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Dirty Money – How to break the link between organized crime and politics.

(C) Americas Quarterly

From issue: Trafficking and Transnational Crime (Spring 2010)

Dirty Money

by Kevin Casas-Zamora

How to break the link between organized crime and politics.

Politics has long been a magnet for drug money in Latin America. In the 1970s, Costa Rican politicians were accused of accepting contributions from the late Robert Vesco, a U.S. financier who settled in Costa Rica after fleeing prosecution at home. Vesco, some of whose money purportedly came from heroin smuggling, was a major backer of the winning party’s 1974 election campaign, according to former Costa Rican President José Figueres.1

At the time, campaign finance activities were not regulated by Costa Rican law. Even in Vesco’s wake, they would remain unregulated for a long time—which, unsurprisingly, led to a new scandal a decade later, when the main parties in Costa Rica were found to have accepted contributions from a number of donors linked to the drug trade.2 One important donor was General Manuel A. Noriega, then neighboring Panama’s leader, whose involvement in drug trafficking would lead to his ouster from power by a U.S. military intervention in 1989.

By then the Costa Rican experience was hardly exceptional. The campaigns of Bolivian President Jaime Paz Zamora in the 1980s were tainted by accusations of links to drug traffickers, as was the 1994 campaign of Panama’s President Ernesto Pérez Balladares.3 There were also the more serious cases of Colombia and Mexico, where the role of drug barons in underwriting campaigns had been an open secret since the 1970s.4 In Colombia, in particular, the election of drug lord Pablo Escobar to congress in 1982 was a sobering as well as farcical moment.5 The day of reckoning, however, came with the emergence of tapes showing that the campaign of President Ernesto Samper had sought and received several million dollars from the drug cartels in the runup to the 1994 election. This revelation, the mother of all drug trafficking-cum-campaign finance scandals in Latin America, not only doomed Samper’s administration but rattled Colombia’s otherwise solid democracy.6

Since then, there are reasons to think that the drug-politics link has grown deeper in the region. Just last year, in the run-up to the mid-term congressional elections in Mexico, two legislative candidates (one in the State of Chihuahua, another in the State of Mexico) were accused in press reports of having links with organized crime.7 More strikingly, in early February of this year, the ruling Partido de Acción Nacional (PAN) decided to suspend all open primaries in the border state of Tamaulipas due to the risk of infiltration by narcotics cartels.

“In the case of Tamaulipas, everybody knows the possible influence of crime in candidate selection,” explained PAN’s national chairman, César Nava, “We won’t leave any room for that to happen.”8

The case of Tamaulipas illustrates the very real dilemmas that beset democratic systems in Latin America in trying to coexist with a huge illicit industry that requires political protection as humans require oxygen. While not unique to Latin America, these challenges manifest themselves in the region with uncommon intensity.

Notwithstanding vast efforts to eradicate illicit crops and interdict drugs, Latin America continues to be the world’s largest cocaine producer and plays a growing role in the production of synthetic drugs and opiates. Whether as producers of illicit crops, as transshipment countries, as entry points to key markets, as money laundering locales, or as large consumption markets, practically all countries in the region take part in a drug trade that mobilizes tens of billions of dollars every year. This money flow and the sophistication of the criminal networks that sustain it feed many other illicit activities and have transformed the region’s political and security landscapes.

The funding of parties and candidates is just one of the fronts where the battle between organized crime and democratic institutions is played out. But it is an important one.

Investing in politics is a natural step for an industry that requires weak law enforcement and a measure of control over crucial public institutions, like customs, to thrive. Helping to elect friends who can open doors and peddle influence throughout the state apparatus is often more efficient than other methods, such as bribing, blackmail or threatening violence.

While buying political protection is the name of the game for drug traffickers, their decision to contribute to parties and candidates may also have other rationales. As the cases of Vesco and, more clearly, Escobar show well, it may also be an attempt to penetrate political circles to gain social respectability.

This points to one of the most interesting, if unsung, political struggles underway in Latin America today: the battle in which traditional economic elites reject the arrival of that ragged newcomer, the drug trafficker, to the dispute for political power. In countries as diverse as Mexico, Honduras and Colombia, political finance is one of the ways in which a new kind of barbarian is crashing through the gates of country clubs and presidential palaces, to the horror of the well-bred few.

While drugs and politics have a long history in the region, several new political factors have made Latin American politics more vulnerable to organized crime. Here are four key ones:

Competitive Democracies

In most Latin American countries, elections are more competitive. In 43 presidential elections held in 18 Latin American countries between 2000 and 2010, opposition candidates prevailed 53 percent of the time.9 While competitive elections and viable opposition parties probably help to improve the levels of political transparency, they also tend to raise the cost of politics. Although reliable evidence on the cost of campaigns in the region is notoriously difficult to come by, the available data yield some worrying findings. In the case of Mexico, estimates of paid political advertising on television by the three main presidential candidates ranged from $70 million in 2000 to well above $100 million in 2006.10 And much more is spent on other campaigns at both the federal and subnational level. In Brazil, a rough estimate of the cost of the 2006 general election was $2.5 billion, according to Brazilian expert Bruno Speck.11 Sums spent in small countries are often higher, proportionally speaking. The current president of Panama, Ricardo Martinelli, a wealthy businessman, spent $19 million in his campaign, a remarkable figure in a country with barely 2 million registered voters.12 Competitive elections, in other words, offer terrific opportunities for crime syndicates hoping to make political investments.

Lax Enforcement

While Latin American countries have made significant strides toward regulating campaign finance, the enforcement of these rules continues to be extremely weak.13 With the exception of El Salvador, for instance, every country has either banned certain kinds of political funding or introduced contribution limits. Likewise, in nearly every Latin American country (El Salvador is the exception again) parties must submit regular financial reports to the electoral authorities, an obligation that also covers candidates in several countries including Brazil, Colombia, Chile, Panama, Uruguay, and Venezuela. Moreover, fines (in all countries, except El Salvador, Guatemala and the Dominican Republic) and penal sanctions (in 7 out of 18 countries) have been introduced to back up existing political finance controls. Yet, more often than not, these regulations are honored in the breach. The comprehensive controls introduced in Argentina in 2002, for instance, lost all credibility when 10 days before the 2003 presidential election the leading candidate and eventual winner reported, without any adverse consequence, that his campaign expenses amounted to one peso.14 In Central American countries, despite numerous blatant violations of political finance laws, not a single criminal or electoral sanction has ever been meted out to anyone.15 Mexico stands out as the only regional example in which a powerful electoral authority has made a genuine effort to enforce campaign finance laws, in some cases with extraordinary severity.

Indeed, in the wake of Mexico’s 2000 election, the Partido Revolucionario Institucional (PRI) was fined $100 million by the electoral authority for having received electoral funds from a state-run company, which were not reported to authorities. This is, by a huge margin, a world record.


The region-wide trend toward political decentralization is facilitating the penetration of organized crime. On the one hand, decentralization processes open up new arenas of electoral competition that add to the cost of politics. Very often, these new layers of competition are outside the scope of the already lax campaign finance controls that operate at the national level. On the other hand, the devolution of significant powers, even police powers, to local authorities creates an obvious incentive for the intervention of organized crime.

Even in small countries, co-opting national institutions—through campaign contributions, bribes or the threat of violence—is a much more difficult, expensive and conspicuous option for drug traffickers than securing the co-operation of local authorities. Besides, the latter are often the ones endowed with the power to disturb or shield criminal activities in a particular locale. The experience of Colombia, where a vigorous decentralization process has taken place since the 1980s, is particularly relevant. In that case, since 2006, over 80 national congresspeople have been investigated for ties to paramilitary groups. Penetration of violent criminal gangs is even more pervasive at the local level.

Weak System Parties

The weakness of parties and party systems throughout the region also has troubling financial implications. The dearth of fee-paying party members and the modest amounts available to candidates from most systems of public election funding in Latin America leave parties and their candidates heavily dependent on their ability to attract private contributors.

The weak party systems in many Latin American countries also make them particularly prone to the emergence of political outsiders who are supported by little more than a well-funded electoral machine. Panama’s Martinelli is merely the most recent addition to a list that includes Colombian President Álvaro Uribe and Ecuadorian President Rafael Correa, among many others. This points to a glaring risk: in many Latin American countries criminals don’t need to buy off a national party structure in order to have a fighting chance at electoral success: all they need is to bankroll an electoral machine, often surprisingly flimsy.

The capture of parties and elected officials by moneyed interests is bad news for democracy. At a minimum, it compromises the premise of political equality that supports the whole edifice of democracy, reflected in the principle of “one person, one vote,” and stunts the ability of parties and leaders to channel broader social demands. Such a loss of political autonomy is serious if it occurs vis-à-vis legitimate interests, business or otherwise. It is, however, devastating when it involves organized crime.

The encroachment on the autonomy of elected leaders as a result of the financial participation of organized crime in their campaigns has peculiar traits. Insofar as the funds come from a donor with an uncommon ability to exert coercion, the campaign contributions from organized crime are far more than a mere attempt to buy influence with policymakers. Unlike interactions between private donors and politicians, where quid-pro-quos are seldom articulated explicitly and elected politicians always retain the possibility of not fulfilling the donor’s expectations, the normal codes of etiquette and uncertainty in the case of drug traffickers do not apply.

In the classic formulation that became Pablo Escobar’s trademark, “plata o plomo” (buck or bullet) are often the only choices public officials face. Given these options, once he or she is “bought,” it is exceptionally difficult for any politician to escape from this dynamic.

Indeed, drug-related contributions received, even unknowingly, by a politician may be used to blackmail him once elected. This is no Hollywood script. It is exactly what José Castrillón Henao, a Cali cartel associate who contributed generously to the campaign of President Pérez Balladares in Panama, attempted to do when arrested on drug trafficking charges by the Panamanian authorities in 1996.16 Although he failed to secure impunity for himself by going public with his contribution checks, he managed to embarrass the president well beyond Panama.

There are more fundamental issues at stake than the loss of the autonomy of elected officials. The capture of parties, leaders and institutions by perpetrators of illicit activities is done with the goal of achieving impunity from any of their crimes and thus undercuts the rule of law. This is a crucial difference between organized crime and any other interest group. Legitimate interests that contribute to campaigns seek to shape the law in their favor. Organized crime seeks to prevent the law from being enforced altogether—and this strikes at the heart of the viability of the state.

Campaign contributions from organized crime enhance the power and influence of actors who, in many cases, actively dispute the state’s sovereign control over a territory, as Colombians and Mexicans know well. They nurture a power that exists not through the law, but outside it. In the worst cases of political penetration by organized crime, the distinction between institutions and crime—between inside and outside the law-—dissolves as the state and its authorities become effective abettors of criminal activities, and may even depend on such activities to function.17


1. Hutchinson, Robert (1975), Vesco; New York, Praeger, pp.411-412; The New Republic, April 23, 1977.
2. Casas-Zamora (2005), Paying for Democracy: Political Finance and State Funding for Parties; Colchester, European Consortium for Political Research, pp. 140-141.
3. Mayorga, René (1998), “El financiamiento de los partidos políticos en Bolivia”, in Pilar Del Castillo & Daniel Zovatto, eds., La Financiación de la Política en Iberoamérica; San José, IIDH-CAPEL, p. 35; Casas-Zamora, Kevin (2003), “Financiamiento de campañas en Centroamérica y Panamá”, Cuadernos de CAPEL, No.48, San José; “Drugs are back”; The Economist, May 25, 1996; “Well I never, says the president”, The Economist, June 29, 1996.
4. Curzio, Leonardo (2000), “Organized crime and political campaign finance in Mexico”; in John Bailey & Roy Godson, eds., Organized Crime and Democratic Governability; Pittsburgh, University of Pittsburg Press.
5. Bowden, Mark (2001), Killing Pablo: The Hunt for the World’s Greatest Outlaw, New York, Penguin, pp. 30-35.
6. Jordan, David C. (1999); Drug Politics: Dirty Money and Democracies; Norman, University of Oklahoma Press, pp.158-162; Vargas, Mauricio; Lesmes, Jorge & Téllez, Edgar (1996), El presidente que se iba a caer: Diario secreto de tres periodistas sobre el 8000; Bogotá, Planeta.
7. “Héctor Murguía: los narcos en casa”, El Universal (Mexico D.F.), March 27, 2009; “Registran Candidatura de Héctor Murguía”, El Diario (Ciudad Juárez), April 23, 2009.
8. “Blindan candidaturas del PAN en Tamaulipas”, El Universal (Mexico D.F.), February 3, 2010.
9. Madrid, Raúl (2005); “Ethnic cleavages and electoral volatility in Latin America and the Caribbean”; Comparative Politics, Vol. 38 (Octubre), p.6; Payne, Mark et al (2006), La Política Importa: Democracia y Desarrollo en América Latina, Washington DC, BID-Planeta, pp.183.
10. “Elecciones 2000: Cuánto gastaron los partidos en spots”, Etcétera (Mexico D.F.), November 1, 2002; “Cada voto por Calderón costó en spots $45.46”, El Universal (México D.F.), July 7, 2006.
11. “Filiados deveriam financiar partidos”, O Popular (Goiania, Brazil), February 16, 2010.
12. “Gasto millonario en pasadas elecciones”, La Prensa (Panama), November 9, 2009.
13. Casas-Zamora, Kevin & Zovatto, Daniel (2010), “Para llegar a tiempo: Apuntes sobre la regulación del financiamiento político en América Latina”, Nueva Sociedad, No. 225, January-February, pp. 48-67.
14. Ferreira Rubio, Delia (2005); “El control del financiamiento de los partidos en Argentina: ¿Qué cambió con la nueva ley?”; Buenos Aires, Serie Documentos de Trabajo No. 292, Universidad del CEMA, pp.10-11.
15. Casas-Zamora (2003), op. cit.
16. “In Panama, drug money’s clout outlives Noriega”, The Washington Post, November 19, 1998.
17. Naim, Moisés (2005); Illicit; New York, Doubleday.
18. Casas-Zamora (2005), op. cit., pp.36-39.
(C) Americas Quarterly From issue: Trafficking and Transnational Crime (Spring 2010) Dirty Money by Kevin Casas-Zamora
How to break the link between