Uruguay’s Marijuana Bill and Organized Crime

To be sure, the relative safety of Uruguay makes it an unlikely candidate to measure the impact of marijuana regulation on organized crime. Other countries clamoring for a paradigm shift in drug policy -- Guatemala and Colombia, for instance -- are some of the most violent in the region and their calls follow a shared logic: the shift of resources away from repression of drug users will allow them to focus security forces on the most violent actors.

Uruguay has few of these violent actors. Indeed, the issue of insecurity is something of a political paradox in Uruguay. The country has long had low levels of violent crime, and its homicide rate of 6 per 100,000 is among the lowest in the region.  Yet at the same time, the perception of insecurity among Uruguayan citizens is surprisingly high. A May 2012 region-wide survey by Corporacion Latinobarometro found that Uruguay has one of the highest gaps in Latin America between the level of perceived insecurity and actual victimization rate.

Homicides in Uruguay

Despite the low level of crime, 40 percent of the country rated citizen security as the biggest issue facing the country, and 84 percent said crime had worsened in the last two months. One recent study found that residents of the capital Montevideo are more likely to rate their country as “highly unsafe” than those polled in either of Colombia’s two largest cities, Bogota and Medellin, which each see roughly ten times as many murders annually.

The consensus among Uruguayans seems to be that insecurity is a recent phenomenon, a product of the past decade.

“Ten years ago this was a different country,” said National Drug Secretary Julio Calzada. “People used to leave their houses unlocked, their car doors open while they went into the store. Not anymore.” 

New Illicit Drugs, More Crime

So what changed? According to Calzada, one of the main factors was the influx of an unprocessed cocaine derivative known as “pasta base,” or what is also known as "cocaine paste," around the turn of the century. Though it was almost unheard of in the 1990s, in the early 2000s consumption of paste became widespread in low income areas in Uruguay.

Uruguay’s cocaine paste problem has several causes. Drug officials and police claim that the arrival of the drug coincided directly with increased regulation of precursor chemicals in Colombia and Peru in the early 2000s, forcing traffickers to look for new ways to sell unprocessed cocaine. To make matters worse, a devastating economic crisis in Uruguay in 2002 caused unemployment to spike, and provided an increased market for the cheap drug.

Robberies in Uruguay

This rise of cocaine paste, coupled with a sudden decrease in economic opportunity, fueled criminal activity in the South American country. According to the non-governmental Observatorio Fundapro, in 2002 there were some 8,500 reported robberies in the country. By 2006 this figure went up to 9,669 and in 2012 it was at 16,812, roughly a 200 percent increase over ten years.  In 2005 officials registered a total of 188 homicides. In 2012 there were 265, the highest number on record.

Organized Crime in Uruguay: a Mugshot

While Uruguayans are highly concerned about insecurity, organized crime is not considered to be a major issue in the country. However, there is a sense that the dynamic is shifting. In January, Deputy Director of the National Police Raul Perdomo told leading daily El Pais that officials attributed a recent spate of killings in Montevideo to a “budding phenomenon” of rising gang activity. Perdomo claimed these groups were concentrated in three western neighborhoods of the capital city.

Other police sources consulted by InSight Crime confirmed this trend. In poor neighborhoods in cities around the country, a number of rudimentary street gangs have sprung up in recent years.  So far their criminal portfolio is fairly limited. Police say they are involved in car theft and robbery, as well as the sale of marijuana and pasta base, but only in relatively small amounts.

While these are by no means major players in the drug trade, there have been a handful of Uruguayan drug traffickers over the years. The most famous was Omar Clavijo, referred to in local papers as the “czar” of the country’s underworld. His 2001 arrest for smuggling 300 kilos of marijuana made headlines, as he was rumored -- but never proven -- to have political connections in Uruguay’s congress.  Once in prison, he continued to lead a sizeable trafficking network from his cell, which investigators claim included police officials in the northern province of Salto. Clavijo escaped in 2001 and fled to Paraguay, hoping to expand his illicit business.

However, it seems the Uruguayan narco bit off more than he could chew. In July 2003 Clavijo was gunned down in the Paraguayan city of Pedro Juan Caballero, located on the border with Brazil. Locals claimed he was killed by his boss, a Paraguayan trafficker named Magno Rios, after making one too many costly mistakes. Days before he was killed, Paraguayan police seized 17 tons of marijuana reportedly belonging to Rios.

A more recent example of a Uruguayan drug trafficker is 30 year-old Luis Alberto Suarez Correa, alias "El Betito” (pictured at left). Arrested in 2006 for leading a stick-up gang known as the “Profesionales,” Betito has taken advantage of his incarceration as an opportunity to branch out, and, according to officials, has had success. In December, organized crime judge Nestor Valetti Rodriguez described him as “the most dangerous criminal” in Uruguay.

“He’s in a maximum security prison, reserved for drug traffickers, and controls an army of 50 gunmen. That’s how he wins turf in some areas. He leads from jail,” said Judge Valetti.

The judge also claimed that his time in prison had allowed him to make contact with Brazilian prison gangs like the First Capital Command (PCC).

In October 2012, an investigation published in Busqueda magazine found that Betito had expanded his group over the years, and was running a microtrafficking operation in neighborhoods in west Montevideo.  According to the report, Betito’s organization controlled around one hundred drug-dealing locales, and was locked in a deadly conflict with a rival drug gang over territory.

The Marijuana Bill's Impact on Organized Crime

It is criminals like Betito and Omar Clavijo who will be most affected by marijuana regulation in Uruguay. The government’s most recent drug abuse statistics show that while 20 percent of the country has consumed marijuana at some point, only 6.2 percent has tried cocaine, and only 1.1 percent had ever consumed cocaine’s cheaper alternative, cocaine paste. This suggests that if the government can undercut them in pricing and quality, they will lose a significant chunk of their profits.

View Uruguay's Marijuana Market in a larger map

Successful regulation will rely on thorough monitoring of licensed crops, paired with strict punishment of illegal trafficking and cultivation. Users must be compelled to purchase or grow the drug legally in order for the measure to be effective. While it may be unpopular among marijuana legalization advocates, this means that the penalties the law mandates for those who deviate from legal production will have to be strictly followed. This will be especially important in isolated border areas, otherwise Uruguay risks becoming a marijuana-exporting country.

Fortunately the administration of President Jose Mujica appears to be conscious of the need to supplement regulation with targeted enforcement. An underreported fact about the initiative is that it was first proposed in June 2012 as part of the governing Frente Amplio coalition’s plan to address insecurity in the country. Known as the “Strategy for Life and Coexistence,” its 15 points included measures like raising mandatory sentences for corruption and large scale trafficking, creating more streamlined investigation processes for the small-scale illicit drug trade and offering reparations to victims of crime. In the past year, the government claims it has implemented 11 of the provisions, including all three of those mentioned above.

In order to fully tackle the problem, it will also be imperative for the government to address police corruption. While not generally associated with law enforcement in Uruguay, it is an issue nonetheless. According to Rafael Paternain, a leading Uruguayan criminologist and former member of an advisory council to the Interior Ministry, this is a key component of these local gangs’ territorial control.

“While I am not convinced these groups represent ‘organized crime’ in a traditional sense, it is difficult for me to believe that they operate without collusion of police,” Paternain said.

According to Paternain, this amounts to district police offices in these areas accepting regular payments from gangs in exchange for permission to operate with impunity. In 2012, some 76 police were found guilty of corrupt dealings, including receiving kickbacks, arms trafficking and extortion.

Transnational Crime in Uruguay

Domestic gangs are not the only criminal groups in Uruguay. According to Officer Douglas Da Silva, a member of the National Police’s Organized Crime unit, transnational crime is becoming a greater problem every year.

“The biggest criminal structures operating in the country are foreigners, especially Colombian and Peruvian groups,” Da Silva said.

However, according to Da Silva, compared to local criminal groups involved in drug dealing, foreign actors attract far less attention, and cannot be linked to insecurity in the country, as they are mostly interested in Uruguay as a bridge to the cocaine market in Europe.  They are unlikely to be affected by marijuana legalization, according to Da Silva, because they are on “another level.”

There are other reasons for criminals on this level to be interested in Uruguay: it represents an attractive place for these foreign criminal organizations to launder illicit profits. The US State Department’s 2013 International Narcotics Control Strategy Report found that Uruguay’s relatively high dependence on the dollar made it "vulnerable" to money laundering schemes, something the government has become highly concerned with over in recent years. Officials say more than 100 people have been jailed since 2005 for money laundering, and the governments of both Argentina and Brazil have expressed alarm over the trend.

Ultimately, legalizing marijuana will do little to affect major transnational criminal networks.  These will remain unless the government takes a more aggressive stance on money laundering and border security. But it will take a major bite out of the profits of Uruguayan traffickers, the main contributors to insecurity in the country.

Insecurity would be further addressed if the bill were accompanied by a wave of police operations targeting gang activity and cocaine/pasta base dealing in urban areas. Provided officials prevent these groups from adjusting to the changed law and making up their profits with other criminal activity, the bill stands a good chance of reducing homicides and other violent crime.

*Geoffrey Ramsey is a former investigator for InSight Crime. He currently resides in Uruguay where he is doing research for Open Society Foundations, one of InSight Crime's funders. See more of Geoff's work at InSight Crime here.