Transnational Crime in the Americas

Tom J. Farer

• Publisher: Routledge
• Year: 2004
• Topic: Social Sciences
• eBook ISBN:
  9781135961398
• Subtopic: National Security
• Index: Social Sciences

The most destructive force in the Americas today is not El NiÑo-it is the criminal enterprises that recognize no geographic, legal or moral boundaries. This book exposes the main characteristics and effects of criminal enterprises in the Americas and considers realistic strategies for combating them. Looking at how crime penetrates private business, government, and the everyday lives of the people, this collection examines the impact of criminal enterprises on the legitimate economy and the ability of states to promote the rule of law. It compares criminal enterprises in the Americas with other regions, and considers the foreign policy concerns of the US. With a recent upsurge in the scope, sophistication and cooperation among groups, this book is essential tool for understanding one of the greatest challenges to security, peace and democracy in the Americas.

1
TRANSNATIONAL ORGANIZED CRIME: AN OVERVIEW

Rensselaer W.Lee III

INTRODUCTION

Recent transformations in the global economy and in international political alignments have been a boon to the criminal underworld. Capitalizing on increased cross-border flows of goods, money, and people, criminal organizations have expanded their territorial reach and augmented their wealth and power relative to national governments. This development has spawned various direct and indirect threats to U.S. national interests. On the one hand, the new face of organized crime introduces new uncertainties into the international political environment, complicating U.S. relations with a number of foreign governments. For example, powerful narcotics constituencies increasingly influence electoral processes, challenge the political status quo by seeking de facto political representation, and undermine the rule of law in a number of Latin American and Asian states. In postcommunist countries, violence, corruption, and predatory behavior associated with emergent mafiya formations possibly complicate the transition to free markets and the development of stable democratic systems. On the other hand, organized crime’s business lines—such as extortion rackets and trafficking in weapons, drugs, or (potentially) fissile nuclear materials—are themselves a threat to public safety and the health of populations. The devastating social and human consequences associated with drug consumption in the United States represent an obvious case in point.

The contours of the new international crime threat are in certain respects diffuse and ill-defined. Organized crime itself is an elusive phenomenon. Most definitions include at least three characteristics—continuity of operations, practice of corruption, and a capability to inflict violence. Some include Weberian attributes such as a hierarchical structure, clear division of labor, and prescribed organizational codes and taboos.¹ Within the global criminal archipelago, some forms of entrepreneurship approximate traditional models of organized crime, even resembling formal organizations in certain operational aspects. Yet some organized and continuous criminal activity—cocaine wholesaling within the United States (a multibillion-dollar business), for example—involves very little interaction with the authorities; criminals simply find it more advantageous to operate in the shadows without resorting to violence or corruption.² Likewise, much of the heavy lifting in international illegal commerce, from heroin trafficking to the smuggling of radioactive material and counterfeit money, is done by ad hoc criminal coalitions with few apparent resources, little formal structure, and uncertain connections with the political or official upperworld. Such groups commonly coalesce for one or two deals, divide up the proceeds and then disband.

Still, the concept of organized crime retains analytic and practical significance for this discussion. Traditional organized crime is a consequential force in much of the modern world, especially in fractured states with weak central government (the situation in much of Latin America and Asia) and in countries undergoing difficult economic and political transformations (the situation in the former Soviet Union). In such cases crime groups have been able to accumulate significant wealth and to protect their businesses by nourishing connections with the political authorities or by coercing and intimidating them. At the same time, modern organized crime, capitalizing on trends in the global economy (reduced border and customs controls, increased rapid technological change, and the like), is acquiring transnational characteristics. Organizations that maintain permanent representation (“cells”) outside their home countries, enjoy corrupt relationships with foreign leaders, forge strategic alliances with criminal counterparts abroad, and penetrate the legitimate economics of other states are by definition transnational. Such transnational criminal arrangements represent difficult targets for law enforcement systems of nation-states. Criminals can exploit asymmetries in national legal or regulatory regimes to avoid detection or prosecution. Partnerships among different criminal entities with different comparative marketing strengths could vastly accelerate international trafficking in weapons, narcotics, and other dangerous materials.

U.S. international crime-fighting strategy as it has emerged in recent years comprises two related but distinct imperatives. The primary imperative is to limit the availability of criminal goods and services that are legally proscribed or injurious to society.

In the narcotics field the standard fare of supply reduction measures includes eradicating coca and opium fields, destroying processing laboratories, and seizing illicit drugs en route to the United States. An additional imperative, one that has acquired increasing prominence in the 1990s, is to attack and disrupt large aggregations of criminal power. In practice this has meant breaking up so-called cocaine cartels, immobilizing their top leaders, and severing drug traffickers’ links to the legal economy and to the power structure. The new ideology of crime-fighting portrays international organized crime, including narcotics trafficking, as a threat to cherished values such as national sovereignty, democracy, and legitimate economic progress. Some observers view global crime as a kind of successor menace to monolithic world communism. For example, the late writer Claire Sterling referred to a “planet-wide criminal consortium” that came into being when the Soviet Union collapsed and that threatens “the integrity and even the survival of democratic governments in America, Europe, everywhere.”³

Counterorganization is emerging increasingly as a rationale and justification for U.S. crime-fighting efforts overseas. (This is evident, for example, in the Drug Enforcement Administration’s “kingpin” strategy that targets the heads of major cocaine-trafficking families in Colombia, and in the renaming of the State Department’s Bureau of International Narcotics Matters as the Bureau of International Narcotics Matters and Law Enforcement Affairs.) One reason is that Counterorganization has shown tangible results, at least in Colombia—consider, for example, the virtual destruction of the notorious Medellín cartel in the early 1990s, the more recent incapacitation of the Cali cartel leadership, and the successful prosecution of high-level Colombian officials and politicians for corrupt links to the Cali mob. On the other hand, supply reduction has been an unmitigated failure, at least as judged by trends in the U.S. marketplace. Per gram prices of cocaine and heroin dropped by approximately two-thirds between 1981 and 1996, while purity of these drugs increased respectively by 44 percent and 83 percent, according to the U.S. drug czar’s office.⁴ Whatever the benefits for Colombia, the apparent demise of the traditional cartel structure has not reduced the availability of cocaine on U.S. streets. A related reason is that onslaughts against malevolent criminal entities and their ties to power—though not without risk—have a certain basic legitimacy with publics and governments. Measures that are most likely to stop drug flows, on the other hand—such as sealing large extensions of the U.S.-Mexican border or conducting a massive aerial blitz against Andean cocaine crops—affect the livelihood of large populations and are probably infeasible politically. From a domestic U.S. perspective, though, reducing the drug supply is the principal significant justification for U.S. counternarcotics programs overseas; most Americans understandably are likely to care less about protecting the integrity of Colombian or Mexican democratic institutions (if this is what is at stake) than about getting psychoactive substances off America’s streets.

Furthermore, U.S. concerns over organized crime in its national and transnational dimensions are partly attributable to the demise of Soviet communism and to post-Soviet “mission creep” of national security elements of the federal government. As an artifact of U.S. post-cold-war consciousness, the threat is sometimes overblown or misinterpreted. Some qualifications and corrections are in order here. For example, current U.S. security doctrine routinely depicts drugtrafficking organizations as threats to democratic institutions, especially in the Western Hemisphere. Yet all important drug-producing and —exporting states in the hemisphere have functioning democratic systems, so that proposition requires some analytical refinement. The illicit drug trade has financed authoritarian regimes—that of Luis García Meza in Bolivia in 1980–1981 and of Manuel Noriega in Panama in the mid—and late 1980s—yet production of cocaine and the drug transit traffic respectively in Bolivia and Panama flourished and even expanded after these dictators departed from the scene.

Modern narco-elites in Latin America, in fact, behave politically very much like traditional economic elites. They fund political campaigns (often spreading contributions among opposing candidates), sponsor party-building and get-out-the-vote activities, and lobby legislatures for passage of laws favorable to narcotics business interests. Narco-businessmen are the principal or the sole source of funding for election contests in some regions, so their activities probably serve to increase the overall level of political participation. Interestingly, a recent (1997) State Department report asserts that large trafficking organizations “in many ways” represent “a greater threat to democratic government than most insurgent movements,” but this is typical Washington hyperbole.⁵ To be sure, the ability of drug dealers to influence electoral outcomes and to corrupt public officials, legislators, and judges can undermine public confidence in democratic institutions and processes. However, such a threat is long-term and diffuse, whereas in countries torn by civil war (in Colombia, for example, the main guerrilla groups control an estimated 20 to 40 percent of the nation’s territory), the insurgent challenge is immediate and substantial.

The tendency toward threat inflation is also apparent in much U.S. commentary on crime trends in the former Soviet Union. “Roughly two-thirds of Russia’s economy is under the sway of crime syndicates,” says a recent (1997) report by Washington’s Center for Strategic and International Studies (CSIS). “Russia is in danger of evolving into a criminal-syndicalist state,” says the CSIS report. The fusion of criminal capital with the state bureaucracy has created “virtually a fullfledged kleptocracy,” says Benjamin Oilman, chairman of the U.S. House International Relations Committee.⁶ But if organized crime is as ubiquitous as these writers suggest, the concept loses much of its organizational shape. Instead of defining violent and lawless subgroups, it begins to encompass much of the Russian state and society. For example, the so-called shadow economy in Russia is indeed large, accounting for some 20 to 40 percent of the country’s gross domestic product, according to different estimates. Yet most of this share consists of legal production and commercial activity unregistered and hence untaxed rather than traditional mafiya pursuits (drugs, extortion, weapons trafficking, and the like).⁷

Furthermore, artificial biases inflate Western assessments of Russian organized crime. What are considered serious crimes and punishable corrupt behavior in Western countries are not necessarily considered so in the East. For example, the rules concerning the privatization of state assets in Russia are murky at best and are widely flaunted. According to investigative news reports, Moscow Mayor Yuriy Luzhkov, a possible presidential contender, benefited directly from the sale of municipal property to the prominent real estate firm “Most” (Bridge) in the city.⁸ Prime Minister Victor Chernomyrdin, until May 1992 the chief executive of the state natural gas company, Gazprom, reportedly ended up with 1 percent of the company’s stock after it was privatized—an equity holding worth a minimum of $1.2 billion and possibly as much as $7 billion. (This egregious windfall led a former Yeltsin National Security Council member, Yuriy Skokov, to label the premier “the chief mafioso in the country.”).⁹ Obviously Chernomyrdin, Luzhkov, and countless other officials reaped rewards from opportunism during the breakup of the Soviet system and afterward; yet to label these senior political leaders criminals is pointless—for better or worse, they represent the state of the system in Russia today.

Such caveats and concerns aside, organized crime and transnational crime clearly merit an important place on the agenda of international concern. The juxtaposition of powerful crime organizations and weak states poses subtle threats to government authority and legitimacy, and to the operation of free markets in these countries. Moreover, organized crime historically has tended to exploit, manipulate, and exacerbate conditions of economic dislocation and political upheaval. In addition, the transnational operations of the criminal underworld augment the supply of illicit products and services that have dangerous, if not lethal, ramifications for human societies everywhere. (The latter proposition is explained via comparative analyses of two illegal businesses that this writer knows well—drug trafficking and the smuggling of nuclear materials.)

Still, transnational crime is far from being a satisfactory substitute for world communism. The fight against this phenomenon in its various manifestations confronts the United States and the international community generally with some painful choices. Such dilemmas have been especially apparent in the area of counternarcotics policy, where the proverbial ax can cut both ways. It is now painfully apparent to U.S. policymakers that the production, sale, and export of narcotics are closely interwoven with the economies and political systems of many countries. These activities are an important source of foreign exchange, income, and employment in the affected states. Criminals’ episodic positive contributions in certain areas—for example, delivering social services to impoverished peasants and slum dwellers and contributing to local security and counterinsurgency operations (in Colombia and Peru)—underscore the complexity of these linkages. Quite obviously, counterstrategies have to be coupled with care.

For instance, military intervention against the cocaine cartels or stiff economic sanctions against a host government could actually create public sympathy and support for criminal groups, while materially weakening the capacity of the government to defend itself against them. Aggressive campaigns to eradicate drug crops can generate peasant support for antigovernment insurgent movements (and actually have done so in Colombia and Peru) and may impoverish countries with disastrous human or developmental consequences. Even financial strategies, such as freezing traffickers’ assets or blacklisting their commercial ventures, can hurt legitimate business interests in some drug-torn countries (or, in the case of Mexico, can inflict collateral damage on the U.S. economy); obviously such measures need to be carefully fine-tuned to inflict minimal damage on the wider economy. The larger point, though, is that the so-called war against drugs in this hemisphere is subject to a multitude of compromises and constraints that practically vitiate the effectiveness of antidrug efforts, especially those focusing on curtailing the supply of these dangerous substances.

THREATS

“Institutional” Threats

Organized crime in the post-cold-war era presents an array of complex and novel challenges to United States security interests. Traditionally a domestic concern in a handful of countries (such as the United States, Italy, and Japan), organized crime’s increased scale of operations, territorial reach, and destructiveness potentially threaten the stability of the international order. The threat has several dimensions. First, massive changes in the global economy—stemming from disintegration of hostile power blocs, technological advances in transportation and communications, and diminished government controls over flows of goods, services, and money—have fundamentally changed the context in which organized crime operates. Increased legal commerce provides a handy cover and justification for the movement of illegal merchandise and cash proceeds. As a result, criminal organizations have been able to globalize their operations, to position themselves in new markets, and to expand the range of their illicit activities.

A second dimension is closely related to the first. Largely as a result of expanded transnational activities, criminal organizations have been able to accumulate wealth and power on a scale that rivals or surpasses the resources available to the state and potentially impairs the legitimacy and effective functioning of governments, although this is not necessarily the criminals’ intent. In some Latin American countries, narco-business income is so large relative to key economic variables that it could easily alter a country’s path of economic and political development. In Colombia and Mexico, the taint of criminal funds has already compromised top political echelons, permeated legal economies, and in the view of some observers, undermined the moral basis of the state. In countries of the former Soviet bloc, that is, countries transitioning from authoritarian to democratic rule and from statist to open ...

Table of contents

• COVER PAGE
• TITLE PAGE
• COPYRIGHT PAGE
• ACKNOWLEDGMENTS
• PREFACE
• INTRODUCTION
• 1: TRANSNATIONAL ORGANIZED CRIME: AN OVERVIEW
• 2: INTERNATIONAL ORGANIZED CRIME, NATIONAL SECURITY, AND THE “MARKET STATE”
• 3: OFFSHORE MONEY
• 4: SMUGGLING WARS: LAW ENFORCEMENT AND LAW EVASION IN A CHANGING WORLD
• 5: TRANSNATIONAL CRIMINAL ENTERPRISE: THE EUROPEAN PERSPECTIVE
• 6: THE IMPACT OF THE ILLEGAL DRUG INDUSTRY ON COLOMBIA
• 7: THE DECENTRALIZATION IMPERATIVE AND CARIBBEAN CRIMINAL ENTERPRISES
• 8: TRANSNATIONAL CRIMINAL ORGANIZATIONS IN BOLIVIA
• 9: SEMIORGANIZED INTERNATIONAL CRIME: DRUG TRAFFICKING IN MEXICO
• 10: BAD BUSINESS: A COMMENTARY ON THE CRIMINOLOGY OF ORGANIZED CRIME IN THE UNITED STATES
• CONCLUSION: FIGHTING TRANSNATIONAL ORGANIZED CRIME: MEASURES SHORT OF WAR
• CONTRIBUTORS