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Communist party nomenklatura infiltration and exploits of the global Financial Markets Organized Crime: A Behind-the-Scenes Player One Big Happy Family Involvement of Russia and China The Crimes of Communism Origins of Today's Terrorism The Russian Mafia 'Wars of National Liberation' An ill-timed U.S. Intelligence Cutback The 'Deception Plan' Hands Off Our 'Ally" Russia Russian Ties to al-Qaeda Weapons of Mass Destruction Significance of the Anthrax Attack The Real 'Terrorist' Threat Drugs, Russia and Terrorism

Post-soviet communist party nomenklatura turned into Russian Organized Crime that infiltrated and exploits global Financial Markets

Joseph D. Douglass, Jr.

1999 /10 /12

Over the past few months, the story of Russian money laundering, whose Bank of New York operation was the first to surface, has expanded as additional tidbits of information have become available. The amounts of money grew from $4 billion to well over $10 billion. The involvement of additional banks from New York to London to Switzerland added more fuel to the fire. Eventually, this concern over penetration reached so many banks that specific banks were no longer news. Rather, the issue became Russian penetration of many banks around the world. At an international meeting sponsored by Mut zut Ethik in Feldkirch, Austria, this past September, Klaus Schmidt, an intelligence official with Organisierte Kriminalitt in Europa spoke in measured terms about the problem. Russian ministers and top officials are involved in the corruption, he said. Russian organized crime is a threat to the underpinnings of society, the culture, in both Europe and the United States, as a result of its activities. Drugs corrupt the youth and illegal money corrupts the legal, financial, and political system. Thus, the moral basis of the culture is destroyed. The process of moving money from the shadows to legal structures is magnifying the corruption by an order of magnitude. 15 to 20% of this money is now in the stock market and having serious influence. While in the past, the principal crime organizations were Sicilian, Japanese, Chinese, and Latin American, the main problem today is Russian. Illegal drugs play the lead role. This is no longer just a problem of heroin and cocaine but also one of synthetics legally produced, particularly by companies with excess production capacities, e.g. Bulgarian pharmaceutical companies. Drug crime in Europe has gone from 15,000 crimes in 1995 to 185,000 in 1997. Prostitution, blackmail, and murder are all coupled in and part of the operations. Organized crime in Russia now controls over 40,000 business, 85% of the banks, and 20% of the Duma. t is only a short time before organized crime will control the police forces all over the world and major businesses. They will also use politicians to expand their stealing potential, and will control the international financial markets.

His closing remark was most sobering: "This problem can no longer be defeated with legal means." Three years ago the gross size of international organized crime was estimated by World Bank specialists to be in the neighborhood of $1.2 trillion per year, of which at least $500 billion was profit. This year (1999) , a study sponsored by the UN estimated the gross size at $1.6 trillion. Both of these figures are believed to be low politically conservative estimates. More realistic estimates run from $2 trillion to $3 trillion. Over 50 percent of that is profit, which means $1 trillion to $1.5 trillion profit each year that is transferred into the coffers of international organized crime. All of this is, of course "laundered" and the bank laundering fee runs from 15 percent to 20 percent, which helps explain their obvious witting involvement. Since the drug trade exploded in the late 1960s in the United States, it is not unreasonable to estimate the total accumulated proceeds in the $30 trillion to $50 trillion range, mind boggling though it may be. Moreover, since this is the profit, it is easy to see how the amount spent on political and police corruption, propaganda, and other influence in important nations can easily have been many billions of dollars each year. To understand what is happening, it is necessary to go back many years and track Soviet strategic intelligence operations. This is hard to do partly because it has been Western policy not to say or reveal anything that would embarrass the Russians, partly because of the very extensive Soviet penetration and influence operations in Western governments, and partly because it has been very difficult to obtain credible "inside information" Soviet security was very good. The problem of obtaining good information also was exacerbated because of the efforts by governments, Soviet/Russian as well as Western governments, to automatically discredit good information. This information is embarrassing to both the Russian and Western political leaders, which is why scandals such as the Russian money laundering through Western banks have been so hidden in the shadows and how they have grown so large without discovery or, more important, publicity. To better comprehend the nature of the present day situation, I would like to present some history that was explained to me by the former Czech official, Jan Sejna, prior to his death in 1997. Up until he defected in 1968, Sejna had been a high-level insider. Prior to his defection he was the chief of staff to the Minister of Defense, head of the Secretariat of the Defense Council, which outranks the Politburo in matters of defense, intelligence, counter-intelligence, deception, and anything of a national security matter, which includes much of foreign and economic policies. He was also a key official in the Main Political Administration, Administrative Organs Department, and Main Party Group, which controlled the Presidium and National Assembly.

Most important, he had an impeccable memory. In 1992, the director, Defense Intelligence Agency, sent a memo to his bosses stating that Sejna was an excellent source and had provided reliable intelligence to U.S. and allied intelligence services for over twenty years. During the course of thousands of hours discussion with Sejna between 1976 and 1997, Sejna explained to me in detail how, as part of Khrushchevs modernization of the Soviet revolutionary war strategy in 1955-1956, drug trafficking, organized crime, terrorism, and deception became major Soviet strategic intelligence operations. Drugs and terrorism were run mainly out of the GRU (military intelligence) because they were sabotage operations. Organized crime was mainly a KGB (civilian intelligence) operation because it was more political (in contrast to military) in nature. Organized crime was believed to be closely coupled into the banks and politicians, both of which were considered primary targets for espionage and political influence operations. In organized crime, they infiltrated existing crime families first, then organized their own operations. By 1960, their initial infiltration had been most effective. For example, the Bulgarians had 23 penetrations into the Italian Mafia, the Hungarians had about the same number, the Czechs slightly fewer, and the Soviets slightly more than the Bulgarians and all this just in the Italian Mafia. Within five years, the Soviets and their surrogates had well over 100 organized crime operations that they had started around the world! The Czechs alone managed or had penetrated 50 organized crime groups around the world. The GRU, Soviet military intelligence, had the lead role in terrorism because of the major quantities of guns, explosives, and associated training and support that were required. However, because of the strong political mission of terrorism, which was to destabilize regions and prepare countries for political revolution, the KGB was also involved, especially in the overall management. Another political use of terrorism was to help split the West and isolate the United States. Drug trafficking was used mainly to corrupt and weaken the society, mainly the youth, which provides the backbone of the military. The schools were main targets because that was where the future leaders were to be found. Drugs were also a major component used in espionage and to corrupt public officials and, especially, banking institutions. Deception was used as an adjunct to foreign policy. It was also used to protect drug trafficking, organized crime, and terrorism by shifting the blame and protecting the key elements. For example, deception was used to promote the idea that organized crime, the Mafia, was behind drug trafficking and was used to protect the banks or, as Sejna explained, "to prevent the spotlight of publicity from shining on our friends the banks."

By 1965, so much money was flowing in, that closer cooperation with international finance was organized. International finance and Moscow were very close, Sejna said. "Never was an important decision made in Moscow that international finance was not present." The organization of money laundering was managed by international finance. The financiers and Soviet officials met in special villas in Prague because it was considered too risky for the bankers to travel to Moscow for such meetings. Every week there were meetings in Prague. Sejna knew because his staff had the task of coordinating the use of the special villas for these meetings. The guidance the Czech intelligence services received was very explicit. In 1964, they were specifically instructed to use nine banks in fifteen countries, which included Singapore, Austria (Vienna), Argentina, and Holland. They were even given the names of "reliable" people to use at various banks. They were also told to use banks that were not closely watched, as for example, banks in New Zealand and Norway. Banks in Switzerland, Spain, Luxembourg, and Liechtenstein were also used, he said, but more to corrupt the banking officials than to move large amounts of money. It is very important to understand the importance of the banks in Soviet strategy. In 1964, the large banks were the Soviet priority target for intelligence penetration because of the bankers access to and influence over political decisions and because the banks were such good sources of information of a technical espionage nature. What is also easily overlooked is that the banking officials are a valued channel to use in obtaining "casual" introductions to industrialists and people of power and influence. The bankers, thus, were not only key providers of information but great facilitators as well. In the 1960s, two top Austrian banking officials were Czech agents as was one of the top Swiss banking officials. The Czechs were particularly effective in Switzerland, even though the Germans and Russians were the primary intelligence operators in Switzerland. As Sejna explained it, there was so much information coming in on a daily basis from Switzerland that it "was like watching the 7 oclock news." The corruption files on "people of power and influence" that were gained from their criminal and drug operations were massive. The Czechs themselves had active dossiers on roughly 3,000 such corrupted important people in 1967. Add in the files of the Soviets, Germans, Bulgarians, Hungarians, and Poles and the total would easily exceed 20,000 by 1980 all people who were important and who were subject to blackmail and influence operations. Secret bank accounts were no secret to the Russians. As a result of their penetrations, they were well informed about the secret bank accounts of various national leaders like, for example, Marcos.

According to KGB estimates at this time, the Soviets ran or were able to exercise strategic control over 31 percent of the drug trade into the United States. In the Americas, they had multiple drug operations in Canada, Mexico, Panama, Costa Rica, El Salvador, Belize, Uruguay, Paraguay, Colombia, Peru, Chile, Bolivia, Argentina, Brazil, Guadeloupe, Jamaica, and Dominican Republic that Sejna was personally aware of. The Cuban operation, directed by Raul and Fidel Castro personally, was a Soviet operation. All of their agents were trained indigenous recruited agents. This includes the United States where, in 1967, the KGB estimated they controlled 38 percent of the drug distribution networks. Also, at that time, the Soviets had agents in roughly 75 percent of Latin American banks and 45 percent of American and Canadian banks, and this was before the explosion of cocaine money. The plague of illegal drugs that struck America in the 1960s was no accident. It was the product of deliberate intelligence operations. The first operation, organized by the Peoples Republic of China, began in 1949. The Soviet scheme became operational in 1959. The tie-in to the banks, as indicated above, began very early in the game. How else could a multi-billion dollar a year operation operate, let alone grow into a trillion plus dollars a year operation? Sejna recalled some of the Defense Council discussions on their meetings with German banking officials and the development of fake companies and bogus public works projects invented to cover the massive transfers of money. The sudden emergence of Russian organized crime around the globe, including in seventeen major American cities, a year or two following the collapse of the Soviet Union was no accident either. These crime operations did not suddenly "develop" following the collapse. Nor are they the result of independent entrepreneurs, although that is precisely what we are asked to believe. They were already large and effective long before the collapse and run by KGB agents. The KGB went to great lengths to preserve and protect valuable assets and operations, such as organized crime and drug trafficking, prior to the dissolution of the Soviet empire. It was clear that these criminal operations had become so effective that their presence could no longer be kept secret. According, the only logical course was to "go public" and create the image of their independent emergence as a natural course of events that was of as much concern to the new Russian officials as it was to Western officials. Hence the need for Western security services to "cooperate" with the Russian services in battling organized crime with the financial assistance of the West! Given the important nature of these operations (not only money, but political corruption and influence operations as well), asking whether the KGB and GRU are still involved is about as nave as asking whether they are still involved in espionage and influence operations. The answer is yes, more than ever before.

The recent revelations that have flowed from the investigations into Russian money laundering and associated financial manipulations, which served a whole host of nefarious operations, are just a tiny, tiny glimpse of a massive hiding monster. The ramifications are orders of magnitude worse than any of the reported accounts. They include associated political, economic, legal, financial, and judicial corruption that is present around the world in nearly all countries. The ties between the organized crime and drug trafficking groups with terrorist operations is yet another dimension that should not be ignored. It is a dangerous world, but isnt it time we took off our eye shades and began to recognize the problem in its entirety, including what has happened to the consequences for criminal behavior, which helps tell us where we are headed? As was clearly evident from the various talks in Feldkirch last month, and associated intense off-the-record discussions, we may not have much time left. It is clear that the legal processes and current approaches to police operations can not begin to cope with the problem. Moreover, the influence in finance, politics, justice, and the media that international organized crime has already achieved is frightening. Author : Joseph D. Douglass, Jr. is director of the Redwood Institute and author of Red Cocaine: The Drugging of America and the West (London and New York: Edward Harle, 1999) in which many of the details of Russian narcotics trafficking, organized crime, and cooperation (and corruption) of the banking industry is presented

Drugs, Russia and Terrorism, Part 1

Joseph D. Douglass Jr.
Editor's Note: This article is the first part of a two-part article. "When we fight drugs, we fight the war on terror," President Bush explained on Feb. 12 as he announced an increase in the budget for the war on drugs. He is right. Additionally, we cannot wage a real war on terrorism without waging a real war on illegal drugs, because the two are closely coupled.

The two are so intertwined that perhaps the real question is "How can we win a war on terrorism if we can't win a war on drugs?" The players are the same in both games. Drug trafficking is a significant source of terrorist financing. The root of several terrorist groups is narcotics trafficking, and vice versa. The few drug traffickers who are not terrorists depend on terrorists for protection and enforcement services that are usually paid for in drugs. This is just the start of the hidden side of the war on terrorism.

Organized Crime: A Behind-the-Scenes Player

A little over a year ago, a U.S. government interagency group conducted a study of international organized crime. Its conclusions were more frightening than the 9-11 attacks. Just the money-laundering part of international organized crime revenues was estimated to be at least $900 billion, possibly exceeding $2 trillion, a year. Other studies place their gross annual revenues at $2+ trillion. Drug trafficking, with annual revenues at $500+ billion, is one of the major components of organized crime. Another component is the sale of illegal goods and arms, most of which go to terrorists and terrorist regimes. A third component is organized crime's role as an intermediary in helping terrorist groups and rogue nations acquire weapons of mass destruction. The money dimension of organized crime its use for buying favors, corruption and compromise is probably of greatest concern. Only a few statements from the interagency report, "International Crime Threat Assessment" (December 2000), are needed to tell the story.

Consider: "Most organized crime groups have successfully corrupted those persons charged with investigating and prosecuting them." "Criminal groups are most successful in corrupting high-level politicians and government officials in countries that are their home base of operations." "International criminals are attracted to global finance and trade. They are able to avoid scrutiny because of the importance to businesses and governments of facilitating commercial and financial transactions." "Criminal groups cultivate and rely on corrupt political elites, government officials, and law enforcement and security personnel to protect their operations and to provide cover."

"They use illicit proceeds to: finance political campaigns, buy votes, protect their operations, influence legislation, gain insider access, and pre-empt prosecutions." One more. "One of the more significant developments since the end of the Cold War has been the growing involvement of insurgent, paramilitary, and extremist groups." In other words - terrorists One Big Happy Family It is not just that terrorism feeds off drug trafficking. Rather, terrorism, drug trafficking and organized crime are one big happy family. Originally, these were independent operations that emerged in different regions and grew in an evolutionary manner. This is not the nature of these operations today. This is because in the latter half of the last century, various states (mainly Communist states that were inherently criminal and terrorist in nature) recognized the potential of these operations as revolutionary weapons. Thus they proceeded to build narcotics trafficking, organized crime and terrorism into major state intelligence operations. The three operations trafficking, terrorism and crime are different but complementary. They work together while striving to appear independent of each other. They do not compete with each other, but cooperate synergistically. The three have become so intertwined that war on any one of the three means war on all. In reality, this is what needs to be done to wage war on all three. They are all unacceptable, they are all covert state intelligence attack operations, each can have dire consequences, and all need to be eradicated. The most damaging are drug trafficking and organized crime, not terrorism. Terrorism is the least damaging of the three because its main product is physical damage, in contrast to organized crime and drugs, which attack the moral basis of society and corrupt its leadership and institutions. However, because of the built-in publicity that goes along with terrorism, it is terrorism that gets the lion's share of the attention. Witness the U.S. government's response to the 9-11 attacks. Actually, far greater damage is done each year by organized crime and drug trafficking in terms of deaths, casualties, corruption and economic costs. The 'Overworld'

In organized crime, the top of the "underworld" is the "overworld." These are the people who pull the political and financial strings. (See David Jordan, "Drug Politics," University of Oklahoma Press, 1999.) The level of importance of the overworld can be judged by the $2+ trillion in annual revenues, which buys a horrendous amount of corruption, compromise and complicity. Its main targets are political parties, top government officials, judges, top law firms, financial institutions, news media, investigatory/police agencies and intelligence services. As pointed out in the "International Crime Threat Assessment," the corruption and compromise achieved staggers the mind. This is a global phenomenon including corruption, compromise and complicity in the United States and in our allies as well as in the usual Middle East suspects. This phenomenon and its implications need to be understood. Our war-on-terrorism objective is to destroy terrorism around the world, in the process drawing no distinction between the terrorists and those who harbor or support them. The implications need to be made explicit. Terrorism is critically dependent on the financial, logistic, material supply and political corruption networks that involve or overlap those of organized crime and state intelligence services. We cannot cut the terrorists' principal financial support without invading the heart and soul of organized crime: finance and money laundering. Further, organized crime has 10 times more lawyers and finance specialists than our Justice Department and FBI, and they are all much better paid, better connected and more committed. This is where the war-on-terrorism rabbit hole takes us and the end is still not in sight.

Involvement of Russia and China

Another critical yet overlooked facet of the terrorism problem was raised briefly during the recent Senate Intelligence Committee National Security Threat hearings. The key question was asked by Sen. Evan Bayh: "Are Russia and China involved with enabling evil?" This question was highly relevant because certain facts with respect to China and Russia, both of which presumably joined us in the war on terrorism, have been missing in discussions about the war on terror.

It is well known that China has been one of the biggest supporters of Middle East terrorists and rogue regimes seeking to acquire long-range missiles and weapons of mass destruction. Even more involved has been Russia. In its former incarnation as the Soviet Union, Russia is the granddaddy of international terrorism. Today's international terrorism is fundamentally the product of Russia's military intelligence, the GRU, and to a lesser extent its civilian intelligence, the KGB. Both the KGB and GRU are alive, well and more powerful today than they were under Communism. Further, the greatest sources of potential weapons of mass destruction, missiles and submarine proliferation over the past decade have been the various Russian laboratories and organizations (e.g., military and intelligence). Thus, the possible involvement of Russia and China should have been under intense CIA covert scrutiny for many years, and Sen. Bayh deserved an honest and straightforward answer. What he got was a nearincoherent response. Consider Director Tenet's answer: "Well, sir, I would say that, first of all and it's all separate. The reasons may be different. And at times we have distinctions between government and entities. And that's always and I don't want to make it a big distinction, but sometimes you're dealing with both those things." Translation: "Yes, Senator, we believe there is involvement, but we don't understand the role of those who are involved, whether they are independent 'entities' or government representatives. Obviously, because we are trying to build a friendship with Russia and because we would not know what to do if they were involved, we would rather not discuss this subject at this time."

The Crimes of Communism

To answer Sen. Bayh's question, we need to go back 50 years, to the origins of today's international terrorism, narcotics trafficking and organized crime. This is not an easy subject to address because of the efforts within academia, political circles, the news media and policy centers for 80 years to keep silent about the crimes of Communism, as eloquently explained in the recent study "The Black Book of Communism" (Harvard University Press, 1999). Because of this silence, data on Communist crimes come as a shock to most people and, hence, is hard to believe. This "silence" is the cornerstone of the political protection that is largely responsible for the unprecedented growth of organized crime, drug trafficking and international terrorism over the past 50 years. This is the hardest lesson of all, and it has not been learned.

That organized crime, drug trafficking and terrorism are Russian (and Chinese) STATE operations is hard for people to accept and even harder to incorporate into their thinking and planning because of the long history of political, news, and academic leadership silence respecting these crimes of Communism. How can these be state operations when our own leaders are silent about them? The implications of this question are equally troublesome.

Origins of Today's Terrorism

The origins of today's terrorism, drug trafficking and organized crime were experienced first-hand by the former top-level Czech Communist official, Gen. Maj. Jan Sejna. He was chief of staff to the minister of defense and was on the inside of the planning and execution of all three operations by various Communist state intelligence services, most notably the Soviet Union and its East European satellites. No one in the U.S. government wanted to hear what he had to say, including (or especially) the CIA, because his information was politically most incorrect. (See the book "Red Cocaine," Edward Harle, 1999.) What Sejna had to say with respect to the Soviet operations can be summarized as follows. When Khrushchev came to power in 1954, he set about renovating the Soviet Union's global revolutionary war movement, which had stagnated under Stalin. Under Khrushchev's direction, the Soviets quickly dropped the "revolutionary war" moniker and henceforth referred to the activity as wars of "national liberation" to reflect a new deception, that these were only national liberation movements and not internationally stimulated revolutionary war operations, which is what they really were. Concurrent with this change, three new strategic intelligence operations (that is, ones of strategic importance) were adopted: international narcotics trafficking (to undermine the society and weaken its leaders), international organized crime (to corrupt the politicians and financial institutions) and international terrorism (to destabilize the countries and create revolutionary situations). Terrorism and drug trafficking were run mainly out of the GRU and organized crime was run mainly out of the KGB. The Soviets already had considerable experience in these operations. Since its inception, the Soviet Union has been synonymous with terror. As explained in The New KGB " (William R. Corson and Robert T. Crowley, Morrow, 1986)," "No nation in the world can claim parity with the USSR in this bloody arena." The chief instrument in the orchestration and implementation of terror was the Cheka, forerunner of the KGB. Its head was Felix Dzerzhinsky, who spent many years in prison (1897-1899, 1900-1902, 1912-1917) prior to the overthrow of the Russian czar in February 1917.

While he was in prison, his toughness and leadership ability won him the respect of the prisoners, most of whom were members of the Russian criminal underworld and from whom he learned the fine art of crime. He was even made an honorary member of the Russian underworld.

The Russian Mafia

Lenin appointed him head of the Cheka a few weeks following the November coup, and Dzerzhinsky proceeded to build the Cheka into a Mafia-like instrument of terror whose sole goal was the protection of the Bolshevik regime. As in the Mafia, novitiates had to earn their keep by obediently carrying out acts of murder and brutality and live according to their oath of secrecy and loyalty until death. The Russian criminal underworld that Dzerzhinsky knew so well was actually used as a mechanism for propping up the failing socialist economy. However, it was thoroughly penetrated and watched to ensure that it did not become in any sense a threat to the state. The Russian Mafia, from the beginning of the Soviet Union, was, in effect, an informal extension of the Cheka (KGB). By the time of Dzerzhinsky's death in 1926, the culture was set. As foreign intelligence operations grew, narcotics were used to both trap and corrupt foreign officials. Contraband smuggling, an organized crime activity, was actually facilitated because it provided an ideal mechanism for inserting intelligence agents, later spetsnaz (Russian special operations forces) professionals, under the cover of a common criminal activity. 'Wars of National Liberation' Up until 1955, these operations crime, drugs and terror were mainly internal security operations and low-level tactical foreign operations. But beginning in 1955, this quickly changed as decisions were made to build serious strategic intelligence operations in all three areas organized crime, illegal drugs and terror in support of the new wars of national liberation. For each area, strategic deception operations, another traditional Russian forte, were devised to safeguard the operations by masking their connection to the Soviet intelligence services and by keeping the spotlight of publicity away from especially sensitive components such as the banks. During the latter half of the 1950s, there was a planning and organizing phase during which operational strategies were worked out, intelligence cadres were trained, logistics and material supply lines were organized, and special covert communications were established. By 1960 the base had been built and field operations were initiated, with indigenous people from various countries recruited and trained to run the foreign country aspect of operations. To appreciate their successful growth, consider: In drug trafficking, by 1965 the Soviets (assisted by their East European satellite intelligence services) had multiple indigenous drug production and distribution operations around the world, but most important in almost every Latin American country and half of the Caribbean Islands.

By 1968, the KGB estimated that the Soviets controlled over 37 percent of the drug trafficking into the United States. The growth in cocaine trafficking, beginning in 1967, was almost 90 percent the result of Soviet operations set up in Bolivia, Peru and Colombia between 1963 and 1966. Venezuela was a major organizing and money laundering center. In terrorism, the Soviets recruited, organized and trained terrorist groups around the world, from Japan and Indonesia to Cuba and Latin America, but particularly those in the Middle East Middle East. The Soviets had been particularly adept in penetrating the Muslim religious groups, going back to Indonesia in the 1920s. They helped create Arafat's core group in 1957 and the PLO in 1964, which acted as a Soviet surrogate in the late 1960s and 1970s. By 1984, the role of the Soviet Union in organizing, training, sponsoring and equipping all terrorist groups was documented and terrorism was acknowledged to be a "global force." (See, for example, Benjamin Netanyahu, editor, "Terrorism: How The West Can Win," Farrar, Straus, Giroux, 1986.) In organized crime, by 1960 there were over 80 Soviet penetration agents within just the Italian mafia. By 1968 they had penetrated most of the 200 international organized crime groups around the world (their count) and had organized over 75 new groups. Czechoslovakia itself ran or had infiltrated 50 organized crime groups around the world. By 1990, Russian organized crime was regarded by police and national law enforcement agencies in both the United States and Europe as far and away the most vicious and controlling of all the organized crime groups. Initially, these were three complementary but independent operations. Gradually, the three operations became integrated. The roots of integration were present as early as 1965 when the Tri-Continental Congress, called to coordinate terrorist planning, first met in Havana. It looked (at the secret level) like a terrorist coordination meeting. But at the top secret level, the meeting was used to cover the coordination of drug trafficking and money laundering, which at that time was in the process of being redesigned by top-level experts within organized crime and international finance. Over the subsequent years, the synergism and need for coordination to keep the operations from stepping on each other's toes led to their natural integration. In the case of drug trafficking and terrorism, this merger was recognized in the West in the early 1980s and labeled narco-terrorism.

An Ill-Timed U.S. Intelligence Cutback

It would be nice to think that these activities were discarded by the KGB and GRU after the Soviet Union metamorphosed back into Russia in 1991. But no one yet has explained why they would ever want to discard such immensely profitable and powerful entities as drug trafficking, organized crime and terrorism, especially when no one in the West complained. That would have been politically incorrect, not to mention impolite. It would also have meant breaking the silence in a meaningful way, which no one in a position of authority has done.

What is most unfortunate, and almost unbelievable, the instant Russia emerged in its new garb, the United States cut back to the bare bone intelligence collection directed against the former Soviet Union. This was at the precise time when, from a national security perspective, intelligence collection should have been expanded. This was the best time in 70 years to run collection operations, due to the temporary confusion present in the former Soviet Union. Moreover, it was tremendously important to know what was happening then. The Russians were notorious for their use of Potiomkin-like deceptions to get the West to believe they had changed and were no longer a threat (e.g., Lenin's New Economic Plan in the 1920s, Khrushchev's "peaceful coexistence" in the 1950s, Brezhnev's "detente" in the late 1960s, and Gorbachev's perestroika in the 1980s). In 1982, Yuri Andropov, a master of deception and chief of the KGB, was made general secretary of the Communist Party, and the KGB moved into the Kremlin. As noted in "The New KGB," it had been Andropov's goal as early as 1967 to modernize the KGB and orchestrate its assumption of full control of the Soviet state. The world revolutionary movement was again stagnating, and Andropov believed that the KGB "solution" was the only practical way to get rid of the bureaucracy that was choking both the Party and the government. That something big was about to happen was actually signaled in 1988 and 1989 when Georgiy Arbatov, a top Russian theoretician and director of the Institute of the USA and Canada, stated several times that they were going to do a terrible thing to us they were going to deprive us of their enemy image (see Anatoli Golitsyn, The Perestroika Deception, Edward Harle, 1998). Rather than increase our vigilance, however, U.S. intelligence curtailed intelligence collection. Henceforth, U.S. intelligence about and understanding of what was happening in Russia went from poor to worse. The seriousness of this U.S. intelligence cutback is magnified because this was also the culmination of what increasingly appears to be a Soviet effort, timed to coincide with the dissolution of the Soviet Union and rebirth of Russia, to switch its direct support of international terrorism from the GRU and KGB offices to organized crime operations, to achieve a measure of deniability. The recognition of Soviet ties to and sponsorship of international terrorism had become embarrassingly evident by the early 1980s (See Herbert Romerstein, "Soviet Support for International Terrorists," Foundation for Democratic Action, 1981) and the image of this relationship had to be cleaned up. The sudden emergence of the Russian Mafia (which in reality was a KGB operation) around the world as a "consequence" of the dissolution of the Soviet Union in 1991 now appears to have been one of the mechanisms employed.

Drugs, Russia and Terrorism, Part 2

Joseph D. Douglass Jr. Monday, March 11, 2002

Editor's note: This is the conclusion of a two-part article. Read Part 1 of article.

The 'Deception Plan'

To better understand what is happening, it is useful to return briefly to the modernization of the KGB under Andropov, a topic introduced in the first part of this article. Probably the most important part of this modernization, in understanding the Soviet approach, is the accompanying deception plan that was designed to mislead the West in its interpretation of what was happening. The goal of this deception was to hide the modernization and the updated KGB professionalism by carefully promoting the image that KGB was operating in a "business as usual" mode that is, as a bunch of KGB "thugs." Gen. Sejna used to emphasize over and over in his explanations of how Communism works: "Never was there a decision taken that there was not a deception plan designed to facilitate its implementation." Deception is as much a part of the Russian culture as freedom is a part of the American culture. In breaking loose the Russian Mafia from the KGB during the rebirthing process, there would have been a deception plan designed to mislead people as to what was happening and why. The image of the Russian Mafia that emerged out of the settling dust of the "dissolution" of the Soviet empire is as it was planned to be, misleading. The best deceptions are those designed around an element of truth. In this case, an obvious approach would have been for the Soviets to modernize their organized crime operations so that these operations would appear to be independent operations. The real character could have been masked by enabling, even orchestrating, the growth of an independent Mafia that reflected the characteristics of the Mafia as understood in the West. The core of the modernized organized crime operation likely would have been the modernized core of the elite strategic intelligence directorate that has been very effectively hidden from the West, as witnessed by its absence in both KGB and GRU organizational charts in related studies, both unclassified and classified.

The strategic intelligence directorate becomes, in effect, a super-secret part of the KGB that is unknown even to most KGB officials.

Its mission is to run those extremely important foreign operations that are the core of Russia's continuing attack on the industrialized countries: terrorism, drug trafficking and organized crime are within this core set of operations.

Hands Off Our 'Ally" Russia

Unfortunately, at this precise time the U.S. intelligence services were told to shut down their operations and treat our former enemies the same as we treated our European allies. Part of CIA director Tenet's problem may be simply the lack of information about the various "entities" that were most visible in support of terrorism. This problem is compounded, however, by the fact that the CIA, as an institution, in support of politically correct foreign policy, had expended more energy trying to sweep intelligence on Soviet sponsorship of terrorism, drug trafficking and organized crime under the rug than it had expended in trying to understand and expose what was going on. Thus, there were serious systemic problems inherent in the CIA's institutional understanding. Exacerbating this already extant problem, there appeared in 1989 a further internal incentive not to hold to a belief that the Soviets were sponsoring terrorist operations and running organized crime and drug trafficking. President G.H.W. Bush announced the beginning of joint FBI-CIA-KGB efforts to counter terrorism, organized crime and drug trafficking, along with the establishment of FBI and CIA offices in Moscow to coordinate and cooperate with the KGB! Unfortunately, it is hard to come up with any reason for thinking the Soviet/Russian intelligence services were changing or had changed. The Russians certainly did not stop their missile development, or stop work on underground command center complexes, or stop their illegal biological and chemical weapons development, or curtail their foreign intelligence operations, which actually was expanding with the dominant presence of the KGB in the Kremlin. Certainly they denied everything. They always have.

Russian Ties to al-Qaeda

Thus, what is happening? Did al-Qaeda terrorists really execute the 9-11 attack by themselves, or did they have some help? Several former intelligence professionals in the weeks following 9-11 scoffed at the idea that this was just a Muslim extremist operation. Some competent foreign intelligence service had to be involved, they wrote. There have also been reports that critical information was funneled through the Russian Lourdes intelligence facility in Cuba to the terrorists. If anything, cooperation between Cuba and the various terrorist Muslim states in the Middle East increased in 2001.

Additionally, as pointed out by Yossef Bodansky ( "Bin Laden" Prima, 1999 ) , since the mid-1990s bin Laden has been using the Russian Mafia (i.e., KGB entities) for the covert movement of funds to support terrorist operations and to acquire terrorist arms, explosives and related materials. Soviet intelligence links to the emerging Islamist terrorist groups were evident in the early 1980s (though not as blatant as the PLO-Soviet links of the late 1960s and 1970s), and those links are still active. Numerous links from bin Laden and company to former high-level Russian officials in 2000-2001 have now been reported in the news media. None of this should be a surprise. As stated in the first part of this article, the Soviets had long-standing penetrations into the Muslim community around the world and had used the Muslims as surrogate terrorists since the 1920s. At every step in the evolution of bin Laden's terrorist network, as reported in Bodansky's "Bin Laden, Soviet/Russian links are in evidence.

Weapons of Mass Destruction Of serious concern today is the possibility of a terrorist group or nation acquiring a nuclear weapon or device. The focus of a more moderate concern in the 1990s was Russia. It was not until people really became worried after the anthrax episode following 9-11 that the CIA suddenly produced a declassified portion of a study in which it states that there is no information of any nuclear weapon having been stolen from Russia or sold to the terrorists by some Russian organized crime "entity." (Whether this information is true or designed to mislead the American people, as appears to have been the case in the crash of TWA 800 and the Oklahoma City bombing incident, is anyone's guess.) Likely, CIA director Tenet used the term "entity" to project the image of non-state involvement. The idea of a Russian non-state entity seems to have been introduced following the dissolution of the Soviet Union in 1991 as an artificiality used to raise and characterize the proliferation problem as rogue individuals and "criminals" taking advantage of the sorry economic plight of those people who were safeguarding the various stockpiles. This scenario (deception?) was promoted by both sides to demonstrate our "working together" and to justify the movement of billions of U.S. dollars to Russia to help it thwart such activities. But those U.S. voices involved in crying wolf failed to understand that such criminal "entities" have played an integral role in Soviet covert operations since the 1920s, as indicated earlier, and as such were thoroughly penetrated and carefully watched by the KGB. Moreover, the organized crime entities that were suddenly given free rein when the Soviet Union became Russia more likely than not were merely adjunct KGB covering crime operations (that is, selected components of the traditional Russian underground mixed in with a number of KGB-run branches). What is especially evident in the newly emergent organized crime and especially Russian banking operations is the clear and dominant presence of both current and former KGB officials.

(See, for example, Yevgenia Albats, "The State Within a State," Farrar, Straus, Giroux, 1994.) But again, insofar as U.S. intelligence collection in the former Soviet Union was cut back to the bone, we are left mainly with information the Russians want us to have about what happened in Russia during and following its rebirth. In this respect, extensive efforts have been expended to promote the Russian Mafia as an organized crime operation that the Russians disliked as much as other nations did. They said the Mafia was simply there and they were unable to control it any better than other nations were able to. This argument depends for its credibility upon the continued silence (including poor memories) about the massive KGB-GRU state intelligence operations in organized crime, narcotics trafficking and terrorism that was initiated 35 years earlier at mid-century, and a traditionally inadequate Western understanding of Russian deception, which more than anything else remains guided by Lenin's directions to Dzerzhinsky: "Tell them what they want to believe."

Significance of the Anthrax Attack To understand why this lack of understanding or assisted self-deception is so dangerous, consider the anthrax episode that followed on the heels of the 9-11 attacks. The main thrust of the investigation is now evidently focused on the possibility of an internal lone U.S. individual with the appropriate skills, such as a disgruntled university microbiology teacher. The working assumption now is that the episode was independent of 9-11 that is, a mere coincidence of simultaneous timing. Possible, but highly improbable. More disturbing is the evident lack of any attention directed toward the suspects with the greatest expertise and both technical and operational capabilities: Russia, Cuba and China. While coming close on the heels of 9-11, the anthrax operation by design was operationally very different. In the case of 9-11, notwithstanding the explosion and fire that pretty much destroyed the plane and all those aboard, there was still almost instant identification of the culprits and responsible organization. In contrast, in the anthrax case, there has been no suggestion of a single scrap of evidence to have come out of the anthrax investigation, and there was no explosion or fire to burn everything and everyone up. The anthrax operation has all the earmarks no trail associated with skilled intelligence professionals. The anthrax episode demonstrated the ability of an unidentified hostile force to manufacture a significant quantity of very special anthrax spores and distribute them in a manner guaranteeing that the U.S. government would not be able to suppress the information on what had happened. The actual ability to cause horrendous damage was demonstrated without causing more than a few deaths this was the message. In a sense, the reality of this ability is far more serious than the 9-11 attack, yet there are no clues and it almost seems that the episode is being allowed to die a natural death.

The Real 'Terrorist' Threat

The implications of the anthrax episode point toward an existing, present terrorist threat of truly frightening magnitude and possible consequences. The United States and, by extension, Europe are in a situation in which our main enemies' regimes (of over 80 years in the case of the former Soviet Union republics, 50 years in the case of China and 40 years in the case of Cuba) are pretty much as they were before the dissolution of the Soviet Union. All the former Soviet republics and most of the former satellites are run by former Communists. They are, in all but name, Communist regimes, and most still have control lines that run to Moscow. They remain closely connected with terrorist groups and rogue nations, and thus have the capability of supporting or running catastrophic sabotage operations using weapons of mass destruction. These would have enormous social, economic, and political consequences all to the benefit of the hostile regimes, beginning with those in Russia, China, Cuba and the various totalitarian Islamist states. What this means is that a skilled, professional intelligence service, with relative ease, should be able to execute an attack on the United States, or any of our allies, with weapons of mass destruction and get away without detection. Operationally, the 9-11 attacks were far more difficult to manage and execute, but the consequences of a serious attack using weapons of mass destruction (particularly a suitcase nuclear warhead) likely would be far more devastating, without the attack being recognized as a state-directed attack. This intelligence service could use a terrorist group as a surrogate or execute the operation so that it had all the accouterments of a terrorist operation. Is it any wonder that CIA director Tenet had such a difficult time responding to Sen. Bayh's question?

Drugs, Russia and Terrorism

By presidential decree we are in a war on terrorism and those who harbor or support terrorists. We have been told it will be a long and difficult war that may never end, which sounds distressingly like the war-ondrugs rhetoric. There has been no explanation of who or what is within the ranks of those who "harbor and support the terrorists," other than the terrorists' financial support networks. While use of the label "state-supported" was made politically incorrect in the Clinton administration, no one of note has claimed that today's terrorists are either independent or self-sufficient. As Bodansky repeatedly points out in his book, "Bin Laden," significant terrorist operations, including those orchestrated by bin Laden, are still state-supported, with bin Laden providing the states with "plausible deniability."

His support includes both active and passive support, material as well as moral support, East and West support, Muslim and non-Muslim state support. What if, as Sen. Bayh questions, Russia and China are not only involved, but involved in a big way? Has anyone stopped to draw a complete picture of the very possible ramifications of the war on terrorism, including the various hidden entities, for President Bush and his War Cabinet?

My guess is that the answer to this last question is no, not that the information is unavailable, but that those in the intelligence bureaucracy are not about to volunteer institutionally sensitive information and, more likely than not, no one is asking.

SOURCES

ABOUT Joseph Douglass Intereragency report: "International Crime Threat Assessment" (December 2000) Red Cocaine: The Drugging of America and the West London and New York,Edward Harle, 1999 2002: Senate Intelligence Committee National Security Threat hearings "The Black Book of Communism" , Harvard University Press, 1999 ABOUT Czech Communist official, Gen. Maj. Jan Sejna The New KGB " by William R. Corson and Robert T. Crowley, Morrow, 1986 Anatoli Golitsyn: The Perestroika Deception, Edward Harle, 1998 CIA: Soviet Support for International Terrorists " Foundation for Democratic Action, 1981 Yossef Bodansky : "Bin Laden", Random House, 1999 Yevgenia Albats, "The State Within a State," Farrar, Straus, Giroux, 1994