Secure digital communications and our financial system are cornerstones of the modern economy. The recent Edward Snowden leaks – where the US National Security Agency tapped into the server of IT firms to access encrypted internet communications – should not only be seen as a privacy issue, but also a serious security matter.
Intelligence agencies have to be able to combat enemies and foil terrorist attacks. But how do we ensure the activities of these agencies are securely framed within long-term strategic objectives and do not inadvertently contribute to longer term systemic threats such as illicit trade?
For example, targeted cyberattacks are increasing, as is their level of sophistication. By intentionally creating vulnerabilities – called backdoors – intelligence agencies can intercept encrypted communication, which can be used to monitor suspected terrorists and other enemies. However, this type of system comes at a cost. Experts claim that they are more difficult to design securely. If their security is compromised, there is a much higher risk of huge leaks of confidential information.
Financial transactions are another sensitive area where there are conflicts of interest between “operational” and “strategic” security interests. The United Nations Office for Drugs and Crime estimated that 2.7% of global GDP was laundered in 2009. The underlying criminal activities that depend on these laundering operations keep millions addicted to narcotics, result in hundreds of thousands dying due to fake medication, undermine border security, corrupt public officials, make weaponry accessible to terrorists and inhibit economic development.
The intelligence agencies of most countries need to make pay-offs for information, set up front operations that have to be financed and engage in a host of activities that require transactions that cannot be traced. In yet another Snowden leak it was revealed that the annual “black budget” of the US national intelligence programme exceeds $50 billion. A small part of this budget, as well as the intelligence budgets of other states, is processed through a chain of transactions, so as to make their origins untraceable. This process is very similar to how criminals launder their profits. As the intelligence agencies depend upon the very same methodology used by the criminals, there is a potential systemic resistance to effective reform against money laundering.
In the secret world of black operations, the hand that pulls the strings has to remain hidden. Illicit markets for fake documentation, weapons, money laundering and other criminal services empower the networks that we are fighting. Yet the intelligence agencies need and feed those very same markets in their black operations to fight criminal networks and other enemies.
The private sector and civil society must be fully informed and engaged participants in intelligence strategies. Take the example of backdoors. Legitimate backdoors designed for use by law enforcement agencies with the cooperation of service providers are much safer than covert backdoors inserted for intelligence purposes. Constructive engagement from the private sector and civil society is a prerequisite to optimize the intelligence efforts needed to ensure our security, whilst minimizing the vulnerabilities to our communications and financial systems.
Author: Karl Lallerstedt is co-founder of Black Market Watch. He is an alumnus of the World Economic Forum’s Global Agenda Councils, who are meeting this week in Abu Dhabi.
Image: A hand is seen in front of a computer screen in Berlin REUTERS/Pawel Kopczynski