Maduro’s Mafia State

As the Venezuelan crisis worsens, an international consensus is beginning to form around one key issue: Venezuela is not just a dictatorship but is also involved and complicit in criminal activity, including narcotrafficking. This was the topic of an event that the CSIS Americas Program hosted on Friday, October 12, 2018, featuring Ambassador William Brownfield and Juan Zarate. Their comments provide the basis for this article, which further explores the path Venezuela has taken to becoming a mafia state.

Venezuela has become a hub for a wide range of smuggling and trafficking activities as the result of a two-decade-long process of institutional devolution. This is clearly reflected in U.S. government evaluations; in the 2018 International Narcotics Control Strategy Report (INCSR), Venezuela is classified as a “Major Illicit Drug Producing and Major Drug-Transit Country,” a “Major Precursor Chemical Source Country,” and a “Major Money Laundering Country”—all three of the possible classifications in the report. According to the report, the Venezuelan government “failed demonstrably” to uphold its commitments to counternarcotics agreements in 2017, but the U.S. government issued a national interest waiver to allow continued humanitarian assistance.

Institutional Collapse

The 2018 INCSR notes that public corruption enables drug trafficking to continue. In fact, some public officials have been targeted by U.S. and international sanctions for drug trafficking activities, including former Vice President Tareck El Aissami. Ambassador Brownfield argues that the situation is even more dire as the entire government has become a transnational criminal enterprise, citing several trends in Venezuelan institutions that have led to the existence of a mafia state.

A prime example of the Venezuelan regime dismantling institutions occurred with the state-run oil company, PDVSA. Following the oil workers’ strike in 2002, former Venezuelan president Hugo Chavez personally fired seven senior PDVSA directors on live TV. Over the next year, he fired about 19,000 employees, replacing them with loyalists. The consequences for Venezuela’s oil sector were devastating, as this massive turnover resulted in the loss of decades of institutional knowledge and expertise. Since PDVSA was then and is now the principal piggy bank for the government, it has become an attractive target for those involved in financial crimes and money laundering.

This process of institutional devolution accelerated in 2004 when former Venezuelan president Hugo Chavez and his coalition passed a law expanding the Supreme Court from 20 to 32 seats to pack the court with loyalists. This reform essentially destroyed the checks and balances enshrined in the Venezuelan constitution, including the independence of the Supreme Court. The events of 2002 and 2004 are just two examples in a long history of institutional corruption which encourages a culture of criminality among regime loyalists.

Impact on International Relationships

Ambassador Brownfield also noted that, around 2005, Chavez effectively terminated all relationships with the West. Since then, there has effectively been no cooperation with Venezuela on drugs, money laundering, financial crimes, or transnational organized crime. This has had an inevitable effect in terms of how Venezuela is perceived by criminal organizations, making it seem more attractive to them. 

Zarate argued that a key turning point was when the Venezuelan government severed ties with the U.S. Drug Enforcement Agency (DEA), accusing them of spying for the U.S. government. They denied all new visas, barred visa-holding DEA staff from returning to the country once they left Venezuela, and restricted DEA contact with Venezuelan law enforcement. Ambassador Brownfield notes that, by the time he left Venezuela in 2007, the DEA office had been reduced from 12 agents to two agents who were not allowed to leave the country. This fundamentally changed the nature of bilateral relations between the two countries, and in the following years, the Venezuelan state began to more actively coopt networks of illicit trafficking.

As the Venezuelan government has turned away from the United States and Western allies, it has allied itself more closely with their adversaries. The three closest allies of the regime—Cuba, Russia, and China—consistently assist the Venezuelan regime financially and politically, leaving the government with little incentive to pursue a different path. Additionally, members of the Venezuelan government have begun to engage more deeply with Iran and members of Hezbollah. They became involved in money laundering and terrorist financing networks tied to drug trafficking and terrorist groups.

Zarate noted that from 2007 to 2008, there was a recognition that the Venezuelan regime’s behavior couldn’t be ignored, as it had become entangled with a set of transnational threats that were important to U.S. foreign policy and national security. In recent years the U.S. government has taken several steps to restrict and punish the Venezuelan government for its involvement in drug trafficking, financial crime, and other forms of criminality. The United States has designated high-level officials as drug kingpins, including El Aissami in February 2017. The U.S. government also began to target the regime on a broader basis and used sanctions to limit the regime’s efforts to issue new debt, which restricted them to their profits from corruption and illicit activities.

Looking Forward

Both Ambassador Brownfield and Juan Zarate offered some thoughts on what the future could bring for Venezuela as a mafia state, particularly looking at the role of the international community to help Venezuela during “Day After” challenges. Ambassador Brownfield argued that the Maduro regime is doomed because Maduro has been unable to force consensus. President Maduro does not have the authority, credibility, or ability to bring together the entire Chavista movement on a difficult point such as transnational crime. Zarate predicted that we will continue to see the targeting of senior leadership as well as continued nuanced use of sanctions to try to contain the way the regime is trying to work around sanctions and controls. Both Zarate and Ambassador Brownfield were confident that there will be a “Day After” situation in Venezuela, in which many of these issues of corruption and criminality will come to the surface.

Moises Rendon is an associate fellow and associate director of the Americas Program at the Center for Strategic and International Studies in Washington, D.C. Mia Kazman is an intern with the CSIS Americas Program.

Commentary is produced by the Center for Strategic and International Studies (CSIS), a private, tax-exempt institution focusing on international public policy issues. Its research is nonpartisan and nonproprietary. CSIS does not take specific policy positions. Accordingly, all views, positions, and conclusions expressed in this publication should be understood to be solely those of the author(s).

© 2018 by the Center for Strategic and International Studies. All rights reserved.

Moises Rendon

Moises Rendon

Former Senior Associate (Non-resident), Americas Program

Mia Kazman

Intern, Americas Program