Terrorist Networks: Emergent Patterns Found in Al-Qaedas Funding and Structure

LeeAnn Edith Featherstone leeann.featherstone@hotmail.com Complexity in International Relations Terrorism December 2013

Introduction Terrorism, and how to combat it, continues to remain at the forefront of discussion in international relations. Groups such as al-Qaeda are seen as decentralized networks within a hierarchical framework of authority. The groups leadership provides the support, logistics, and funds for its network members to carry out attacks. Policy makers target leadership in an attempt to both destabilize the organization of the group and to prevent it from acquiring the financing to sustain itself and to carry out future attacks. I argue that targeting the leadership to disrupt the organizations funds may not be the best solution, and that policy makers should instead look to disrupting the flow of financing at the middle tier of the organizations personnel to destabilize the network. Traditionally, terrorist groupsbe they anarchist, left-wing, nationalist, or religious have been characterized by their hierarchical structure1, their leadership credited for maintaining the groups cohesion (both structurally and ideologically). They entice new recruits, plan and execute attacks and campaigns, and attract and secure financing. They are also credited for the groups very survival.2 According to David C. Rapoport, 90 percent of terrorist groups dissolve within the first year following the death of their leader, while Bruce Hoffman adds that an additional 5 percent of groups end within 10 years of the leaders death, capture, or removal.3

Rapoport, David C., Four waves of modern terrorism In Attacking terrorism: Elements of a grand strategy, eds. Audrey Kurth Cronin and James M. Ludes, (Washington, DC: Georgetown University Press, 2006) 46-73. 2 Cronin, How al-Qaeda Ends: The Decline and Demise of Terrorist Groups, International Security 31:1 (Summer): 12; Jordan, When Heads Roll: A Dynamic Model of Leadership Decapitation, International Studies Association 2008 Annual Meeting Conference Paper; Price, Removing the Devil You Know: An Empirical Analysis of Leadership Decapitation and Terrorist Group Duration, International Studies Association 2010 Annual Meeting Conference Paper, 7-12; Price, Targeting Top Terrorists: How Leadership Decapitation Contributes to Terrorism, International Security 36:4 (Spring 2012). 3 Rapoport 1992, 1067; Bruce Hoffman, Inside Terrorism (New York: Columbia UP, 2006), 241.

Proponents of leadership decapitation as a counterterrorism strategy explain that cohesion of the group breaks down in the absence of the leader. This happens as attempts are made to adjust the groups strategy, and because potential replacements may be deterred from assuming leadership for fear of death or capture. Furthermore, planning and strategy to carry out attacks is confused and disrupted as potential leaders vie for the role, and recruitment may become more difficult if the leader held a charismatic authority or embodied the ideology of the group. Finally, the group may find funding and resources to be more difficult to sustain or attract during this period of instability.4 Rapoport has updated his views on leadership and longevity since his 1992 published work, Terrorism. This is a result of the post-9/11 period and its recent literature on the decentralized nature of terrorist groups such as al-Qaeda, and he has taken into account the relative lack of data available on the survival rates of religious groups and their evolving, decentralized organizational structure.5 Yet scholarsincluding many prominent onescontinue to use Rapoports 1992 data to support their arguments for leadership decapitation.6 This has had serious implications for policy as states have put the removal of al-Qaedas leadership at the forefront of their counterterrorism strategies. Not only are these efforts reflected in documents such as the US National Strategy for Counterterrorism,7 but they are also seen in that countrys counterterrorism budget, which was allotted 16.6 billion dollars for the fiscal year ending September 30, 2013, and

Price, Targeting Top Terrorists, 9-10, 16-20; Jordan, When Heads Roll, 3; Neumann et al, Locating al-Qaedas Center of Gravity: The Role of Middle Managers, Studies in Conflict & Terrorism 34:11 (November): 837. 5 Rapoport, The Four Modern Waves, 47. 6 Cronin, How al-Qaeda Ends, 13; Hoffman, Inside Terrorism, 241; Faria and Arce, A Vintage Model of Terrorist Organizations, Journal of Conflict Resolution Vol. 56 (May): 634. 7 The White House, National Strategy for Counterterrorism, 2011 (Washington): 1-26.

is approximately 36.6 percent of the USs total intelligence budget for the year.8 This is a lot of time, manpower, and resources to put toward a strategy we have yet to see the effectiveness of, and of which may no longer be relevant in its current framework. A secondary emphasis of states counterterrorism strategies has been placed on severing al-Qaedas sources of funding, whether it be through individuals, businesses, fake charities, cyber laundering or other avenues of laundering money, such as through trade or the selling of illicit drugs.9 On September 24, 2001, George W. Bush announced the freezing of assets of several individuals and organizations who were believed to be linked to al-Qaeda in a move to show tangible, immediate results.10 In the early years following the 9/11 attacks, it was also widely believed that al-Qaeda was largely being funded with Osama bin Ladens personal inheritance of $300 million dollars, and that the al-Qaeda organization had brought in $30 million dollars in 2004.11 Experts currently claim that the organizations income today is down significantly due to international counterterrorism efforts.12 That this strategy of targeting those with assumed financial ties to al-Qaedas leadership was implemented so soon after the attacks and has been essentially maintained until today is problematic for three reasons. First, it is extremely difficult to verify how much money al-Qaeda makes in a given year. Moreover, it is difficult to assess the impact that financial-based counterterrorism efforts have had on either the preventing or
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Desilver, U.S. Spends Over $16 Billion Annually on Counter -Terrorism, Pew Research Center September 11, 2013. 9 Hunt, The New Frontier of Money Laundering: How Terrorist Groups Use Cyberlaundering to Fund Their Activities, and How Governments are Trying to Stop Them, Information and Communications Technology Law 20:2 (June); Salam and Fatih, War on Terror: Fantasy and Fiction Behind the Mythology of Terrorism Financing, Intellectual Discourse 17:1. 10 el Fatih, War on Terror, 6, 8. 11 Hunt, New Frontier, 137. 12 el Fatih, 8.

seizing of the groups financial assets. We know much more today than we did ten years ago about the types of individuals, couriers, organizations and financial institutions through which financing flows to al-Qaeda. Unfortunately, we have also learned that these sources are not only difficult to detect, but also that money originating from or flowing through them tends to be quickly dispersed. This makes estimations of alQaedas net worth impossible.13 Finally, because we do not know al-Qaedas net worth or its specific avenues of resources, we cannot accurately assess how much money counterterrorism efforts have really prevented the organization as a whole from acquiring. Second, without a prior plan in effect and in a haste to produce results, the administration essentially applied the war on drugs model to targeting al-Qaedas perceived financial network.14 Not only is the organizational structure between al-Qaeda and organized crime different, but the two also have very different motivations, recruitment methods, and goals.15 It is also assumed that funds provide the core of the group its stability, and that a central authority controls those monies and distributes it throughout the network to finance members activities, which does not seem appropriate given the post-9/11 literature on the decentralized and leaderless jihad nature of todays alQaeda.16

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Greenburg, Douglas et al. Staff report to the commission, National Commission on Terrorist Attacks Upon the United States. 2004, 17. 14 el Fatih, 8. 15 Smith et al., Geospatial Analysis of Terrorist Activities: The Identification of Spatial and Temporal Patterns of Preparatory Behavior of International and Environmental Terrorists, Terrorism Research Center, University of Arkansas (February) 10, 13. 16 Hunt, New Frontier, 136-7; The term leaderless jihad is taken from Marc Sagemans book of the same title. Sageman, Leaderless Jihad: Terror Networks in the Twenty-First Century (Philadelphia: University of Pennsylvania Press, Inc., 2008).

Inherent in the pro-leadership/ centralized financial network approach to counterterrorism is the belief that the two operate within a hierarchical network structure and are intrinsically linked. Al-Qaedas core leadership is the command and control center of the group and receives, controls, and distributes its finances for its activities. Counterterrorism efforts aim to interrupt or stop both leadership and funds by targeting the top of the hierarchy under the belief that the group will disband or dissolve in eithers absence, preventing future attacks. Given this emphasis placed on a centralized structure, that the US administration has spent over 500 billion dollars on counterterrorism since 2001,17 and that progress has been assumed with little verifiable proof of success of the above counterterrorism measures, there is a need to re-examine how we approach the issue of diverting funds away from terrorist groups and their affiliates. My research examines the leadership-finance relationship of al-Qaeda and aims to show a false correlation between the groups financial flow and the core leadership of alQaeda. Furthermore, I argue there is an important group of actors in the al-Qaeda organization that has been ignored in recent literature and which play a crucial role of facilitator between the peripheral and core of the organization. More importantly, I believe that without this group of middle managers18 al-Qaeda would be significantly impaired, its ability to recruit and carry out attacks hampered. I will discuss the theories of two leading scholars in the area of terrorist organizational structure, to which I offer my own argument on the role that second-tier actors play in the organization. I then discuss my research design using computational modeling, before discussing the model itself and its parameters. I then describe the results of my tests and analyze them against
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Desilver, US Spends Over $16 Billion Annually. The term middle managers is taken from Neumann et als article, Locating al -Qaedas Center of Gravity.

my own and other mainstream theories. Finally, I end with a brief discussion on the implications these results have a future policy, and conclude with some suggestions for future research.

Critical Analysis of the Literature Leadership decapitation is no doubt important; the majority of both successful terrorist attacks and unsuccessful attempts in the West that were prevented by officials had ties linking the individuals back to al-Qaeda.19 The organizations core continues to espouse its ideology and entice new recruits, many of who are trained at al-Qaedas bases, and who pursue a strategy that continues to inform both the movements and the cores operations and activities.20 Herein lies the paradox. Leadership has proved itself a threat, yet efforts to get rid of it have failed. With several leaders having been killed or captured, the core leadership has been able to replenish itself and maintain its core base. Therefore, it seems a reasonable conclusion that although the hierarchical structure of al-Qaeda should not be ignored, neither should it be at the very forefront or primary focus of states counterterrorism agenda if it is not working. In recent years a number of scholars have concluded that the leadership of al-Qaeda is no longer relevant given the changed structure of the organization.21 The structure of alQaeda has responded to threats to its leadership and adapted accordingly. The group is a highly decentralized network of cells and independent actors operating from different

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Hoffman, Al Qaedas Uncertain Future, Studies in Conflict & Terrorism 36:8 (August): 638. Ibid, 642. 21 Jones, Al-Qaedas Innovative Improvisers: Learning in a Diffuse Transnational Network, Cambridge Review of International Affairs 19:4; Moghadam, How al-Qaeda Innovates, Security Studies 22:3 (JulySeptember); Helfstein and Wright, Success, Lethality, and Cell Structure Across the Dimensions of alQaeda, Studies in Conflict and Terrorism 34:5 (May).

locations around the world, and its members and affiliate groups do not require direction from a centralized authority, instead learning and operating autonomously at a grassroots level under the ideological umbrella of al-Qaeda.22 In a very public dispute in 2008, Bruce Hoffman and Marc Sageman, both prominent terrorism scholars, particularly in the area of organizational structure, debated the relevance of todays leadership and structure of al-Qaeda. In Foreign Affairs magazine, Hoffman responded to Sagemans book entitled Leaderless Jihad: Terror Networks in the Twenty-First Century, with a scathing review.23 In Hoffmans The Myth of Grass-roots Terrorism: Why Osama bin Laden Still Matters, he criticizes Sagemans emphasis on local cells and his claim of the irrelevance of al-Qaedas leadership, insisting that alQaeda now exercises both a top-down and a bottom-up approach. He points to the continued thriving leadership and the plots that are yet to be revealed but have likely been in the works for a number of years.24 Although observers would have it believed that the two men are steadfast in their polar opposite positions, in reality, both are more flexible. For example, while Hoffman believes al-Qaeda to be continuing to operate with a hierarchical structure in contrast to Sagemans highly decentralized, leaderless cells, but he does recognize the changed nature of al-Qaedas structure, though tends to emphasize the cores ability to replenish itself, again, utilizing both top-down and bottom-up approaches. Hoffman reasonably shows that while the structure may have decentralized, the threat from the core is still imminent, yet it continues to remain stable (although it is still too
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Sageman, Leaderless Jihad. Hoffman, The Myth of Grass-roots Terrorism: Why Osama bin Laden Still Matters, Foreign Affairs (May/ June). 24 Hoffman, Myth of grassroots terrorism.

early to assess what impact the death of bin Laden will have on the group). Therefore, targeting leadership has proved futile. Sagemans argument is compelling given the evidence, but officials have difficulty creating a policy to target lone wolves acting entirely of their own volition. With leadership remaining intact and able to continue its recruitment campaign from a virtually endless pool of adherents, it has proved a huge challenge to find individuals seeking to emulate or join the group. Others adhering to Sagemans viewpoint offer an in-depth analysis of the decentralized structure of alQaeda, describing the ways in which the organization learns, adapts, and innovates, yet rests on description, the literature conspicuously lacking in solutions to prevent individuals or autonomous groups from executing future attacks.25 Missing from current literature is the role that upper-echelon members play in maintaining the structures integrity. These are not the top-tier leaders, but rather a middle management that acts as facilitator between the autonomous actors and cells and the leaders of the group. According to Neumann, Evans, and Pantucci:

(The middle managers) are not permanently based in the tribal areas but have returned to their home countries or other non-battlefront states, sometimes travelling back and forth, building support networks and raising money for the global jihad(and) they can provide skills and expertise, and may facilitate access to finance and training camps. Also, being connected to the top leadership, middle managers offer strategic direction andcriticallygive grass-roots members a sense that they are part of Al Qaeda.26

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Helfstein and Wright, Success, Lethality and Cell Structure; Jones, Al -Qaedas Innovative Improvisers; Moghadam, How al-Qaeda Innovates, Security Studies 22:3 (July): 467. 26 Neumann et al, Locating al -Qaedas Center of Gravity, 829.

Without this middle management, actors at the grassroots level will lack the opportunity to connect with leaders who can provide the training and resources necessary to execute a successful attack; conversely, leadership without access to foot soldiers is likewise unable to sustain the organization as the ability to recruit new individuals and make alliances will be seriously diminished. Furthermore, without the replenishment of trained and skilled operational leaders arising from middle managers, current leadership will be more vulnerable to counterterrorism attacks as it attempts to connect with new recruits and conduct the day-to-day operations. Research Design Using Uri Wilenskis Netlogo computer model, Diffusion on a Directed Network,27 I will be examining the relationship between the hierarchy, centralization, and resources of a terrorist group. I expect to find three outcomes from my results: first, I expect to find a correlation between resources and centralization. As centralization increases, leadership has a tighter control on both money and how it is used. Second, I expect to find that while the degree of centralization will impact how the groups finances flow, there will not be a correlation between hierarchy in leadership and a linking of funds to that leadership. Centralization refers to the route in which resources take, whereas hierarchy refers to how the money is actually distributed throughout the network. This would lead to my final expectation: as money is distributed throughout the network, I expect to find the emergent importance of the middle manager. Acting as the intermediary between the

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Stonedahl and Wilensky, NetLogo Diffusion on a Directed Network, Center for Connected Learning and Computer-Based Modeling, Northwestern Institute on Complex Systems, (Northwestern University, Evanston, IL).

grassroots actors and leadership, this upper-echelon of the group will possess the majority of the resources necessary to facilitate the execution of the groups activities.

Model Netlogos Diffusion on a Directed Network consists of a number of nodes evenly dispersed throughout the space, which represents the entire terrorist network (See Figure 1.1). Each node (actor) has the same starting value of 1, and the total value of the network being 81.

Figure 1.1 Stonedahl and Wilensky, NetLogo Diffusion on a Directed Network, Center for Connected Learning and Computer-Based Modeling, Northwestern Institute on Complex Systems, (Northwestern University, Evanston, IL).

The percentage of value (or money) that actors can share with their neighbors can be adjusted and predetermined by using the models DIFFUSION- RATE slider. This slider will be tested at 25, 50, and 75 percent, or low, medium, and high degrees of

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centralization. For my research, the nodes represent both an actors financial capability and the degree of centralization in the network. As actors share their value, other actors values will either grow or diminish by the end of the run. Therefore, if the proponents of a centralized leadership are correct, the leadership should consistently have the highest value of resources at the end of each run of the model. This would be shown on the model with the majority of nodes having a small end value, and one or two nodes having a very large value of the total value of the network (81). If I am correct, however, I expect to find that the largest values of resources lay elsewhere in the network, specifically with the middle managers, whose parameters I will discuss shortly. If this happens, we will see several nodes with a moderate amount of value. The second variable I will be analyzing is the hierarchy of actors in order to determine the paths and patterns through which funds flow through the system. The top echelon of the group will have more actors, or a number of actors, sharing resources with them, while the bottom rung of foot soldiers will have few, if any neighbors sharing resources with them which they will retain for themselves. This is represented by the number of incoming (receiving resources) and outgoing links (sharing resources) that each actor has, and is displayed in the model through arrows linking an actor with its immediate neighbors. The largest number of outgoing links an actor may have with its neighbors is four, although it should be noted that the models data collection is limited to four links, but there are many more connecting links throughout the network that allow actors to share their values with actors anywhere else within the network, depending on the connecting path. You will notice the arrow directions in Figure 1.2. Tracing the path of arrows directed at a single node you could find many more than just four directed or

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successive connections, which is randomly determined by the program. This gives you an idea of the hierarchal nature of the grid, but what we are counting here is the value shared through those pathways, which is limited to four.

Figure 1.2. Stonedahl and Wilensky, NetLogo Diffusion on a Directed Network, Center for Connected Learning and Computer-Based Modeling, Northwestern Institute on Complex Systems, (Northwestern University, Evanston, IL).

How connected the network is (leaderless jihad or hierarchical) at the initial set up of the model before running the test can be adjusted by the LINK-CHANCE slider on the model, and will also be run at 25, 50, and 75 percent. This represents differing theories about the structure of the network, with 25 representing a very decentralized network of lone wolves, and 75 representing a network that, while not necessarily representing

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hierarchy, does represent a very connected, yet dispersed network. The more incoming links an actor has, the higher the position that actor is in the network (foot soldier, middle management, or leadership). If the centralization theory is correct, those nodes with the highest values should correspond to the nodes with the highest number of links, as finances would be flowing through the system from the bottom two tiers of actors to the leadership who would be controlling all finances of the group.

Findings and Analysis The network size was left at its default settings, and each actor was linked together randomly with the same initial starting value of 1. The model was run five times for each parameter combination at a time period of 200 ticks for each of the five times. Testing the level of connectedness in the network against how much value agents shared with their neighbors produced some interesting results. The highest end value of actors was seen in parameter set 5, in which both the linkdiffusion rate and link-chance were set at 50%, with the average value high at 24.43, and was represented by approximately 30.16% of all agents. Alone, this would tell us that in a moderately connected network that is moderately centralized, our theory is supported, because the leadership does not hold the highest value. If the opposite were the case, we would have seen a positive feedback effect, with an upward trend toward centralization, seen in parameter 9. The average high value trend among agents, seen in figure 1.3, displays this result.

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Value

Parameter
Figure 1.3. Actors end value highs per parameter set.

This trend was also reflected in the flow of finances in the network, supporting the actors end values, showing the most financial activity in the network takes place in a moderately centralized network in which agents are sharing moderate amounts of money. That the most financial activity is taking place in parameter set 5 (at 3.42/ 4.00) seems to also suggest that it is under these conditions that the terrorist organization should thrive. Overall, we do see a monetary trend from the grassroots level to a highly centralized model. On either end of the spectrum, however, at parameter sets 1 and 9, neither Sageman nor Hoffmans claims are supported. At the grassroots level in which the network is highly decentralized and actors are not sharing their resources, we see this segment holding only 12.84% of the total network value. If Sagemans theory were correct, that figure would be a much higher portion of the actors. Conversely, Hoffmans assumptions are also not accurate. There is no hierarchy (which will be expanded upon shortly), but a high level of centralization, contrary to his claims. In parameter set 9, we see the leadership holding 72.4% of the total network value. Realistically, in neither case 14

is the network sustainable as at the grassroots level there are too few foot soldiers to carry out attacks; at the centralized level, virtually all actors are pooling their resources for a single activity, and are not receiving funds to carry out their own attacks. The results testing the hierarchy of the organization were also promising. For each group of parameters determined by the link chance (or how connected the network is) of 25, 50, or 75 percent, there was a clear upward trend represented by figure 1.2. The general trend showed that as the network grew in size, a clear hierarchical structure emerged with foot soldiers, a middle management, and top tier of leadership. Here is where we find the most surprising, but encouraging results. As noted above, there appears Incoming Links

Parameter
Figure 1.4. Incoming links reflecting hierarchy of network.

to be no hierarchical network structure in terms of actors end value highs, with parameter combination 5 having the largest value. When compared against the clear hierarchical structure of incoming links, we see that it is the middle managers that not only end up holding the most resources, but also who see the most financial activity.

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Conclusion While each Hoffman and Sageman have compelling arguments, neither take into account the second tier of actors in the al-Qaeda organization. Hoffman acknowledges the decentralized nature of al-Qaeda, but asserts that the hierarchical nature of the leadership should remain the focus of counterterrorism policy as it is resilient and can easily replenish itself. Sageman emphasizes the important new segment of al-Qaeda in the twenty-first century, but also ignores the middle management of the organization. The Netlogo results have shown that while a clear hierarchy emerges when all actors start in the same initial position, there is a correlation between the way in which finances flow in the network and the middle management. The implications for policy from these findings suggest that without the middlemen facilitating interactions and activities between the grassroots and leadership levels, neither could sustain itself. The grassroots actors would not have access to the experience, planning, training, and resources of the leadership. The leadership would neither be able to replenish itself nor have access to foot soldiers to carry out attacks abroad. A second scenario would be that the leadership makes itself much more vulnerable as it attempts to recruit or makes alliances. Future research with this model would be to run it with initial conditions reflecting a realistic structure of the organization; to expand the code in the model to allow for data to be collected from innumerous links as opposed to the four we ran in this test; and finally, to utilize the RE-WIRE button that removes and creates new links in the network. This would emulate a successful counterterrorism measure, severing ties or financial flows between actors.

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