PERL ON ORGANIZED CRIME IN LATIN AMERICA
USIA
14 July 1998
TEXT: PERL ON ORGANIZED CRIME IN LATIN AMERICA
(Need seen for international anti-crime steps) (2500)
Washington -- A Congressional Research Service (CRS) specialist on
global crime says that Latin America remains an "attractive arena" for
organized crime because it offers minimal risks and new opportunities
for exploitation.
Raphael Perl noted that because of the proximity and the export of
criminal contraband from the United States, Latin America is an ideal
location for criminal enterprise, which will cause more transnational
criminal activity (TCA) in the future.
Perl said that the presence of more TCA in Latin America could lead to
more violence, environmental pollution, gambling, and drug use in
these countries. In order to prevent these problems he said that the
United States and Latin America would need to promote openness in
government, build corruption safeguards, and exercise leadership.
He made the comments July 14 at a Heritage Foundation roundtable
discussion on global organized crime in Latin America. Perl is a CRS
specialist on global organized crime.
Following is a text of Perl's remarks as prepared for delivery.
(Begin Text)
My remarks today on the globalization of organized crime in Latin
America: implications and options for U.S. policy will address four
questions:
1. Why is crime going global?
2. Why Latin America? Why are Latin American nations increasingly
becoming either a base or a target for transnational criminal activity
(TCA)--either facilitators of such activity, or victims of it.
3. What kinds of TCA can we expect to see more of in Latin America?
4. What can the United States and Latin America do about such
activity?
1. WHY IS CRIME GOING GLOBAL?
We increasingly live in a world affected by global trends towards
deregulation, open borders, and enhanced movement of people, money,
goods and services. In this world, this global village, traditional
time, distance, and spatial barriers are increasingly broken down by
advanced technology. The flip side of this global village concept is
that the world has also become a global crime pool. This globalization
facilitates the ability of drug trafficking and other criminal
organizations to operate in a relatively unregulated environment and
amass and legitimize enormous wealth.
In today's world, just about everything is going global. So why not
crime? Illegitimate business activity, like legitimate business
activity, seeks new opportunities for expansion, safehaven and profit.
Transnational crime goes where the money is or where the money or the
operations generating it are protected. In today's world,
opportunities for both profit and protection are available in a global
transnational environment. Which brings us to Latin America. Why Latin
America? If I represent a transnational criminal enterprise, what is
it that makes Latin America attractive to me?
2. WHY LATIN AMERICA?
First of all, location--proximity to the United States. We cannot
ignore the fact that geographically the United States basically has an
open border to the south. Some observers have compared this phenomenon
to a hotel lobby--you can walk in and you can walk out. From the
criminal perspective, Latin America is a natural market for the export
of criminal contraband from the United States--whether it is illegally
exported arms, untaxed cigarettes, or stolen cars.
This same phenomenon of open borders contributes to the attractiveness
of the United States as a market for export of Latin American
contraband to the United States, primarily from the drug trade as the
U.S. appetite for illicit drugs fuels the growth of powerful criminal
organizations on the southern continent.
But aside from geographic proximity and the mutual export and
concomitant import of illicit products based on the principle of home
supply and foreign demand, Latin America remains an attractive arena
for TCA for two very basic reasons: Latin America offers minimal risks
and new opportunities for exploitation.
To operate effectively transnational criminal organizations (TCO's)
need base or home countries, target or victim countries, and market
countries, which may include home countries or target countries. Let
us look at some of the characteristics TCO's look for in ether target
or home (base) countries. How widespread or indigenous are such
characteristics in the Southern Hemisphere today?
Base countries: One could count--but then again it may not be too
diplomatic to do so. How many Latin American countries have attractive
characteristics as base countries for the transnational criminal
enterprise (TCE)? How many countries have poverty, economic
dislocation widening gaps between the rich and the poor--providing
recruitment pools for the TCE? How many countries have fragile, weak
governments, lax borders or coastlines, fragile judicial institutions,
unresponsive civil administration, traditions that tolerate if not
countenance corruption, unzealous or inefficient law enforcement? How
many countries have developing economies with expanding trade and
financial systems where opportunities to mix licit and illicit
business abound? If I, the transnational criminal enterprise, were
looking for a headquarters or base country, would I be advised to set
up in Germany--Bonn or Berlin, or in Mexico, Colombia, or the
tri-border area of Paraguay, Argentina, and Brazil?
Target or victim countries: Many of the qualities that make a country
attractive as a base country for TCA are also present in the target or
victim country. However, in the case of the victim country, a
developing economy is key. Does the economic standard of living
support a market for stealing or selling stolen cars? Does the
economic standard of living support a market for stealing or selling
intellectual property? Are there enough computers to warrant
widespread pirating of software? Are there enough compact disc players
to warrant stealing the works of Mexican, Brazilian, or North American
pop artists?
I suggest to you that the time is ripe, the conditions are present and
stage is being set for an explosion of TCA in Latin America.
3. WHAT TYPES OF TCA CAN WE EXPECT TO SEE MORE OF IN LATIN AMERICA?
Now looking to the future: what types of TCA can we expect to see more
of in Latin America in the coming decade? I suggest we are already
experiencing dramatic increases in at least a dozen types of criminal
activity.
-- 1. Penetration of political systems. Especially, attempts by well
funded criminal organizations to fund political campaigns.
If the organization can buy in at the top--protection is virtually
insured. Several weeks ago I had lunch with an ambassador from a Latin
American country we hear a lot about, in the news, in connection with
the drug trade. And a central topic of discussion was not so much the
drug trade, violence associated with it, and implications for
bi-lateral relations, but campaign finance models of other nations and
how to develop a working model for a Latin American environment.
As two of our panelists will address issues in Colombia and Mexico,
I'm certain we will hear more of this issue today.
-- 2. Attempts by well funded organizations to break and disable often
fragile criminal justice systems at the national and local level by
widespread corruption backed by violence. Analysts used to talk about
the danger of the Colombianization of Mexico. Today they are beginning
to talk more in terms of the Mexicanization of the hemisphere.
-- 3. Clearly more financial crimes, which aim to exploit the new
technological sophistication of today's commercial and financial
markets. Money laundering is a big problem. Money is smuggled out of
the U.S. in bulk to Latin American countries with weak money
laundering laws. One thing one realizes when one looks at the State
Department's INCSR money laundering report, or speaks to law
enforcement agents in the know, is that there appear to be more
nations in Latin America where this is perceived to be a major problem
than not. Other growth industries are bank fraud, credit card fraud,
manipulation of stock exchange transactions, insurance scams and
banking scams.
-- 4. Attempts by criminal organizations to expand activities into new
victim states. This is frequently a result of states peripheral to the
drug trade being drawn into it. For such states, this means more
violence by criminals equipped with military type firepower,
undermining of civil norms, and loss of legitimacy of government as
crime makes inroads, loss of state revenues from untaxed income, loss
of foreign investment and legitimate trade, and the danger of a
political backlash designed to crack down on crime--a backlash which
threatens individual liberties, human rights, and democracy.
-- 5. More violence traditionally associated with criminal activity
including common street crime & kidnapping for ransom, and extortion.
In many countries in LA, abduction is becoming a daily life activity.
-- 6. More environmental pollution--whether by drug traffickers or
criminal waste disposal services. Of growing concern is pollution by
methamphetamine laboratories. Chemicals employed are both hazardous
and volatile and the cost of cleanup for an average laboratory is
$40,000.
-- 7. More gambling is moving down the continent and organized crime
will move along with it. Also, prostitution and exploitation of
children for pornographic activities--traditional forms of organized
criminal activity--can be expected to expand as well.
-- 8. More arms trafficking, from the U.S. towards the south, unless
we get a handle on it. Also, with the end of warfare in Central
America, there is a big surplus of weapons available on the streets in
an increasing number of countries. And also we can not overlook the
diversion of arms into the criminal marketplace from domestic arms
industries based in the Southern Hemisphere.
-- 9. More attempts by internationally sought criminals on lam to use
Latin America as a safehaven from detection, arrest, extradition and
prosecution. This will mean a bigger trade in diverted or digitally
forged documents such as passports and visas. I understand that if one
goes to the Internet, Dominica offers a passport and name for the
paltry sum of $60,000. In other countries, which I don't want to
specify, the right amount of cash buys a national passport in the name
requested. The ability of individuals in many Latin American countries
to obtain identity documents and follow-up passports with minimal
initial identification is a problem of growing concern for the U.S.,
particularly in the case of countries from which the U.S. does not
require a visa.
It is also well known that in many states in the U.S., it is possible
for undocumented aliens to obtain legal state drivers licenses or
state voter registration cards or to buy forged green cards for a
pittance, raising the possibility that the U.S. may increasingly be
becoming a haven for criminals sought by Latin American authorities
and those from other nations.
-- 10. More drug use. Drug use follows drug production and trafficking
routes, and the problems associated with drug use, especially street
crime, are coming home to roost in Latin America. Look at Mexico,
Colombia, Brazil, and I am told that Venezuela has a higher per capita
illicit drug addiction rate than the U.S.
-- 11. More intra-hemisphere illegal alien smuggling--aside from
generating income--this builds satellite ethnic communities in
recipient nations outside of the law who are seen as a source of
recruitment for criminal groups and as local cover for foreign
criminals of similar ethnic characteristics, who may want to operate
in a victim state without attracting undue attention.
-- 12. More property crime. As disposable wealth increases on the
Latin American continent, so will the opportunities to steal the
property it buys. This means more theft of all kinds--locally owned
cars, VCR's, art, antiquities, technology, and particularly
intellectual property rights. This is an escalating problem for
Mexico, for example. Mexico has a major hemispheric recording and
publishing industry, which is being systematically violated. The
government there just created a position of special Deputy Attorney
General for Property Rights Enforcement.
4. IN LIGHT OF THIS ACTUAL AND PROJECTED EXPANSION OF TCA IN LATIN
AMERICA, WHAT SHOULD THE UNITED STATES AND THE LATIN AMERICAN NATIONS
DO? WHAT OPTIONS ARE AVAILABLE?
I have identified six options:
-- 1. Promoting transparency and openness in government and banking.
Criminal activity hates openness, for openness means exposure. A free
and secure press plays an important role here. It is no accident that
murder of journalists is up in countries where organized crime and
corruption flourish. President Clinton has suggested that the OAS
create a special unit to ensure press freedom similar to the press
ombudsman at the Organization on Security and Cooperation in Europe.
Strong money laundering legislation is central to such transparency.
Brazil, for example, recently enacted such legislation.
-- 2. Building corruption safeguards. These can include investigatory
commissions, campaign finance reforms, financial disclosure
requirements for public officials, special offices in the ministry of
justice to deal with corruption, anti-bribery laws, and witness
protection programs. But it is not enough to have safeguards on the
book. To be an effective deterrent, they must be enforced with
convictions and jail time.
-- 3. Promoting a culture of lawfulness and social responsibility.
This begins with the educational system, with family values, with the
church and community. In cultures where crime is glorified on TV
daily? This is a difficult challenge for the state.
-- 4. Promoting multilateralism. The criminals are forming
multilateral alliances in the hemisphere (Colombian groups with
Russian groups and Italian groups) and the nations of the region must
do the same. We are seeing more and more of this. Agendas on the
nation state level include: harmonization of laws, information
exchange, customs cooperation, law enforcement cooperation,
multilateral training programs, and exchange of personnel, passage and
implementation of conventions such as the OAS arms control convention,
which passed in record time, and conventions to see that exports such
as precursor chemicals or weapons go to the correct recipient.
-- 5. Mobilizing the private sector. Much organized crime preys on the
private sector, which in turn takes extraordinary measures to protect
itself from loss. We need more public/private partnership initiatives
to combat organized crime. Government could do much more to help
industry police itself and visa versa.
-- 6. Exercising leadership by example. Those nations who are, or who
aspire to be, leaders must set the example. In the case of the United
States, one could suggest this means doing more to stop illicit arms
exports to Latin America, more to stop untaxed market cigarette sales
to Latin America, more to stop domestic money laundering or the
wholesale export of cash to Latin banking institutions, more to
control our borders, to keep drugs out and stolen cars in --to deny
Latin American criminal groups the proceeds of their activity, more to
control the borders so that the U.S. does not increasingly become a
safehaven for criminals on the lam from other nations, more to ensure
that we pursue an agenda of protecting human rights in nations where
we pursue vigorous anti-crime policies, more to insure anti-corruption
safeguards in organizations that operate transnationally, such as the
U.N. and the World Bank, and more to reduce domestic drug demand.
(End Text)