Small Wars Journal

Antimafia Impasse: State-Driven Organized Crime & Organized Crime States

Tue, 05/04/2021 - 5:54pm

Antimafia Impasse: State-Driven Organized Crime & Organized Crime States

Edgardo Buscaglia

The main purpose of this article is to explain why some countries experience chronic and growing deterioration in their institutional performance in fighting and preventing transnational organized crime, even when plentiful national human and material antimafia resources are readily available. This piece also focuses on country case studies where the State sponsors or fosters organized crime, such as in China and in Mexico.

All the field research results that I have published as an author or as a coauthor on transnational organized crime during the past thirty years have been based on objective data derived from judicial and/or intelligence case files, thus avoiding the usual biases and pitfalls of perceptional surveys. In each case, victims’ separate accounts were also obtained through their own testimonies during interviews, from judicial case files and through reports provided by international civil society organizations active in the field. The main purpose of these studies is to measure the institutional counter-organized crime performance of intelligence agencies, specialized police units, specialized prosecutors, judicial branches and the capacity of these institutions to work in tandem.[1]  Throughout this thirty-year time period, a few of the field teams I lead were also institutionally embedded to assess and to assist the efforts of judicial authorities and financial intelligence agencies in cases of specific transnational criminal networks perpetrating complex transnational economic crimes.

The most frequent case files of transnational organized crime found in our international samples of judicial and financial intelligence case files covering 119 countries included frequent or infrequent low-level public sector corruption jointly with drug smuggling, arms trafficking, migrants trafficking, human trafficking, counterfeiting of many types of goods and currencies, and other 14 types of complex crimes with economic motivation.  At the same time, the geographic expansion and the scale and scope of goods and services trafficked were linked to the longevity and organizational sophistication of the criminal enterprises.[2] 

Within this jurimetrics-data framework, the most frequently indicted criminal networks were criminal organizations composed of different hierarchies of operational members perpetrating crimes within informal economic sectors, most of them dedicated to transporting or distributing illegal goods and services across national borders and laundering their illicit gains through the complicity of legally-constituted firms in different national jurisdictions worldwide.  This provides an operational description of the traditional transnational criminal networks as defined in Article 2 of the UN Convention against Organized Crime.[3] 

It is noteworthy that these traditional types of criminal networks can be found operating, to a lesser or greater extent, in all countries around the world, i.e., networks with different types of organizational structures that sometimes include the presence of low-level public sector corruption and low-level private sector corruption.[4]  In these samples of case files, public or private sector corruption occurred either very frequently or seldom, depending on the preventive strength and punitive predictability of judicial institutions, anti-money laundering economic regulations, and social preventive policies within each country.[5]

The criminal capture of state authorities at any level, coupled with legal businesses acting as money laundering or logistical support channels sometimes accompanied by fake civil society fronts, characterize the most pure form of “organized crime” in contrast to other simpler types of criminal associations, many times wrongly labeled in media reports as “organized crime,” such as street gangs or other types of criminal associations with no internal hierarchies and no division of labor in criminal activities.  For example, countries such as Mexico, Pakistan, or Ukraine show the presence of thousands of local or regional criminal associations and gangs dispersed throughout their territory. Yet, in the case of Mexico my field research since 2010 has detected just 4 main transnational organized crime formations (each with hundreds of regional criminal associations and local criminal gangs attached) while these 4 main transnational Mexican-based criminal networks illegally export hundreds of goods and services with vast illicit money outflows to 85 countries around the world.[6]

In my international experience since 1993, in only 1% to 7% of the sampled case-files in a minority of countries could one identify a transnational criminal structure that included corrupt public officials at the highest levels of the States (i.e., heads of state, central government ministers, legislators or supreme court judges) and top-level businesspeople within the legal sector with fake civil society organizations.  These more sophisticated criminal structures were found in, for example, Brazil, China, Mexico, Nigeria, Russia and Ukraine.  In this minority of case-files, one could see that top political public sector officials took the initiative of establishing and managing criminal networks within the State, such as in the well known case of the multinational construction firm Odebrecht in Brazil linked to the Lozoya case file in Mexico.[7]

Corruption as “Institutionalized Delinquency”

In their forthcoming book, Jorge Pontes and Márcio Anselmo analyze “the challenges of institutionalized delinquency” in judicial case-files involving top-level political corruption and the largest construction multinational firms in Brazil, such as in the case-file known as Lava Jato.[8]  Such case-files are linked to what, in an international analysis applied to Mexico, I have been denominating “mafiocracy,”[9] understood as State-driven Organized Crime (Buscaglia 2011).[10]

Pontes and Anselmo, as former high-level Brazilian federal police officers, provide unique insights into the main institutional challenges and improvements in anti-organized crime performance in their federal police investigations that the two authors were leading.[11]  More specifically, the authors show institutional improvements in Brazil’s federal police performance coupled with tangible antimafia progress within the Brazilian federal judicial branch in tandem with the financial intelligence agency. These institutional improvements occurred despite of official blockages orchestrated by organized crime networks composed of Brazilian top politicians.

These blockages included premeditated budget cuts applied to the federal police, many types of presidential obstructions of justice that the authors describe in full detail and many other types of institutional “distractions” in order to exclusively limit law enforcement just to low-level drug street crimes.  This publication by Pontes and Anselmo (forthcoming 2021) also highlights how the strengthening of collective ethics within the federal police force and institutional judicial reforms can sometimes have a positive impact on antimafia performance against an organized criminal network created and managed by top-level political officials.[12]  The outstanding merit of Ponte and Anselmo’s professional and academic careers, hard collective police work, excellent coordination with financial intelligence authorities, vast Brazilian civil society bottom-up pressure supporting anti-corruption judicial indictments and strong international judicial coordination are all factors explaining the latest successes in fighting State-driven organized crime in Brazil.

Mexico, on the other hand, never in its history accomplished judicial system improvements in addressing high-level political corruption to later be able to reduce judicial corruption and achieve improvements in judicial punitive performance.  Moreover, Mexico’s public sector never implemented social policies to prevent hundreds of thousands of youth per year from falling into the low ranks of organized crime networks, such as the rtel Jalisco Nueva Generación (CJNG), Golfo Cartel/Noreste criminal network and the Sinaloa transnational criminal organizations.[13] Therefore, México today keeps sliding down the path of greater frequencies of mass homicides and “femicides.” Furthermore, Mexican President Andres Manuel López Obrador, since his presidential political campaign days in 2017, proposed, and now in power has implemented a frustrated “pax mafiosa” approach to organized crime or what President López Obrador denominated an “anticipated amnesty” to the benefit of organized crime politicians and to the detriment of international judicial coordination efforts and to the detriment of the Mexican population at large.[14]

“State-driven” Organized Crime

International comparative studies show that State-driven organized crime is much more socially damaging than the traditional and more frequent organized crime networks that only operate within informal markets without being able to capture entire public sector institutions. These criminal informal market networks with no State capture can be found in most countries with relatively effective judicial, intelligence and social State institutions coupled with organized civil society organizations able to audit the performance of public officials.[15]

An example of a State-driven organized crime is provided by Pontes and Anselmo (forthcoming 2021) through their analysis of a case involving the Brazilian multinational construction company Odebrecht and the top-down criminal capture of the Brazilian State during the administration of former President Lula da Silva.  The authors describe the President’s Chief of Staff engaging in a frequent and massive corrupt re-allocation of hundreds of billions of dollars to fraudulent public tenders through rigged bids allocated to the Odebrecht firm and to other four companies over a period of decades. Vast amounts of public sector budget resources were thereby taken away from the health, educational or from the judicial sectors and re-allocated to mafia-like corrupt “procurement” linked to construction companies such as the Odebrecht firm that, according to the US Justice Department, was also involved in high level political electoral corruption in dozens of countries around the world.[16]

One of the conclusions of my comparative counter-organized crime international studies that I referred to above is that State-driven organized crime is much more difficult to combat than the criminal networks limited to the informal economy that are found operating in countries with effective antimafia systems.  As Pontes and Anselmo (forthcoming 2021) also show, in cases of “institutionalized” organized crime high-level political officials create, drive and manage their own criminal organizations within the State—for example, by organizing multi-billion dollar public tenders through rigged bids within the oil sector—while the judicial resources that are supposed to prevent or combat these complex crimes are under the illegal influence of the same criminal politicians.[17] Therefore, a mafiocracy or State-driven organized crime is more enduring and more widespread socially damaging than the traditional organized crime that is only created, coordinated and managed from outside the State and limited to vast or small informal economic sectors, such as it is normal occurrence in Canada, France, Germany or the USA.

By analyzing the international experience on this subject, one can conclude that “institutionalized delinquency” or uncontrolled State-driven organized crime emerges as a result of long periods of judicial and financial intelligence “state vacuums” coupled with a lack of social infrastructure to rescue marginalized youth from a life of crime.  Yet, judicial system institutions (including specialized police) have effectively reacted in a few countries, such as Brazil or Colombia.

In other countries, such as Mexico or Ukraine, State-Driven organized crime has fragmented the State and each transnational organized crime group captures different governors and different state police bodies in order to use the power of a fragmented State against other competing criminal organizations that are capturing other fragments of the State in the same manner.  This a pernicious spiral of extreme violence with uncontrolled crimes against humanity, such as the forced disappearances of 43 rural students from Ayotzinapa in Mexico.[18] 

In this scenario, uncontrolled political corruption, such as in Mexico, fosters a competing violent organized criminal capture of different fragments of the State, thus uncontrollably increasing levels of violence in a spiral fashion. Within these scenarios, uncontrolled political corruption, in countries such as Mexico or Ukraine, is the main causal factor behind the violent transnational expansion of organized crime networks.[19]

“Organized Crime States”

International experience also shows that criminal networks limited to operations within informal drug markets with relatively seldom public sector corruption, such as in Canada or Germany, can cause many deaths and injured each year. Yet the organized crime managed from the State cause incalculable greater harm. As was stated in my previous publications, [20] within mafiocracies, such as Mexico, uncontrolled State-driven organized crime networks compete with extreme violence to shape laws, shape judiciaries and capture pieces of the public sectors to their own advantage.

In other countries such as China, Russia and North Korea their political autocracies have been strengthened over time through “stable” dictatorships with the top-down capacity to impose an iron fist control (with no rule of law) over previously uncontrolled State-driven organized crime networks in order to use these mafia-type structures for the purpose of enhancing the power of the authoritarian State.[21]  Such is the damaging transition observed between the chaotic Yeltsin regime and the present Putin dictatorship in Russia.  In these scenarios, one can observe what I have denominated an “Organized Crime State”[22] in, for example, North Korea’s State-driven US dollar counterfeiting and drugs trafficking aimed at obtaining hard cash to support its nuclear program and other domestic and foreign policy priorities.  Furthermore, vast proportions of illegal fishing worldwide and other illegal trafficking of minerals, flora and fauna involve the Chinese public and private sector working hand in hand in order to illegally traffic goods to serve the Chinese State’s strategic hegemonic objectives worldwide.[23]

In other words, organized crime in China is sponsored by the Chinese State and selected organized crime networks (Triad or otherwise) serve the hegemonic foreign and domestic policies of the Chinese State.[24]  Other cases of “Organized Crime State” include, for example, Chad, a country ruled during the last thirty years by the iron fist of the dictator Idriss Déby until he was killed by rebels this past 19 April 2021.[25]  Chad is a country that has earned hundreds of billions of dollars in oil money that has been illegally “privatized” by Chad’s top officials while 20 percent of children die before five years of age. 

In all these cases, the very nature of an autocratic political system drives the top-down strategic and tactical control of transnational organized crime networks sponsored by the totalitarian State.  Consequently, an “organized crime state” in China, Russia or North Korea has shown to possess the capacities to massively kill and injure its own populations or cause irreparable environmental damage abroad through hidden and State-controlled institutional channels, such as in the Uighur genocide,[26] similar in scale to the more visible and scattered extreme violence caused by the uncontrolled State-driven organized crime in Mexico or in Ukraine.

Conclusion: Overcoming the Criminal-State (Antimafia) Impasse

In conclusion, the effectiveness in combating transnational organized crime always depends upon a mix of implementing more effective political campaign financing laws and audits to prevent political corruption, judicial institutions working hand in hand with financial intelligence agencies, better implementation of economic-financial regulations to prevent illicit money flows and preventive social policies.  My previous peer-reviewed publications referenced throughout this essay clearly show that the long-term absence of these four public policies “in action” always cause the growth of transnational organized crime and its more frequent pernicious mutation into uncontrolled State-driven organized crime, such as in Mexico at present.

Yet, the implementation of these four pillars of antimafia policies can only be feasible if organized crime networks do not control the State in the first place.  If the State sponsors organized crime as a normal tool to enhance the power of its politicians—either in an extremely violent, fragmented and uncontrolled Mexico-like manner or in a controlled and unified Chinese State approach—international experience shows that response is problematic.  Only a mix of vast international economic/political sanctions legitimately applied by States through international organizations, such as the United Nations, coupled with a simultaneous bottom-up international pressure from unified civil society organizations will be the only two simultaneous ways to break with the antimafia impasse.

Endnotes

[1] Edgardo Buscaglia, “On Best and Not so Good Practices for Addressing High-level Political Corruption Worldwide: An Empirical Assessment,” Chapter 16 in Susan Rose Ackerman and Susan Soreide (Eds.), International Handbook on Corruption, 2011.

[2] Buscaglia Edgardo, The Paradox of Expected Punishment: Legal and Economic Factors Determining Success and Failure in the Fight against Organized Crime,Review of Law & Economics. Vol. 4, no.1, pp. 290-317, October 2008: https://ideas.repec.org/a/bpj/rlecon/v4y2008i1n14.html.

[3] United Nations Convention against Organized Crime: https://www.unodc.org/unodc/en/organized-crime/intro/UNTOC.html.

[4] Buscaglia 2008. supra note 2.

[5] Edgardo Buscaglia, “Institutional Factors Determining the Gaps between Laws in the Books vs. Laws in Action: An Analytical Framework for Improving Judicial Effectiveness" in Legitimacy, Legal Development and Change: Law and Modernization Reconsidered. London and New York: Routledge, 2016.

[6] Edgardo Buscaglia, Lavado de Dinero y Corrupción Política/Money Laundering and Political Corruption: Mexico: Penguin Random House, 2015.

[7] Understanding Odebrecht: Lessons for Combatting Corruption in the Americas (2019). Hearing Before the subcommittee on the Western Hemisphere.  US House of Representatives. Serial No. 116–18.  Available at: https://www.govinfo.gov/content/pkg/CHRG-116hhrg35616/pdf/CHRG-116hhrg35616.pdf;  Also refer to Sandrine Gagné-Acoulon, “Ex-Boss of Mexico’s Oil Company Pleads not Guilty in Odebrecht Case.” OCCRP (Organized Crime and Corruption Reporting Project). 30 July 2020: https://www.occrp.org/en/daily/12886-ex-boss-of-mexico-s-oil-company-pleads-not-guilty-in-odebrecht-case.

[8] Jorge Pontes and Márcio Anselmo. Crime.gov. London: Bloomsbury Academic. Forthcoming 2021.  

[9] Pete Madden, “Mexican elections are bloodiest in recent memory.” ABC News. 1 July 2018, https://abc7ny.com/3687862/.

[10] Buscaglia 2011, supra note 1.

[11] Pontes and Anselmo, forthcoming, supra note 8.

[12] Ibid.

[13] Prevención del Delito y Disminución de la Delincuencia: Experiencias Internacionales de Éxito:Prevención+Police=Seguridad.  Diputada Federal Claudia Cruz Santiago, Coordinadora. Congreso de la Unión.  26 May 2015. Available at at https://www.slideshare.net/MarcoAntonioTovar/prevencion-del-delito-experiencias-de-exito-internacionales.

[14] Las familias de desaparecidos rechazan la amnistía de AMLO; No nos dará justicia ni paz, afirman.Sin Embargo. 23 July 2018: https://www.sinembargo.mx/23-07-2018/3446387.

[15] Edgardo Buscaglia, “The Economic Analysis of Human Rights and Organized Crime” in Manuel Tablante, et. al. (Eds.), Corruption and Human Rights. Max Planck Institute, 2018.

[16] “Combating Corruption in Latin America: Congressional Considerations.” Washington, DC: Congressional Research Service. Report R45733, 2019:  https://crsreports.congress.gov/product/pdf/R/R45733; and “Odebrecht and Braskem Plead Guilty and Agree to Pay at Least $3.5 Billion in Global Penalties to Resolve Largest Foreign Bribery Case in History,” Washington, DC: US Department of Justice, Office of Public Affairs, 2016: https://www.justice.gov/opa/pr/odebrecht-and-braskem-plead-guilty-and-agree-pay-least-35-billion-global-penalties-resolve.

[17] Pontes and Anselmo, forthcoming, supra note 8.

[18] Marco A. Jimenez, “Ayotzinapa 43: The Criminal Corruption of the Mexican State.” Educational Philosophy and Theory. Vol. 48, no. 2, 2015: https://www.tandfonline.com/doi/full/10.1080/00131857.2015.1037226.

[19] Buscaglia 2018, supra note 15.

[20] Buscaglia 2015 & 2018, supra notes 6 and 15

[21] Buscaglia 2018, supra note 15.

[22] ibid.

[23] Gunnar Stølsvik, “The development of the fisheries crime concept and processes to address it in the international arena.” Marine Policy. Vol. 105, pp. 116-122, 2019: https://doi.org/10.1016/j.marpol.2018.12.027.

[25] Juan Ignacio Cánepa, “Entrevista al Jefe del Comando Sur: China posee una flota pesquera patrocinada por el Estado e involucrada en actividades ilegales’.” Infobae. 9 April 2021: https://www.infobae.com/def/defensa-y-seguridad/2021/04/09/entrevista-al-jefe-del-comando-sur-china-posee-una-flota-pesquera-patrocinada-por-el-estado-e-involucrada-en-actividades-ilegales/.

[26] See “Chad’s strongman president, Idriss Déby, is killed by rebels.” The Economist. 24 April 2021, https://www.economist.com/middle-east-and-africa/2021/04/22/chads-strongman-president-idriss-deby-is-killed-by-rebels.

[27] See Human Rights Watch Reports at https://www.hrw.org/tag/uyghurs#.

Categories: El Centro

About the Author(s)

Edgardo Buscaglia is presently a Senior Scholar in Law and Economics at Columbia University (USA); the Director of the International Law and Economics Development Centre; and President of the Institute for Citizens Action (Mexico).  Professor Dr. Buscaglia currently serves as Visiting Senior Academic at the Università degli Studi di Torino (Italy) and Visiting Professor at the Universidad Nacional de Buenos Aires (Argentina).  Prof. Dr. Buscaglia has served as Visiting Professor of Law and Economics at the Mexican Autonomous Institute of Technology (ITAM–Instituto Tecnológico Autónomo de México (ITAM) between 2003-2013 and at the National Autonomous University of Mexico (UNAM–Universidad Nacional Autónoma de México in 2013, Georgetown University (USA) between 1995 and 1996 and Hamburg University (Germany) in 2014.  Prof. Dr. Buscaglia was affiliated as a Fellow with the Hoover Institution at Stanford University between 1991 and 2008, and Director of the International Law and Economic Development Center at the University of Virginia until 2005. Dr, Buscaglia also served as United Nations staff, United Nations external adviser and as World Bank staff. Dr. Buscaglia’s worldwide applied research field work on organized crime and terrorism financing covers 119 countries.  In 1995, he co-founded the Latin-American and Caribbean Law and Economics Association (ALACDE). He received his legal postdoctoral training in the Jurisprudence and Social Policy Program at the University of California at Berkeley and received a master’s in law and economics and a PhD in law and economics from the University of Illinois at Urbana-Champaign in 1989.