The Challenge of Drugs, International Crime and Terrorism March 2013 BARRY R. McCAFFREY GENERAL, USA (RETIRED)

1. The Challenge of Drugs, International Crime and TerrorismMarch 2013BARRY R. McCAFFREYGENERAL, USA (RETIRED) 211 N. Union Street, Suite 100 Alexandria, VA 22314 brm@mccaffreyassociates.com 703-519-1250

2. Biography of General Barry R. McCaffrey, USA (Ret.) • Barry McCaffrey served in the United States Army for 32 years and retired as a four-star General. At retirement, he was the most highly decorated serving General, having been awarded three Purple Heart medals (wounded in combat three times), two Distinguished Service Crosses (the nation’s second highest award for valor) and two Silver Stars for valor. • For five years after leaving the military, General McCaffrey served as the Director of the White House Office of National Drug Control Policy (ONDCP). Upon leaving government service, he served as the Bradley Distinguished Professor of International Security Studies from 2001-2005; and an Adjunct Professor of International Security Studies from 2006-2010 at the United States Military Academy at West Point, NY. He served as an Associate Professor in the Department of Social Sciences from 1973-1976 teaching American Government and Comparative Politics. • General McCaffrey is a member of the Council on Foreign Relations and the Inter-American Dialogue. He has been elected to the Board of Directors of the National Association of Drug Court Professionals and the Atlantic Council of the United States. He is also Chairman of the Vietnam Veterans Memorial Education Center Advisory Board. He has served on the Board of Directors of several corporations in the engineering design, technology, and services sectors. He is on the Board of Directors of CRC Health Group – the nation’s largest behavioral health care company. • General McCaffrey attended Phillips Academy, Andover, Mass.; and graduated from West Point with a Bachelor of Science degree. He earned a master's degree in American Government from American University and attended the Harvard University National Security Program as well as the Business School Executive Education Program. • In 2007 he was inducted into the US Army Ranger Hall of Fame at the US Army Infantry Center, Ft. Benning, GA. In May 2010, he was honored as a Distinguished Graduate by the West Point Association of Graduates at the United States Military Academy. General McCaffrey is married to Jill Ann McCaffrey. They have three married adult children and six grandchildren. Their son, Colonel Sean McCaffrey, just retired from the Armed Forces after his third combat tour. • Currently, General McCaffrey is President of his own consulting firm based in Alexandria, Virginia www.mccaffreyassociates.com. He also serves as a national security and terrorism analyst for NBC News.

3. The Seven Principle Challenges to Global Security The proliferation of nuclear, biological, and chemical weapons. Regional war among nation states. (4 state sponsors of terrorism). Civil war and failed states. (56,391 total US killed and wounded in Iraq and Afghanistan). International terrorism. (51 Foreign Terrorist Organizations). The global recession and poverty. International crime and drug cartels. Humanitarian crisis/refugees.

4. Global Tools to Shape the International Environment • Diplomacy is under-resourced by Congress. Superb leadership by Secretary of State Clinton (now Secretary of State John Kerry) and Secretary of Defense Panetta (Senator Chuck Hagel nominated). • InternationalDevelopmentAssistance lacks money and international collective leadership. • ArmsControl is more effective than air attacks. • InternationalLawEnforcementCooperation is a major success. (FBI lead Agency) • NonproliferationInitiatives lack a modern framework and appropriate international leadership. • ShapingWorldOpinion is a function of sound policy and collective diplomacy -- not slick public relations. • InternationalCounter-terrorismCovertActionandCollectionPotential has improved enormously with new resources and courageous dedication by the global intelligence community. • UN/NATO/USMilitaryIntervention must be the tool of last resort. When employed it must be violent, focused on clear objectives, and fully integrated with other elements of national power.

5. Protecting America’s critical infrastructure and key assets is a formidable challenge. Our open and technologically complex society presents a huge array of targets. In 2012 we will resource homeland security with $70 billion. The macro numbers are enormous: 87,000 communities; 1,800 federal reservoirs; 2,800 power plants and 104 commercial nuclear power plants; 5,000 airports; 120,000 miles of railroads; 590,000 bridges; 2 million miles of pipeline; 80,000 dams. 85% of our critical infrastructure is privately held. Critical Infrastructure Protection (CIP) must be a public-private enterprise. It is impossible to defend everything against every conceivable threat. We must move beyond gates, guards, and guns. We need to design security features and new technology to protect potentially high-casualty targets. Federal Government support is vital in the transportation sector. Transportation choke points are a particular concern. We must develop a coordinated mechanism for assessing vulnerabilities and evaluating risk mitigation activities. We must defend against chemical, radiological, and biological threats with both active offensive measures overseas – and serious, large-muscle defensive measures in the NORTHCOM theater of operations. Protecting US Critical Infrastructure

6. The U.S. will be attacked by a non-state actor employing radiological devices or biological agents in the coming 25 years. The U.S. is currently under massive, continuing reconnaissance and attack by foreign powers employing cyber warfare. Eventually our nuclear deterrence will lack technical credibility. There is a small probability (5%) of terrorist employment of a low yield nuclear device against an American city in the coming 25 years. There is a modest probability (20%) of employment of nuclear weapons by state actors in the coming 25 years). We need a U.S. Air and Army National Guard force of greatly increased manpower and technology to respond to CONUS WMD attack. (Domestic military universal service). WMD reconnaissance and decontamination. Military police and motorized infantry. Field medical hospitals. Engineer heavy construction. Logistics. USAF C17 and C130 airlift. U.S. Army helicopter lift. U.S. Joint tactical and strategic communications capability. U.S. military command and control (deployable TOC’s). Right of Boom – Where is the Fear?

7. Afghanistan in Peril - 2013 • Afghanistan – 2nd most corrupt nation on earth, and the 5th most impoverished. This war is about 40,000 villages. • President Karzai has become a political disaster and eroded international support for Afghanistan. • The intensity of fighting against the Taliban has increased rapidly. 110 attacks a day in June 2012 -- the most since the war began. US combat forces have decreased to 68,000 troops in Afghanistan (as of 1 October 2012). All US combat forces will be withdrawn by 2014. • Afghanistan is a Narco-state which produced more than 6,400 tons of opium in 2011. (Up 61% over previous year.) 900,000 drug users. Two million people are employed in the opium trade. Taliban and warlords are supported by the $1.4 billion in the 2011 opium production. • The competence and reliability of the Afghan Army and Police are unraveling. 20% of US KIA are caused by Afghan Security Force treachery. • The US has tripled non-military aid to Pakistan to $1.5 billion a year for five years. (Since 2002 total $12.3 billion total aid). The Pakistan Armed Forces are taking selective military offensive action against Taliban in the border regions. The political stability of a nuclear armed Pakistan is uncertain. • Operations in Afghanistan cost $6 billion per month. The war is not supported by two thirds of the American people. • Special Operations Forces and the CIA are brilliant tools of enormous leverage. (Bin Laden Termination)

8. Iran and Oil – What’s at Stake? • Population 75 million. (90% Shi’a Muslims.) (50% Persians.) • 2011 GDP - $482.4 billion. • Iran -- 4th largest oil producer in the world – 4.1 million barrels per day. • Petroleum makes up 80% of all trade exports out of Iran. • 50% of China’s oil imports and 75% of Japanese imports travel through Strait of Hormuz. • In 2011, an average of 28 tanker ships passed through the Strait per day. (Half are empty.) • 87 millions barrels of oil moved through daily: 20% of all oil traded world-wide; 35% of all seaborne-traded oil. • Options for moving oil to markets rapidly being developed for pipeline bypass.

9. Iranian Military Capacity 2013 • 540,000 Active Military including Revolutionary Guards. One million plus reserves. • Giant, obsolete, poorly trained ground combat force with marginal out-of-area offensive punch. (3,300 armored vehicles – 3,200 artillery.) • 20,000 ActiveNavalForces – theeliteservice (3,000+ Marines): • 26 submarines. Three SSK Kilo Attack Subs (Val-Fajr torpedoes – 485 lb. weapon.) • IranianAirPower: • 52,000 Active Air Force. • 525 total aircraft. 312 combat aircraft. • Obsolete, poorly trained force on 14 operational air bases. • AirDefenseCapability: • Weak command and control. Vulnerable to electronic warfare. • SpecialOpsCapability – Islamic Revolutionary Guard Corps: • Quds Force, Hezbollah, Hamas combat multipliers. • Declared Chemical Warfare capabilities. • Probable Biological Warfare capability. • Iran has between 300 and 400 Shahab-3 ground missiles that it can fire at Israel. • Iran will have a dozen nuclear weapons within 5 years.

10. Iranian Nuclear Production Capabilities • Iran is now operating around 11,000 centrifuges. • 16 declared nuclear enrichment facilities. • Have installed more than 2,100 of the roughly 2,800 centrifuges destined for underground site, Fordow. • Stockpiling uranium – enriched to 3.5% and 20% purity. • According to the U.N. International Atomic Energy Agency – as of August 2012, Iran has produced 190kg of higher-grade enriched uranium since 2010 (up from 145kg in May 2012). • Despite international sanctions, Iran continues to acquire supplies from abroad with the possibility of producing special metals domestically. • Iran will have a nuclear capability of a dozen weapons within 60 months with the missile and fighter delivery systems required to strike targets in Israel, the GCC states, and regional US military forces. Graph from The New York Times – August 30, 2012

11. The Gulf Confrontation: Conclusions • Iran has the naval and air power (mines, submarines, patrol/missile boats) and shore-based anti-ship missiles to close Gulf oil deliveries and strike Saudi/GCC petroleum facilities. • US air and naval power could destroy Iranian air and naval power, shore-based missile batteries, and nuclear production facilities only with a sustained attack campaign of several months duration requiring Saudi and GCC basing support. The Gulf Arab states would support this operation. • Iran has significant economic and political internal problems which when compressed by US Congressional economic sanctions may cause it to implode at some point. Iran is very unlikely to forsake its nuclear ambitions. • The Israelis lack any credible conventional military power to counter the Iranian nuclear threat. Their forced option--- if convinced that Iranian nuclear attack was impending ---would be pre-emptive nuclear strike. • There is a significant chance of Iranian miscalculation resulting in major military confrontation in the Gulf in the coming 36 months.

12. The Drug Crisis in Mexico • Population of 113 million people. (60 million in the middle class). • The 12th largest economy in the world. • 7th largest global crude oil exporter (32% of all Mexican government revenue). • 95% of all the cocaine which enters the US comes through Mexico. • Mexico is also a major producer and principal supplier to the U.S. market of heroin (19,500 hectares of opium), methamphetamine (more than 30 metric tons of methamphetamines seized in the US 2007-2011.), and marijuana (17,500 hectares). • Cartels control as many as 980 local governments in Mexico -- and are the dominant criminal presence in more than 230 US cities. (From the US Department of Justice--National Intelligence Center.) • Levels of violence in Mexico are extreme. (52,000 murdered; 2,000+ members of Security Forces since 2006). • Drug trade generates approximately 3-4% of Mexico’s $1.5 trillion GDP – totaling almost $30 billion and employing over half a million people – about the same as Foreign Direct Investment.

13. 2011 global GDP approximately $79.39 trillion U.S. (population 313 million) contributed over 20% ($15+ trillion) China (population 1.3 billion) contributed approximately 15% ($11.3 trillion) Giant U.S. GDP: Brazil GDP = Florida + Illinois GDP Russia GDP = Texas GDP India GDP = ½ of California GDP 2012 US consumes double the amount of oil a day as China, and five times more than Russia (18.7 million barrels of oil a day) U.S. Defense spending 4.7% of GDP. (Includes war direct expenditures). Operations in Iraq & Afghanistan have cost the U.S. $1.2 trillion, with 94% of funds going to DoD. U.S. is second leading global exporter. (China $1.89 trillion; Germany $1.4 trillion; U.S. $1.51 trillion -- 2011). U.S. is still the leading global manufacturing power. (21% of all global manufacturing output. America remains #1 manufacturing country out-producing #2 China by more than 40%). U.S. is the world’s leading single-country exporter of agricultural products. ($136.3 billion in 2011). The U.S. still has dominant efficiencies from the NAFTA market place. The Powerful US Global Economy

14. Putting a Value on America Thousands Trillions **All data retrieved from the CIA World Fact Book - 2012

15. 2013-2016 National Security Challenges to America • #1 RISK -- WITHDRAWALFROMAFGHANISTAN: • 68,000 US forces in NATO-ISAF are 870 miles from the open sea--- and the US Navy. • Pakistan safe transit essential to logistics survival of the force. (60,000 vehicles; 100,000 conex containers). • 2014 declared withdrawal shapes entire political/military calculus of the Karzai government and the Taliban. • #2 RISK – Aggression by a nuclear armed Iran and war in the Gulf. • #3 RISK – North Korean transition fails. Military/nuclear confrontation with US, South Korea, Japan. • #4 RISK – Pakistan implodes – General Kayani and the Pak Army/ISI lose control – security of 90-110 nuclear weapons at risk. • #5 RISK – Chavez dies in Venezuela – Fidel Castro dies in Cuba – violent regime change takes place. • #6 RISK – The newly elected Mexican Administration of President Peña Nieto might come to an agreement with the six drug cartels. Rule of law collapses.

16. The American People: A Crisis of Confidence in Institutions 75% US Military 56% Police 44% Religion 41% Medical System 37% Supreme Court 37% President 29% Public Schools 25% Newspapers 21% Television news 21% Banks 13% Congress 0% 40% 60% 80% 20% Source: The Gallup Organization, Poll dated June 7-10, 2012