October 15, 2001
The Shadow CIA
A private intelligence service predicts more terror attacks -- and victory for the U.S.
By JONATHAN R. LAING
For most Americans, last week's media diet of American war planes blasting off from carriers into the inky blackness of the Arabian Sea, paired with the upbeat assessments of the air campaign in Afghanistan by the Bush Administration, bolstered spirits. The waiting was at last over and the battle against global terrorism had finally been joined.
All of this did little to alter the air of cool detachment of the operatives at Stratfor, a private, for-profit intelligence outfit that operates out of nondescript offices in Austin, Texas. They continued their routine of pumping out daily online analyses on a variety of topics from the possible outcomes of the Afghanistan campaign -- victory could prove as difficult for the U.S. to manage as the effort to unseat the Taliban Militia and eliminate Osama bin Laden's al Qaeda terrorist network -- to the likelihood of future major terrorist attacks in the U.S. -- almost a certainty, given al Qaeda's decentralized structure and need to respond to the U.S. attack. Patriotic tub-thumping and easy dismissal of future perils have little place in the rarefied atmosphere of Stratfor. Horrific acts of terrorism like the assaults of September 11 become mere "attacks" in the purposely neutral lexicon of Stratfor analysts.
Stratfor's views should not be taken lightly. The brainchild of a 54-year-old former political-science professor named George Friedman, the company boasts among its clients a number of Fortune 500 concerns, which pay as much as $40,000 for an annual subscription to Stratfor's potpourri of general political, economic and security analysis from regions all over the world in addition to current hot spots such as Afghanistan, Indonesia and Macedonia. Or the companies may hire Stratfor for specific intelligence missions to garner insights into potential customers and competitors.
A private quasi-CIA, Stratfor has enjoyed an increasing vogue in recent years as a result of the heady forecasts and many news breaks provided mostly free on its Website, www.stratfor.com1. More than 100,000 subscribers receive, also free, its global intelligence update by e-mail five days a week.
The Website has a huge underground following, dating back to 1999 Kosovo War. Stratfor was miles ahead of CNN and all the other media, for that matter, reporting the location of bomb strikes, NATO's destruction of the Chinese Embassy in Belgrade -- "We showed that it wasn't a mistake as result of an out-of-date map liked NATO first claimed but what was likely done on purpose because of Chinese involvement with the Serb war effort," says Friedman -- and the impossibility of NATO's mounting a ground attack against Serbia despite feints in that direction late in the bombing campaign. Traffic on the site has exploded since the September 11 attacks, to over 2 1/2 million page views a week for Stratfor's daily analyses and situation reports.
Stratfor claims to glean nearly all of its information from publicly available, online sources such as news-oriented Websites and wire services around the world, unclassified government studies, newsgroup chat lines and various reliable informants. Stratfor's several dozen analysts and writers are adept at mining the depths of the Internet using sophisticated proprietary search and retrieval methods to separate the ore of useful intelligence from the slag of useless information, opinion, surmise, disinformation and just plain fantasy that exists in the cyber world. "The CIA has to spend thousands of dollars a month to have an agent in, say, Teheran or Peshawar to monitor local newspapers or political developments that we can find on the Internet within a few hours," Friedman claims to a visitor at Stratfor's downtown Austin offices.
Stratfor also benefits from cyber blowback. Once it begins to cover a crisis closely, interested visitors soon become e-mail informants on the ground all over the world, apprising the company of the latest developments. Thus it was informed within minutes of the latest air strikes in the Kosovo campaign by Serbs, Albanians and Kosovars living in the areas under seige. Friedman flipped Barron's a sheaf of e-mail messages from the night before with the names of the senders carefully inked out. One from Pakistan, for example, came from a local observer with obviously detailed knowledge of the volatile ethnic politics of the country and the influence of Islamic militants in the armed forces. His conclusion: President Musharraf would be able to survive either revolution or coup in providing limited cooperation to the U.S. because of the absolute loyalty of his key line army units.
Outfitting bombers for an air attack.
Of course, true intelligence requires proper analysis of an avalanche of available information. For this Stratfor relies on its staff of twenty-somethings, whom Friedman recruits for their ingenuity, moxie and intellectual unconventionality rather than academic credentials. "We want zero-based thinking and Zen detachment from our people," Friedman says. "That means parking faddish academic beliefs and ideological preconceptions at the door."
Nonetheless, the so-called ferrets and gophers at Stratfor include interesting capabilities including working knowledge of languages such as Arabic, Czech, Russian, Bulgarian, Korean and Hebrew along with more mainstream tongues. Presiding over the intelligence operation is a former Russian army officer with experience in private intelligence work, introduced to a visitor as simply Viktor. Nor are any other last names proffered during a morning meeting of the other Stratfor analysts.
Stratfor's intellectual high priest, Friedman, boasts a doctorate in government from Cornell and taught political science at several institutions, including Louisiana State University, before veering off into private-enterprise intelligence analysis. He has been a frequent consultant to the Department of Defense and the likes of the Rand Corp., though he has tried to stay away from inside-the- Beltway thinking throughout his career.
He counts himself a disciple of political thinkers Leo Strauss and Hans Morgenthau. "I, like they, believe in the balance of power and the fact that national behavior can be predicted by rational analysis of nation-states following the dictates of their political self-interest," he remarks.
Stratfor's record has had its shares of misses. Early on, it reported that the hijacked airliner that crashed near Pittsburgh on September 11 might have been shot down by U.S. F16s. But its hits have materially outweighed its misses. Stratfor was the first observer to predict that former Philippine President Estrada wouldn't complete his term in office. The firm predicted an economic collapse in Asia, long before Asian Flu hit with a vengeance in the fall of 1997. And early on, Stratfor identified Vladimir Putin as a comer in Russian politics who would exploit nationalism and his close ties with the Russian intelligence and military establishment to win election and spark a revanchist attempt to reverse the contraction in Russian territorial hegemony.
Beating Osama bin Laden is just the beginning.
These days, Stratfor's attention is obviously riveted on the geopolitical aftermath of the September 11 attacks and the war in Afghanistan. The views of Stratfor and Friedman are unconventional, to say the least. Weeks before Bush Administration figures warned of the almost certainty of future terrorist attacks on the U.S., Stratfor was sounding that alarm. Friedman now feels that some kind of counterpunch will come even sooner because of the attack on Afghanistan. "We think that bin Laden may have been sending some kind of coded message to operatives in his recent statement broadcast around the world," he tells Barron's. "The government obviously thinks so, too, with all sorts of spooky things going on like Vice President Cheney being moved to an undisclosed location and the kind of security warnings now coming out."
Finding bin Laden's cells before they strike will be difficult. According to Friedman, bin Laden cleverly structured al Qaeda into separate self-contained attack groups, or cells, rigidly compartmentalized so as to avoid being compromised by the roll-up and elimination of other cells. Friedman expands: "He obviously learned from the failures of organizations like the Baader-Meinhof Gang in Germany, Red Brigades in Italy, Red Army in Japan and Black September in the Middle East in setting up al Qaeda. The latter operates on a trans-national basis without any dependence on the foreign policy goals or intelligence cooperation of any single nation. Each cell has its own command and control structure and is able to select and carry out its own mission even if bin Laden and the center of al Qaeda is destroyed. Contact with the center is kept intermittent to escape any detection."
The hundreds of detentions that have occurred in the U.S., Europe, and the Far East in the wake of the World Trade Center and Pentagon bombings have been impressive. Yet Friedman warns that the arrest of "every Arab in the U.S. with outstanding parking tickets or expired student visa" isn't likely to capture the additional "sleeper" cells targeting the continental U.S. He points to the fact that dozens of arrests made in previous alleged al Qaeda operations, such as the 1998 embassy bombings in Kenya and Tanzania, the foiled Millennium Day attack supposedly planned at Los Angeles International Airport and the bloody attack on the USS Cole in Yemen last fall, resulted in no betrayal of the September 11 operation.
According to press accounts, the recent arrests in Europe as a result of global dragnet cast after the WTC bombing have uncovered al Qaeda plans to bomb the U.S. Embassy in Paris and landmarks in Paris and London. Bin Laden has also hinted of future airplane hijackings. Moreover, aggressive efforts by U.S. investigators have uncovered a profusion of individuals with connections to the dead hijackers. Many of the clues linking the others to the events of September 11 were supplied by the hijackers themselves in phone lists, flight manuals and other compromising materials left behind in rented rooms and rental cars.
There may be less than meets the eye to this investigative cornucopia, however. Friedman surmises that this lack of tradecraft on the part of the hijackers may have been intentional. Why else would one of the hijacking teams at Boston's Logan Airport have called unnecessary attention to itself and its rental car by getting into an argument over a parking spot in the car-return area? It's as if they wanted to ensure that their car, loaded with the Koran, religious materials and other evidence, would be quickly found by investigators.
He advances a number of theories to explain the hijackers' apparent sloppiness. First, they wanted to leave a chilling memorial to the world of the reach of bin Laden's jihad. Likewise, once a cell's operation is completed, supporters and ground crew of the mission are willing to sacrifice themselves like the bombers. They are used up and thus expendable. Many readily talk to investigators without much prompting. What better way, asks Friedman, is there to gain publicity for the movement, overburden the investigative efforts and justice systems of the Free World and, perhaps, spread disinformation and false leads about future operations? "It's ridiculous to think that al Qaeda cell members who are ready to die for the movement just cave in and give up names of fellow operatives after a few hours of interrogation," Friedman contends.
Several circumstances point to the fact that al Qaeda has already additional cells in place in the U.S. with requisite funding, says Friedman. For one thing, it would be unlikely that al Qaeda would have mounted such an ambitious, high-risk attack as the World Trade Center bombing without additional follow-on operations in mind. Also, the organization had to know that the uproar that would attend the September 11 attack whether it succeeded or failed would lead to dramatically heightened security in the U.S.
When these attacks may come, if at all, is anybody's guess. Friedman points out that past alleged al Qaeda operations have differed substantially in terms of targets, geographic locations and the method of delivering the explosions. Generally six months to a year elapse between operations, perhaps to take advantage of an inevitable relaxation in vigilance. Lots of false signals are put out to, in Friedman's words, "pulse the system" with false alarms. "Generally the cells only activate themselves and begin final preparations for their mission once the previous cell acts or is foiled by investigators," he asserts. "This time, however, any follow-up cell in the U.S. might move faster to provide a counterpunch to the U.S. retaliation or to act quickly if arrest seems imminent. The latter desire to use-it-or-lose-it might impel action."
The discovery of anthrax in Florida and New York last week has fanned understandable hysteria about the possibility of terrorist attacks involving the use of chemical or biological weapons, hazardous waste spills or even low-level nuclear devices. "The anthrax attack is certainly scary because we have no idea of what its source was or how it was planted," he says. Yet Friedman reasons that al Qaeda has little incentive to abandon its more conventional methods in favor of more technically challenging delivery mechanisms, given the deadly effectiveness of its past efforts.
The September 11 campaign enjoyed a success beyond the wildest dreams of the perpetrators. It single-handedly crippled the U.S. airline industry, shut down the financial markets for four days, robbed America's economy of a full week of production, created $30 billion or more in direct losses. More sinister, he believes, is the long-term impact the attacks are likely to have on U.S. productivity. Wasteful spending on enhanced security, fattened transportation costs and the abandonment of just-in-time inventory supply in favor of just-in-case redundancies will play hob with New Era efficiency.
In Friedman's view, future terrorist operations on the U.S. would likely involve grand-scale attacks on the nation's infrastructure. September 11 has only raised the expectations of the possible. Another such attack would not only wreak serious damage on the American economy, but also prove profoundly demoralizing to a population already in a state of high anxiety.
Likely targets could be nuclear power plants, petrochemical installations, transportation facilities such as ports and major bridges across the Mississippi, high-value manufacturing plants such as microchip fabricators, the server facilities of major Internet backbone companies and government computer centers such as the Social Security headquarters in Maryland.
"Imagine if somebody were able to blow up one of the major oil refineries along the Houston Ship Channel, where a substantial portion of the country's refinery capacity is located," Friedman says. "The entire row of refineries could blow like Chinese firecrackers, and the resulting pall cast over Houston would make the metro area unlivable for a significant period of time."
Far fetched, perhaps. But, according to Friedman, Houston has certain attractive features for al Qaeda. The city has a fairly large Middle Eastern population to provide cover for any attackers. Likewise, several airlines provide daily direct flights from Houston to the Middle East. And in any event, such doomsday scenarios aren't bad for Stratfor's corporate consulting business.
Nor does Friedman dismiss the possibility of al Qaeda detonating car or truck bombs in U.S. residential suburbs. The idea would be to undermine Americans' already shaken sense of security and confidence in government, bringing Beirut or Tel Aviv to the local shopping mall. Bin Laden has recently hinted at such an effort.
In the immediate aftermath of the bombings, Stratfor was quick to make several prescient forecasts. Early on, it discounted the chances of the U.S. mounting a major ground assault on Afghanistan. In the group's judgment, the Pentagon and White House both had rejected the strategy in light of the sorry fate the Russians had suffered there during its decade-long attempt to pacify the fractious nation. Stratfor's detailed analysis of U.S. troop movements into theater, as well as the limited call-up of reservists, also confirmed this inference. Likewise, the firm was quick to predict, in a study done for a major corporate client, that oil prices would plummet rather than rise, even with the large American military buildup in both the Persian Gulf and Indian Ocean. Any near-term military response would more than likely bypass oil-rich Iraq, Stratfor concluded.
And oil prices should continue to languish for the next six months, at least, according to Stratfor. The global recession, buildup in inventories of oil and gas and the refusal of non-OPEC states to cut their production will sabotage the attempt by OPEC to shore up prices by production cuts. "The Russians are contributing most to the glut by ramping up their production to its highest level since the Soviet breakup," Friedman asserts. "Besides, the OPEC producers would bankrupt themselves if they cut production sufficiently to get crude oil prices back up to their minimum price-band level of $25 a barrel."
Stratfor also foresaw that the U.S. and allies such as Britain would end up using bases in former Soviet republics in Central Asia such as Uzbekistan and Tajikistan for troop deployment and air support for the Afghanistan campaign. According to their analysis, Russian President Putin would be only too eager to make the bases of these Commonwealth of Independent States available, as well as Russian intelligence, logistical and even military support. This was a no-brainer for students of balance-of-power calculations like Friedman.
Putin's support won't come cheap, Friedman is quick to add. Moscow wants a free rein to suppress the Chechens free of Western criticism in its bloody civil war, recognition by the West of Russia's sphere of influence in Central Asia, no NATO expansion to the Baltic states or Ukraine, no national missile-defense program, more Western investment and trade with Russia and a bigger role for Russia in international political affairs.
So far, the Afghanistan campaign is going well, according to Friedman. The U.S. and British aerial assault has appeared to knock out the Taliban's primitive air defense, communications and command and control systems. The U.S.-backed Northern Alliance is starting to push south toward the capital of Kabul. Stratfor informants in Moscow report that Soviet armor and military advisers are moving into the Northern Alliance area in the far northeast of Afghanistan to assist the ragtag rebel force in the offensive. It's even possible that Kabul could fall before next month, when the Muslim holy period of Ramadan and the onset of winter will halt much of the military activity.
Moreover, Friedman has little doubt that the U.S. will be successful in persuading a number of tribal chieftains to defect from the Taliban militia. He cites reports that late last week some 40 unit commanders of the Taliban switched sides with 1,200 troops and now control the only road connecting the north to the south of the nation. The U.S. aerial bombardment was partly designed to impress such fence sitters of U.S. might and resolve. Also, says Friedman, don't discount the power of venality in determining ultimate loyalties -- not in a country like Afghanistan, where the three primary pillars of its economy are opium, smuggling and ripping off international aid programs. U.S. Special Forces and intelligence operatives can win the hearts and minds of key tribal chiefs with modest gifts of money and military equipment.
Friedman thinks that the U.S. and its allies will be successful in toppling the Taliban and destroying al Qaeda, though bad weather may delay ultimate victory until spring. The Taliban and al Qaeda are inextricably linked, Friedman asserts. The best soldiers in the Taliban Militia are several thousand Saudis and other transnationals trained and supported by bin Laden. Also, bin Laden is literally part of the Taliban family by virtue of his marriage to a daughter of the Taliban's supreme leader, Mullah Mohammed Omar.
Yet Stratfor typically spins out alternate scenarios of what could go wrong. Friedman worries, for example, that the Taliban might decide to abandon their defense of Afghanistan's major cities and disperse into the mountains to mount a guerrilla war against the U.S. and its indigenous proxies. The Taliban, after all, have the luxury of time. A porous border with Pakistan would afford them both sanctuary and resupply. Then the Taliban could dictate the pace of the war and blunt overwhelming U.S. air superiority. And the U.S. dream of fighting a commando, special-operations type of war in Afghanistan would go out the window.
Friedman likewise avers that winning in Afghanistan could be almost as traumatic for America as losing. Almost every faction that would be part of any postwar coalition government, whether Pushtun, Tajik, Hazara or Uzbek, has longstanding conflicts with every ethnic group. And treachery is the mother's milk of Afghanistan. One Stratfor report describes an Uzbek general who in 1997 switched to the Taliban side and back again in the space of seven days, killing hundreds of combatants and taking many more prisoners before each switch. Even establishing a U.N. protectorate or some other international instrumentality in Afghanistan would face insuperable barriers. "Think Somalia rather than Bosnia when you think of Afghanistan," Friedman comments acidly.
Apocalyptic thinking abounds in al Qaeda. According to Friedman, bin Laden is likely resigned to a U.S. victory in Afghanistan and even his own death. "If we kill him, his corpse should be displayed and photographed like Che Guevara's was so that no legends develop that he remains live and well roaming the mountains of Afghanistan like some latter-day Saladin," Friedman insists.
But bin Laden's end game goes far beyond trying to bog the U.S. down in the quagmire of Afghanistan. Al Qaeda hopes that the U.S.'s aggressive response in Afghanistan will galvanize the Islamic militants to overthrow governments such as those of Pakistan, Indonesia and Egypt and establish Islamic republics. Friedman deems these three nations vulnerable because of large, militant underclasses, endemic poverty, extreme maldistribution of income and tensions between secular and religious forces. The U.S. would have no choice but to get involved should any of these governments fall, given the countries' size and strategic importance. It's al Qaeda's fondest hope that the effort would prove so costly that the U.S. would ultimately completely withdraw from the Islamic world.
But that's a topic for future Stratfor intelligence reports. At the moment, the company's clients have quite enough to worry about with anthrax, conventional terrorism and Afghanistan.
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