State control is diminishing or nonexistent in growing swaths of the world, giving rise to a growing number of failed or “soft” states and non-state armed groups. Although these states and groups pose a threat and direct security challenges to their neighbors, their regions and the rest of the world, they are little understood. The U.S. Defense Department, four years after the tragic events of 9-11 has just initiated a major study of “ungoverned areas,” another name for the phenomenon. This illustrates how difficult it has been to for the intelligence community and policymakers to shift their focus from the Cold War emphasis on states to the current problems where states play a far less central role.

Non-state actors can be roughly divided into four types that merge and overlap: insurgencies, engaged in a protracted political and military struggle aimed at weakening or destroying the power and legitimacy of a ruling government; terrorism, the deliberate use of fear through the threat or use of proscribed kinds of violence for political purposes; militias, recognizable irregular armed forces operating within an ungoverned area or a weak or failing state; and international criminal organizations, internally-cohesive groups that engage in one or more type of criminal enterprises and operate across regions and national borders.¹

A related threat that often overlaps with these non-state groups is that of criminal states—nations that remain states only in name. Through corruption and a desire to obtain wealth, often from natural resources, the state itself becomes a functioning criminal enterprise. In these cases the state, while receiving the international benefits of being a state (the ability to issue recognized diplomatic passports; maintain shipping and airplane registries; control border entry and exit points; and collect taxes), plays host to, and participates with, a variety of non-state actors to achieve its goals.²

The case of Liberia under former president Charles Taylor is illustrative. Not only did he allow all four types of non-state actors to use Liberian territory, he amassed a personal fortune and maximized the use formal state power for his own use and the benefit of those organizations. He also enlisted the aid of neighboring nations like Burkina Faso, offering diamonds and cash in exchange for assistance in importing weapons. But nowhere was Taylor’s intervention more direct or brutal than in neighboring Sierra Leone, where he exported his model of rapacious “big man” economic domination at the expense of the state and state structures. To do this, he trained and armed a proxy army, the Revolutionary United Front (RUF), led by Foday Sankoh, a friend of Taylor’s from their days of training together in Libya.

Under Taylor’s patronage, international arms dealers operated along side al Qaeda operatives, Israeli mercenaries, Hezbollah diamond merchants, Russian and Balkan organized crime figures and South African mercenaries. Because he controlled the borders, Taylor and his security apparatus were able to guarantee that even wanted criminals could enter and exit with impunity. He even issued diplomatic passports under assumed names to help protect them. The state infrastructure was available to those who could pay for their use.

Taylor did not operate alone. He relied on a network of friendships formed in the military training camps of Libya under Moamar Gadaffi, camps that in the 1980s became “the Harvard and Yale of a whole generation of African revolutionaries.”³ Among them were Blaise Compaore, the president of Burkina Faso, who provided weapons shipments and end-user certificates; Foday Sankoh, a barely-literate cashiered army corporal who went on to lead the RUF; and Laurent-Desire Kabila, who later became president of the Democratic Republic of the Congo. These relationships provided important links that allowed Taylor’s criminal enterprise to flourish.⁴ The network was also crucial in providing entrée to criminal elements from Liberia into other state structures. One of his closest confidants, Ibrahim Bah, escorted diamond buyers and weapons merchants to Burkina Faso, Niger, Cote d’Ivoire and elsewhere to do business.

What attracted international criminal and terrorist organizations to Liberia was not only the use of the state infrastructure, but Taylor’s ability to guarantee access to two commodities—diamonds and timber. To gain control of the diamond fields, which are particularly attractive because they are alluvial and require very little investment in order to exploit, Taylor launched two interwoven wars. The first was in Liberia, and the second was in neighboring Sierra Leone, with even richer diamond fields. Both wars were marked by a devastating level of brutality, including ritual executions, the abduction of thousands of children who were drugged and taught how to kill, the widespread use of rape as a weapon of terror and control, and the mutilation of civilians.

Taylor’s exploitation of timber, iron ore, gold and diamonds almost from the beginning of his days as a revolutionary has been well documented. Taylor did not invent corruption or the siphoning off of state funds for personal use. Liberia had a long history of brutal and corrupt leadership. In the 1950s Monrovia was already a haven for international money laundering, even used by the famous gangster Myer Lansky.⁵ Nor was Taylor the first to use the sprawling network of inter-married Lebanese clans to move his diamonds and hide his money.⁶ What set Taylor apart was his ability to merge the state apparatus and different criminal and terrorist groups into a single enterprise that benefited all,, despite their disparate interests. In building this structure Taylor relied heavily on foreigners who could provide expertise he did not have. His inner financial circle included Dutch, Belgian, Israeli, Lebanese, Senegalese and American citizens. Those who bought his diamonds came from all the world’s leading diamond markets.⁷

A look at some of those who operated out of Liberia under Taylor’s protection in late 2000 and early 2001 illustrates the dimensions of problem.

By the end of 1999, Viktor Bout, the Ukrainian arms merchant later dubbed the “Merchant of Death” by a senior official of the British government, had registered his air fleet of several dozen aircraft in Liberia. Bout specialized in breaking international arms embargos, flying hundreds of tons of weapons not only to Taylor and the RUF in Sierra Leone, but UNITA rebels in Angola and several sides of the civil wars in the DRC. His weapons routes to Liberia included transiting Burkina Faso, Gambia, Niger and Cote d’Ivoire with the complicity of senior leaders of each of those countries.⁸

Had he stuck solely to African wars, it is doubtful Bout would ever have become an international figure. U.S. investigations finally began when Bout was suspected of also supplying weapons to the Taliban in Afghanistan, after having been a main supplier of the Northern Alliance. In fact, Bout sold several aircraft to the Taliban and helped maintain their limited air fleet, as well as providing the outlaw regime with weapons.⁹ A survivor above all else, Bout currently has gotten two of his companies contracts with the U.S. military to fly ammunition into Iraq. This, despite having his U.S. assets frozen and two international arrest warrants pending.¹⁰

Another weapons dealer who found his way to Liberia to trade weapons for diamonds and timber concessions was Leonid Menin, and Israeli businessman originally from Odessa, Ukraine. His timber company, Exotic Timber, was established with Taylor’s notorious son, Chuckie. When Menin was arrested in Italy on Aug. 5, 2000 in the company of several high-priced call girls, he had a $1,500-a-day cocaine habit, $3 million in his bank account and $500,000 of diamonds, along with passports from the former Soviet Union, Russia, German and Bolivia. He had completed a 68-ton shipment of weapons—including surface-to-air missiles and anti-tank weapons--for Taylor a few months earlier, using an end-user certificate from Burkina Faso. At the time of his arrest, he had an end-user certificate from Cote d’Ivoire for 113 tons of weapons.

But the most intricate relationship was with operatives from al Qaeda, who were interested in the diamond trade.

Al Qaeda did not stumble blindly into Liberia in the hopes of acquiring diamonds. Its operatives used their contacts in the region, including Ibrahim Bah, a Senegalese soldier of fortune who fought with the mujahdeen in Afghanistan in the mid-1980s. He had been trained in Gadaffi’s terrorist training camps in the early 1980s. After fighting in Afghanistan, Bah, returned to Libya, then went to fight with Hezbollah in Lebanon. He returned to Libya in the late 1980s and became the personal instructor of the cadre of West African leaders who would wreak havoc on the region. In 1998 Bah was a general in the RUF as well as Taylor’s chief gatekeeper for diamond dealing. He set up al Qaeda as he did others who could pay the opening price of $50,000 for a piece of the action.¹¹

Since Taylor controlled Liberian immigration, the al Qaeda operatives were able to come and go unhindered and even rented a house in Monrovia.

The picture of al Qaeda operations in West Africa changed toward the end of 2000, when senior al Qaeda operatives arrived in Monrovia to take control of the diamond buying operations. They set up a monopoly arrangement for the purchase of diamonds through Taylor with the RUF and bought as many stones as they could. But here the intention was not to make money, but rather to buy the stones as a way of transferring value from other assets. This was in the months immediately prior to 9/11, when the terrorists appear to have been moving their money out of traceable financial structures into commodities in preparation for the aftermath of the attacks. They had already learned of the need to move money out of the formal, Western banking structure immediately following the 1998 attacks on two U.S. embassies in East Africa. Shortly after those attacks the Clinton administration, seeking a way to punish the Taliban and al Qaeda, ordered a freezing of these groups’ assets. To the surprise of U.S. officials, the move netted some $240 million, mostly in the form of gold on deposit with the U.S. Federal Reserve.¹²

In order to convert their cash assets to an untraceable commodity, the al Qaeda operatives were paying a premium of 10 percent to 20 percent over the going rate for uncut stones, leaving regular buyers without any merchandise.

Telephone records from the Antwerp-based diamond company acting as the agent show numerous calls to Afghanistan, Iraq, Syria and Iran during this period. The last recorded call to Afghanistan was placed Sept. 10, 2001. The available evidence, compiled by the Belgian police, points to al Qaeda purchasing some $19 million worth of RUF diamonds during the eight months prior to 9/11.¹³

A combination of rebel forces and international pressure, along with the guarantee of gilded exile, forced Taylor to seek asylum in Nigeria in August 2003.

There are several lessons that can be learned from the Liberian experience under Taylor because of the potential of a number of states in sub-Saharan Africa—and elsewhere in the world—to follow the Liberian model and give safe haven to terrorists and criminal groups.

One is that terrorist groups are sophisticated in their exploitation of “grey areas” where states are weak, corruption is rampant and the rule of law nonexistent. They have used areas like West Africa for many years to finance their activities, correctly betting that Western intelligence services did not have the capacity, resources or interest to track their activities there.

A second lesson is that terrorist groups in these areas learn from their own mistakes as well as each other. They are adaptable in ways that make them extremely hard to combat. Al Qaeda lost a large amount of cash following the 1998 Embassy bombings, and moved to correct that weakness before the 9/11 attacks. Hezbollah has been using diamonds from West Africa to finance its activities for at least 20 years, perfecting smuggling routes to Europe and Lebanon, developing a network of middle-men and successfully embedding its financial structure within the diamond trade. Al Qaeda operatives plugged into the same network, showing that these groups can and do work together and learn from each other.

A third lesson is that terrorist networks and criminal networks can overlap and function in the environments of failed states. Commodities like diamonds are the coin of choice as the different groups provide different services to governments or rebel groups in exchange for cheap and easy access to commodities.

The conditions that favored al Qaeda, other terrorist groups and criminal organizations in West Africa: corruption; conflicts over natural resources that are little studied or understood; lack of government control in vast areas; the emergence of sophisticated organized criminal networks; all continue to exist. These “failed states” or “stateless regions” are the ideal operating grounds for terrorists and other groups that pose significant threats U.S. national security and the stability of much of Africa.

---

¹ For a detailed discussion of the security threats posed by non-state actors and the spread of stateless areas, see: Richard H. Shultz, Douglas Farah, and Itamara V. Lochard, “Armed Groups: A Tier-One Security Priority,” Institute for National Security Studies, U.S. Air Force Academy, Occasional Paper 57, September 2004. The categories of non-state actors and their definitions are taken from this monograph.
² For a discussion of post-modern states and the state as a criminal enterprise, see Robert Cooper, “Reordering the World: Post-Modern States,” The Foreign Policy Centre, London, April 2002, number 18.
³ Stephen Ellis, The Mask of Anarchy: The Destruction of Liberia and the Religious Dimensions of an African Civil War, (New York, New York University Press, 2001) p. 71
⁴Ibid, pp. 70-75.
⁵ Ibid, p. 155.
⁶ For a broader look at the Lebanese networks and how they operate, see Lansana Gberie, War and Peace in Sierra Leone: Diamonds, Corruption and the Lebanese Connection, The Diamond and Human Securities Project, Occasional Paper 6, (Ottawa, Canada, Partnership Africa-Canada, January 2003.
⁷ Douglas Farah, Blood From Stones: The Secret Financial Network of Terror, (New York, Broadway Books, May 2004) pp. 47-55.
⁸Bout’s activities in Liberia have been extensively documented in several United Nations Panel of Expert reports (December 2000, October 2001, April 2002). For more information on his international network, see the International Consortium of Investigative Journalists, Making a Killing: The Business of War, (Washington, D.C., Public Integrity Books, 2003).
⁹ The Los Angeles Times did the most complete investigation into Bout’s ties to the Taliban. See Lost Angeles Times Staff, “On the Trail of the Man Behind the Taliban’s Air Fleet,” The Los Angeles Times, May 19, 2002, p. A1. Also, see ICIJ, report, op cit.
¹⁰ Confidential author interviews with members of the intelligence community.
¹¹ The full story of the al Qaeda sojourn in Liberia can be found is Blood From Stones, and is drawn from eyewitness interviews and intelligence reports. Some of the supporting documents can be found at www.douglasfarah.com.
¹² Daniel Benjamin and Steven Simon, The Age of Sacred Terror, New York, Random House, 2002, p. 289.
¹³ The $20 million figure and telephone records was derived by the Belgium police, who are investigating the case because of the April 12, 2002 arrest of one of the principal middlemen, Samih Osailly. According to the Belgian examination of the bank records of Osailly and his uncle and senior partner Aziz Nassour, that amount of money was diverted for “suspected terrorist use.” The police also traced the telephone records of a satellite telephone belonging to ASA Diam, the Antwerp-based firm controlled by Nassour that was purchasing the diamonds from Liberia. An English-language summary of the Belgian police report, prepared in 2002 for the FBI, is available at www.douglasfarah.com.