The U.S. intelligence community is near completion of a major assessment of the national security threat posed by international organized crime, according to administration officials and experts.

The National Intelligence Estimate, which could be finished as soon as January, was conceived more than two years ago to address the dangers posed by Eurasian criminal groups’ suspected infiltration of energy and other strategic markets.

But its focus broadened over time to include a wide swath of criminal syndicates and issues, from drug-trafficking by Mexican cartels to the relationship between terrorism and organized crime, the officials and experts said.

“Globalization has done great things for organized commerce, but it’s also helped organized criminal groups to advance as well,” said one senior Justice Department official, who spoke in general terms about the threat.

The threat was underscored in recent weeks, as reports emerged of an FBI investigation into a major cyberattack on Citibank Inc., which Citibank denies. And the Justice Department announced drug charges in New York against alleged Al-Qaeda associates arrested in Ghana during a Drug Enforcement Administration sting.

NIEs are produced under a classified process and carry the full weight of the U.S. intelligence community’s judgment. The existence of the NIE on international organized crime has not been previously reported.

The assessments are compiled by the National Intelligence Council, a research arm of intelligence community that reports directly to Director of National Intelligence Dennis Blair. The NIC incorporates in its estimates expertise from inside and outside of the federal government.

The estimate’s focus expanded over time as more agencies sought to reap the benefits of inclusion, including increased funding and more say in policy direction. In this case, the departments of Homeland Security, Justice, State and Treasury contributed to the NIE, the officials said. The National Intelligence Council is expected to release a public overview of the threat assessment, increasing its visibility and impact, experts say.

“I think it’s going to open this field up to some serious academic research and funding,” said Louise Shelley, director of the Terrorism, Transnational Crime and Corruption Center at George Mason University. “We’re going to be focusing on a whole range of issues that we haven’t thought enough about, and connecting the dots on other issues.”

A sensitive subject: Russia

One effect of broadening the NIE is that it allows the Obama administration to sidestep the diplomatically sensitive issue of Russia, where authorities have long suspected that the tentacles of organized crime reach into the government.

In 2008, then-Attorney General Michael Mukasey gave a speech that identified as the top security threat organized criminals who control significant positions in the global energy and strategic materials markets, threatening U.S. geopolitical interests.

He never mentioned Russia. But as an example, Mukasey pointed to Semion Mogilevich, who is thought to be at the pinnacle of Russian organized crime and is said to have influence over large portions of the natural gas industry in former Soviet-bloc states.  (Mogilevich is wanted in the U.S. on racketeering charges, and the FBI recently placed him on its Top Ten Most Wanted list.)

Russian control of energy supplies and transport networks is a security issue for the European Union, which relies heavily on Russian natural gas. But Russia controls the spigot for pipelines that service Central and Western Europe through the former Soviet state of Ukraine. Twice since 2006, Russia has cut off gas to Ukraine in payment disputes, affecting EU supplies.

Of further concern to intelligence analysts is the murky ownership of some middleman companies crucial to European energy supplies.

In 2006, the Wall Street Journal reported that the Justice Department’s organized crime unit was investigating the ownership of a Ukrainian energy trading company named Rosukrenergo AG, half owned by Russian state company OAO Gazprom.

In response to U.S. concerns about who ultimately controlled Rosukrenergo, company representatives met with the DOJ in Washington to disclose the ownership stake of a Ukrainian businessmen with ties to Mogilevich – the suspected organized crime figure on the FBI Most Wanted list, the Wall Street Journal reported.

There’s also the case of  William Browder, a U.S. native and British citizen who founded Hermitage Capital Management, once the largest foreign investment fund in Russia but now accused in Russian courts of tax evasion.

Hermitage has denied evading taxes. It has countered with allegations that a government-affiliated “criminal enterprise” siphoned off $230 million in taxes paid by Hermitage units. Browder has retained the law firm of former Attorney General John Ashcroft to investigate.

Hermitage has filed an application for judicial assistance in the Southern District of New York federal court, asking the U.S. to compel access to information it says it needs to defend itself in Russia.

In a recent declaration filed in the case, Neil Mickelswaithe, a British solicitor and outside counsel to Hermitage, said the fund is the victim of a “criminal enterprise” in Russia spanning senior offices of the Russian Interior Ministry, the Russian Federal Security Service (the successor to the KGB), senior Russian tax officers, and certain Russian court judges and “numerous private individuals in Russia, some of whom have previous criminal convictions.”

U.S. authorities have long suspected billionaire Oleg Deripaska, one of Russia’s most powerful tycoons, of having ties to Russian organized crime. Deripaska, who made his fortune in the post-Soviet aluminum industry, is close to Russian Prime Minister Vladimir Putin, often traveling with him abroad. He presides over a business empire that spans metals, finance and construction.

Deripaska, who has denied any ties to organized crime, had been barred entry to the U.S. for years. But recently, the FBI made secret arrangements to allow him into the country to seek his assistance in an ongoing criminal probe, the Wall Street Journal reported. In two visits to the U.S. this year, Deripaska also met with executives of Morgan Stanley and Goldman Sachs Group Co.

Putin and other Russian officials have raised the visa issue with their U.S. counterparts, and in the past Deripaska hired high-powered Washington lobbyists — including former Senate Majority Leader Bob Dole (R-Kan.) — to make his case for entry into the U.S.

New approach more measured

The Obama administration, in contrast, has been careful not single out any country or group. Deputy Attorney General David Ogden, in a speech and in interviews given at the Interpol General Assembly in October, noted continuing threats posed by Mexican drug cartels, South Asian heroin-trafficking syndicates, and traditional crime families from Asia and Eastern Europe.

Ogden made no mention of strategic markets. The apparent shift in message is reflected in the intelligence estimate, officials said.

Under Mukasey, the Justice Department pushed for a finished product before President George W. Bush left office. After a draft NIE was circulated late in the Bush administration, officials in the departments of Homeland Security, State, Treasury advocated a broader sweep, officials said. The recommendations were ultimately passed on to the Obama administration.

“When the Justice Department first started working on the estimate, there was much more focus on energy issues,” said George Mason’s Shelley, who was first contacted in March by government officials involved in drafting the estimate.

“They asked me what I thought was wrong with it, and I told them they needed to broaden the scope and the geographical range. There’s a tendency to stovepipe too much. When you broaden the scope, you are able to see the diversity of the problem and the relationship among
the different aspects of transnational crime,” she said.

The Obama administration has been actively highlighting fronts in the battle against international organized crime.

In November, the State Department and Immigration and Customs Enforcement co-hosted a symposium in Honolulu. The event drew attention to criminal networks that span East Asia, the Pacific and Latin America — and that engage in a broad range of criminal activity, including drug, gun and human trafficking, money laundering and corruption.

Earlier this month, officials from the departments of Commerce, Homeland Security and Justice, as well as the White House, met with entertainment industry executives to focus on intellectual property crimes. The connection between piracy and organized crime is
well-documented, particularly in Asian countries such as China.

At the event, billed as the first of its kind, Attorney General Eric Holder called on the international community to respond.

“This is a problem that the United States cannot solve by itself,” said Holder. “We want to confront these nations, quite frankly, where too much of this occurs.”

Narco-trafficking also a danger

Violent Mexican cartels, responsible for thousands of killings south of the border, have emerged as a singular threat. Their vast drug-trafficking networks reach deep into the U.S., and law enforcement officials fear a scenario in which the cartels rent their smuggling routes to terrorists.

“If you were to ask me what is the biggest organized crime threat, I would say it’s more the cartels in general and other organized crime syndicates engaged in narco-trafficking and other illicit activities,” said David Luna, director for anti-crime programs at the State Department’s Bureau for International Narcotics and Law Enforcement Affairs. “They’re not just in our backyard, they’re actually in the U.S.”

The link between terrorism and crime is also of growing concern, officials said. The case of the three alleged Al-Qaeda associates charged in New York, who are believed to be in their 30s and originally from Mali, appears to show a direct link between the terror group and drug traffickers. Authorities long maintained that Al Qaeda and the Taliban profit from the heroin trade in Afghanistan. Michael Braun, who retired as DEA’s chief of operations last year, told The Associated Press the case was “the tip of the iceberg.”

Decade-long focus

The intelligence community’s interest in international organized crime dates back more than a decade. In the mid-1990s, intelligence officials began work on a separate estimate, with the help of the FBI and other law enforcement agencies, said Jim Moody, a former FBI Deputy Assistant Director who oversaw organized crime investigations.

The estimate, he said, “helped get rid of a lot of barriers to sharing information” between the intelligence and law enforcement communities and set priorities for developing intelligence on international criminal groups.

But its impact was curtailed by the events of Sept. 11, 2001. “Given the trauma that the country faced after the 9/11 attacks, international organized crime was relegated understandably to a second-tier national security priority” as the Bush administration redistributed resources to deal with terrorist threats, the State Department’s Luna said.

Officials said they hoped the estimate would cement international organized crime as top national security priority, motivate agencies to develop stronger policies and make an argument for increased funding.

Jay Albanese, former chief of the International Center at the National Institute of Justice, the research arm of the Justice Department, was cautiously optimistic.

“Estimates are a mixed bag,” he said, adding that international organized crime is neither easily quantified, nor easily defined.

“This puts those of us in the crime businsess at a severe disadvantage,” said Albanese, a criminologist and professor at Virginia Commonwealth University. “It’s very diffcult to say with any degree of accuracy how much we should be focusing on human-trafficking versus arms-trafficking.”

Mary Jacoby contributed to this report.

The Justice Department trails all Cabinet agencies in percentage of occupied Senate-confirmed positions, according to data compiled by an independent group that tracks government personnel.

Two caveats, before we continue: The data, from the The White House Transition Project, disregard U.S. Attorneys and U.S. Marshals in the field, and it counts term-limited positions, such as FBI Director, as vacancies, even if they haven’t expired.

So, of the 37 Washington-based positions subject to Senate approval, five are held by officials who were confirmed during the Bush administration and are still serving terms. They include members of the U.S. Parole Commission and the Foreign Claims Settlement Commission, and the aforementioned Director of the FBI, Robert Mueller III.

That leaves us with 32 other DOJ posts, 10 of which have been filled. That’s a 31 percent confirmation rate — still the lowest, behind the Treasury Department (36 percent) and the Department of Health and Human Services (40 percent), according to the WHTP. The data are current as of Sept. 16 — day 240 of the Obama administration.

President Barack Obama has sent 15 DOJ nominations to the Senate (again, excluding U.S. Attorneys or U.S. Marshals). Let’s do some quick accounting.

Senate-confirmed:

• Attorney General Eric Holder (confirmed on Feb. 2)
• Deputy Attorney General David Ogden (confirmed on March 12)
• Associate Attorney General Thomas Perrelli (confirmed on March 12)
• Solicitor General Elena Kagan (confirmed on March 19)
• David Kris, Assistant Attorney General, National Security Division (confirmed on March 25)
• Lanny Breuer, Assistant Attorney General, Criminal Division (confirmed April 20)
• Christine Varney, Assistant Attorney General, Antitrust Division (confirmed April 20)
• Tony West, Assistant Attorney General, Civil Division, (confirmed April 20)
• Ron Weich, Assistant Attorney General, Office of Legislative Affairs (confirmed April 29)
• Cranston Mitchell, Commissioner, U.S. Parole Commission (confirmed Aug. 7)

Reported out of committee but awaiting a Senate vote:

• Dawn Johnsen for Assistant Attorney General, Office of Legal Counsel (nominated Feb. 11)
• Thomas Perez for Assistant Attorney General, Civil Rights Division (nominated March 31)
• Mary Smith for Assistant Attorney General, Tax Division (nominated April 20)
• Christopher Schroeder for Assistant Attorney General, Office of Legal Policy (nominated June 4)

Awaiting a committee vote:

• Ignacia Moreno for Assistant Attorney General, Environment and Natural Resources Division (nominated June 8th)
• Laurie Robinson, Assistant Attorney General, Office of Justice Programs (nominated Sept. 14)

Terry Sullivan, executive Director of the WHTP, said President George W. Bush had filled about 46 percent of the DOJ’s Senate-confirmed positions by this time in his first year, though the number is likely a bit high. (See caveat No. 2 above.)

At that time in the Bush administration, the department had the third-lowest confirmation rate. The Treasury Department and the Department of Transportation were faring worse.

Sullivan, who teaches political science at UNC Chapel Hill, said the difference between the two Justice Departments — in terms of staffing — is negligible.

“That’s pretty much the statisical range,” he said.

A federal judge in Ohio has rejected one the government’s key tactics in prosecuting charities suspected of supporting terrorists, The New York Times reports.

In a ruling issued late Tuesday, James G. Carr, the chief federal judge in northern Ohio, said the Treasury Department acted unconstitutionally three years ago when it froze $1 million in assets of KindHearts, a Toledo-based charity that was part of a terrorism investigation.

Under an executive order signed by President Bush two weeks after the Sept. 11 attacks, the government has used the tactic — without warrants and court approval — to freeze tens of millions of dollars in assets held by eight charities within the United States. The method also has been used to hamper the activities of hundreds of groups and individuals outside the United States.

If upheld, Carr’s ruling “could severely undercut the government’s authority and ultimately require it to get a warrant and submit to court review in moving against charities,” according to the Times.

The Treasury has alleged that KindHearts provided financial aid to Hamas and coordinated with its leaders in support of terrorist activities. Carr, a Clinton appointee, said the government “has effectively shut KindHearts down” by freezing its assets and criminalizing its contacts.

The Treasury Department’s Office of Foreign Asset Control refused to free up money for the charity to pay its own lawyers, a move Carr deemed “arbitrary and capricious.” The judge also ruled that the government violated the charity’s right to due process and to challenge evidence, rejecting the Justice Department’s contention that the Fourth Amendment did not apply to groups suspected of aiding terrorists because of the president’s national security authority.

The charity’s lawyer, Lynne Bernabei of Washington-based Bernabei & Wachtel, told the Times, “The government has been taking action unilaterally and basically destroying these charities on the flimsiest of evidence. We see this as the beginning of the effort to rein in executive authority.”

The Justice Department will launch a center  that will bring together more than a dozen government groups to fight international crime, Attorney General Eric Holder said today in Rome at the G8 Justice and Home Affairs Ministerial.

The International Organized Crime Intelligence and Operations Center will enable these agencies to meet together and more effectively coordinate international criminal prosecutions, according to a DOJ statement.

“The globalization of criminal networks and advances in technology have made international criminal organizations a significant threat to the safety and security of our nation,” Holder said in the statement.  “But we are answering that threat by developing a 21st century organized crime program that will be nimble and sophisticated enough to combat the danger posed by these criminals for years to come.  [The center] gives us the capacity to collect, synthesize and disseminate information and intelligence from multiple sources to enable federal law enforcement to prioritize and target the individuals and organizations that pose the greatest international organized crime threat to the United States.”

The center will bring together:  the FBI; U.S. Immigration and Customs Enforcement; the Drug Enforcement Administration; Internal Revenue Service; the Bureau of Alcohol, Tobacco, Firearms and Explosives; the Secret Service; U.S. Postal Inspection Service; Department of State, Bureau of Diplomatic Security; Department of Labor, Office of the Inspector General; the Justice Department, Criminal Division;  the U.S. Attorneys’ Offices and the Treasury Department, Office of Terrorism and Financial Intelligence.

At the G8 meeting, Holder also highlighted the necessity for collaboration between U.S. and foreign law enforcement, according to the Justice Department.

“He noted that the creation of (the center) demonstrates the United States’ commitment to addressing international organized crime issues and will make the United States a more effective partner for joint investigations and prosecutions,” the DOJ statement said in the statement.

In a big boost to the Justice Department’s financial fraud efforts, Congress on Monday sent the Fraud Enforcement and Recovery Act (FERA) to President Obama for his signature.

The legislation is in response to the mortgage fraud and financial services meltdown. It strengthens the False Claims Act, the whistleblowing legislation that has helped the U.S. recover more than $15 billion over the last eight years.  As we reported last month, the bill also authorizes $245 million a year over two years to hire more than 300 federal agents, 200 prosecutors and 200 forensic analysts to rebuild “white collar” enforcement efforts that took a back seat after the 9/11 attacks to counter-terrorism. “This bill is a step toward holding accountable those who have caused so much damage to our economy,” Senate Judiciary Committee Chairman Pat Leahy (D-Vt.), a leading sponsor of the bill, said in a floor statement.

Sen. Ted Kaufman (D-Del.), another leading sponsor, said in a statement: “We can’t have separate sets of rules for people who rob  banks and banks who rob people.” Sen. Charles Grassley (R-Iowa) also introduced the bill and made the following statement upon its passage:

This legislation will send a message to those who have defrauded homeowners and mortgage lenders and will send an even stronger message to those who are thinking about committing a future fraud.  It includes the most significant amendments to the False Claims Act since 1986, which will ensure that court decisions that limit the FCA are overturned and congressional intent is restored.  Congress has done the right thing by passing this legislation, and I hope the president signs it as quickly as possible.

The Federal Bureau of Investigation currently has fewer than 250 assigned to financial fraud cases throughout the country, and can’t investigate the more than 5000 mortgage fraud allegations the Treasury Department receives each month, Leahy’s statement said.

The Senate today approved by a vote of 92-4 new legislation to combat financial fraud. The House Judiciary Committee passed a similar measure today, but without the Senate measures to strengthen the False Claims Act, which the House for now is considering in a stand-alone measure.

The Senate version of the Fraud and Recovery Act (FERA) would authorize $245 million a year over two years to hire more than 300 federal agents, 200 prosecutors and 200 forensic analysts to rebuild “white collar” enforcement efforts that took a back seat after the 9/11 attacks to counter-terrorism. “This bill is a step toward holding accountable those who have caused so much damage to our economy,” Senate Judiciary Committee Chairman Pat Leahy (D-Vt.), a leading sponsor of the bill, said in a floor statement.

Sen. Ted Kaufman (D-Del.), another leading sponsor, said in a statement: “We can’t have separate sets of rules for people who rob  banks and banks who rob people.” Sen. Charles Grassley (R-Iowa) also introduced the bill.

The Federal Bureau of Investigation currently has fewer than 250 assigned to financial fraud cases throughout the country, and can’t investigate the more than 5000 mortgage fraud allegations the Treasury Department receives each month, Leahy’s statement said.