Doing Business with Hackers, Terrorists and Dictators

Expert View

Dr. Kenneth Dekleva served as a Regional Medical Officer/Psychiatrist (including 5 years at the U.S. Embassy Moscow, Russian Federation) with the U.S. Dept. of State during 2002-2016, and is currently Associate Professor of Psychiatry and Director, Psychiatry-Medicine Integration, UT Southwestern Medical Center, Dallas, TX. The views expressed are entirely his own and do not represent the official views of the U.S. Government, the U.S. Dept. of State, or UT Southwestern Medical Center.

OPINION — The recent ransomware attack on Colonial Pipeline and subsequent payment of a $4.4 million ransom in bitcoin to a Russian hacking group (‘Darkside’) has highlighted the role of negotiations in such cases.  Doing so requires understanding the leaders of such groups and their motivations.

Analytic technologies exist allowing for understanding the leaders of nation-states, criminal groups, and terrorist groups, as well as hostage-takers, insider threat actors, and cyber criminals.  Such analytic tools can have practical applications in business negotiations, especially high risk/high reward negotiations involving potential investments in emerging markets and frontier economies.

When I have given talks to senior national security personnel, academic scholars, and business leaders regarding a leader such as North Korea’s leader Chairman Kim Jong-un, Russia’s President Vladimir Putin, or China’s President Xi Jinping, the question that always comes up is, “can we do business with him?  Is he a rational actor and reliable negotiation partner?”  Similar questions arise in business settings involving massive private investments, regarding the leaders of emerging economies such as Myanmar, Ethiopia, Kazakhstan, Ghana, South Africa, Nigeria, Turkmenistan, Cambodia, Mongolia, and others.  In these situations, investors desire to limit their risk exposure due to geopolitical factors, uncertainty and ambiguity.  Leadership analytic methodologies can serve to mitigate risk, and thereby have their place in due diligence, reputational intelligence, and other types of business negotiations.

In emerging economies and frontier markets with larger degrees of opacity and control under one leader, and a ‘system’ subservient to a given leader, such analytics matter even more.  This is true even in countries such as Putin’s Russia, Modi’s India, or Xi’s China.  Particular challenges implicate extractive economies, rare earth products, and supply chains therein.  Risks of supply chain disruption due to the COVID-19 pandemic, political/economic instability, nationalization of foreign assets, selective implementation of rule of law, cultural factors, or absence of rule of law are also key variables worthy of analysis.

Another question is whether ‘soft power’ – on a national scale – can influence a leader and his/her inner circle?  The latter has significant resonance in many emerging and frontier market countries, where larger powers such as America, China, France, the United Kingdom, and Russia compete for influence, even more so during and after the disruptive COVID-19 pandemic.

A key point in negotiations is that personal relationships, rapport, and empathy matter.  This means picking the right negotiators, persons with listening skills, empathy, a strategic (not merely tactical) view of intelligence, patience, and a high tolerance of ambiguity and uncertainty.  Likewise, investors in frontier markets value executives who embrace uncertainty, risk, and ambiguity, and who are willing to get their boots dirty.  As the American billionaire investor Gabriel Schulze suggests, “Opportunity is often found on the edge of our comfort zone.”

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Governments and law enforcement agencies have utilized leadership analysis to profile leaders of terrorist groups, in terms of developing political strategies, crisis response, and negotiation strategy.  Such negotiations involve high levels of ambiguity, uncertainty, and the need for empathy and understanding of terror leaders who have committed evil acts of violence.  Such negotiations often involve third party emissaries, as governments cannot be seen as the main negotiating partner.

Recent years have witnessed the involvement of high-level government intermediaries in negotiations involving Hamas and the release of Gideon Shalit (German intelligence officer Dr. Gerhard Conrad) and in negotiations in Nigeria involving the release of many of the Chibok victims (Swiss intelligence officer Pascal Holliger).  The role of culture, trust, language, and nuance remains critical in such delicate negotiations.

Negotiations in kidnap/ransom, ransomware and other unregulated markets (e.g. the recovery of stolen art) often obey similar rules as in traditional negotiations.  And of course, similar to terrorist negotiations, the stakes are high.  Leadership analysis of a ransomware hacker may provide some utility for negotiators and organizations, especially if such persons are novices or relative unknowns in that space.  This can become quite challenging, especially when such persons exist outside of traditional cyberspace (due to strict operational security), or solely inhabit the Dark Web.  Criminals that are known, such as part of either a kidnap gang, or in the case of ransomware, a known advanced persistent threat (APT) actor (e.g. a nation-state such as China, Russia, North Korea, or Iran, or a hacking group such as Darkside in the recent Colonial Pipeline ransomware attack), may prove easier to profile with respect to their intentions and past negotiating strategies.

The sheer amount of data analyzed in the above-noted settings has led to innovative approaches using AI and other deep learning tools.  Examples utilize natural language processing to gather all of the relevant information about a given leader from large amounts of data and metadata; such tools can generate rapid, timely and sophisticated profiles.  Other tools include the Good Judgment Project, which uses super-forecasting and crowdsourcing algorithms to improve predictions with respect to geopolitical trends; this project has found that educated, informed amateurs can often outperform subject matter experts.  Additional strategies may involve AI-based, psycholinguistic analysis of a leader’s social media postings and likes/comments on Twitter, Facebook, and LinkedIn.  Other approaches involve crowdsourcing data from hundreds of experts, analyzing their responses and using deep learning algorithms to refine their conclusions.  Novel tools are also emerging such as voice stress analysis and transdermal optical imaging.  The latter allows for vital sign data to be calculated from a 30-second ‘selfie’ video, including heart rate, blood pressure, respiratory rate, temperature, age, heart rate variability, and stress levels.  These tools have seen development in domains in national security and business intelligence, such as analysis of deception and authenticity verification.

Investors and business leaders require novel approaches to measuring and mitigating risk in private equity, venture capital, and in frontier markets and emerging economies, where significant risks exist along with the potential of large reward.  In emerging economies and frontier markets, as well as in non-traditional, unregulated domains such as kidnap & ransom, ransomware, and art sale/recovery, such analyses can assist private equity investors, venture capitalists, business executives, negotiators, and thought leaders in finding that ‘sweet spot’ and maximizing their gain, while mitigating risk.  The private sector will continue to have a need for novel approaches which can capture those intangibles – the human factor – and answers to that perennial question, ‘can one do business with him or her?  Can he or she be trusted as a reliable negotiating partner?’

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