Tackling Threat Finance: A Labor for Hercules or Sisyphus?

Abstract

In Greek mythology, the Gods gave the hero Hercules twelve, tremendously difficult labors, which he accomplished through clever strategy, tactics, guile, and divine support. (1) In contrast, they condemned Sisyphus, a Greek king, to an eternity at hard and frustrating labor. His assignment was to roll a great boulder to the top of a hill. Only every time Sisyphus, by the greatest of exertion and toil, attained the summit, the stone rolled back down again. Depending on the interagency strategy and policy approach chosen to address threat finance, the US government's resolution of it could produce either a Herculean or Sisyphean outcome. While considered less critical than kinetic operations and therefore somewhat neglected, threat finance is an important subject in the US national security field with both domestic and international implications. Conceptually, the global financial network is a domain similar to its air, land, maritime, and cyber counterparts, requiring similar strategic and interagency approaches. Threat financiers exploit this sphere to the overall detriment of US national security interests. Hence a host of terrorism theorists, military operators, and intelligence officials all posit that the financing of terrorists and cartel groups is so pivotal to sustaining their operations, that their money systems have to become key targets in counter operations. (2) In reality, this aspiration proves exceedingly difficult to execute. This article will explore threat finance by defining it, and then differentiating between its two subcomponents of terrorist financing and cartel money laundering. While acknowledging both the similarities and differences between these subelements of threat finance, this article will then detail the challenges of monitoring the financial networks supporting these illicit global flows, and show the difficulties in combating these criminal money transfers. After highlighting the progress to date, the article will then move beyond the foundational discussion to provide concrete interagency proposals and policy recommendations for further addressing the growing financial nexus between terrorist movements and criminal enterprises. Threat Finance, Terrorist Financing, and Cartel Money Laundering Threat finance is an umbrella term used to encompass various types of financing that support activities harmful to US national security. Within the US government and the Department of Defense, no singular, accepted definition of threat financing exists, and often the variance in definition reflects the particular nature of an organization; predominantly military or law enforcement, or an area of focus--strategic, theater strategic, or operational. (3) One reason for the lack of a clear and comprehensive definition may be the complexity of the topic, combined with the diversity of government actors involved. While the term terrorist finance is commonly used in international security literature to mean threat finance, it is too narrow, focusing only on organizations, cells, and individuals linked to terrorism. Other sources see threat finance as a much broader-based concept that includes: * Proliferation and Weapons of Mass Destruction/Effects (WMD/E) funding. * Terrorist financing. * Narcotics trafficking. * Organized crime. * Human trafficking. (4) The article supports this broader view which lends more utility when dealing with the highly adaptive, secretive, and flexible financing regimes and networks that straddle the criminal and terrorist worlds. (5) This article defines threat finance through its two major of terrorist financing (which subsumes WMD/E) and cartel money laundering (which includes organized crime, narcotics, fraud, corruption, and human trafficking). Terrorist financing is simply the process of raising, storing, and moving funds, obtained through illegal or legal means, for the purpose of terrorist acts or sustaining the logistical structure of a terrorist organization. …