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There is no universally accepted definition of what constitutes a “mafia state.” Here are seven arguments as to why we think Venezuela qualifies and what the implications are of this troubled Andean nation as a regional crime hub.

1. Top level criminal penetration into state institutions

For the last three years InSight Crime has been tracking individuals we believe have links to organized crime and have held, or currently hold, senior positions in Venezuelan state institutions. We have found 123 officials that we confidently believe are involved in criminal activity. For legal reasons we will not publish the entire list, but some of the clearest cases are named in this investigation, “Drug Trafficking within the Venezuelan Regime: The Cartel of the Suns.”

What is clear from our investigations is that the following institutions are staffed at the higher echelons by individuals we believe are, or have been, engaged in criminal activity:
The Vice Presidency, the Ministries of Interior (Ministerio del Poder Popular del Despacho de la Presidencia y Seguimiento de la Gestión de Gobierno), Defense (Ministerio del Poder Popular para la Defensa), Agriculture (Ministerio del Poder Popular de Agricultura Urbana), Education (Ministerio del Poder Popular para la Educación), Prison Service (Ministerio del Poder Popular para el Servicio Penitenciario), Foreign Trade and Investment (Ministerio de Estado para el Comercio Exterior e Inversión Internacional), Electricity (Ministerio del Poder Popular para la Energía Eléctrica), the National Guard (Guardia Nacional Bolivariana), the Armed Forces (Fuerzas Armadas Bolivarianas), the Bolivarian National Intelligence Service (Servicio Bolivariano de Inteligencia Nacional – SEBIN) and PdVSA.

This article is part of a multipart investigation looking at organized crime in Venezuela. See other parts of the series here and the full report here

The penetration of so many key institutions, and the fact that they constitute the state’s main organs in the fight against organized crime, means that Venezuela cannot even contain organized crime, let alone effectively fight it. With so many state actors with interests in criminal activity, be it fuel smuggling, the black market sale of food and medicines or the trafficking of cocaine, this factor alone suggests that Venezuela qualifies as a mafia state.

2. Evidence of kleptocracy

How does a nation sat astride the greatest oil reserves outside of the Middle East go bust? Staggering incompetence, corruption and kleptocracy.

The state coffers have been pillaged on an industrial scale by the Bolivarian elite. With no transparency or public accounting of state budgets or expenditure, it is hard to calculate how much has been looted from the country. An investigation by a congressional committee put the number at $70 billion. A former minister has stated that the number is closer to $300 billion.

Without hard data, all we can do is recognize the scale of the corruption and look at some of its principal motors. The lack of transparency is one. Venezuela ranks 166 out of 176 countries rated by Transparency International’s Corruption Perception Index. If nobody knows how much the state is earning and how it is spending it, then there is no accountability and therefore officials who control budgets can easily divert funds into their own pockets or those of their friends. This kleptocracy has certainly been one of the main factors that has brought Venezuela to the edge of economic collapse and bankruptcy.

Currency and price controls introduced by the Venezuelan government in February 2003 were one of the principle enablers of corruption and kleptocracy during the government of Hugo Chávez. And this continues today, although on a much smaller scale.

“The system was created to be abused,” said Alejandro Rebolledo, a Venezuelan lawyer specializing in organized crime, during an interview with InSight Crime in Caracas. The differential exchange rates were created under the premise of avoiding capital flight in the aftermath of widespread strikes that had led to the 2002 coup. They immediately gave raise to “perverse incentives,” according to Carlos Miguel Alvarez, an analyst at the Venezuelan think tank Ecoanalitica. Unscrupulous businesses and corrupt officials could buy dollars “cheap” at the official rate and sell them for much more bolivars on the black market.

Importers “wildly inflate the value of goods brought into the country to grab American dollars at rock-bottom exchange rates. Sometimes, they fake the shipments altogether and import nothing at all,” according to an investigation by the New York Times.

Now, the exchange system is used to keep key sectors loyal. The privileged get access to US dollars, allowing them to make huge profits. The principal beneficiary today is the military, which controls the importation and distribution of food and medicine, and profits in criminal terms from this monopoly.

3. The devolution of state powers to irregular and illegal actors

Following the 2002 military coup that ousted Hugo Chávez from power for 48 hours, the president made key changes to the levers of power to ensure he could not be toppled in the same way again. One of the measures he adopted was to devolve state functions to irregular and even criminal elements. The security forces also lost the monopoly on carrying arms. Instead there has been a proliferation of weapons and munitions into criminal hands, either by design or through corruption. We have two articles in this investigative series dedicated to two examples of this: “The Devolution of State Power: The Colectivos,” and “The Devolution of State Power: The Pranes.”

The colectivos are irregular, usually armed groups that have control over many neighborhoods, principally in Caracas. They have historically enjoyed government blessing and therefore a degree of legitimacy, but are ultimately accountable to no one. They “police” their areas of influence and some even offer a parallel justice system. While they were initially funded by the Venezuela government, they have increasingly turned to criminal activities to finance themselves, principally the microtrafficking of drugs, as well as extortion. The government of President Nicolás Maduro has used the colectivos to exert social control in their areas of influence and to break up opposition protests.

The Colectivos also perform police surveillance . Credit: Carlos Ramirez

The pranes are the criminal bosses within Venezuela’s prison system. Under Prison Minister Iris Varela, the government has largely delivered control of the prison system to the pranes, with the understanding that they keep violence to a minimum and prevent disorder within the penitentiary system. The system of pranes has become so powerful and successful, that their criminal structures now operate beyond the prison gates, often in tandem with the so called “megabandas,” criminal structures than now exert control over much of the Venezuelan underworld.

4. Exponential growth of Venezuelan organized crime

Venezuela does not have a long tradition of organized crime. Indeed, until very recently it was the Colombian mafias who controlled much of the drug trafficking, extortion and kidnapping, and these were largely confined to the border states.

Today crime is rampant, and Venezuela is likely the kidnap capital of Latin America, although there is no hard data to support this claim.

Right from the outset, the Bolivarian regime adopted a strange attitude to crime. In a now infamous speech Chávez made shortly after becoming president, he condoned those who stole to feed their families, in comments widely interpreted as encouraging crime.

“The truth is that yes, if I were that young man … and I saw my daughter at the point of dying of hunger I think I would go out at midnight to do something to stop her from going to her grave — don’t you think?” he said in a public address.

“The rich are bad and the poor are exploited, the poor are delinquents or violent because they’re poor and exploited,” is how Roberto Briceño-Leon, who heads the Venezuelan Violence Observatory (Observatorio Venezolano de Violencia – OVV), described the regime’s ideological justification for tolerating criminality.

There have been a series of government policies that have directly benefited organized crime. One began in 2013, when the government began implementing what became known as its “peace zone” policy. Run by José Vicente Rangel Avalos, now the mayor of Sucre municipality in Caracas, the policy was to engage in social investment in areas of high criminality and negotiate with local communities to reduce crime. What really ended up happening was Rangel Avalos sitting down with the leaders of megabandas.

Part of the negotiations between the megabandas and the government was a verbal agreement not to allow state security forces into the designated zones without prior agreement, according to reports. Rangel Avalos denied this was the case, but observers and the media reported that the government effectively handed the areas over to the control of the gangs. They became the de facto law, and thus expanded in confidence, strength and territorial control. The absence of the security forces was the most fundamental factor in the growth of the gangs. Much like their colleagues in the prisons, the megabandas were able to create a state within a state.

“They abandoned people when they said to the municipal police, the state police, the city police that they couldn’t patrol these [peace zones] to avoid misunderstandings … and so the criminals said, ‘Hey brother, this is my opportunity to convert this area into our territory, to bring kidnapping victims, to charge ransoms, to batter the people who live here,’” Fermín Mármol, a lawyer and former police chief, told InSight Crime.

The peace zone policy, never officially recognized by the government, has been abandoned, but the zones in which it was practiced remain some of the areas with the highest rates of criminality.

Investigations by InSight Crime point to between 12 and 16 megabandas, some with over 300 members, currently operating in Venezuela, mainly in the states of Miranda, Guárico, Carabobo, Aragua, Zulia, Bolivar, Táchira and in the capital Caracas.

Linked to growth of criminal gangs has been the increase in illegal economies. The biggest has long been the smuggling of subsidized fuel, the cheapest in the world to buy, into Brazil and Colombia. This is now largely in the hands of the National Guard, working with Colombian groups. But a far more widespread series of black markets was created via the system of government subsidies on foodstuffs and medicines. This black market has fed the growth of criminal actors, who profit from their trading or smuggling. Nowadays, almost every Venezuelan does business with black markets, and many state actors, as well as criminal actors, profit from it, once again blurring the lines between the state and criminals, undermining the legitimacy of the government.

5. High levels of violence by state and non-state actors

While there are no official homicide statistics, the most realistic data on murders is provided by Venezuela’s Violence Observatory (Observatorio Venezolano de Violencia – OVV). It placed Venezuela at 89 homicides per 100,000 of population during 2017, making the nation the most dangerous in Latin America, in a region with the highest homicides rates in the world. Caracas ranks as one of the deadliest cities on the planet, with a murder rate of 130 per 100,000.

Of the 26,616 homicides registered by the OVV in 2017, 5,535 occurred at the hands of the security forces, a very high proportion, amid widespread accusations of extrajudicial killings, often in the context of the Operations to Liberate the People (Operativos de Liberación del Pueblo – OLPs). These are anti-crime offensives, launched by President Nicolás Maduro, aimed at bringing down rampant crime rates. They have been marked by high numbers of killings and accusations that there is a “shoot first, ask questions later” mentality. Another factor in the high level of state killings has been the heavy handed response to opposition protests. The United Nations has already questioned the high level of security force killings.

These levels of homicides can be laid firmly at the door of the government. When Chávez took power in 1999, homicide rates were at around 25 per 100,000, with just under 6,000 violent deaths at the end of 1999, according to the OVV. From 1999, homicides began to go up and have risen steadily year on year.

6. The Exportation of Criminality

For decades Colombia exported conflict and criminality to Venezuela, as that country’s civil conflict spilled over the frontier. Colombian drug trafficking organizations and warring factions set up shop, turning Venezuela into a logistics base, safe haven and one of the principal transit nations for Colombian cocaine. However, with the rising levels of criminality and the large-scale contraband to neighboring countries, including many small and vulnerable Caribbean islands, Venezuela is becoming a net exporter of criminality.

Much of this can be laid at the door of sheer desperation. Hungry and penniless Venezuelans, many with little education or marketable skills, have been forced out of the country in their search for survival. They are easy prey for organized crime, as victims and recruits.

The Red Cross estimated that at least one million Venezuelans fled their nation into Colombia over the last 12 months, and that an estimated 37,000 people were crossing the border every day.

Many of these dispossessed are being recruited by organized crime. The biggest recruiters have been the Colombian mafia and rebel groups, but InSight Crime doing field research in Colombia has found Venezuelan women working in the sex trade across Colombia, including as far away as Nariño on the border with Ecuador. The chapter “Colombia and Venezuela: Criminal Siamese Twins” provides further information on the presence of these rebel groups on the border between the two countries.

In the article on the cocaine pipeline from Venezuela through the Caribbean, “Dominican Republic and Venezuela: Cocaine Across the Caribbean,” we track the growing involvement of Venezuelans in a wide variety of criminal activities.

7. Widespread international accusations of criminal behavior

Another indicator of a mafia state is when enough international actors question a state’s legitimacy, not just on its democratic credentials, but for criminal activity.

Not surprisingly, the United States has taken the lead in condemning the Venezuelan government. In one of the most recent declarations, Nikki Haley, the US Ambassador to the United Nations, said that ordinary Venezuelans were “the unwilling victims of a criminal narco-state.”

Colombia’s president, Juan Manuel Santos has accused the Maduro administration of “using criminal gangs to be able to exercise better control over society, over the people, a macabre association of criminal gangs with security forces to control the population.”
The United Nations has received reports of “hundreds of extrajudicial killings in recent years, both during protests and security operations,” the UN High Commissioner for Human Rights Zeid Ra’ad al-Hussein stated.

Panama placed 54 Venezuelan government figures, including President Maduro, on a list of persons at “high risk” of engaging in money laundering or financing terrorism.

The European Union placed sanctions on seven senior government officials, including Interior Minister Nestor Reverol, Supreme Court president Maikel Moreno, intelligence chief Gustavo Gonzalez Lopez and the number two of the ruling socialist party, Diosdado Cabello. They are now subject to asset freeze and travel bans.

Even Switzerland, not known for its aggressive foreign policy, announced sanctions against Venezuela, stating it was “seriously concerned by the repeated violations of individual freedoms in Venezuela, where the principle of separation of powers is severely undermined and the process in view of the forthcoming elections suffers from a serious lack of legitimacy.”

Venezuelans go the polls this weekend, to choose their next president. Nobody is expecting free and fair elections, and the favorite to win is the sitting president, Nicolás Maduro. If he wins, the mafia tendencies of the Venezuelan state are likely to further solidify, and this Andean nation will become one of Latin America’s regional crime hubs, with grave consequences for her neighbors and the region as a whole.

This article is part of a multipart investigation looking at organized crime in Venezuela. See other parts of the series here and the full report here

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