1. Jonathan R. White
www.cengage.com/cj/white
Chapter 3:
Not Random Violence:
Modeling, Structuring and
Financing Terrorism
Rosemary Arway
Hodges University

2. Models of Terrorism
 Models of terrorism:
o Rural:
▪ Guerilla warfare (Cuban Revolution, Che Guevara
Revolution)
▪ Revolution starts with poor peasants that organize into
isolated groups, which form guerilla columns, and finally
organize into army
o Urban
▪ Fanon: mental illness was a result imperialism, colonized
nations practice terrorism against colonial masters
▪ Marighella: the basis of revolution is guerilla and unorganized
violence → governmental repression → massive uprising in
response to oppression → toppling of government
o Insurrection
▪ Marighella

3. An American
Understanding of Insurgency
 Re-evaluation of American strategy:
o Viet Nam experience (averse to enter a war without
clear objectives)
o Insurgencies represent a new mix of operations
and tactics that become possible with the advance
of technology and globalization.
o It is impossible to fight insurgencies with military
tactics:
▪ Insurgences control information.
▪ Insurgences operate with global communication.
▪ Insurgences incorporate technological weapons.
▪ Insurgences require few personnel.

4. An American
Understanding of Insurgency
 Counter-insurgency forces need to be massive
because:
o they must enforce laws
o they also must form a partnership with a host of other
agencies
o they must develop networks of organizations
 Security forces must follow the model of community
policing
 Insurgencies developed at the end of the Cold War
as various tribal, national, ethnic and religious groups
 Insurgencies depend upon social and support
networks

5. Changing Dynamics and Structures
 After WW II, terrorist groups tended to follow
the IRA model of small units or cells.
o Cells are the basic units of traditional terrorist
organizations.
o Each cell has its own mission and operates without
knowledge of other cells in the area.
 Burton:
o Two basic structure of terrorist subunits:
▪ Cells – specialized with 4 to 6 people; may be tactical
or intelligence.
▪ Columns – created from groups of cells;
semiautonomous conglomeration of cells with a
variety of specialties with a single command structure.

6. Changing Dynamics and Structures
 Around the 1990s large terrorist groups
developed more dynamic methods of
organization.
o Fraser and Fulton:
▪ Groups employ variations of command and control
structures
▪ Typical organization is arranged in a pyramid
▪ Hierarchical structure of terrorists groups is divided
into four levels:
• Top level is the smallest level and is responsible for
command.
• Second level is the active cadre
• Third level, second largest and most important, is the
active supporters.
• Fourth level, largest category is the organization’s
passive supporters.

7. Umbrella Organizations
and Modern Piracy
 Legitimate groups form umbrellas under which
terrorist groups could operate.
o Several small pyramids gather under a sheltering
group that:
▪ manages supplies
▪ obtains resources
▪ creates support structures
▪ gathers intelligence
 Terrorist action on the High Seas
o A seemingly legitimate business (sheltering
organization) provides cover for pirates (the
pyramid organization) while denying all
connection with illegal activity.

8. Virtual, Chain, and Hub Organization
 RAND Corporation identifies several
other types of new organizational styles.
o Virtual organizations: created through
computer and information networks
o Chain organizations: small groups linked by
some type of communications
o Hub organization: centralized group with
semiautonomous groups supported in other
regions

9. Managing Terrorist Organization
 Terrorists need to organize like any
other group:
o Groups require management
o Hierarchical groups use cell structure and
top-down management
o Small groups in networks are more
autonomous
o Management and other administrative
functions are hampered by the need for
secrecy

10. Managing Terrorist Organization
 Terrorist groups experience special
organizational problems:
o Secrecy
o Decentralization
o Training
o Internal discipline
o Gaining immediate tactical support for
operations

11. Group Size and Campaign Length
 Gurr:
o Group size:
▪ Most terrorist actions involve only a few people.
▪ Large groups or networks are more effective than
smaller ones.
▪ Majority of successful groups embrace doctrines such
as nationalism.
o Campaign Length:
▪ Terrorism is short-lived.
▪ Most terrorist campaigns end within 18 months of the
initial outburst of violence.

12. Group Size and Campaign Length
 Implications of Gurr Analysis:
o Most terrorist organization are small,
short-lived operations which are law
enforcement problems.
o If terrorism is a result of popular social
issue, sympathizers can enhance the
power of the group.
o Strong support for a group is more
important than the actual number of
operatives.

13. Group Size and Campaign Length
 Hewitt reflects Gurr’s position:
o Small groups do not have resources to damage an
opponent over an extended length of time.
o Terrorist campaigns are more important than
isolated acts of terrorism.
o Terrorist campaigns demand expanded political
responses.
o Large terrorist organizations accounted for the
majority of the terrorism.
o Large terrorist organizations can bring change in
government politics.

14. Group Size and Campaign Length
 Analyst Livingstone describes terrorism as
“warfare on the cheap.”
o State Sponsorship
▪ Nation could support a terrorist group (Hezbollah)
▪ State support automatically creates a large group
 Scheuer
o If state sponsorship and failed state
approaches are applied to Islamic militants, it
will be impossible to understands both the
organization’s characteristics and growth of al
Qaida and related groups.

15. Financing Modern Terrorism
 It takes money to fund organizations, and
resources to support operations.
 Adams:
o The appropriate method of attacking terrorism will be
stopping of the flow of money.
o A terrorist operation does not cost a lot of money.
o The overall budget for a terrorist operation is quite
high.
 The financial investigative debate:
o Major counterterrorism strategies should be aimed at
waging “financial warfare” with financial weapons.
o The National Strategy for Combating terrorism
endorses this approach by targeting two areas:
▪ The source of financing
▪ Mechanism use to transfer money

16. Importance of Financing
 Effective counterterrorist policy involves
strategic efforts to deny fiscal resources to
terrorists.
 Arguments are made, favorable and
unfavorable, concerning the use of finances as
a weapon.
o Financial strategy against terrorism will reduce
violence.
o Working in an underground economy, terrorists are
immune from formal government sanctions.

17. Importance of Financing
 Critique:
o Financial warfare will not be effective
because terrorists do not respond to formal
controls, but participate in undergrad
economies.
o It is relatively easy for terrorist groups to
hide their assets.
o However, targeting flow of money may lead
to important discoveries about terrorist
groups and plans.

18. Underground Networks and Organized Crime
 Three major categories:
o The unlawful raising of funds
▪ Robbery, Fraud, Larceny, Smuggling, Dealing in
contraband, Forgery, Counterfeiting, Identity theft,
Extortion and protection rackets
o The unlawful distribution of funds
o The formal regulated economy
o Economic targeting as force multiplier
 Terrorists raise funds through traditional
criminal methods and exchange resources in
underground networks.
o The differentiating factor between terrorism and
traditional crime is motivation.

19. Underground Networks and Organized Crime
 Terrorists around the world use a variety
of criminal methods to raise funds.
o Middle Eastern terrorists engage in smuggling
and document fraud.
o Central Asian terrorists trade illegal arms,
launder money, and distribute drugs.
o Latin American terrorism is tied to drug
production and public corruption.
o U.S. domestic terrorists engage in fraud
schemes and robberies.
▪ International terrorists also engage in fraudulent
activities in America.

20. Underground Networks and Organized Crime
 Underground networks exists not only in the dimension
terrorists/criminals, but also terrorists/terrorists, and
terrorists/criminals/terrorists.
 International linkages – the nexus of criminal
syndicates – that exists between various terrorists
group were best demonstrated in the case of the
Japanese Red Army group in 1972:
o The unit (Rengo Segikun) composed of Japanese citizens…
o that have been trained in North Korea…
o picked up funds in West Germany…
o for further training in both Syria and Lebanon…
o picked up its arms and ammunition in Italy…
o and then attacked the Lod Airport in Israel on behalf of the
Popular Front for the Liberation of Palestine.

21. Legal sources of Funding
 In addition to traditional crime, terrorists
raise money through legal operations.
 Frequently employed legal activities
include:
o Soliciting contributions
o Operating businesses
o Creating charities
o Running non-government organizations
o Using wire transfers
o Forming or using banks
o The Hawala system

22. Legal sources of Funding: Charities
 Terrorists set up phony charities or skim
proceeds from legitimate organizations.
 Charities are difficult to investigate
o Formed overseas
o State supported
o May hide true purpose
o Supported by legitimate business
o Difficult to infiltrate
▪ Benevolence International Fund
▪ Formed in U.S. & received tax-exempt status from IRS

23. Non-traceable Funding: Hawala System
 Hawala system is a legitimate means of
transferring money without using money.
o Originated in China
o Based on long term trust relationships and
knowledge that each dealer is reliable for all debts.
 Advantages of the Hawala system:
o Money moves with no record.
o Money crosses international borders with ease.
o Money can be easily bartered for contraband.
o Tax records do not exist.

24. The Political Economy of Terrorism
 Globalization:
o Napoleoni states that globalization created
pockets in the world where failed states are
left to govern with little economic and political
power.
▪ Terrorist groups grow in such places.
▪ Terrorist group acts like a government in such a
places.
 Terrorist organizations are strong enough to
resist the state and grow running their own
underground economies.

25. Macroeconomic Theories
 Counterterrorism policies should be aimed at
providing the world’s populace with economic
stability, opportunity, and participation in the
mainstream economy.
 Economic policies to counter terrorism:
o Supporting states in threat of failure.
o Providing opportunities for people to participate
and benefit from economic systems.
o Eliminating underground economic networks.

26. The Narco-terrorism Debate
 Idea of narco-terrorism is a controversial term
linking drugs to terrorism in one of two ways:
o Drug profits are used to finance terrorism.
o Drug gangs use terrorism to control production and
distribution networks.
 Proponents:
o Terrorists use drugs to finance operations.
 Opponents:
o Narco-terrorism is a convenient term for appealing to
public emotions, which gives governments more power.
o Use of the word narco-terrorism is an attempt to take
political advantage of the fear of terrorism.