Venezuela, the New Regional Crime Hub
MEDELLÍN, Colombia — Venezuela has become a regional crime hub, with profound consequences for Latin America and beyond. And with another Nicolás Maduro term, the roots of organized crime in that country will spread further.
The Chavista regime is digging in. Politically, it survived the protests of 2017. The loyalty of the military ensured that President Maduro was able to bypass the opposition-controlled National Assembly, beat back protesters and stage a farcical presidential election in May, giving him six more years in office. The last fig leaf of democracy has fallen.
Mr. Maduro is now maintained by a regime with suspected deep criminal roots. He is surrounded by people involved in criminal activity, like Vice President Tareck El Aissami and Interior Minister Nestor Reverol, both the targets of United States sanctions. In May, Washington added Diosdado Cabello, president of the National Constituent Assembly and the strongman of the ruling United Socialist Party of Venezuela, to the sanctions list.
There is no clear-cut definition of what constitutes a mafia state, but the fact that organized crime touches the daily lives of every Venezuelan, and has penetrated the highest level of state institutions, easily qualifies Venezuela. The Maduro government engages in little bilateral or international cooperation in the fight against transnational organized crime and has prominent state officials facilitating and protecting criminal activity.
Three years ago, my foundation, InSight Crime, started collecting information on senior figures in the Venezuelan government involved in drug trafficking, the so-called Cartel of the Suns. The name came from the golden stars that the generals of the Bolivarian National Guard wear on their epaulets. The National Guard is responsible not only for internal security but also the frontiers, ports and airports, access to which every drug trafficker needs. It was the first institution to be systematically bribed by Colombian drug traffickers to allow cocaine shipments to transit Venezuela.
The first 20 names in our list were easy enough to find. Cross-referencing with files seized from the Revolutionary Armed Forces of Colombia, or FARC, consultations with international counternarcotics agencies and extensive field research in Venezuela ensured the dossiers on these individuals were soon bulging. We stopped opening new files when we hit 123 people sitting in senior positions in government in more than 12 state institutions. We ran out of manpower, not leads.
Cocaine is pouring into Venezuela from neighboring Colombia. Drug production has never been higher, and we estimate that Colombia is producing 921 tons of cocaine a year. In 2010, Venezuela was handling at least 200 tons of that. In the past, it was the Colombian cartels that ran this business, paying off Venezuelan officials. Now there is overwhelming evidence that the Venezuelans are directly participating. The 2016 conviction in the United States of two nephews of the Venezuelan first lady for cocaine trafficking is just the most obvious example of this.
Yet we found that drug trafficking was not the most lucrative illegal industry in Venezuela and that our targets had diverse criminal portfolios. Gasoline in Venezuela is the cheapest in the world. Smugglers who move it across the border into Colombia or Brazil can earn a greater markup than with a kilo of cocaine, and with minimal risk. Mr. Maduro closed the border with Colombia during stretches of 2015 and 2016 to “destroy the mafia.” This strengthened the Venezuelan military’s monopoly on fuel smuggling.
Venezuelan President Nicolas Maduro ordered the military to take control of popular markets including this one in Coche, a neighborhood of Caracas, in the midst of a severe shortage of food and medicine. Credit Federico Parra/Agence France-Presse — Getty Images
But the real money was being made, with no risk, though pillaging state coffers. With all transparency and accountability gone, with positions filled on the basis of political loyalty instead of ability or integrity, Venezuela has become a kleptocracy.
The linchpin of this kleptocracy is the artificial currency control system. Today one United States dollar on the black market is worth as much as 3.4 million Venezuelan bolívares. But those privileged with access to the official exchange rate can get a dollar for just 10 bolívares. It’s probably the most lucrative deal on the planet. In addition to catastrophic economic mismanagement, this has brought Venezuela, even with all its oil riches, to the brink of bankruptcy.
There is now little money left to steal from the state, yet the wheels of corruption still need to be greased. The military rank and file earn around the equivalent of less than $20 a month, while the minimum wage is around $1.50 a month. Because everyone has to be on the take to survive, Mr. Maduro has made every Venezuelan an unwilling participant in the criminal economy. If Venezuelans want food and medicine, they must resort to the black markets; they must feed the corruption that permeates every organ of the state and every aspect of their daily lives.
The military now oversees food and medicine distribution. This may keep it loyal for a while yet, but the model is not sustainable. Drug trafficking is the main growth industry in Venezuela, followed by illegal gold mining. Cocaine may well become the lubricant that keeps the wheels of corruption moving in Mr. Maduro’s Venezuela.
This situation is affecting Venezuela’s neighbors. Central America, particularly Honduras and Guatemala, is the landing strip for an air bridge shipping cocaine from Venezuela. The Dominican Republic is the destination for drug boats streaking across the Caribbean from the Venezuelan coast.
Aruba and Trinidad and Tobago have become contraband centers. Cheap Venezuelan gasoline gushes across the Colombian and Brazilian borders. And over a million Venezuelans have fled their collapsing country in the last 12 months. Many of these are desperate people, sick and hungry. They will work for a hot meal. They are being exploited and recruited by organized crime.
Isolated and broke, President Maduro has surrounded himself with figures involved in criminal activity, and as long as he remains in power the criminal credentials of the government will get only stronger.
Venezuela cannot work to contain organized crime, as the very security forces that should be deployed against it run much of the business. Mr. Maduro, even if he wanted to, could not cut out the cancer of corruption and organized crime as these are the very elements that keep him in power.
And for the international community there is little room for maneuvering. Mr. Maduro is not a reliable partner in any fight against organized crime and he has helped turned Venezuela into a haven for criminal activity.
Jeremy McDermott is the co-founder of InSight Crime, a foundation investigating organized crime in Latin America.