Source: Current History Contact: April 1998 Author: Phil Williams Section: Page 154 THE NATURE OF DRUG-TRAFFICKING NETWORKS There are many reasons why the war on drugs has failed. One of the most important has been the inability of law enforcement efforts and military interdiction to degrade, disrupt, or destroy the networks trafficking drugs into the United States and Western Europe. This inability stems from a failure to understand fully the struc-ture of these networks and their capacity to counter or circumvent law enforcement and military interdiction. The predominant conception - especially in the case of cocaine trafficking - - has been of large, hierarchical, vertically integrated organizations forming cartels and dominating the market. Government strategy has targeted the leaders of these organizations, the so-called kingpins. But although the leaderships of both the Medellin and Cali cartels have been "decapitated," it has had only a limited impact on the flow of drugs to the United States. Critics of supply reduction efforts claim that this is not sur-prising: interfering directly or indirectly with the supply of drugs serves merely to raise prices, which in turn makes the market more attractive and encourages new suppliers. The argument here is not intended to challenge the idea that the market contains self-adjusting mechanisms of this kind. It does suggest that this does not tell the whole story A large part of the supply reduction failure can be understood in terms of the organizational superiority of drug-trafficking supply networks over the more traditional bureaucratic organizations that dominate interdiction and law enforcement efforts. In recent years many business analysts and management consultants have emphasized that networks are far superior to traditional hierarchies in terms of organizational effectiveness, especially when it comes to innovation and teamwork. But what licit business appears to be discovering is something that has long been known to criminal organizations, which have been at the forefront in embracing network structures. This is hardly surprising since network structures are resistant to disruption and have a degree of resilience that other forms of organization lack. By using networks, transnational criminal enterprises and drug-trafficking organizations also enjoy enormous flexibility and are able to respond rapidly to new strategies or innovative techniques developed by law enforcement. Ironically this reliance on networks is something many observers of criminal organizations have generally ignored. There is a tendency in law enforcement circles and among some academic analysts to treat centralized hierarchies as synonymous with organized crime and to treat networks as disorga-nized crime. This is a mistake. A network is a highly sophisticated organizational form. David Ronfeldt of the RAND Corporation has argued that society has gone through a long evolutionary process that has been dominated successively by tribes, hierarchies, and markets. In each case the new form of organization did not replace the previous one but surpassed it in effectiveness and efficiency Ronfeldt argues that society is now at a fourth stage in which networks are emerging as the predominant organizational form, a form that has significant advantages over more traditional bureaucratic hierarchies.[1] If this is the case, law enforcement and military agencies engaged in supply reduction need to recognize network characteristics and modify their strategy accordingly. While such an adjustment would not guarantee total success in the war on drugs, it could help level the playing field. WHAT IS A NETWORK? A network can be understood as a series of connected nodes. The nodes can be individuals, organizations, firms, or even computers, but the critical element is that there are significant linkages among them. Networks can vary in size, shape, membership, cohesion, and purpose. They can be large or all, local or global, cohesive or diffuse, centrally directed or highly decentralized, purposeful or directionless. A network can be narrowly focused one goal or broadly oriented toward many goals, and its membership can be exclusive or encompassing. Networks are at once pervasive and intangible, everywhere and nowhere. More prosaically, they facilitate flows of information, knowledge, and communication as well as more tangible commodities. They operate in licit as well as illicit sectors of the economy and society. This enormous variability makes the network concept an elusive one; at a practical level, it also makes networks difficult combat. The purposes of a network can vary. Networks provide a means to achieve a variety of goals. In effect, they are neutral regarding the nature of the goals and can be used for positive or negative ends. This discussion, of course, is about networks that are highly functional in their own terms yet are inimical to society at large. In the case of drug-trafficking networks there is a common purpose, which is to ensure that drugs move from the source countries through a variety of transshipment points to the customers (with minimum disruption and, loss from law enforcement activity) and that profits accrue, in varying degrees, to members of the network. The networks provide essential links between suppliers and customers, and are critical to the effective functioning of the market. Still there are many gaps in our understanding of drug-trafficking networks. The pattern of authority and direction in these networks is not always evident, the balance between competing and cooperating networks is not readily discernible, and the nature of information flows through them is often elusive. Nevertheless, it is clear that networks have several characteristics that make it difficult for law enforcement to combat them effectively. CORE, PERIPHERY, AND GLOBALIZATION A drug-trafficking network of any substantial size will have both a core and a periphery. The core is likely to consist of dense network connections among a group of individuals or small organizations that provide the steering mechanism and sense of direction for the entire network. The core members will also have bonding mechanisms that afford a high degree of trust and cohesion in their relationships. Bonding can be achieved through a variety of means - common ethnicity tribal connections, family or lineage, common experience in youth gangs or prison - but is critical to the network core. The periphery is likely to be less dense, with somewhat looser relationships in which the bonding mechanisms are not as strong. Peripheries of networks exhibit what in the business literature has been termed the strength of weak relationships, which allows the network to operate far more extensively and with greater impact.[2] The links in the periph-ery of drug-trafficking networks also seem to correspond with what Francis Ianni has called criminal relationships: "links based upon a common core of activity in crime that keep people working together once they have joined in a network."[3] Two-tiered networks of this kind with both core and periphery have formidable internal defense mechanisms. While it is possible for law enforcement to infiltrate the periphery of the network, getting to the core is much more difficult partly because entry is dependent on a high level of trust that is based on bonding rather than functional utility. Moreover, there will usually be several nodes in the network that act as built-in insulators between core and periphery; these distance the core leaders from operations and impede law enforcement efforts to strike at the center of gravity as opposed to nibbling around the edges. The concomitant of this is that the periphery is where the risks from law enforcement are greatest. Ultimately this is not too serious a problem; if parts of the periphery are seriously infiltrated or compromised, the core can simply discard them and recruit new members for the outer reaches of the network. Networks display a remarkable capacity to flow around physical barriers and across legal or geographical boundaries. They in effect transcend borders, and are the perfect means of conducting business in a globalizing world. While not all net-work organizations are transnational in scope or ambition, there is a natural congruence between transnational or cross-border activities and network structures, irrespective of whether the networks operate exclusively in the legitimate sector or in supplying illicit goods and services. In this connection, the capacity of individual criminals or groups in one country to extend their network through linkages with their counterparts in other countries gives organized crime and drug trafficking a transnational character that makes it much more difficult to combat. Criminal networks have become borderless while law enforcement agencies are still constrained by national borders. Their transnational character also places criminal networks in an excellent position to exploit the global financial or global trade system. Global trade has become so extensive that it is easy for criminal networks to embed and conceal illicit products among licit goods. Indeed, containerization is becoming an increasingly important mode of moving drugs from suppliers to consumers. Similarly the capacity of drug-trafficking networks to move the proceeds of their activities through multiple jurisdictions complicates law enforcement's efforts to follow the money trail with a high degree of confidence or in a timely manner. The synergy between social networks and technological or information networks is huge. The ability of transnational drug-trafficking networks to exploit globalization means that in the twenty-first century national and even regional law enforcement efforts will become even more difficult. Another important feature of networks is that they cross easily from the illicit to the licit sector. Drug-traffickers can enlarge their networks to include lawyers, doctors, and bankers to help them conceal and invest their profits. Criminal networks can readily extend their reach, co-opting individuals and organizations in ways that facilitate, enhance, or protect their activities. Co-option can be achieved through bribery, coercion, and intimidation. These links are dynamic rather than static and increase in importance and value over time. A network link between a low-level criminal and a junior official will become much more significant as the criminal becomes more powerful and the official becomes more senior. In these circumstances, the exchange relationship becomes much more substantial in terms of the favors done by the official and the payoffs provided by the criminal. The official is not part of the criminal enterprise per se, but is a vital node in the criminal network. As such, he or she provides important services to the network, including critical and timely intelligence about government and law enforcement activities. If enough people in important government positions are corrupted and co-opted in this manner, the network can almost certainly count on a high degree of protection against vigorous enforcement efforts. The link between organized crime and corruption and the importance of corruption networks in facilitating criminal activities such as drug trafficking have been given scant attention. Yet in countries such as Mexico, Colombia, Nigeria, and Russia the linkages between criminals and officials have become one of the most serious impediments to achieving democratic governance and a free market economy Collusive links also exist at lower levels, with law enforcement and customs officials accept-ing or imposing bribes in return for free passage of drugs. A good example of this is the Turkey-Iraq border where, according to one report, "drug trafficking is always taxed, but seldom checked and never stopped. "[4] Corruption networks, at the political and operational levels, are as insidious as they are pervasive and make both drug trafficking and organized crime increasingly difficult to counter. INTELLIGENCE AND COUNTERINTELLIGENCE Another important characteristic of networks is their efficiency and effectiveness in procuring information. In the case of drug-trafficking networks, the need is for counterintelligence that allows the networks to anticipate and negate law enforcement initiatives. The Cali drug-trafficking organization was especially adept at this and used an extensive network of taxi drivers and street vendors to gain intelligence about law enforcement activities in Cali. Extension of the network into government and law enforcement agencies is also important in this context, resulting in the corruption described earlier. While this is a phenomenon that occurs pri-marily in supplier or transshipment countries - and has become a predominant feature of political life Colombia and Mexico - criminal network infiltration of law enforcement also occurs in the United Sates. There have been numerous instances of street gang members joining the police, thereby obtaining ready access to early warning information that provides an opportunity for defensive actions against law enforcement. Members of the Gangster Disciples, the Latin Kings, and the Latin Lovers are known to have penetrated the Chicago police force, thereby augmenting their understanding of police methods and their capacity to detect undercover agents. Accompanying the efficient acquisition and dissemination of certain kinds of information is the capacity to contain and protect other types of information. Drug-trafficking networks often operate in cellular fashion in which information is compartmentalized or shared only on a need-to-know basis. As a result, arrests tend to be limited to those on the periphery, who do not yield usable connections to those in the core. Moreover, drug-trafficking networks have tried to increase the reluctance of their members to pass information to law enforcement authorities by their readiness to harm the families of informants and by their willingness to support the families of those who remain loyal and resist blandishments such as offers of leniency in return for information. In addition to this, many networks have two characteristics that make them hard to penetrate: ethicity and language. Moreover, many of the net-works use languages or dialects unfamiliar to law enforcement personnel in the host countries. Con-sequently electronic surveillance efforts directed against, for example, Chinese or Nigerian drug-trafficking networks are either neutralized or rendered much more difficult. Furthermore, ethnic drug-trafficking networks do not exist in a vacuum but instead operate in and from ethnic communities that provide concealment and protection as well as an important source of new recruits. Some net-works, such as Chinese drug-trafficking groups, are based largely on ethnicity They are global in scope and operate according to the principle of "guanxi" (notions of reciprocal obligation), which can span generations and continents and provides a basis for trust and cooperation. Such networks are especially difficult for law enforcement to infiltrate. In short, drug-trafficking networks have a significant capac-ity to protect their information and to defend themselves against law enforcement initiatives. Networks are also able to expand or contract as circumstances demand. Their capacity for rapid reconfiguration enables them to respond quickly to law enforcement and interdiction efforts by relocating their activities. Networks have some fixed assets, but are able to move their operations in ways that exploit the paths of least resistance. Most Colombian cocaine was initially transported to the United States through the Caribbean and Florida. When the interdiction effort in this region was increased in the late 1980s and early 1990s, many of the trafficking networks moved to Mexico and the southwestern border of the United States. More recently as law enforcement and military interdic-tion efforts have increased on that border, there has been a return to Florida. Similarly on a global level, during the 1990s much greater use has been made of African states as transshipment points for drugs destined for the United States and Europe. According to a 1997 study by the Observatoire Geopolitique des Drogues (Geopolitical Drug Watch) in Paris, almost 30 percent of heroin shipments seized in Europe or the United States passed through Africa, which is an easy place for traffickers to do business. As the group has noted, "There are plenty of under-policed air or sea ports-like Mombasa (Kenya), Dar es Salaam (Tanzania) and Maputo (Mozambique) - and civil wars in countries like Angola, Somalia, and Liberia mean porous borders - where drugs can be shipped or traded with impunity." Closely related to this, networks can respond to law enforcement profiles of network participants by recruiting new network members to act as couriers. Nigerian drug traffickers in particular increasingly face the profiling problem: because many Nigerians are known to be heavily involved in the trafficking of cocaine and heroin, they are more likely to be stopped at airports and other points of entry and searched by customs inspectors. Nigerian traffickers have dealt with this partly by recruiting network members who do not fit the profile and therefore tend to make more successful couriers. This exten-sion of the network typically involves recruitment of middle-aged white women, but in one case (in June 1996) included a group of American sailors with the Sixth Fleet. In other cases, Nigerian men have married Polish or Hungarian women and then sent them to buy cocaine in South America. The cocaine is delivered to countries such as the Netherlands and transferred to other women who travel to other countries, such as Britain, where the cocaine is sold. Neither the Nigerian connection nor the South American link is evident, and the network is itself virtually invisible. MANAGING RISK Networks are excellent organizations for managing risk and limiting damage to the criminal enterprise. If the network is compromised or degraded in some way it can alter its shape and still function. This is achieved in part through compartmentalizing organizational activities, disseminating knowledge on a need-to-know basis, and separating operators and strategic managers. This makes it possible to maintain within a network a series of safety devices that not only insulate the core but also limit damage. Networks are highly resilient, partly because of what might be termed loose coupling. In his 1984 book "Normal Accidents," Charles Perrow distinguishes between tightly coupled and loosely cou-pled systems. The most vulnerable are tightly coupled systems where disturbances involve a chain reaction or, at the very least, serious cascading effects. In contrast, "'loose coupling gives time, resources, and alternative paths to cope with the disturbance and limits its impact." Drug-trafficking networks, by their very nature, involve loose coupling and can more effectively manage the risks they face. Another crucial characteristic of networks is that they have built-in redundancy that allows for recovery if part of the network is impaired. Some of the literature on business networks has noted that a network, left to its own devices, will tend to produce redundant contacts that are not especially efficient. In the case of drug-trafficking networks, the inefficiency associated with redundant contacts is negligible when compared to the benefits. For networks, which almost invariably face the problems of degradation and attack by law enforcement, redundancy is a virtue. It provides a range of options to move the commodities to the market and to repatriate profits, allowing the network to exploit the path of least resistance. Even more important, it enables network members to take over tasks and responsibilities from those who have been arrested or killed. While there is specialization in drug-trafficking networks, roles are rarely so specialized that substitutes cannot readily be found. Consequently redundancy allows networks to mitigate the impact of successful law enforcement actions. Because of this characteristic, the network is the ideal form for maintaining organizational integrity in an inhospitable environment. THE VIRTUE OF DIVERSITY Networks can take various forms and their members can exhibit enormous similarities or enormous differences. A money-laundering network in New York that was not very sophisticated in its operations but still succeeded in laundering over $70 million for Colombian drug-traffickers included a taxi driver, an honorary consul-general for Bulgaria, a New York City police officer, an assistant bank manager in Citibank, two rabbis, and a firefighter. The network transferred drug-trafficking proceeds to a bank in Zurich, where two employees forwarded the funds to the Caribbean account of a major Colombian drug trafficker. While some networks consist of individuals, others, according to Aaron Hollen, consist of both individuals and organizations, including some that might be hierarchical in character. In this connection, there is an important difference between the cocaine and heroin networks. The cocaine-trafficking networks operating from Medellin and Cali in Colombia had a considerable degree of vertical integration, with a relatively small number of organizations controlling the flow of drugs from leaf to nose. In the case of heroin, however, there are multiple supply sources such as Southwest Asia (especially Afghanistan and Pakistan), Southeast Asia (especially Burma), and Colombia which, during the 1990s, has diversified into opium poppy cultivation and heroin processing. There are also multiple sup-pliers, including Chinese networks, Nigerian drug-traffickers, Turkish groups, various Italian mafia organizations, and the smaller Colombian drug-trafficking organizations that have effectively superseded the Medellin and Cali cartels. Much of the heroin trade, especially in and near the source countries, occurs through network transactions in which brokers appear to play a major role. Moreover, many of these brokers and middlemen (particularly the Chinese) are extensively engaged in licit as well as illicit business. These variations in network structure and membership make the task of law enforcement even more formidable. Another characteristic of networks is that they can easily forge links with one another. A network does not lack an organizational identity, but it is not overly preoccupied with organizational form. Consequently networks can come together when it is convenient or beneficial without this being in any way a threat to their identity or raison d'etre. Indeed, one of the most important trends in drug trafficking and organized crime in recent years has been the growing connections among different criminal enterprises. Colombian-Sicilian networks, for example, were critical in developing the cocaine market in Western Europe. They joined Colombian suppliers with the Sicilian mafia, which had local knowledge, well-established heroin distribution networks, extensive bribery and corruption net-works, and a full-fledged capability to launder money. In a similar vein, Italian and Russian criminals have forged their own networks while Colombian and Russian criminals have been meeting in various Caribbean islands including Aruba. The extension of influence through networks of this kind provides new opportunities for criminals. One result of the Colombian-Russian contacts has been increased amounts of cocaine both imported to and transshipped through Russia. Colombian money-laundering activities could also be extended into and through Russian banks and companies. In this case, two powerful networks of criminal enterprises seem to be allying for mutual advantage. Not all connections among networks are reciprocal. Mexican drug-trafficking families have used Hispanic street gangs in southern California for retailing drugs and for contract killings. Indeed, the relationships between criminal networks cover a spectrum from spot sales at the lowest level to joint ventures and strategic alliances at the highest. In between are a series of arrangements such as contracting out or franchising for particular functions or roles. A recent development noted by the United States Drug Enforcement Administration, for example, has been the willingness of some Colombian groups to franchise smuggling and transportation operations to Puerto Rican and Dominican groups, which then transfer the drugs to Colombian wholesalers in the United States or retail the drugs themselves. Extending their networks in this way allows the Colombians to operate without going through Mexico and paying the Mexican drug-trafficking organizations the large percentage of profits they demand. Such an approach also minimizes the need for an extensive Colombian presence in Puerto Rico. The critical point about networks is that they facilitate cooperation of this kind among criminal enterprises just as they do in the licit business world. FIGHTING FIRE WITH FIRE Networks are a highly efficient and effective organizational structure for drug traffickers. Network organizations are fast, flexible, and forward looking. They put function over form and are far less concerned with neat organizational charts and jurisdictional niceties than with their overall effectiveness in achieving their goals. In contrast, governments are composed of and rely on large, bureaucratic hierarchies that operate according to standard operational procedures, are bound by budgetary constraints, and are, for the most part, cum-bersome. If governments are to make significant inroads against drug-trafficking networks, they have to acknowledge and act on the fundamental point made by John Arquilla and David Ronfeldt: it takes a network to defeat a network.[5] Governments and law enforcement agencies have to think and act much more in network terms; they need to develop the same kind of flexibility to operate both nationally and transnationally through the creation of informal transnational law enforcement networks based on trust that is exhibited by drug-trafficking networks. Greater care also needs to be given to devising strategies for more effective attacks on networks. Such strategies need to identify both critical nodes (those where redundancy is minimal) and critical connectuions - especially those to government and the legitimate financial sector. They also need to attack the network both externally through the removal or elimination of key nodes and connections, and internally through such tactics as disinformation and the creation of mistrust. While this approach does not guarantee success, it does at least conform to the first precept of effective strategy, which is to know your enemy and adjust your actions accordingly. [1] See David Ronfeldt, Tribes, Institutions, Markets, Networks:A Framework about Societal Evolution (Santa Monica, Calif.: RAND, 1996). [2] Mark Granovetter, 'The Strength of Weak Ties," American Journal of Sociology, Vol. 78 (1973). This idea is further developed in Ronald S. Burt, Structural Holes: The Social Structure of Competition (Cambridge, Mass.: Harvard Univer-sity Press, 1992). [3] Francis J.Ianni, Black Mafia: Ethnic Succession in Organized Crime (New York: Simon and Schuster, 1974), p.281. [4]Observatoire Geopolitique des Drogues (Geopolitical Drug Watch), Annual Report 1995-1996, September 1997 on the OGD home page (http://www.ogd.org). [5] See John Arquilla and David Ronfeldt, eds., In Athena's Cam p: Preparing for Conflict in the Information Age (Santa Monica, Calif.: RAND, 1997). - --- Checked-by: Mike Gogulski