Munich Anniversary Blog Burst: Terror, Inc. (Part 1/2)

The following article is part of a blog burst - a simultaneous and cross-linked posting of many blogs on the same theme. This blog burst commemorates the 30th anniversary of the Munich Olympics Massacre, which began in the dawn hour of September 5th, 1972. Go to The Index of the Munich Massacre Blogburst to find links to all the other articles.

Indeed, the most significant development for terrorism in the 1970s may be the most unremarked: despite their leftist origins, the terrorist groups that survived and prospered often did so because they became self-sustaining businesses.

Darwinism is such a bitch.

-- Sponsors & Sugar Daddies --

The gale-force winds of change stirred up in 1968 spawned a wide variety of terrorist groups on the radical left, from Italy's Red Brigades to Germany's Baader-Meinhof Gang (who would ironically achieve its most enduring fame several thousand miles away, in a place called Entebbe). They joined a stable of already-established organizations, from the Basque ETA to Arafat's PLO.

Despite the romantic image of Spartan freedom-fighters, running a terrorist organization isn't cheap. Salaries, safe houses, communications, clandestine shipping of men and materials, forged documents, and of course the weapons and equipment necessary for operations… it all adds up in a hurry. Local patrons like Giangiacomo Feltrinelli and other "silver spoon Marxists" could help in the initial stages. Criminal activities like extortion, bank robberies, et. al. could fill in some of the rest. Once a terrorist movement begins the climb beyond nuisance level, however, these sources are usually inadequate.

Enter the state sponsor.

State sponsorship from the Eastern Bloc and Arab countries like Libya, Syria et. al. greased the wheels for organizations around the world, paid for arms and manpower, and provided the interlocking infrastructure needed for continued operations. Locked in mortal combat with their enemies in the West and driven by an ideology that had emphasized armed insurrection from the very beginning, the USSR and its proxies were natural allies of terrorists and guerrillas the world over. The Arab states, meanwhile, had been building an infrastructure to support the Palestine Liberation Organization (PLO) since their formal creation of that group at the Jerusalem [JK: recall that Jerusalem was Jordanian at the time] Arab League summit in 1964. Many were also Soviet clients, driven either by Nasserite visions of Arab state socialism or by geopolitical calculus toward the Soviet orbit.

For a while, this seemed like an ideal solution. Resources. Deniability. Cross-fertilization. All were suddenly available at need to groups with the right background and revolutionary credentials. As a result, terrorism literally exploded onto the geopolitical scene.

Still, state sponsorship is a mixed blessing. For one thing, they always attach conditions to their aid. Often, too, it's less than expected – a consistent PLO complaint with respect to the USSR, for instance.

Worst of all, state sponsors can be turned.

Internal politics and the playing of faction against faction by state supporters had already made state sponsorship an unreliable blessing for aspiring terrorist leaders. In addition, growing recognition of state sponsorship as an important cog in the mechanics of terrorism began to produce serious countermeasures by the early 1980s. While terrorist groups were dispersed and without high-value assets that lent themselves to attack, the same was not true of their sponsors. Efforts like Operation El Dorado Canyon ended up having far-reaching effects on Libya's support for terrorism, for instance, and the collapse of the Soviet Union removed many of "The Terror Network's" key supports.

Some survivors had state sponsors of their own who were unaffected by the Soviet Union's collapse (i.e. Iran). Most of them, however, share a different characteristic: alternative sources of income. As is so often the case in the annals of terrorism, the "Palestinians" created the template and exemplar.

-- The PLO Model --

It was a happy coincidence that the post-1973 Mideast oil revenue boom occurred just as the PLO's need for capital was becoming acute.

Reeling from the disaster of 'Black September' and the expulsion of over 150,000 Lebanese from Jordan, in 1970 the PLO set up a front company named SAMED. It would provide employment opportunities for Palestinians in the Lebanon refugee camps, and as a commercial and manufacturing entity it would act as the economic arm of the PLO's fighting forces. SAMED first used cheap labor from Palestinian refugee camps in Lebanon and expanded into Arab and African states and communist Eastern Europe with a diverse portfolio of textiles, factories, oil refineries and other businesses. Eventually, it acquired large shares in airlines (such as Maldive Airways, Caledonian Airlines, Air Zimbabwe and Air Kenya) and duty-free shops (at Nairobi's Kenyatta Airport, for example), thus providing the PLO with the means to move arms and operatives inconspicuously.

Of course, SAMED is not the PLO's only source of income. By the time the 1975 Lebanese civil war started, James Adams ("The Financing of Terror" c.1986) estimates that over $1 million per day flowed into Lebanese banks from Arab supporters and foreign assets the PLO had made liquid. Indeed, bank estimates, backed by Israeli sources, suggest that more than $400 million was transferred out of Lebanon in a single week during the 1982 war with Israel.

These funds and their accompanying investments are administered by the Palestine National Fund (PNF), whose assets were generally estimated at $2-5 billion by 1986. An impressive infrastructure of dispersed computers with multiple backups and disaster-recovery plans monitors these investments, and professional financial management administers them. The PNF's financial performance over the years has been equally impressive, and Arafat's control over it is one of the principal reasons for his longevity.

Others have taken notice of such success. Even if they’ve applied it with their own twists.