Obama Admin designates MS-13 a Transnational Criminal Organization”

On October 11, 2012, the Obama administration designated la Mara Salvatrucha (MS-13) a “transnational criminal organization,” allowing federal officials to freeze the gang’s financial assets in the U.S. The goal is to weaken the gang and make their illegal enterprises less profitable. MS-13 is alleged to be involved in drug dealing, drug and human trafficking, prostitution, smuggling, and extortion in the United States and El Salvador. Gang members in the U.S. allegedly generate large profits from these activities and send money to gang leaders in El Salvador. These illegal ventures often entail violence and have earned MS-13 a high ranking among the world’s most violent gangs.

According to the “LA Times,” U.S. financial institutions “are obligated to immediately identify and freeze property or property interests of MS-13 and to report any such blocked assets to the Treasury Department,” said department spokesperson Hagar Chemali. This will make it more difficult to use banks and wire transfers to conduct gang activity. Police in Los Angeles and Washington DC hail the Obama administration’s decision as a necessary and positive step. They believe the scope of the gang’s activities will be diminished if they have fewer financial assets and are unable to use the banking system to transfer and launder money.

Only two other gangs have been labeled transnational criminal organizations: the Mexican Zetas and Japanese Yakuza, and MS-13 is the first gang to have originated in the United States to receive this label. One thing curious about the Obama Administration’s designation is that it targets MS-13 and not 18^th Street, one of El Salvador’s other large gangs.

By requiring that banks identify and freeze M3-13 assets, Government officials seem to be giving the banks a lot of authority. They are going to have to have clear guidelines in place to help banks and financial institutions distinguish legitimate targets from hardworking Salvadorans sending money home to their families. Even if there is an appeals process in place for people who believe their assets have been wrongfully seized, many who send money to El Salvador are undocumented and may be afraid to step forward.

Seizing financial assets may prove important for cracking down on organized crime, but it won’t stop illicit activities such as drug trafficking and extortion. What is still lacking is a comprehensive approach to providing legitimate economic and social opportunities for youth so that they have options beyond joining gangs. It requires treating our drug habit as a public health issue and not just a criminal justice problem.

Gun Trafficking in El Salvador- Hard to Track, Harder to Stop

One thing is certain about El Salvador – there is no shortage of firearms. Along with explosives, firearms are the leading cause of violent death in the Republic. The frequency of violent attacks, such as the December 8, 2010 hand grenade assault on the City Hall in San Salvador, and recent highly publicized investigations of gun traffickers, such as former Brigadier General Martínez-Guillén, calls for a closer examination of where the weapons come from and how criminals get them.
El Salvador has an extensive and easily accessible black market where buyers can find firearms and explosives of all shapes, sizes and origins, with little interference from law enforcement. The black market is comprised of individual dealers who operate out of their homes, cars, or even the backrooms of local businesses. Most often, black market weapons come from international sources in the US or Europe and are trafficked through Mexico down to El Salvador, or they are stolen out of Salvadoran military or police arsenals.
One of the biggest buyers of illegal weapons is El Salvador’s numerous security firms that protect private and government interests. Though they are legal entities, security firms prefer to purchase arms off the black market to avoid government scrutiny. Security companies have thrived over the years, making millions from Salvadorans who increasingly live in fear of being robbed or killed by the country’s notorious street gangs. These security firms also serve as a large source of weapons for thieves.  In the past two years alone, more than 1,700 weapons have been reported missing by private security companies.

Every year, Salvadorans purchase roughly $20 million in small weapons from the legal market, and approximately two to three times that amount from the black market. Though government officials tend to blame street gangs for the high murder rates that make El Salvador one of the deadliest countries in the world, political scientists and international experts have been questioning whether they could really accomplish the 10-15 murders per day they are blamed for. One of the points they make is that the youth involved in these gangs probably  cannot afford to purchase the high-grade weapons that are often used.

Many of the weapons used in crimes have been in El Salvador for decades, left over from the 12-year civil war that ended in 1992. Despite the United Nations’ numerous efforts to disarm El Salvador following the conflict, a large percentage of wartime weapons continue to be bought and sold on the streets. Additionally, the Salvadoran military’s large arsenals are frequently stolen from, and their weapons end up being sold on the streets. Such weapons include M-16 AK-47 automatic rifles and hand grenades, such as the ones used in attack on San Salvador’s City Hall that killed two and caused $20,000 in damage. Last summer, the Washington Post published an article highlighting the issue of “1980s-era hand grenades, originally distributed to the militaries of El Salvador and Guatemala, making their way onto the black market. Drug cartels have used them in firefights with police and military, and against rival gangs.

As the Wall Street Journal recently explained, large-scale gun traffickers are responsible for a negligible percentage of the weapons in illegal circulation.  Gun theft and small-scale distribution of stolen and found weapons are much more common and even harder to combat, especially since policymakers are focused on the very few large-scale distributors.  Current strategies like this one, and using the United States Bureau of Alcohol, Tobacco, and Firearms databases to trace U.S.-made guns used in crimes abroad, turns up fewer than 15 high-volume (more than 250 guns per year) gun trading networks each year.

The Ministry of Defense has uncovered numerous gang plots to steal or illegally buy small numbers of weapons from the armed forces or police.  Traffickers tend to prefer lower-volume sales or thefts, and guns that change hands up to four or five times, making the guns harder to trace, and the buyers harder to find.

The illicit weapons market in El Salvador and other Central American countries is closely tied to drug trafficking. Not only do traffickers use the same routes, but drug traffickers buy weapons to protect their shipments and territories. Most significantly, guns are the most common method of payment for drugs.  One explanation for this lies in the trade equity between the two products. Because guns and drugs are both high-value and low-density items, it is easier to trade based on bartering rather than using currency as a medium of exchange.  Since weapons (especially small, cheap guns) are more abundant than drugs, the higher-ups in the drug trade networks have begun to demand and subsequently gain access to newer, bigger, and more sophisticated weaponry, making the potential for violence even greater.

A recent story that has been widely reported by the Associated Press, the Washington Post, and the Canadian Press, among others, highlights exactly how far this black market reaches.  Three missing M-16 rifles from military barracks sparked an investigation aided by the US Drug Enforcement Agency, which has an office in El Salvador.  The investigation revealed that Brigadier General Hector Antonio Martínez-Guillén was illegally selling arms to the Revolutionary Armed Forces of Colombia (FARC), which the United States considers a terrorist organization.  Although the general resigned in May 2010, the DEA spent nearly a year on a sting operation that focused heavily on him.  In a meeting with an undercover agent, Martínez-Guillén agreed to illegally sell rifles after being warned by the agent that they would be used to kill American troops and consultants in Colombia if possible.  This agreement along with a later trip to the US to sell more than $1 million in cocaine in what he believed was a FARC drug deal, put the issue under US jurisdiction.  He was arrested upon arrival to the Washington Dulles International Airport in Northern Virginia and has been awaiting trial, which is scheduled for July 29.  Also accused of selling more than 20 pounds of C-4 plastic explosive, he allegedly fully supported the FARC’s cocaine trafficking and Anti-American ideology.  He admitted selling “automatic rifles, ammunition and plastic explosives” to FARC members, but the investigation continues in El Salvador to unearth similar actors in illegal gun trades and narcotrafficking.  His guilty plea came as part of a plea deal in which the prosecution agreed to seek no more than 45 years for terrorism charges.

This case is just one of many that highlights exactly how far the illegal black market for weapons extends. The cooperation between the Salvadoran authorities and US agencies was instrumental in this case, and it shows one way this widespread and dangerous trade can be confronted.  The case is also a good sign, showing that El Salvador may be beginning to take seriously both illegal arms deals and military officials acting outside the law.

Talk of an International Commission Against Organized Crime in El Salvador

El Faro posted a story this morning about a growing movement to create an International Commission Against Organized Crime in El Salvador. This Commission, modeled after the CICIG in Guatemala, would investigate and prosecute cases that the Salvadoran Attorney General’s Office (Fiscalia, in Spanish) has not taken on. Though the CICIG (the International Commission Against Impunity in Guatemala) has had its troubles over the last few years, its successes and lessons learned could greatly benefit El Salvador.

Momentum for such a commission has grown out of a general frustration with the Fiscalia, which is led by Attorney General Romeo Barahona, for its failure to investigate drug trafficking and organized crime. Though El Salvador has struggled with organized crime throughout its modern history, drug trafficking has taken off in recent years as cartels have increasingly used Central America to transport their products to the United States markets.

One of the complaints against Fiscal Barahona is that under his leadership, the Fiscalia has gone after low-level gang members while staying away from more difficult cases involving higher-level organized crime syndicates.  A related issue is that the Fiscalia attributes many homicides that appear to be political in nature to gang members (“common crime”) or family issues. An example is the 2009 murder of Marcelo Rivera.  Rodolfo Delgado, the prosecutor and lead investigator, called it a crime of passion committed by four gang members. He also attributed the 2004 murder of union organizer Gilberto Soto to a family disagreement and arrested Soto’s mother-in-law. As in many, many other cases, Barahona and his team of prosecutors seem more interested in depoliticizing murders and steering investigations away from organized crime rather than seeking the truth and justice.

Fiscal Barahona, however, believes an international committee is unnecessary.  In response to the idea of creatingsuch a commission, he stated, “We do not believe it is necessary to create a commission to combat crime. It is better that the resources that it would take be invested in strengthening the Fiscalia and the Police.”

Though it seems early in the process, El Faro reports that the Salvadoran government is taking the steps necessary to create the legal foundation for this international authority. Though the Commission would have to work with Fiscal Barahona, those working on the project realize that it would require a significant amount of autonomy. The Commission would have to be led by someone with the character to take on organized crime-a vast network that includes past and present government officials who have maintained the culture of impunity and gotten rich from illicit activities.

The discussion of a commission is becoming public just days before President Obama is scheduled to visit El Salvador, a visit during which he and President Funes are sure to discuss security and the region’s growing struggle with crime and violence. At the end of January, the Economist reported that El Salvador, Guatemala, and Honduras make up the most violent region in the world, battlefields aside. Everyday there are new reports about the Zetas and other Mexican cartels setting up camp in Central America where the cost of doing business is less, and there are plenty of corruptible government officials at the local and national levels. President Obama and the US ought to support the idea of an International Commission in El Salvador and provide all of the support and training necessary to ensure its success.

Update on Inspector General of the PNC, Zaira Navas

Since last week when we posted an article about the Legislative Assembly’s plans to form of a Special Commission to investigate the Investigator General of the National Civil Police (PNC) Zaira Navas, several top ranking officials, including Salvadoran President Mauricio Funes have spoken out on her behalf. Members of the Legislative Assembly, including Diputado José Antonio Almendáriz, accuse Navas of improperly investigating Police Commissioner Douglas Omar Garcia Funes, former Commissioner Godofredo Miranda, ex-Director of Police Ricardo Menesses, and many others for corruption and ties to organized crime and drug trafficking.

During the legislative session last Thursday, the 45 votes in favor of the Special Commission were enough to move ahead with the investigation of the Inspector General. While no left-wing FMLN diputados voted in favor of the special commission, 45 right-wing ARENA, PCN, PDC, and Gana legislators supported it.

Yesterday, President Funes expressed his support for Navas, confirming that she has only followed the guidelines he gave her in conducting a thorough “cleaning’ of the PNC. Simialrly, the Minister of Justice and Security, Manuel Melgar, has claimed that the commission may be unconstitutional and should not be permitted to go forward. Even Carlos Ascencio, the Director of the PNC, defended Navas, saying that she was simply following the lines of investigations that President Funes had ordered. The Office of the Ombudsman for Human Rights has also stated “we must respect the work of the Inspector General.”

Government Agencies in El Salvador have operated in the shadows for a little too long.  A little sunshine every now and then is good for everyone, unless they have something to hide.

Salvadoran Police Find a 4Th Barrel of Money

Last night, Salvadoran police found a forth barrel of money in El Salvador. The first three were found last weeked and contained a combined total of $10.2 million.  This latest barrel was found buried on a property in La Quinta Residencial Las Mercedes, in Canton Lourdes of Colon, La Libertad, while the other barrels were found in a canton of Zacatecaluca, La Paz. The police have not said how much was in this latest barrel only that “approximately 80% of the bills are large.”

While we don’t have much information on how the police came to search this particular property, the search last weekend was the result of information provided to Salvadoran police by the U.S. Drug Enforcement Agency (DEA). The Attorney General’s office has stated that the $10.2 million found in Zacatecaluca is without a doubt the product of drug trafficking, though he did not provide details. Authorities also report that Guatemalans owned the property where the latest barrel was found.

The capture of such large quantities of money is a blow for drug traffickers. This week, several Salvadoran analysts have speculated that the shutdown of the bus system was less about gang members voicing their frustrations, and more about drug traffickers angry about government officials confiscating their money. While we have no indication that this is the case, it is clear that drug trafficking and money laundering are a serious issue in El Salvador. In recent years, top officials in the police department, and even members of the legislative assembly have been accused or convicted of being involved in the drug trade.

While El Salvador is a transit point for drugs en route from South American producers to North American markets, many experts believe that the country’s main value added to the drug trade is laundering money.  There are several routes that traffickers take to North American markets, all of which include various legs over land, sea, and air. Narcotics often enter El Salvador in the Gulf of Fonseco or other areas along the coast, shipped in on small, fast boats that easily escape detection from DEA or Salvadoran Navy patrols. They also enter over land, through any one of El Salvador’s punto ciegos (unmanned boarder crossings).  Earlier in the summer, President Funes deployed military units to help close these boarder crossings and stem the flow of drugs and other contraband in and out of the country.

Less is known about money laundering in El Salvador, though experts claim that the country’s stable banking system and lax regulations create the right conditions for drug cartels wanting to convert their ill-gotten cash into clean bank deposits. Two other factors that facilitate the process is that El Salvador has a constant flow of remittances from the U.S. (remittances are the cash sent by Salvadorans working in the U.S. to their family members back home) and the fact that El Salvador adopted the U.S. dollar as its official currency back in 2001. Experts fear that drug traffickers are using the system for sending remittances to El Salvador as a way of laundering their drug money. In addition, money launderers operate businesses and report false sales and transactions to clean their drug money.

It remains unclear how the barrels of money found over the past couple of weekends fit into this process, but it is a very big reminder that drug cartels are using El Salvador for shipping their product and managing their cash.