Saturday, August 18, 2012

BACRIMs, Colombia's "New" Nightmare

Ever heard of Águilas Negras, Autodefensas Gaitanistas de Colombia, Banda Criminal de Urabá, Los Urabeños, Los Machos, Los Paisas, Renacer, Nueva Generación, Los Rastrojos, ERPAC, Cordillera, Cacique Pipintá, Grupo de Martín Llanos, Los Nevados or La oficina de Envigado? They're Colombian BACRIMs. BACRIM, a term strategically coined by former president Uribe to be used instead of paramilitaries, stands for Bandas Criminales Emergentes that translates as Emerging Criminal Gangs. Some foreign NGO's use the acronym NIAG (New Illegal Armed Group) or call them neo-paramilitary groups. These "new" groups are mostly composed of former members of  paramilitary groups (AUC) that were demobilized since 2006 and virtually granted amnesty by the administration of former President Álvaro Uribe for all their atrocities. Now BACRIMs are growing rapidly and spreading all over the country, because new sources of income were found. They're called "el nuevo enemigo" (the new enemy) in Colombia.

According to a recent (2012) study of Colombian NGO Indepaz BACRIM presence was reported in 406  of 1,119 municipalities (46 more than in 2010) and 31 out of 32 departments in Colombia. About 8,000
troops in its armed units and logistics were counted. FARC-EP is only present in 249 municipalities. Because many BACRIMs  used to be active, or still are,  in Narco-trafficking they're also called Narco-paramilitaries. Rastrojos, ERPAC and Urabeños are most profiting from narco activities.

Brief History of Colombian Paramilitaries

Jorge Eliécer Gaitán Ayala

While many books and reports have been written about the Colombian domestic conflict, I will try to write a very brief overview here of the history of Colombian Paramilitaries. It all started with US meddling 3 years after the 1948–1958  Colombian Civil War (La Violencia) between Conservatives and Liberals/Communists that cost 300,000 lives. Some sources even say this Colombian Civil War was a direct result of a CIA covert operation (Operation Pantomime), namely the 1948 assassination of  Jorge Eliécer Gaitán Ayala, a lawyer, populist leader of the liberal party, presidential candidate and probably president elect with socialist ideas like land reform and taming the oligarchy. The  assassination  started the civil war which came to an end in 1958.

In February 1962 an U.S. Special Warfare team, headed by Special Warfare Center commander Yarborough visited Colombia  to investigate the internal security situation due to the increased prevalence of armed "communist" self-defense communities in rural Colombia. Yarborough secretly advised the creation and deployment of US backed paramilitary force that should be used to perform counter-agent and counter-propaganda functions and as necessary execute paramilitary, sabotage and/or terrorist activities against known communist proponents. These "communists" were just peasants forming a defensive front to protect themselves, their families, homes and lands against the state-supported violence of large landholders. A global intensifying Cold War climate, which also intensified in the Latin American region and that was manifested as the 1954 CIA-backed coup in Guatemala, the Cuba 1959 revolution, the failed CIA operations to overthrow Castro and the 1962 Cuban missile crisis, made the US decide to launch a military attack on the community of Marquetalia in 1964. 16,000 Colombian troops backed by US advisors who conducted aerial bombardments, helicopter attacks and napalm spraying to attack 1,000 villagers, of whom only 48 were armed. The whole military operation would today total over US$ 3 billion. This massive reasonless attack was the reason that the FARC was born in 1964.

The US advise for paramilitary deployment was instituted in Colombia. The Colombian military recruited civilians into paramilitary civil defense groups which collaborated with the military in its counter-insurgency campaign, as well as in civilian intelligence networks. Law 48 of 1968 legalized the formation of private security forces used to protect large landowners, cattle ranchers, and government officials and became the legal foundation for the military's support for all paramilitaries. In the 70s and 80s many drug barons had to launder their drug monies and became very large landowners, who raised their well trained private armies and equipped them with all sorts of modern weaponry.

The large landowner's private armies in the Magdalena region organized themselves into a bigger association MAS/ACDEGAM, that equipped itself with helicopters, aircraft and battle rifles, but also intelligence and communication units, all financed with drug monies. ACDEGAM, initially set up to manage PR and logistics for MAS, became also very active in bribing politicians and promoting anti-socialist politics (against labor or peasants' rights). The aim was to secure the possessions and businesses of the large landowners, the existence of their private armies and the prevention of their US extraditions. While the Colombian communists have been persecuted and assassinated since their very existence, MAS also started political assassinations of communists. MAS expanded to 8 out of 32 Colombian departments and also started to kill members of the Patriotic Union or any political groups that opposed drug trafficking. In the 90s MAS began networking with ACCU, Autodefensas Campesinas de Córdoba y Uraba, and together took over large areas of northern Colombia, the shipping point for drugs.

In 1997 Carlos Castaño's (ACCU) efforts to achieve a measure of unity between most of the other paramilitary forces in the country resulted into a new assocation: Autodefensas Unidas de Colombia, representing about 90% of existing paramilitary forces. The business as usual continued and thanks to better coordination the AUC was even able to bribe politicians more effectively, expand its businesses and tighten the relation with the military. However as an umbrella organization it now became very visible and it was classified as a terrorist organization by the US and EU. The US and EU urged Colombia to do something about it and a demobilization process was initiated between 2003 and 2006 by the Álvaro Uribe administration. Due to the AUC's political influence, the process was designed in such a way, that it had very little effect (see below). The paramilitaries started re-organizing themselves once more and now became BACRIMs.
Because of the funding with drug monies, the paramilitary organizations could grow and spread rapidly. At first they were a tool for the large landowners to protect and strengthen their businesses, but they eventually "learned the trade" themselves and became autonomous and self supporting. Self-defense against guerrillas wasn't their core business anymore. They formed associations to bundle their forces and secure their existence and future in Colombian society. Because of the long-term collaboration with the military and the Colombian state, the atrocities of the paramilitaries stayed under the radar of the (International) mainstream media. When the political influence of the paramilitaries grew and killings of journalists started, the domestic press became very cautious. However, Human rights organizations have unveiled and meticulously reported about the true nature of the atrocities and activities of the paramilitaries in Colombia. The paramilitaries did not only outnumber the guerrillas most of the time, but committed the most assassinations of civilians, the most massacres and were responsible for most of the 5 million Internal Displaced People (IDP) in Colombia, not to mention the 1.5 million refugees who left the country.

Violations of International Humanitarian Law in Colombia by Armed Groups 1990-2011
...Increasing again since 2010 (Source
(Click to enlarge)

Already in 1987 the government statistics showed that paramilitaries had been responsible for more civilian deaths than guerrillas. Paramilitaries had the habit to dress up murdered civilians as guerrillas, so even the official charts were under estimating. The same goes for massacres, which are committed to intimidate. See the chart below about massacres 1983-2011. Keep in mind that this chart is only about massacres and not about all civilian deaths. 

Paramilitaries in Colombia were responsible for 58% of massacres 1983-2011.
Unidentified Armed Groups (presumably mostly existing of  paramilitaries)
were responsible for 14%

What did the Colombian government do to "combat" Paramilitary Organizations?

In 1989 decree 1194 was issued by the government which established criminal penalties for civilians and members of the armed forces “who recruit, train, promote, finance, organize, lead or belong to the armed groups, misnamed paramilitary groups, that have been formed into death squads, bands of hired assassins, self-defense groups, or groups that carry out their own justice”. The enforcement was minimal and quickly undermined by Directive 200-05/91.

In 1991 the Colombian defense ministry issued Armed Forces Directive 200-05/91, aimed to help Colombian military in "counter-narcotics" efforts. The effect was that the Colombian military could create covert intelligence networks to combat the insurgency. It laid the groundwork for continuing an illegal, covert partnership between the military and paramilitaries.

In 1994, decree 356 of Colombia's Ministry of Defense authorized the creation of legal paramilitary groups known as Servicios especiales de vigilancia y seguriadad privada ("Special vigilance and private security services"), also known as CONVIVIR (meaning: living together) groups, again. Álvaro Uribe, then governor of Antioquia, was one of the primary proponents of the CONVIVIR program that resulted in more or less 50,000 paramilitaries. 

In 1997 because of many human rights violations, the Constitutional Court of Colombia stated that the issue of military weaponry to civilians and specifically to CONVIVIR groups was unconstitutional. From then on the CONVIVIR groups joined the AUC association. Because of the advances of the FARC in 1998 these - still illegal - paramilitary groups were turned a blind eye by the government.

In 2005 - after negotiations with the AUC by the Uribe administration - Law 975, Ley de Justicia y Paz (Justice and Peace Law), was approved by the Colombian Congress and constituted the main legal framework applicable to those paramilitaries who had committed serious crimes. It was intended to demobilize FARC and AUC and offered a single reduced sentence of five to eight years to paramilitaries responsible for serious crimes. According to la Agencia Colombiana para la Reintegración the demobilization was a success and only 11% of present BACRIM members are demobilized AUC members. But Human rights organizations call the law fundamentally flawed. Since 2005, approximately 1,800 of the demobilized have begun a process of confessions in exchange for sentencing benefits. Only some foot soldiers of AUC demobilized and the majority of the persons who went through the ceremonies received pardons for their membership in the group, but were never investigated for other crimes. The government did not interrogate demobilizing individuals about the AUC blocks’ criminal networks and assets. Paramilitary forces recruited young men simply for the purpose of participating in the demobilization ceremony. Thus, thousands of individuals going through the demobilization ceremonies were simply asked to answer a handful of questions by prosecutors, and later granted pardons or cessation. They then entered reintegration programs that offered them stipends and other economic and social benefits, with no further scrutiny from the authorities. Uribe had offered leniency to paramilitaries who renounce trafficking and disarm. Some of these people didn't even have anti-guerrilla credentials, they were just drug traffickers who've bought their way into the paramilitary movement as a way to claim political status, legitimize their fortunes and walk free.

In 2009 a quarter of the Congress under the Uribe administration was accused of actively supporting paramilitaries. Within the 2010 newly-elected Congress, as many as one in three members was under investigation for allegations including links with paramilitary groups. By April 17, 2012, 139 members of Congress were under investigation. Five governors and 32 lawmakers, including Mario Uribe Escobar, President Uribe's cousin and former President of Congress, were convicted. The terms Para-Politica and Para-Uribismo were coined. The former president Álvaro Uribe was once on the Pentagons narco-terrorists list and his presidential campaign was funded by paramilitaries. The infiltration of paramilitary groups is not limited to politics, but  involves judiciary, institutions and businesses as well.

In 2011 Law 1448 Ley de Víctimas y Restitución de Tierras 2011 (Victims and Land Restitution) was approved and was enacted January 1st 2012. It is meant as a mechanism that will facilitate the restitution of millions of hectares of lands abandoned or stolen as a result of human rights abuses and violations. The implementation of the Bill on restitution of land is designed to be applied over a ten year period, with the Government designating approximately US$25 billion for its implementation. The Bill is planning to restore approximately 2.2 million hectares of land to victims of forced displacement. The financing plan is based on the National budget but with the disclaimer of "fiscal sustainability", meaning that the social expenditure of the Colombian state cannot increase in a manner that risks the macro economical equilibrium of the nation. On the other hand one of the few strengths is that the law also holds businesses accountable for contributing to victimization. Local authorities, but also INCODER were often collaborating with the paramilitaries in the land theft that was being resold to investment companies who leased the land to agricultural (mostly palm oil plantations) or mining companies or the land was resold to these companies directly. This has been called Land Laundering. Not only drug monies went into the palm oil industry, but paramilitaries were able to acquire monies from the USAID crop substitution budget as well for their illegal palm oil plantations. In June 2010 Colombian Fedepalma's president Jens Mesa Dishington expressed concern that the oil palm industry is being increasing infiltrated and funded by illegal activity. The State recognizes only 4 million victims (of the 6.6 million), which according to the Colombian government amount to approximately one million families, including the displaced population. Santos administration’s insistence that paramilitaries groups are nothing more than criminal gangs (BACRIMs), prevents the victims being recognized as of politically motivated violence, and thus denying them the right to truth, justice and reparation and land restitution. It calculates that this would mean restoring land to approximately 350 families daily for the next 10 years. An Amnesty International report concluded that the law had many shortcomings and recommended to remedy the weaknesses.  The signing of the Victims Law has already led to increased violence against representatives of groups that have made claims on stolen land, particularly in the northern Antioquia and Cordoba departments where neo-paramilitary groups have most control. In 2011 22 claiming representatives were already killed. While Santos is sticking his neck out with this law that can be called a serious step forward, the common expectation is that illegal landowners, BACRIMs and neo-paramilitaries will use all the weaknesses of the law and their political and institutional influence to sabotage law 1448.  

Since 2011 the Colombian military is combating the BACRIMs in Urubá, Córdoba, Nariño, Antioquia, Sucre and Choco (so called TROY I and II operations) and there are some successes, but it is like fighting cockroaches in a kitchen. They multiply at the same rate as you exterminate them, because there is plenty of food.

One can not escape the impression that all legalization regarding combating the paramilitaries has been mainly and understandably political window dressing, because of the government's and army's involvement in the operations. It makes you realize that the present state of Colombia needs paramilitaries, drug monies and the FARC-EP/ELN enemy to continue the status quo of  unequal land distribution and domestic armed conflict. There is a common interest to maintain the status quo and keeping the 60 years old domestic armed conflict alive. It keeps the conservatives and liberals in power and prevents the real socialists to take over.
There are only two (simplified!) working solutions to the problem: 1. Redistribute grabbed land by confiscating it back from the large landowners, drugbarons, druglords and paramilitaries, and give it back to the landless campesinos and IDP's. Then the  guerrillas will most certainly demobilize. 2. Legalize and regulate coca and cocaine and drain the cash-flow to the paramilitaries (and guerrillas). Both solutions are very difficult to realize, because of the widespread corruption and paramilitary political influence.


The Business Model of BACRIMs

When the Medellín cartel (1976–1993) and Cali cartel (1977−1998) were dismantled in the late nineties, some of their fragments were reassembled as the Norte del Valle Cartel which is known today as once one of the most powerful organizations in the illegal drugs trade. After the downfall of the Cartels, paramilitary organizations took over to a significant extent the international cocaine trade. While the Norte del Valle Cartel (partially dismantled now), Rastrojos, ERPAC and  Urabeños focus primarily on illicit drugs, the BACRIMs have a broader variety of primary activities: land cleansing for companies or government, gambling, prostitution, illegal mining, illegal logging, extortion, arms trafficking and fuel smuggling from Venezuela, to name a few. When the monies start coming in, cartels as well as BACRIMs have to start up secondary activities to launder their profits. This could be facade company networks, producing fake services and fake invoices. When the organization grows, managing and laundering all the monies becomes a very difficult problem. Professional money launderers usually charge 15%. But still very large cash deposits are kept on safe places. So literally "decreasing the dirty cash flow" becomes priority one. This could be done by not paying in cash, but in goods like cocaine. Expanding the business by more investing in cocaine labs, new drugs and new markets is done aggressively, but helps only temporarily. Increasing the dirty cash budget for bribing politicians, officials and civil servants helps too and serves as an insurance policy as well. Sadly enough eventually the largest part of the expenditures of most criminal organizations ends up in bribing. Colombia's corruption is increasing again since 2005. Finally the organization has to invest their laundered monies in clean tertiary activities in the real economy. Gambling industry, cash-intensive businesses, land, real estate and real estate projects seem to be the favorites. When primary, secondary and tertiary activities are set up, obviously these activities start to mingle and that's when you have the full grown criminal organization, that is extremely hard to eradicate.

Because of the cocaine history, Colombia has quite some years in experience of (International) money laundering. Not only the drug cartels had to launder their dirty money, but all bribed politicians, high officials and business associates as well. Because of that long term experience in Colombia, there is a lot of expertise and the industry is quite inventive. If there would be any ranking system, Colombia might end up in the Top 3. Without the professional money laundering industry, Colombian drug cartels could not survive. So BACRIMs are also profiting very much from the Colombian money laundering industry.

One of the latest inventions is International telephone call shops networks (Locutorios), that are being used by Colombian drug cartels to transfer their profits back to Colombia. Locutorios are commonly used to make long distance calls as well as to make rapid and inexpensive money transfers at a cost of three euros per transaction. Using many helpers, launderers avoid problems by not exceeding the limit of €3,000/person that can be sent abroad in any three-month period with no questions asked.

Gold is a legal commodity that suits money laundering very well. It's unregulated, that is you can't see where it came from and it has a high value/weight. The link between gold mining and drug cartels exists for a long time in Colombia, but only as a secondary activity thus for laundering drug monies.This is done in two ways: 1. Buying production of artisanal gold miners with dirty money and sell this gold legally as production of your own goldmine and receive laundered money. 2.  Illegally Importing gold production from Ecuador, Venezuela, Africa or Eastern Europe and sell this gold  legally as production of your own goldmine. Also, foreign recycled gold imports from pawn shops (that usually belong to the criminal organization as a tertiary activity) often follow the same route.
The BACRIMs added gold mining to their primary activities as well. When some years ago large areas of land were secured from FARC-EP domination by the Colombian army, illegal landless artisanal gold miners started to dig for gold in these areas. BACRIMs started to buy this gold for low prices and started extortion by asking for "protection money". As a matter of fact FARC-EP uses the same gold mining practices in their territories, but is asking for "Taxes".

Gold and Coca/Cocaine Production in Colombia

As explained above there is a relation between Colombia's gold and cocaine production. Because of the strong US financed eradication programs, coca cultivation in Colombia has decreased in the last 10 years. Coca cultivation can be precisely estimated by satellite imagery. The decreased production/cultivation is taken over by Peru and Bolivia.
Coca cultivation, Aerial eradication and Manual eradication in Colombia
US Drug czar Gil Kerlikowske, director of the Office of US National Drug Control Policy, said July 30, 2012 that potential cocaine production in Colombia country has dropped by 72 percent since 2001. Colombia now ranks third, behind Peru and Bolivia, in production of pure cocaine. He also said the decline in production is largely the result of Plan Colombia, a $7.5 billion U.S.-backed effort launched in 1999 to help the Colombian government crack down on a left-wing insurgency and drug organizations. This is clearly PR talk of course, because the monies spent on Plan Colombia did  only result in a balloon effect  in the South American region. The regional production level remained about the same. Besides it is impossible for the DEA to calculate the amounts of cocaine production in Colombia that precise. It could be at least 30% more or less. Kerlikowske is just talking about cocaine, the high end coca product. He isn't mentioning that  large portions of coca paste produced in Colombia is refined in cocaine labs in Venezuela, Ecuador or even Central America. Besides Colombian coca paste products like dry, washed and waste coca paste a.k.a. paco, bazuco or pitillo are increasingly exported to and consumed in other South and Central American countries.

Colombia - Official Gold Production 1923-2010
Because Coca cultivation and cocaine production in Colombia became more difficult, BACRIMs became increasingly active in illegal gold mining activities. Not only for laundering their dirty monies, but also to exploit their extortion practices.

Colombia could produce around 3 million ounces of gold in 2012, twice as much as the 1.57 million ounces produced last year and much higher than the 501,500 ounces produced in 2006, Colombian Ingeominas said in February. That growth was possible thanks to the increased number of projects that began producing in the provinces of Santander, Cauca and Antioquia, typically the departments with high BACRIM activities. Colombia has more than 40 international companies exploring for gold.

You have to take the "Colombian Official Gold Production" chart above with a few grains of salt. As explained below with current procedures it is very difficult to collect the real production figures. BACRIMs import lots of  gold from neighboring countries or  recycled gold from all over the world. Even according to official 2010 figures, exports jumped to 62.8 tonnes, exceeding production by just over 9 tonnes (!). Some official district sources have no record of any gold production. The town of Alto Baudó in the Pacific state of Chocó reported no gold production until the last trimester of 2009, according to statistics from the state mining agency. In 2010, Alto Baudó reported producing more than 800kg of gold(!).

Royalties on gold (recursos de regalías) in Colombia are 4% of 80% of the market price (6% for concessions), of which 87% goes to the municipality, 10%  to the department and 3% goes to the Fondo Nacional de Regalías fund. The municipal authorities will keep a register of operators, retailers or direct purchasers in order to enforce regulations for production of precious metals. Smelters, traders and refiners have to fill in declaration forms (formulario de declaración de regalías), withhold the royalties for the municipality and ask the seller for his ID. Of course many municipalities are corrupt as are the traders, smelters and refiners. They'll accept gold from illegal miners and don't fill in declaration forms to keep the royalties for themselves. But they will also write declaration forms on demand for imported or dirty gold as the BACRIM money launderers ask them to.

Unrefined gold like gold nuggets, recycled gold and gold dust, in which the gold content might be 60% or 70%, will roughly sell for 80% of World market price for their gold content. Refiners charge 3 to 5% and will make .999 fine gold bars in standard sizes. About 2% to 3% is lost in the refining process. You'll get the full world market price for .999 fine gold bars in standard sizes.
I'm here focusing on the money laundering through gold mining in Colombia, but similar stories could be written about the Black Market Peso Exchange, emerald, platinum or coltan mining.

The Colombian government is now trying to combat the illegal gold mining and Santos has ordered more raids against illegal miners. Illegal mines are destroyed/closed and small miners are arrested, because they're considered to cooperate with BACRIMs or FARC-EP when they pay protection monies. In remote areas it isn't commonly known that you need a license since the 2001 Mining Code was approved. Small artisanal gold miners aren't even aware of the health and environmental dangers using mercury (which could be easily prevented by using a small US$ 20 retort). Obviously there's little education provided in remote areas.


Because of the decrease of FARC-EP controlled territories, foreign mining companies were able to acquire a lot of exploration rights in these former unsafe regions. Explorations are already resulting in profitable exploitations. The Colombian government receives royalties over these activities, however it will have to make sure that these mining areas will stay uninfected from violence and extortion. This could be a very difficult goal to achieve for the Colombian government. It is far more expensive to combat and eradicate organized crime than it is for organized crime to expand their activities. Besides BACRIMs have already more income from their gold mining activities than the government has from mining royalties and exploration concessions. It is to be expected that FARC-EP will restrengthen its forces with the new incoming monies and will be able to reconcur part of its lost territories.

If the Colombian government intensifies the combat against the BACRIMs, violence in the country will undoubtedly increase, like in Mexico. If the government does nothing the BACRIM will continue to grow and spread rapidly. The battle against the BACRIMs will be very difficult because it is not one single organized group, but many. But how to eradicate the Cartels and BACRIMs?

The best way to go is to completely focus on eradicating organized crime and corruption by draining the dirty cash flow. Prioritizing the combat on coca and cocaine production in the first place is the wrong way as the past has proven so well.
A recent Colombian study published by the Universidad de los Andes, Bogotá demonstrated that while cocaine production ravages countries in Central and South America, consumers in the US and Europe are helping developed economies grow rich from the profits.  The study shows that in Colombia only 2.6% of the total street value of cocaine produced remains within the country, while a staggering 97.4% of profits are reaped by criminal syndicates, and laundered by banks, in first-world consuming countries. It must be possible to confiscate at least part of these International illegal profits. Together with  confiscation of  all possessions of drug kingpins that are extradited to the US, these funds could be used to combat organized crime in Colombia and restore law and order in the rural areas. The approx. US$ 100 million of dirty cash that was found and confiscated in the Caicedo Velandia case  or the US$ 160 million settlement of the Wachovia bank with the US prosecutor could be a start.

Colombia President Juan Manuel Santos 
If you see one of these days President Juan Manuel Santos looking worried and distressed on a picture, it might be because of the BACRIM nightmares he is suffering from...

More to Read:
Jasmin Hristov - Blood and Capital: The Paramilitarization of Colombia

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