From the Cathedral to the Geopolitical Negotiating Table

George Friedman, of Hungarian origins, is one of the world’s most renowned geopolitical experts. His books have regularly topped bestseller lists in recent years.  In his geopolitical analyses, he looks up to 100 years into the future, projecting the rise and fall of states. Friedman’s knowledge is based on Stratfor, an intelligence company that he established in 1996. With a staff of over 130, an extensive and well-working information network, as well as more than two million subscribers, Stratfor has become the world’s largest private intelligence business. However, George Friedman has not stopped with the creation of the Stratfor: he left the company he created, and at the end of 2015 established a new intelligence based agency: Geopolitical Futures, which provides analytical geopolitical forecasts.

Born in 1949 in Hungary, George Friedman was less than one year old when he and his parents, captive behind the Iron Curtain, under adventurous circumstances, escaped the country. They finally settled in the United States. Friedman went to school in New York and obtained a PhD from Cornell University.  Then, he was a lecturer of political science at Dickinson College for nearly 20 years.  His main fields of interest and research were US foreign policy, global geopolitics, international relations, modern and historical warfare, and geopolitical projections. He became famous around the world as an expert in international relations and as a geopolitical author after establishing Stratfor in 1996. He managed his company as chairman and also led the global intelligence department.

Stratfor: an Empire Built of Information

The power of geopolitical consultancy companies is best exhibited in times of crisis. Stratfor had risen to the position of a major global news agency when bombs were exploding in Kosovo, and its reputation peaked when the World Trade Centre fell.  Strategic Forecasting Inc., established in 1996, is now one of the world’s leading private intelligence, analysis and research institutes.

The company, established by George Friedman, had gone mostly unnoticed for a while, but had a breakthrough in 1999 at the time of the bombing of Kosovo. That is when they decided to set up the “Kosovo Crisis Centre,” an entity that poured out analyses of the situation in the war-stricken region for weeks. The information was initially forwarded by e-mail; however, hunger for news on Kosovo necessitated a public online interface.

Those public documents were snapped up by news media, making Stratfor a well-known brand. According to Friedman, staff slept in Stratfor’s office for six weeks at the time of the Kosovo crisis, so they could process and publish the information as it came in. As a result, the number of subscribers grew by several thousand over a few weeks. It turned out that intelligence is not a prerogative of governments, but can also be a rather profitable business.

The 9/11 Tragedy and “Disaster Tourism for Information”

While Kosovo was the first step toward fame, Stratfor’s real breakthrough came, paradoxically, at the time of 9/11, a grave tragedy for the United States. They used sources close to the government in their analyses, and all of their documents were publicly available free of charge for a period after the catastrophe.

Associate Co-author for Life – Meredith Friedman is married with four children, two of whom serve in the US Army.  His wife, Meredith Friedman, writes under the pen name Lebard (which she has used in several books co-authored with her husband). For a long time, Meredith also held an important position in Stratfor, working as the company’s deputy chair in charge of international relations and communication. George Friedman, a conservative Republican, lives in Austin, Texas with his family. That is where the headquarters of Stratfor is located. Russian sources consider him clearly “anti-Soviet” and “anti-Communist,” which determines his view of today’s Russia. This is obviously related to his family’s history. Friedman, a globally reputed author, likes to appear in the media and is a regular guest at conferences on geopolitics and security policy.

Stratfor’s products have entered the international media and have become a prime information source for Bloomberg, AP, Reuters, BBC, The New York Times and mainstream media.

Stratfor has built up a large corporate basis. Even though the names and data of its customers are confidential, according to some reports they include the largest American corporations, as well as numerous government institutions. In 2013 Stratfor had 300,000 paying customers, with more than two million people receiving its free newsletters.

The number of Stratfor staff has rocketed in the past decade: after the breakthrough in 2001 the number of its analysts was multiplied. In 2004 the company had 70 employees. After less than a decade, in 2012, the number had almost doubled, reaching 130. According to the company, their analysts speak 29 languages in all.

Several Stratfor authors are successful writers. Friedman himself wrote numerous bestsellers, and Kamarn Bokhari’s name has also repeatedly appeared on sales charts. Most senior officials are experts in the Middle East, probably in response to America’s needs and interest in the wake of 2001. In the past two years, however, a shift towards Russia has begun.

The King is Naked

On 27 February 2012, Stratfor’s servers were hacked by the Anonymous group, and 5.5 million internal e-mail messages from the period between 2004 and December 2011 were disclosed. The information was published on the WikiLeaks page, where anyone could read the confidential mail of the world’s largest private intelligence agency. The press jumped at the opportunity, and a multitude of articles were written in the first half of 2012 based on the leaked database documents (which described, among other matters, the above-mentioned internal structure of Stratfor, and the practice of collecting information on civil activists). The data leakage alone harmed Stratfor’s prestige considerably, because the company is an intelligence business working with sensitive information. Yet, it was the content of the letters that dealt the final blow. For example, Stratfor turned out to have cooperated with Goldman Sachs, which bordered on insider trading. As part of this cooperation, Stratfor provided intelligence for transactions in the global market through a third company (Strat-Cap). Shea Morenz, former Goldman Sachs director, went on to work as Stratfor’s CEO, and he still holds that position. The leaked e-mail messages also show that the company knew about a probable secret pact between Russia and Israel in 2008. According to leaked correspondence, Israel gave Russia codes to remote-controlled aerial vehicles (the kind previously purchased from Israel by Georgia), while the Russians returned codes to TOR-M1 missile protection systems sold by Russia to Iran. This deal might have had a direct negative impact on Georgian defence capabilities during the war with Russia in August 2008.

Stratfor’s main activity involves the analysis and projection of economic and geopolitical developments, but they also provide specific services to customers: newsletters analyses tailor-made analyses premium customers’ questions answered round the clock monthly phone conferences with George Friedman corporate training consultancy speech writing

Five Million Telling Mails

Where does Stratford’s information come from? From secret informers or public intelligence sources?

According to the company’s official position, two sources are used to obtain information – firstly, from carefully chosen foreign staff; and secondly, from public data available to anyone, such as news agencies, internet portals and forums, a well as public studies by governments.

Pyramid-like Corporate Structure

Sources providing information are at the base of the pyramid. Stratfor assigns various categories to its sources based on the value and reliability of the information they provide. The best rating is A, and the worst is F.  The ratings are further divided into subcategories by region, and each source is given a numerical rating by region.  According to the leaked information, Stratfor pays its sources highly, depending on their value. The amount may reach USD 5-6 thousand a month.

Speed is a basic expectation in this pyramid-like structure.  Interestingly enough, Stratfor also uses its own subscriber base to recruit new sources, contacting people who seem well-positioned and valuable based on user profiles.

Analysts constitute the next level of the pyramid. They keep in touch with information providers directly and also use various public and web-based sources. They collect and categorise the available information by reliability, timeliness, accessibility, uniqueness and other parameters. Above the analysts, the next stage is “watch officers”. They select some of the information collected and forwarded to them by the analysts, comparing the data to publicly available information. One of the goals is to prevent the disclosure of expressly confidential information. Until recently the organisation was led by George Friedman and his deputy Fred Burton.  Neither George Friedman nor Fred Burton are in the top management of the Stratfor any longer.

Still, in February 2012, WikiLeaks disclosed over five million of Strafor’s internal e-mail messages, which qualify the company’s statements. For example, the leaked e-mails show that public sources are much less important to Stratfor than its network of informers. In fact, this latter source is vital to the company’s operation.

How Reliable is Stratfor’s Intelligence?

Stratfor is most heavily criticised because its analyses are claimed to be very biased in certain matters. Critics state that the company’s work is characterised by a “pride in the global power of the USA,” which significantly distorts reality.

Unconditional acceptance of Israeli sources is another cause for criticism. In many regions, Stratfor’s primary sources prefer American and Israeli intelligence, rather than relying on local information. This practice is most heavily criticised by Arab media, who cite it as a good example of why Strafor and other

Western media misunderstands or fails to understand non-Western communities.

Intelligence at Home, the Shadow CIA

Other documents leaked in 2012 indicate that Stratfor has performed major research for governmental and corporate customers upon opposition parties and NGOs such as the Occupy movement in the United States. Interesting information has surfaced about the government having used anti-terrorist laws against protesters. Further inconvenient facts have emerged. Some opposition activists have also cooperated with Stratfor, actively supplying information about other opposition/NGO leaders.  Remarkably, the government and other Stratfor customers have used the company in applying a “divide and rule” strategy.  Activists and opposition leaders were grouped into four categories: radicals, idealists, realists and opportunists.  Based on this classification, Stratfor tried to influence them.