringing, and
political and legal gymnastics of the Colombian legislature in dealing with
Presidential level narco-corruption during the summer of 1996 is illustrative
of what can happen when juggling and balancing acts by regimes fail to mask
the truth.
Once a symbiotic relationship begins to form, and immediate or direct
threats to the state appear to be absent, the state is often likely to fail to
perceive the problem correctly or to act accordingly. The virus once implanted
feeds, but the while the body politic may fever, it fails to respond. The
hundreds of unsolved murders of construction workers, and telephone
employees in Cali and Valle de Cauca, Colombia attest to what such blindness
and decisional avoidance can mean for ordinary citizens within such a
strickened polity.
If the nation-state is to succeed convincingly against transnational
organized crime, it must act and act with a will early on. It must act in the
predatory stage to decapitate the emerging criminal organizations. It must act
before the disease spreads, reaches a tipping point, and infects the body
politics as a whole.
The Threat and What Must be Done
The long term threats to civil society from organized crime identified in
Figure 5 (on page 44) underscore some of the end states of the cancer that is
transnational organized crime.
As we have seen in the Colombian case, in the long term the destabilizing
effects of transnational organized crime can lead to delegitimization of the
regime and the opening of Pandora's box of evils. Penetration of the legal
system and legitimate sectors by organized crime tilts the scales of justice,
unbalances the economy, eliminates the rule of fairness, and tilts the playing
field against ordinary citizens. In the long term, criminal impunity creates
political immunity that leads to fear, intimidation, oppression, violence and
tyranny as the state becomes criminal and delegitimate. The end result is the
 44
TRANSNATIONAL ORGANIZED CRIME roe VERSUS THE NATION-STATE 45
rupture of civil society and community.
Unlike many other intelligence centers, NDIC leadership recognized from
FIGURE 5
the start the importance and usefulness of open source information bases
THE THREAT (OSCINT) and are creating analytical models and tools, not data bases. To this
end, NDIC taps into all sources of interagency data for strategic purposes and
1. Political and economic destabilization does not seek to create databases. As the new center on the block NDIC faces
a lot of competition, envy, and attack from other bureaucratic players in
2. Injustice Washington DC. But, if it is allowed to grow, prosper, and if it is given a five
or ten year commitment to funding before some sunset judgement, it should
3. Unfair competition become the premier organized crime intelligence center in the United States.
Although its initial mission is drugs, given its long term purpose, it must
4. Institutional delegitimization become the transnational organized crime center in the USA. As such, NDIC,
even now, can serve as a model for other nation states seeking to combat OC.
5. Corruption The EU has now created EUROPOL, and has INTERPOL which has
served European and other nations for a number of years. The key issue for
6. Monopoly pricing and organized crime extortion nations in this community is to share the secrets and liaise adequately with the
EU. For all of these organizations, even Europe's best intelligence shop,
7. Unfair treatment Germany's Bundeskriminalamt (BKA), this will turn on the sovereignty issue
and to what degree trust and transparency can be built to share the secrets. At
8. Violence, intimidation, and fear the moment Great Britain, France, Italy, and Spain, appear to have rather
different approaches to this problem. 49
9. Oppression When one, for example, looks at issues such as agricultural commodity
fraud within the old European Community (EC) and the European Free Trade
10. Tyranny
Area (EFTA), one notes that Italy's representative in the European Parliament,
was the late Salvo Lima, a made member of Toto Riina's Sicilian Mafia
family and key link to the Christian Democrat party. 50 He was always a vocal
To respond to this threat a number of actions need to be taken. First, in lobbyist for Italian agricultural products and high support payments. These
order to co~nter the threat of transnational organized crime every nation state accounts were frequently inflated and falsified by Italian organized crime who
mu~t establish and maintain 'all source' criminal intelligence centers. And reaped large profits from the European market and EC. The result of
while .many may argue the point, in this analyst's opinion, one of the best transnational organized crime's penetration of the EFTA not only was higher
emergmg exem~lars in the United States is the National Drug Intelligence prices for consumers and taxpayers and unearned profit for the Sicilian Mafia,
Center (~lDIC/ m Johnst~w~, Pennsylvania. While the Center was initially it was a precedent for distrust. Recent squabbles between France and the
fund~d with a po~k ?arre~ piece of legislation, the recognition of the need for Netherlands over border controls and drugs are another reflection of the
a n~t10nal strategic mtelhgence center was present in both the FBI and the problem. Yet, nation-states cannot fight transnational organized crime alone,
White House. Wha~ is most important is that the Center's developers have if they will not cooperate, seek transparency, and share the secrets.
learned from_ the m1~takes of other intelligence centers in the United States Equally important is how, and to what degree, elements and agencies of
and are. creatmg a um~ue 'all source' resource, focused on organizations and national security intelligence will be blended and mixed with law
enterpnses, and searchmg for patterns of vulnerability while creating strategic enforcement. In Great Britain, MI5, the Security Service; the Government
responses .to combat OC. NDIC is also an interagency center with Communications Headquarters (GCHQ); and the Secret Intelligence Service
representatives from all maj~r law enforcement and intelligence agencies of (MI6); are all seeking a role in dealing, along with New Scotland Yard, with
the Fede~al Government on its staff. This fact should, over time, lessen the transnational organized crime. To this end, a new Intelligence and Security
standard mteragency problems common to law enforcement agencies. Committee has been set up in Parliament to analyze the issue. In the United

l
46 TRANSNATIONAL ORGANIZED CRIME
47
TOC VERSUS THE NATION-STATE

States, the Brown/Rudman Commission, as well as several Congressional . · The American Mafia (New York: Appleton-Century-Crofts, 1971).
Joseph L. Albim,
Committees have been examining the future of intelligence organization and "
7. ,.ew_
York Times, 2 March 1995, p.1.
K
. 67 68
d Alec Dubro Yakuza (Rading, MA: Addison Wesley, 1986), pp. - ·
policy. They recognized that, as nation-states seek to confront transnational 8 David E ap1an an ' h 1994) 21
· · e S~erling Thieves World, (New York, Simon and Sc u~ter, , p. . . . ,
organized crime, interagency blending, melding and coordination will be 9. Clair W' L 111 'The Organized Crime Morass m the Former Soviet Umon ,
10. Rensellae~ .i ae~o12' No 3 (Summer 1994), p.404.
essential. Here the Cali cartel case study can provide a useful starting place. Demokr~t1zaS~~;gic ~d In~ernational Studies (CSIS), CSIS Reports, Global Organized
While these battles are fought in international meetings, congresses and 11. Center 1or
Crime (Washington, DC: CSIS, 1994), p.120.
parliaments, every law enforcement agency must seek to establish its own o anized Crime Digest, Vol.16, No.6, 15 March 1995, p.1.
1;· H~ Messick, Syndicate in the Sun (New York: Pocket Bo~ks, 1965), pp.34-38.
strategic, proactive programs of intervention. If it is not now being done, 1 · A M c y ..,..he Politics o' Heroin (New York: Lawrence Hill, 1991), p.78.
baseline intelligence, on the movement and migration of goods and people 14. . c 0 ' , , ~ .
15 . Global Organized Crime, op.cit., p.16.
needs to be collected. How many Russians, Nigerians, Chinese, Italians,
16. Ibid., p.16. N K chan and R Whittington Dirty Money (Washington, DC: National Press
Colombians, Ghanaians, etc. are arriving and staying? What are their 17. Mark Potts, . o ' · '
movement patterns and frequencies? How is business and industry benefiting Inc. 1992).
18 . Global Organized Crime, op.cit., p.18.
from licit and illicit product outflows from Eastern Europe, the CIS or 19. CNN TV NEWS, 16 March 1995, 06:30A. EST.
elsewhere? What theft and criminal exports are flowing into the CIS and 20. Claire Sterling, op.cit., p.124.
21. Organized Crime Digest, Vol.16, No.3, 2 Feb. 1995, p.3.
Eastern Europe from the United States and Europe? Auto theft and 22 Organized Crime Digest, Vol.16, No.5, 1 March 1995, p.2.
transshipment as we know is one major growth industry. 2
3: Robert D. Kaplan, 'The Coming Anarchy', The Atlantic Monthly, Vol.273, No.2 (Feb. 1994),
Research, computer simulations and modeling of complex enterprise pp 44-82. f D T ffi k'ng'
24 p ~er A Lupsha 'Nets of Affiliation in the Political Economy o rug ra IC 1 •
crimes, and criminal organizations, as well as theory building and hypotheses . c:nfere~ce Rep~rt, Economics of the Narcotics Industry, 21-22 November 1994
testing, chronologies of events and flow patterns, configurative analysis and (Washington, DC: US Department of State).
exploitation of open-source materials are tasks that need to be undertaken. 25. Author's interviews during travels in Peru, Summer 1994.
26. Washington Post, 12 March 1995, p.JA.
Thomas Jefferson noted, 'The price of Liberty is eternal Vigilance'. 27. Author's Interviews, Paris, France (July 1994).
Today, all source vigilance against transnational organized crime is essential, 28. Washington Times, 6 February 1995, p. l.
if civil society is to be maintained and preserved. 29. CSIS Report, op.cit., p.59
30. Ibid, p.122 1994) 21
31 Henry Kissinger, Diplomacy (New York: Simon and Schuster, , P: · .
NOTES 32: Hans Gerth and C.W.Mills, From Max Weber, (New York: Oxford Umrers1ty Press, 1958),
pp.82-83. · • · · · state
33. In Peru and Colombia an estimated 33 percent of these nation s temtones are. m non-
I. This article is a major revision of a paper first presented in Stockholm, Sweden at The First actor control, either guerrillas or drug traffickers. Also see, Organized Crime Digest, Vol.16,
International Workshop on Low Internsity Conflict. ILIC'95, 29-31 March 1995. See No.I, 4 Jan. 1995, p.3. 1991) 192
Conference Proceedings, edited by Dr. Alexander E. R. Woodcock et al. The author wishes 34. Martin Van Creveld, The Transformation of War (New York: Free Press, ' P· ·
to thank Dr. Woodcock for his thoughts and comments and the Swedish Armed Forces for 35. Ibid., p.204.
their hospitality and support. 36. R. Lee III, op.cit., pp.396-399. . . . . . · d C"
2. Enlargement and Engagement: National Security Strategy of the United States (Washington, 37. See Edwin Stier and Peter Richards, 'Strategic Decmon-makmg m Organize nme
DC: GPO, Feb. 1996), p.25. Control' in H. Edelhertz, Major Issues in Organized Crime Control (W~shmgton, DC'. NI~
3. Report of the Brown/Rudman Commission on the Roles and Capabilities of the United Symposium Preceedings, 25-26 Sept. 1996). Also see Peter A. ~upsha, Or~amzed Cnme
States Intelligence Community. (Washington DC: GPO, March 1996). As early as 1993 in ICMA, Local Government Police Management, 3rd ed. (Washmgton, DC. ICMA, 1991),
intelligence experts, Roy Godson and William Olson, were urging Congress to hold hearings pp.210-234.
38. R.T. Naylor, Prof. Economics McGill University, Montreal,
canada, te1ep homc·
on this issue. See their, International Organized Crime: Emerging Threat to US Security,
National Strategy Information Center paper (Aug. 1993). communication with the author. . A d
4. J.F. Holden-Rhodes and Peter A. Lupsha, 'Horsemen of the Apocalypse: Gray Area 39. See Graham H. Turbiville, Jr., Mafia in Uniform: The Criminalization of the Russian rme
Phenomena and the New World Disorder', 'Low Intensity Conflict and Law Enforcement, Frees (Ft. Leavenworth, KA: Foreign Military Studies Of~ce, .1995). See also Ste~hen
Vol.2, No.2, (Autumn 1993), pp.212-226. Handelman, Comrade Criminal (New Heaven, CT: Yale Umverslly Pre_ss, 1995\,Lomse I.
5. John Martin and Anne Romano, Multinational Crime (Newbury Park, CA: Sage Publishers, Shelley, 'Transnational Organized Crime: An Imminent Threat to the Sallon-State. , Journal
1992), p.1. of International Affairs, Vol.2,No.48, p.481-483. . .
6. See Donald R. Cressey, Theft of the Nation (New York, 1969), Francis A.J. Ianni with 40. Michael Ignatieff, 'On Civil Society', Foreign Affairs, Vol.74, No.2, March/Apnl 1995,
Elizabeth Reuss-Ianni, A Family Business (New York: Russel Sage Foundation, 1972), pp.128-136. See also, Ernest Gellner, Conditio?s of Li?erty, (London: Pengmn, I??4).
41. Peter A. Lupsha, 'American Values and Orgamzed Cnme: Suckers vs. W1seguys m Rupert
48 TRANSNATIONAL ORGANIZED CRIME

Wilkinson e.d.'. Ame~ican Social Character (New York: Harper and Row, 1992), pp.294-309.
42. See, Phil .Wtlhams, Grave New World: Transnational Organized Crime on the Eve of the
Twent~ ~irst Century', unpublished paper.
43. The ongmal. concep~ for this chart is based on the work of Charles Rogovin and others of the
196~ Orgamzed Cnme Task Force. For details See: Peter A. Lupsha, 'Organized Crime'
op.cit., above.
44. Report of the Special Investigation Division of New Jersey Division of Gaming Enforcement
(July 1978). See also Giri Mahon, The Company that Bought the Boardwalk (New York·
Random House, 1980).
45. For th~ con~inuing role and impact of organized casino gambling on US politics and political
campaigns m 1996 see Sally Denton and Roger Morris, 'Easy Money in Vegas', The New
York Times, 9 July 1996, p.A-11.
46. Se~ P~il Will~ams and Ernesto ~avona, 'Th~ United Nations and Transnational Organized
~nme (~pecial Issue) •. Transnatzonal Organized Crime, Vol.l, No.3, Autumn 1995.
47. Colo1!1bia Report:, Cali's Economy Suffering', The Miami Herald, 12 June 1996, p.A-3.
48. Associated Press, Drug Crackdown Ends Jobs', The Albuquerque Journal 10 July 1996
p.A-2. ' '
49. 'Conve~tion Again.st Cri~e', ~he Economist, ll March 1995, Vol.334, No.7905, p.53.
50. Authors convers~Uons with G10vanni Falcone in Naples, Italy in the summer of 1984. Also
see Al~xander Stille, Excellent Cadavers: The Mafia and the Death of the First Italian
Republic (New York: Pantheon Books, 1995), pp.135-137 and 383-384.
Ocean-Going Smuggling of Illegal Chinese
Immigrants: Operation, Causation and
' Policy Implications
·
ZHENG WANG 1
Introduction
On 6 June 1993, hundreds of illegal Chinese immigrants jumped on
Rockaway Beach near New York, resulting in 6 persons drowned and 16
seriously injured. The whole nation was shocked by the scene. This incident
highlighted a growing problem: illegal Chinese immigrants being smuggled
into the United States by Taiwanese ocean-going cargo ships and fishing
vessels. 2
Illegal aliens smuggling and related criminal activities have been
confronted by US law enforcement agencies for a long time. The current
surge of illegal Chinese immigration, however represents a continuation and
intensification of illegal migration from Fujian (Fukieu) and Guangdong
(Canton) provinces of the People's Republic of China (CPR) which started in
the early 1980s.
Although the vast majority of illegal Chinese immigrants are still coming
3
by air, in August 1991 a new type of operation began to take shape. It
involved the use of Taiwanese ocean-going ships to smuggle illegal Chinese
immigrants to the US. The occurrence of this new type of operation can be
explained largely in terms of lower overheads, higher profit, and easier
logistics involved (no passports and only minimal bribery are required).
Further, this new criminal operation is different from the air smuggling
operation in terms of techniques involved, networking used, the number of
persons smuggled (about 150 persons per ship), and the amount of money
charged (about 30,000 US dollars per head).
Obviously, this new modus operandi of illegal aliens smuggling has
raised some serious questions for law enforcement agencies as well as policy
makers: Why did this ocean-going smuggling begin in the early 1990s? Why
is such criminal activity still occurring? How are such transnational activities
operated? What are some of the causal factors and theoretical explanations
for this new phenomenon? And, finally, what are some of the

Transnational Organized Crime, Vol.2, No. I, Spring 1996. pp.49-65

PUBLISHED BY FRANK CASS, LONDON