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Corruption Watch: January 9, 2003

9 January 2003, Volume 3, Number 1
By Roman Kupchinsky

On Friday, 27 December, suicide bombers driving a KamAZ truck and a UAZ military jeep burst into the Grozny headquarters of the pro-Moscow Chechen administration. They drove through a side fence of the facility, thus avoiding several security cordons around the complex. Two enormous blasts gutted the building. The death toll as of 7 January was 80 people killed and another 86 injured. No group has claimed responsibility for the blast.

Russian Defense Minister Sergei Ivanov told journalists in Chita on 5 January that investigators have established who masterminded the operation. But Ivanov said their identities will not be made public until they are brought to justice.

The "Los Angeles Times" reported on 29 December that Chechnya's deputy interior minister, Akhmed Dakaev, said the two vehicles used by three kamikazes had military license plates and official passes. The paper added that the attackers, who were carrying identification papers, wore Russian military uniforms and did not look Chechen.

Russian NTV on 29 December carried an interview with Russian Deputy Prosecutor-General Sergei Fridinskii, who told listeners: "We can say with certainty today that the investigation has determined a violation of the law on the organization of security and defense of the complex of government buildings."

Viktor Kazantsev, Putin's representative in the Caucasus, placed the blame on authorities in Chechnya. In the "Los Angeles Times" article, he is quoted as saying: "Those in charge of the security of the government compound did exceptionally badly. Carelessness was shown by many, from a rank-and-file soldier to high-ranking people." Kazantsev insisted that if well-established security procedures had been followed, the attack could never have succeeded.

Russian President Vladimir Putin has called for a referendum to be held in Chechnya in March to determine the future of the region. Putin has also ruled out any talks with the rebels. According to the "Los Angeles Times," the latest bombing will make it difficult to hold this referendum. "The referendum is unlikely to bring about peace in Chechnya, simply because the main reasons of the war have not been removed," Alexander I. Zhilin, a Moscow-based military analyst, told the peper.

President Putin told government ministers on 30 December that the attack was an attempt by "terrorists" to sabotage the search for a political settlement in Chechnya but added that such attempts are doomed to failure, Reuters and Interfax reported.

On 10 December, a press conference was held in Gaza by the Palestinian Preventive Security agency in which the main speaker was a masked Palestinian calling himself "Ibrahim." According to reports the following day in the Arab newspapers "Al-Hayat" (London), "Al-Bayan" (Dubai), and "Al-Hayat Al-Jadida" (Ramallah), Ibrahim claimed he was a key recruit in an Israeli intelligence operation to create a false Al-Qaeda cell in Gaza. According to these reports, Ibrahim claimed the following: He was contacted by a man called Youssef, who allegedly recruited him to form an Al-Qaeda cell in Gaza. Instead of following those marching orders, Ibrahim reported it to the Palestinian Preventive Security Agency, which instructed him to go along with Youssel's wishes. Youssef told him that one cell already was in existence in the southern part of Gaza and that he should form one in the north. Youssel then asked Ibrahim to supply him with the names of Hamas supporters in Gaza, for they might be potential recruits into the new Al-Qaeda cell. At this point, the Palestinian Security Agency told him that Youssef was an agent of the Israeli Mossad.

In an interview with "Al-Hayat" after the press conference, Ibrahim's story continued: Youssef told him that he would organize large-scale military operations inside Israel and that these operations would be announced through Ibrahim. Thus Ibrahim would send out "Communique Number One from Al-Qaeda, Gaza-Martyrs-Branch," for example, to the international press claiming responsibility for the attack or attacks.

The head of the Palestinian Preventive Security agency in Gaza, Rashid Abu Shbak, said documents concerning the case have been given to the U.S. government.

When asked about this alleged operation by the Mossad, former U.S. intelligence officers told "RFE/RL Crime and Corruption Watch" that if the claims were indeed true, it was a method used by intelligence services to gain control over individuals inclined to commit terrorist acts and neutralize them prior to an atrocity being committed. RK

Two major reports were issued recently on global terrorism and on the 11 September 2001 attacks against the United States. The House Permanent Select Committee on Intelligence released the joint U.S. House and Senate "Findings of the Final Report of the Joint Inquiry Into the Terrorist Attacks" (, including recommendations on the functioning of the U.S. intelligence community in the fight against terrorism. One week later, on 17 December, the United Nations issued a report on the current status of terrorist organizations around the world and the counter terrorism effort. Combined, the reports provide an overview of the war on terrorism, its successes and shortcomings

The UN report's author, Michael Chandler, told a press conference on 19 December, according to AP: "Al-Qaeda continues to command an extensive network of well-financed terrorist operatives in 40 countries and has reopened new training camps in remote eastern Afghanistan to prepare a new generation of Islamic extremists for attacks against the West.... New volunteers are making their way to these camps, swelling the numbers of would-be Al-Qaeda activists and the longer-term capabilities of the network."

Chandler said the camps might have sprung up near the town of Asadabad, in Kunar Province. AP reported that many "disillusioned" young men still flock to the camps, either to be trained as "foot soldiers" for Al-Qaeda or to receive more specialized training. "There is a tremendous amount of sympathy in some countries for the movement," Chandler said, referring to Al-Qaeda. He did not name any of those countries.

Commenting upon the report's "Watch List" of known and suspected terrorists, some observers noted that the names of four men on the FBI's "Most Wanted" list who are suspected of terrorist activities do not appear on the UN watch list. Richard Grenell, the spokesman for the U.S. mission to the United Nations, could not explain the discrepancy. But he said the Bush administration had placed more names on the list than any other country. "We are the leader in adding names and in maintaining the list," Grenell told the "International Herald Tribune" of 19 December. "We are vigilant." According to the UN, the list currently has 324 names, including 232 individuals and 92 groups.

The UN notes that while efforts to stop money laundering have been successful in freezing many assets belonging to Al-Qaeda, the Hawala system of money transfers is still a major means used by terrorist groups to move money around the globe (

Nearly 16 months after the 2001 attacks on the United States, the U.S. House Permanent Select Committee on Intelligence on 10 December released its findings, focusing on the behavior and competence of U.S. intelligence organizations prior to the coordinated attacks.

The inquiry sought to establish why there was no early warning of the strikes, which caught authorities off-guard with deadly precision. The only part of the plan that was foiled was the result of passengers on one of three hijacked aircraft putting up a struggle, resulting in that passenger jet crashing in a wooded field in Pennsylvania rather than hitting its intended target -- which to this day remains a mystery. "The Washington Post" on 24 December reported: "In an interview conducted in June but broadcast in September by the satellite television network Al-Jazeera, Al-Qaeda operative Ramzi Binalshibh said United Flight 93, which crashed in Pennsylvania on Sept. 11, had been aimed at Congress. U.S. analysts lean to the view that Binalshibh was lying. Four officials said the better evidence points to the White House as the target."

The plan was well-executed, well-conceived, and security was tight. It would have been nearly impossible to detect and prevent, the report asserted, concluding that the U.S. intelligence community was unable to accomplish its mission -- i.e., provide early warning of a major attack on the United States.

The report states:

"1. Finding: While the Intelligence Community had amassed a great deal of valuable intelligence regarding Usama Bin Laden and his terrorist activities, none of it identified the time, place, and specific nature of the attacks that were planned for September 11, 2001. Nonetheless, the Community did have information that was clearly relevant to the September 11 attacks, particularly when considered for its collective significance.

"Beginning in 1998 and continuing into the summer of 2001, the Intelligence Community received a modest, but relatively steady, stream of intelligence reporting that indicated the possibility of terrorist attacks within the United States. Nonetheless, testimony and interviews confirm that it was the general view of the Intelligence Community, in the spring and summer of 2001, that the threatened Bin Ladin attacks would most likely occur against U.S. interests overseas, despite indications of plans and intentions to attack in the domestic United States."

The report does not reveal the reliability of this "modest stream of reporting." Were the sources of these reports highly reliable, or did they represent gossip picked up in a Peshawar marketplace? The answer to that question might seem essential in order to lay blame -- yet the joint committee report does exactly that:

"Neither did the Intelligence Community demonstrate sufficient initiative in coming to grips with the new transnational threats. Some significant pieces of information in the vast stream of data being collected were overlooked, some were not recognized as potentially significant at the time and therefore not disseminated, and some required additional action on the part of foreign governments before a direct connection to the hijackers could have been established. For all those reasons, the Intelligence Community failed to fully capitalize on available, and potentially important, information."

The problem of valuable information being lost in a "vast stream of data" is not a new phenomenon for the intelligence community. Michael Handel of the Harvard University Center for International Affairs, writing in Roy Godson's study "Intelligence Requirements for the 1980's" (National Strategy Information Center, 1980) wrote: "The more information is collected, the more difficult it becomes to filter, organize and use. The more information is collected, the more noise may be added. The more successful an intelligence organization becomes, the less are its reports questioned and the greater the chance that it will fail. The more alerts are sounded, the less meaningful they become ('alert fatigue')."

Handel goes on to say that ignoring reliable and repeated warning signals is symptomatic of intelligence organizations due to rigid concepts. The U.S. intelligence community failed to anticipate the OPEC oil embargo because it simply refused to believe that the U.S. economy was vulnerable to a weapon (in this case, oil) in the hands of a Third World cartel, for instance. In the case of the OPEC embargo, U.S. intelligence agencies had frequent warnings. Saudi officials said both publicly and privately that the oil weapon would be used by Arab states. In the end, wishful thinking prevailed and the information was not disseminated to the proper consumers.

Why was the U.S. intelligence community led to believe that if a terrorist attack were to take place, it would be outside the United States? The record, perhaps, spoke for itself. The attack on the "USS Cole" and the bombings of U.S. embassies in Africa were part of a pattern of attacks on U.S. targets abroad. Those attackers were known to be Al-Qaeda operatives, and it was understandably felt by most analysts that the next potential attack would follow this pattern.

The joint committee report's confirmation that there was no intelligence that pinpointed the time and place of the 11 September attacks should come as no surprise. A terrorist act is almost impossible to prevent if the people planning it adhere to the basic tenets of conspiratorial behavior. This has been proven time and again: in shops and on buses in Israel, a country with a highly developed intelligence system that has been operating in a country at war with terrorism since its inception; in a disco in Bali; and in countless pubs in Londonderry. Terrorists, as a rule, are elusive, do not brag about their targets prior to acting, and are not in it for the money. They enjoy the upper hand in any given operation, for it is they who call the shots. They choose the target; they create the timetable; and if they avoid needless chatter on the phone (cellular or otherwise) and watch what they write in their e-mail messages, they stand a very good chance of succeeding at what they intend to do.

An earlier statement by the joint committee on 8 October noted: "Al-Qaeda's terrorist manuals and training emphasize that operations should be kept secret and details compartmented. Communications security is also stressed. Thus, disrupting these operations is difficult, even if low-level foot soldiers are arrested or make mistakes. Several Al-Qaeda attacks occurred with little warning. Even the successful disruption of part of a plot, as occurred during the Millennium, does not necessarily reveal other planned attacks, such as the planned attack on another U.S. Navy warship around the same time."

After the 1998 bombing of U.S. embassies in Nairobi and Dar Es Salaam, the "Report of the Accountability Review Boards on the Embassy Bombings in Nairobi and Dar Es Salaam" (produced by what is known as the Crowe Commission) found: "There was no credible intelligence that provided immediate or tactical warning of the August 7 bombings." Reporting was imprecise as to location and date, and -- in contrast to the steady stream of warnings before the Khobar Towers attack in 1996, when a massive truck bomb outside that housing complex, killing 19 U.S. service personnel and injuring hundreds of other people -- the Crowe Commission noted that "indeed, for eight months prior to the August 7 bombings, no further intelligence was produced to warn the embassies in Nairobi and Dar Es Salaam," according to the Joint Inquiry Staff Statement of 8 October.

In that staff statement, there is further confirmation that U.S. intelligence services had made certain assumptions prior to the attack on the "USS Cole" on 12 October 2000: "A senior Defense Intelligence Agency terrorism analyst noted in an interview that, in general, there was little effort to question underlying assumptions, such as preconceptions that bin Ladin would not attack in Yemen because it was an important Al-Qaeda logistics hub or that Al-Qaeda would not strike a Navy ship because of the difficulty of doing so."

Given these attitudes and assumptions prior to the attack on the "USS Cole," it is understandable that few, if any, intelligence analysts would risk predicting a much more audacious attack on the Pentagon and the World Trade Center just one year later.

The U.S. intelligence community also came under severe congressional criticism for its failure to infiltrate Al-Qaeda: "Prior to September 11, 2001, the Intelligence Community (IC) did not effectively develop and use human sources to penetrate the Al-Qaeda inner circle. This lack of reliable and knowledgeable human sources significantly limited the Community's ability to acquire intelligence that could be acted upon before the September 11 attacks. In part, at least, the lack of unilateral (i.e., U.S.-recruited) counterterrorism sources was a product of an excessive reliance on foreign liaison services."

Mercifully the report does not specify which "foreign liaison services" were used. The reasonable suspicion is that the intelligence community relied on the Pakistani Inter-Services Intelligence (ISI) organization -- which many observers claim was itself involved in arming the Taliban and Al-Qaeda -- for most of its information on the intents of Al-Qaeda.

The use of human intelligence (or HUMINT) sources was another problem facing the intelligence community. As the joint inquiry subsequently found, the CIA was highly reluctant to use non-official cover (or NOC); thus most postings for CIA personnel were U.S. embassy assignments. This placed great limitations upon its ability to gather information. The question of promotions was a related issue: Many officers were reluctant to work outside of NOC, fearing this would hamper their odds of promotion.

In order to understand the historical context of this finding, it must be recalled that prior to 11 September 2001, the U.S. intelligence community was working in the shadow of Executive Order 12036, signed by President Jimmy Carter on 24 January 1978 -- which placed severe limitations on covert activities by the intelligence community. The Hughes-Ryan Amendment to the Foreign Assistance Act of 1974 also placed limits on covert action. Thus, eight congressional committees -- a total of 163 members and their staffs -- had to be notified before any covert action was taken, thus negating its "covert" nature. In 1978, the Foreign Intelligence Surveillance Act (FISA) was enacted, which also placed strong limitations of the ability of counterintelligence organizations to conduct clandestine surveillance in the United States. FISA resulted in the creation of "walls" between the different components of the intelligence community, walls that were to play a pernicious role prior to the 11 September events.

In a separate report issued on 10 December by Senator Richard C. Shelby (Republican-Alabama), the vice chairman of the Senate Select Committee on Intelligence, another major problem was identified: that of information sharing. Shelby wrote: "One of the serious problems identified by our Joint Inquiry is the pervasive refusal of the CIA, in the months and years before September 11, to share information about suspected terrorists with the very U.S. Government officials whose responsibility it is to keep them out of the United States" ("September 11 and the Imperative of Reform in the U.S. Intelligence Community").

But information hoarding, in order to protect methods and sources, as the intelligence community often claims, simply goes beyond the realm of reasonable compartmentalization in certain situations. Shelby cites a case in which the CIA refused to share highly relevant information with U.S. Navy intelligence officers about the source of an intelligence warning that might have prompted the Navy to direct the "USS Cole" away from Yemen in October 2000.

The territorial disputes became more marked during the attack on Afghanistan in the wake of 11 September. According to "The Washington Post" of 24 December 2002: "Some of those involved in the hunt [for Al-Qaeda] said the government lost many and perhaps most of its best chances to kill the top targets in the critical first month of the war in Afghanistan. Disputes at the time over rules of engagement and lines of command, some of which have not been described before, are more significant in retrospect. In October and November 2001, they said, the most wanted enemies were concentrated in Afghanistan. Struggles within the CIA and U.S. Central Command, and between them, prevented operators of the armed Predator drones from opening fire on terrorist targets with Hellfire missiles at least 15 times, according to sources directly involved. The disputes persisted through two changes of the rules of engagement, with more missed opportunities to fire, until spring." By spring, most of the senior leadership of Al-Qaeda had escaped.

A situation arguably existed whereby -- had the CIA infiltrated Al-Qaeda with an agent (which it was reluctant to try, given a propensity for relying on local intelligence services, thus avoiding the use of "non-official cover" agents, and the stigma of past congressional restrictions on such methods) and received prior knowledge of a looming attack on the Pentagon or World Trade Center (which it was unlikely to get from Pakistan's ISI and, if it did, was unlikely to believe) -- it would not be able to institute a covert operation to disable bin Ladin's organization without a lengthy procedure in Congress. Furthermore, if the CIA had prior knowledge of a terrorist group operating in the United States and passed this information on to a domestic law-enforcement agency -- and if the FBI felt the information important enough to act on and followed the FISA regulations imposed by Congress in 1978 -- they would find it cumbersome to place these individuals under surveillance. All of these factors -- in addition to enmity between the intelligence community and domestic law-enforcement agencies -- conspired in favor of the silent and well-trained Al-Qaeda operatives in the United States. RK

The International Union of Automobile Transportation announced on 12 December that the worldwide system of freight insurance will cease to operate on Russian territory, effective 24 December, Ekho Moskvy reported. A document issued by the union asserted: "In essence an instrument of international trade has been turned into an effective means of defending organized crime.... More than 75 percent of all violations [of rules regarding insurance payouts] take place in Russia." As of 24 December, Russian transportation companies will no longer be able to use the worldwide system of freight insurance either in Russia or abroad. In addition, foreign freight companies will be barred from renting vehicles registered in Russia or from establishing business contacts with Russian transport planes. Laura Belin

Aleksandr Vasilyev, a 47-year-old assistant to Russian State Duma Deputy Mikhail Grishankov (Chelyabinsk Region), was shot in the head on the morning of 18 December and subsequently pronounced dead in St. Petersburg, according to ITAR-TASS. A police investigation is in progress. RK

Dimitrii Parshin, chief of the department for combating drug trafficking in the Novgorod Oblast, was arrested and charged with drug trafficking, according to ITAR-TASS on 16 December. RK


By Thomas Henriksen and Christopher Walker

The European Union and NATO, the two key engines for expanding Europe's zone of prosperity and stability, have in the last month taken historic steps toward enlarging their respective memberships. While leaders throughout Europe can rightfully take great satisfaction in this achievement, there are urgent issues right on Europe's doorstep that leave little time to relax and savor the recent decisions on enlargement.

An unwelcome surge of underground arms trafficking on Europe's periphery is among the challenges raising profound questions for the European Union, as well as the wider trans-Atlantic community and the war against global terrorism. From Belarus down through the Balkans, countries on Europe's fringe are raising alarm by serving up an unsavory menu of dangerous weapons, military supplies, and know-how to outlaw states. Comprising pieces of the former Yugoslavia and former Soviet Union, this corridor now represents a sort of no-man's land, which is always the most perilous place in any battlefield. With international weapons inspectors returning to Iraq and the United States and its allies poised to defang Saddam Hussein, the timing of these troubling reports from the EU's periphery could not be worse.

Operating in environments where official corruption and organized crime predominate, networks of current and former officials with shadowy business interests are facilitating the flow of weapons and experts to hostile regimes, including Iraq and Iran. Such regimes covet enhanced missiles, conventional armaments, or weapons of mass destruction.

During the 1990s, Slobodan Milosevic's truncated Yugoslavia, shunned by the West, looked eastward to build its political and security networks. Trade linking today's Yugoslavia to Iraq, Libya, and China, for example, developed during the Cold War era and continued over the past decade. Similarly, Belarus, which remains entirely outside the family of Western nations, has oriented its illicit trade toward Iraq, Iran, and other such problem states.

Much of the soon-to-be-enlarged EU will abut lands whose weapons shipments are a serious cause for concern. There is a host of recent cases of proliferation that should set EU decision-makers and their partners into action.

In Belarus, under the autocratic leadership of Alyaksandr Lukashenka, this country of 10 million has achieved full pariah status for both internal repression and external arms dealing. Possessing a vibrant arms industry, Minsk is believed to have supplied Iraq and other unsavory regimes with a range of dangerous technologies and equipment. Last spring, the U.S. State Department accused Belarus of training Iraq in the use of S-300 surface-to-air missiles.

On the basis of a joint U.S.-British investigation, the United States has cited a "credible possibility" that Ukraine transferred a sophisticated radar system to Iraq via an intermediary. Attention has also been drawn to military research facilities in Ukraine, whose weapons-grade uranium is neither properly accounted for nor safeguarded.

In Moldova, front companies have been implicated in secret transfers of dangerous technologies and in the spread of armaments to a host of conflict zones, including Chechnya.

Bosnia's Republika Srpska is also providing a critical link in the arms trade to Iraq and other states. Preliminary hearings have started in northeastern Bosnia in the case against three officials of a Bosnian Serb company accused of violating a U.N. arms embargo against Iraq. The company, Orao, had been refurbishing engines for Iraqi military aircraft through Yugoimport, a state-run Yugoslav company, for at least four years before NATO peacekeepers discovered the illegal activity.

Yugoslavia, emerging from a decade of conflict, has positioned itself to smuggle clandestine arms to Baghdad. Violating the UN embargo, Yugoimport, the hub of the exchange, is believed to have brokered illegal arms to Iraq, using third countries such as Syria to complete transactions from Ukraine and Bulgaria.

Even westward-looking Bulgaria, which just received an invitation at the Prague Summit to begin accession negotiations with NATO, found itself in a particularly uncomfortable position when a planned transfer of military equipment to Syria, presumably bound for Iraq, came to light. Still more embarrassingly, the implicated company, Terem Targovichte, is owned by the Bulgarian Defense Ministry. Eager to join NATO, Bulgarian officials immediately pledged to suspend the trade and institute strict export controls.

Revelations about arms transfers from Europe's periphery should become a sharp point of convergence for the United States and its European allies. The intersection of rogue states, international terrorism and trafficking in everything from spare weapons parts to weapons-grade uranium -- what NATO Secretary-General Lord George Robertson has referred to as a "deadly cocktail" of contemporary threats -- demands immediate, coordinated action.

The security threats emanating from these European borderlands also point to another larger dilemma: namely, how to engage lands that have felt neither a strong attraction to nor the salutary impact of membership of key Western clubs?

The free flow of people, goods, and services has been the EU's creed. But the budding arms bazaar that flourishes along its future border surely isn't what Europe's founding fathers had in mind. The task of uprooting entrenched, illegal arms networks poses an especially tough task for Western policymakers and enormous challenges to wider Europe's long-term success.

The United States and its European allies must work cooperatively to halt the deadly arms dealing. Together they can exert economic pressure and diplomatic leverage over the offending states to curb their hazardous commerce. In the era of global terrorism and the related challenges of proliferation of deadly weapons and materials, anything short of strict compliance to arms control invites the gravest of risks.

Thomas Henriksen is a Senior Fellow at the Hoover Institution and Christopher Walker is Head of the Rapid Response Unit at the EastWest Institute. The views expressed in this article are the authors' own.