Colombia's gangs cash in with 'micro-extortion'(Read article summary)
Criminals in Colombia are extorting payments of as little as $10 a week from local businesses. The sums are too small for victims to want to report, but can add up to huge profits for gangs.
Shop owners, bus drivers, and street vendors all have to make weekly extortion payments to the many gangs in Medellin, Colombia. The payments are small and difficult to track, but add up to big profits.
According to Fondelibertad, a Colombian agency which tracks security statistics, last year the department of Antioquia registered the highest number of extortion cases in Colombia: 223 in total. This is likely a gross underestimate: In cities like Antioquia's capital, Medellin, many victims of extortion do not bother to report the crime. The city registered only 137 official cases in 2010. Often, the extortion payment – known colloquially in Colombia as a "vacuna," or vaccination – is as small as 20,000 pesos (about $10) a week.
Charging such small vacunas makes sense on several levels: The sums are small enough that victims have less incentive to report the extortion to police, for fear of reprisals. The model can be adopted by a wide range of street gangs who may not have the power or the connections to demand vacunas from Medellin's real moneymakers: the brothels, casinos, nightclubs, and real estate businesses. Instead, the less wealthy and poorly armed street gangs extort smaller, more low-risk industries.
This can be as simple as knocking door-to-door and asking each household in a gang's given territory to pay a weekly "security" tax. This can range from 10,000 to 20,000 pesos for families ($5 to $10), and 25,000 to 40,000 for store owners (between $12 and $20).
One former member of the Medellin mafia got his start by extorting the city's onion and garlic traders, earning him the alias "El Cebollero." Other food distribution industries in Medellin – like arepas (maize cakes) and eggs – are taxed by local gangs, according to Medellin newspaper El Colombiano. One egg distributor was told he had to pay a weekly fee of 50,000 pesos (about $25) in order to continue supplying the neighborhood where he worked.
The phenomenon is not limited to Medellin. In other urban areas, like the Pacific port of Buenaventura, the so-called "platano cartel" (Spanish for plantain cartel) controls the entry of food supplies into the city: Gangs force store owners to pay a "security" tax in return for selling the food, causing the price of basic items like plantain to spike dramatically.
The other big moneymaker for gangs – especially those which make up Medellin's biggest mafia, the Oficina de Envigado – is the extortion taxes demanded from bus companies. On July 22, the bus companies that service Medellin's hillside barrios went on strike, protesting the various vacunas they had to pay to competing gangs – 70,000 pesos (about $40) in one section of a comuna, 38,000 pesos (about $20) in another. One transport minister told El Colombiano that an estimated 80 percent of all buses in Medellin pay an extortion tax. Drivers who do not collaborate see their vehicles burned, and can be killed.
The "micro-extortion" that afflicts Medellin's public transport is one reason why the city government is considering implementing a cashless payment system. "The logic of micro-extortion is the size. It's so small that people think it's better to pay up, and more costly, shameful, and risky to report it," Defense Minister Rodrigo Rivera said in a March interview with El Colombiano, arguing in favor of the reform.
Street workers in Medellin also pay their own vacunas. Those at the bottom of Medellin's economic ladder – the street vendors hawking chewing gum, cigarettes, or cell phone minutes – must reportedly pay between 500 and 5,000 pesos (25 cents to $2.50) a week. Even the mariachi bands found along Medellin's Carrera 70 must pay for the right to work, with groups handing over as much as 150,000 pesos (about $83) for the right to do business on popular holidays like Mothers' Day.
One study by C3, a local NGO that studies urban conflict, found that in Medellin's central comunas alone there are an estimated 41 street gangs who charge vacunas from virtually every informal business. The total profits may be as high as $1 million a month, the study says.
Cracking down on these small-scale extortion payments is tough, precisely because the size of the "tax" is low enough for victims to tolerate, rather than taking the risk of reporting it to authorities. If a city like Medellin were to succesfully install a cashless bus system – perhaps forcing the gangs into demanding larger, monthly payments rather than smaller, weekly ones – this could make it harder for transport companies to tolerate the vacunas. Halting the extortion of workers in Colombia's informal economy will prove more difficult. At the moment, the benefits of giving in and paying the extortion tax outweigh the risks of not paying. It is up to the Colombia security forces to switch these incentives around.
--- Elyssa Pachico is a writer for Insight – Organized Crime in the Americas, which provides research, analysis, and investigation of the criminal world throughout the region. Find all of her research here.