Smuggler Nation (58 page)

New technologies will continue to increase government capacity to track and police the cross-border flow of people, cargo, money, and information. The digitization of U.S. border controls and the creation of “virtual borders,” for instance, has ranged from the use of more expansive and sophisticated databases for “data mining” and computer tracking systems for prescreening cargo and passenger manifests to the creation of more tamper-resistant travel documents and “smart” IDs with biometric identifiers (such as digital fingerprints and facial and retinal scans). Cargo inspections traditionally done at ports of entry have also increasingly been pushed outward through prescreening and preclearance, facilitated by the development of “smart containers” and the use of new cargo-tagging and tracking devices.

Many commercial activities facilitated by new technologies, such as electronic banking, also leave digital fingerprints that government authorities can detect and trace.
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Illicit online financial transactions are often constrained by the need for electronic payment, which can leave a record. This is partly the reason so many illicit activities in cyberspace—ranging from circulation of pirated music to child porn—involve a barter exchange economy based on file sharing rather than profit-driven commercial transactions (no wonder, then, that the widely reported claim that Internet child porn is a $20 billion a year business turned out to be bogus
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). Cybercops have failed to eliminate these electronic smuggling activities, but they have succeeded in taking some of the profit out of them. At the same time, the persistence of these illicit online transactions furnishes the rationale for more police investigations and sting operations in cyberspace. This has included setting up a government “Cybersmuggling Center,” an outgrowth of U.S customs initiatives against child pornography in the 1990s.

The very anonymity of the Web that facilitates illicit exchange and makes prosecution difficult also makes it hard for cybersmugglers and other cybercriminals to differentiate between an accomplice and an informant or undercover cop. This vulnerability, for example, has made
the online “carding” business (trading stolen credit card numbers) a high-risk business, as “carding forums” are increasingly infiltrated by cybercops—with one major carding forum even turning out to be a law enforcement sting operation. And this, in turn, has pushed cybersmuggling deeper into the digital underworld.
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Policing cyberspace will continue to develop as a new frontier of anti-smuggling initiatives that coexists and intermingles with traditional policing.
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Recent U.S. cyberpolicing initiatives include targeting major search engines for facilitating illegal online transactions, such as unauthorized downloading of music and movies, and allowing advertising for illegally acquired prescription drugs. In August 2011 Google agreed to a $500 million settlement for its failure to turn away advertising from illicit businesses, notably online Canadian pharmacies that use Google to place targeted ads pushing illicitly imported prescription drugs.
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In January 2012, the Justice Department and the FBI announced a grand jury indictment against seven individuals connected to the popular website Megaupload, an Internet service that allows users to anonymously share large files. They were charged with operating an international criminal conspiracy responsible for hundreds of millions of dollars in online copyright violations. The founder of the site, Kim Dotcom (previously Kim Schmitz), along with three others, were arrested in New Zealand. The international hacker collective Anonymous quickly retaliated by “taking down” the website of the Justice Department, along with the websites of the Motion Picture Association of America and the Recording Music Industry Association of America.
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According to Cisco Systems’ Visual Networking Index, more than a fourth of all online activity involves using peer-to-peer and locker sites—mostly for illegal sharing and downloading.
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The difficulty of carrying out a full-blown crackdown against online piracy was dramatically demonstrated by the backlash against two proposed bills in Congress that initially had considerable bipartisan support: the Stop Online Piracy Act (in the House of Representatives) and the Protect Intellectual Property Act (in the Senate). In a startling display of the new ability to harness the power of the Internet to both protest and lobby, free-speech advocates teamed up with tech companies, websites, and broadband service providers to derail legislative initiatives supported by Hollywood, the entertainment industry, and
the U.S. Chamber of Commerce. The outpouring of criticism, ranging from Internet activists to web powerhouses, charged that the proposed new laws were too broad and heavy-handed, would stifle creativity and innovation, and would lead to censorship. The protests included Google placing a black banner across its home page and the English-language version of Wikipedia going dark on January 18, 2012. Key political supporters of the legislation quickly pulled out, and the White House also signaled concerns. It was a stunning turn of events and a setback for traditional media companies, but the political battle over online piracy was just getting started.
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In some cases, scientific and technological breakthroughs not only facilitate illicit trade but can also enable entirely new types of illicit trade. For instance, the black market for human organs, especially kidneys, has been made possible by advances in organ-transplant procedures. Yet we should keep in mind that future scientific advances in the development of artificial organs could greatly reduce black market demand. New scientific procedures may also enable DNA theft and illicit cloning as a form of smuggling in the not-too-distant future—but this can also be expected to open up new forms of policing through more advanced genetic testing and tracing. One can also imagine the development of synthetic cocaine or heroin—as part of the growing trend toward use of synthetic drugs—that could radically shake up (and potentially domesticate) the international drug trade. At the same time, scientists are reportedly working on an “addiction vaccine,” which could greatly curtail licit and illicit drug markets alike.
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And even if this proves illusive, scientists will likely continue to unlock the mysteries of addiction in ways that should improve treatment. Advances in science and technology can also create legal substitutes that inhibit illicit trade, as evident in the invention of Viagra and its potential as a substitute for illicitly trafficked animal parts traditionally used as aphrodisiacs. At the same time, the predictable downside has been to also create a thriving new black market in Viagra, including counterfeits.
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Complicity

Too often gone unnoticed in conventional accounts of illicit globalization is that governments at times create and exploit illicit trade networks
to pursue their own interests. So rather than illicit globalization simply threatening governments, it is also sometimes harnessed by governments for their own ends. Although attracting the most attention, state-sponsored illicit trade is not restricted to a handful of “rogue states” such as Myanmar (formerly Burma) and North Korea. In the U.S. case, illicit finance and gunrunning have long been closely tied to covert operations. The Cold War, not globalization, provided the most important impetus. The CIA exploited illicit networks for a variety of geopolitical purposes in the Cold War years, including to fund and supply insurgents around the globe, from Southeast Asia to Afghanistan to Central America. At times this involved turning a blind eye to the drug-trafficking activities of anticommunist allies. Though the details are murky and enmeshed in controversy, it is clear that security imperatives sometimes collided with and trumped concerns about drug trafficking.
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Washington’s strategic use of illicit trade networks extended into the post–Cold War era, ranging from encouraging and facilitating arms embargo busting in the Balkans in the 1990s to tolerating and even supporting drug-connected Afghans allied in the fight against the Taliban and al-Qaeda in more recent years. For instance, Ahmed Wali Karzai, the brother of the Afghan president, was widely suspected of ties to the drug trade before he was assassinated, but he was also allegedly on the CIA payroll.
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These contemporary cases receive the most attention, but this is in some ways an old story—a modern-day variant of a practice that dates back in American history at least as far as the War of 1812, when U.S. military forces led by Andrew Jackson made a short-term alliance of convenience with the band of pirate-smugglers led by Pierre and Jean Laffite in repelling the British in the Battle of New Orleans. The Laffites were treated as heroes and granted presidential pardons as a reward for their patriotic assistance—and they then promptly returned to their illicit business activities.

U.S. intelligence connections to illicit traders have repeatedly generated damaging blowback effects. Again, this is an old story. Let out of jail as a reward for his cooperation and collaboration with U.S. Naval Intelligence during World War II, the New York mobster Charles “Lucky” Luciano was deported to Italy, but he then became a leading heroin supplier to the U.S. market. Similarly, the CIA covertly aided
Corsican gangs in Marseille against France’s leftist labor movement, but these same gangs then set up the famed “French Connection,” which became the main heroin supplier to the United States in the 1950s and 1960s.

Or take the case of the Haqqani network in Afghanistan and Pakistan, whose criminal activities include the smuggling of drugs, precious gems, and stolen lumber. This network enjoyed covert CIA backing in the 1980s in fighting Soviet forces, but in 2011 it was responsible for orchestrating a bold daylong attack on the American embassy in Kabul and was described as the most dangerous security threat to U.S. forces in Afghanistan. As the
New York Times
put it, in the 1980s they were supplied with U.S. missiles; now they are the targets of CIA missiles. Texas Representative Charlie Wilson, whose support for the Mujahedeen was the subject of the Hollywood film
Charlie Wilson’s War
, had even described the elder Haqqani leader, Jalaluddin Haqqani, as “goodness personified.”
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A very different sort of government complicity in illicit trade involves intellectual property theft. The United States and other industrial powers are understandably frustrated that China has been so resistant to external pressure to more aggressively crack down on counterfeiting and pirating intellectual property, including knockoffs ranging from Luis Vuitton handbags to fake Rolex watches, which one can find just as easily on Canal Street in New York or Santee Alley in Los Angeles as in Silk Alley in Beijing.
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For many reasons beyond corruption, it seems that it is simply not in China’s immediate interests to curb such illicit business practices. But some historical perspective is useful here. As we saw earlier, the U.S. government tolerated and even encouraged intellectual piracy and technology smuggling during the country’s initial industrialization process. Theft and smuggling were integral to America’s early economic development strategy. China today in some ways is merely following in America’s footsteps, albeit in an age when industrial espionage and other forms of intellectual property theft can take place via the Internet.
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If the past is any guide to the future, it is possible that China will become a serious advocate of intellectual property protection only when it has more of its own intellectual property to protect—just as was the case of the United States once it became an industrial powerhouse.

Intellectual piracy in nineteenth-century America extended well beyond illicit technology transfers. American authors and filmmakers today are of course upset that bootleg copies of their books and films almost immediately make it to the black market in China and elsewhere. For instance, forged editions of Bill Clinton’s autobiography
My Life
quickly appeared in Chinese, filled with glaring editorial alterations, including Clinton confessing his admiration for Mao.
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The United States has been at the forefront of international efforts to push other countries to crack down on intellectual property theft. Yet in the nineteenth century it was British authors such as Charles Dickens who were outraged by the widespread copying of their works in America without their authorization—and the unwillingness of the U.S. government to do anything about it. The American copyright law of 1831 was silent on the issue of international literary piracy, and this did not change until 1891. It was not until America’s own authors (notably among them Mark Twain) became victims of such theft that the country began to promote emerging international copyright standards.

The Conflict Connection

The illicit side of globalization is also increasingly blamed for fueling contemporary armed conflicts, and vice versa. Indeed, the link between illicit commerce and conflict is considered a defining attribute of “new wars,” from the Balkans to West Africa.
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But despite the label, the connection between illicit trade and conflict is not a post–Cold War invention. It goes back not just decades but centuries. One need only look to the early American historical experience: much to the dismay of the British imperial authorities, illicit “trading with the enemy” kept French forces clandestinely supplied by American colonial merchants during the Seven Years War, and transatlantic smuggling kept George Washington’s Continental Army supplied during the American War of Independence. Much to the delight of the British, American colonial merchants illicitly traded with the enemy and helped keep English forces supplied during the War of 1812, and Confederate cotton smuggling helped keep English mills supplied during the American Civil War. Much is made of the importance of “conflict commodities” in
sustaining recent conflicts, from cocaine in Colombia to so-called blood diamonds in Sierra Leone. But few of today’s illicit exports from conflict zones rival the importance of Confederate cotton—we could call it “blood cotton”—in fueling a war that cost more American lives than any other conflict in U.S. history.