Elites and Organized Crime: Conceptual Framework – Elites

This InSight Crime project defines elites as: specific groups of people with a privileged position that allows them to control, direct or greatly influence the dynamics of community life in political, social, cultural and/or economic terms.

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We base this definition on three theoretical concepts. The first comes from Goran Therborn. He describes what he calls the “dominant class,” or failing that, an alliance of dominant classes, which is broad in its power and reach. Part of this construct rests on the idea that every state has a class character and every society a dominant class, which is dominant because it has hegemonic power over at least three aspects of society: economics, politics (embodied by the state) and ideology.¹ To Therborn, the dominant class is not necessarily installed within the state, but its actions and power (interventions) are such that it influences state policies for its own benefit. His perspective also assumes a dominant class is not homogeneous, but often broken into factions. It is a dominant class with diverse interests. Therborn recognizes that the power of the dominant class is not only based on economic aspects but also political and ideological ones, and that it makes use of those resources to legitimize itself before society and intervene in the state, either from within or from the outside. Thus, while recognizing the strong determination of economic relations in the constitution of the dominant class, it also attributes great significance to the political and ideological aspects.

This is one part of a multipart series concerning elites and organized crime. Read full introductory section (PDF). See other parts of the series here.

Our second concept for understanding the elites comes from Gaetano Mosca, who understands elites as a “ruling class” or a “political class,” which is made up of a minority of people who direct what Mosca calls “public affairs.” They perform all political functions, monopolize power and enjoy its advantages. This class consists of a minority whose qualities distinguish them from the governed masses and give them material, intellectual and moral superiority. Analyzing the historical makeup of the ruling class, Mosca identifies among its members: political and military leaders, wealthy landowners, religious hierarchies and high-level state bureaucrats.²  For Mosca, the political class tends to become hereditary by law or by circumstance, and develops attitudes and qualities for acquiring and conserving power. But when important changes happen in society, the ruling class also changes by either renewing itself or making room for a new ruling class. While acknowledging the distinction between governors and the governed is not novel, it does help identify the “ruling class” through its real and effective control of the state.

Mosca establishes that “the governing minority is made of individuals that distinguish themselves from the governed masses by determining qualities that grant them a certain material and intellectual superiority. Social position, family tradition and class ethos determine and condition the character of men, as well as certain cultural bases which help determine the superiority of the political class.”³

The third concept in which we base our understanding of elites comes from C. Wright Mills, who, through a historical analysis on the makeup of elites in the United States, identified key groups in different periods.⁴ He argues that the middle of the post-World War II period produced a process of political power infiltration by “corporate leaders” and “military men” that became an elite made up of politicians, military leaders and capitalists that made decisions together, except in certain situations where the interests of one group prevailed.

Mills also does not believe this elite is homogenous. In reference to Mosca, Mills argues that members of the elite have a common origin and education, but their class origin does not necessarily mean they only represent the interests of this class and that behind that concept of a ruling class is the idea of an economic class that manages politics as well.⁵ Mills argues that Mosca’s idea of a “ruling class” is not appropriate because the term alludes to economic power, but elites are not always made of people with economic power. Such is the case of political elites and state bureaucratic elites.

Adapting the Theoretical Approaches

In general terms, literature on elites offers a restricted view of their configuration as it focuses on political and economic levels, their relation to the market and the state as it relates to acquiring power, or conflicts over control of the state and the market. Empirical evidence from case studies in Guatemala, Honduras, Nicaragua and Colombia reinforces our focus on the existence of diverse elites, forming something akin to elite factions. The evidence indicates that the last 30 years has been marked by conflicts amongst elites that have led to some dispersal of power.

Contrary to the idea that the dispersal of power and authority amongst different elites generates a balance of power in their democratic societies while neutralizing tensions and reconciling interests among them,⁶ in Central America multiple interests generated by different elites have provoked tensions as well as legitimate and illegal ad hoc alliances. These alliances aim at controlling the state, are not transparent to public management, and are key to preserving the economic and political interests of elites, as well as helping them maintain social control.

Due to this diversification of traditional structures and the scramble for power, we feel the need to examine each piece and understand how elites function within societies and states. We accept that there is a general idea that elites influence the direction or dynamics of community life in political, social, cultural and economic terms. But our focus assumes said elites come from a variety of sectors including government and non-government actors, military and economic sectors, community organizations and politics.

In this sense, it is important to specify at least three scenarios regarding the configuration of elites and the way they usually impose their interests.

The first is when the dominant classes exert political control over either a weak or a strong state. On the basis of this strength or weakness, criminal groups find space for their illegal activities. In other words, elites set the standard for the creation of the rule of law, the justice system, the tax system, the security forces and other aspects that may curb the activities of organized crime. Problems occur when there is a notable lack of incentives to create strong institutions, like in Central America, because they may also limit the elites’ own empires, which often are held through illicit arrangements.

The second element is the introduction of a military or bureaucratic elite as a key variable in the study given the importance of this powerful group in Latin American history and its role in developing both the state and organized crime. Evidence from Guatemala, Colombia and Honduras shows that there can be no understanding of organized crime dynamics without paying attention to the role of the military in the last 50 years.

Mills’ approach enables us to take the concept of “powerful elites,” which empirically identifies groups that have and exercise power from different capitals: economic, political, symbolic, etc. This is because societies are complex and various elites also have interests that conflict with the others. The key element of the analysis is that the spaces where power is exercised are scattered and elites are diverse.

Our understanding begins with the premise that there is a plurality of elites that not only compete for state and market control, but also influence the life of the communities where they live. We also agree that the term “elite” refers to various groups in society that enjoy privileged status and exercise decisive control over social organization. Although elite suggests a position of power, it does not necessarily require wealth or an official title.⁷ From this perspective, we break down these elites into three categories: economic, political and social. We also introduce the concept of bureaucratic elites, since it their role as bureaucrats within the state that puts resources and power at their disposal. These bureaucratic elites have played a key role in the success of the operations of organized crime networks, so much so that delineating and exploring their development and reach has been paramount to the project.

The Elites, Their Profiles and Their Ways of Exercising Power

We take as a starting point that one of the traditional characteristics of economic elites is that they control the means of production and exercise strong influence over the labor market and consumption. Their power base is the economic capital they have accumulated, which they use to exercise power not only in economic circles but also in political and social arenas. This economic capital includes land or property, natural resources and finances. They are also committed to influencing public opinion to adjust it to their economic interests. This is usually accomplished through oligopolies that concentrate the most important media in their hands, including radio, newspapers and television.

Political elites, for their part, are connected to parties and political movements. They look to use their political connections to increase their hegemony over communities. In other words, political elites use state resources or connections to the state and political parties in order to play a dominant role in the life of communities they inhabit. These political elites do not have to hold a political position to exert influence. They may be a party leader, a consigliore or a lobbyist with political parties to ensure that the interests of those elites are aligned with economic power groups. However, for the purposes of this initiative, we have limited the scope of the political elites to those who operate through the structure of political parties. This also helps us to understand the operation of the scope of the bureaucratic elites and specify the role they have in the sustainability and success of organized crime.

Social elites we understand as actors with leadership roles and the ability to direct the community or region, putting forth strong ideas alongside the capacity to promote and mobilize these ideas. This can include community and religious leaders as well as artists and intellectuals. This elite does not necessarily have political or economic power to exercise. But they can obtain both in the process, and they can also use their technical knowledge of the structure and procedures of the state to their advantage. They are not an elite by having gained their position through the electoral process. Their position as elites is won through leadership, credibility, legitimacy, debate and acting in a manner that creates confidence and support within the community. These characteristics are fundamental in understanding the configuration of local power in multiethnic communities, like Guatemala, and multiethnic regions like those in Nicaragua.

The bureaucratic elites refers to a specific group, enmeshed in the state apparatus, with power and capacity for decision-making. Operationally these elites can achieve a relative autonomy from the economic and political elites, and are organized on the basis of their resources and their own interests. Their importance lies in the power and hegemony they have over state resources: its procedures, their technical capacity and their leadership. This includes the police and to a much greater extent the military. The level of differentiation and complexity of the functions of a society can be seen in the degree of development and specialization of the state, such as in its economic activities. Hence, as stated by Max Weber and Mills, the state is made up of a group of people with a level of specialization, which gives life to a state bureaucracy that acquires power as measured by their level of specialization and their capacity to make decisions.⁸ This bureaucracy creates in turn bureaucratic elites with power over state resources, including political resources. Mills and Mosca explain how this bureaucracy came to be and was incorporated into the power elites of the United States and Europe, through a long period in which bureaucratic elites weaved their relations and links with economic and political elites, until becoming part of them.⁹ We see the same in some of our case studies, but note that in Central American countries the possibilities of autonomy for bureaucratic elites with respect to economic political elites are marginalized by lack of meritocratic processes in the appointment of senior management and intermediate institutions in the state.

Of course, there is some mixing between these groups. It is an inevitable consequence of living in complex societies where there is social, political and, to a lesser extent, economic mobility. However, we believe it is essential to distinguish between the influence that each group has, so that we can better understand where, why and how organized crime intersects with these elites. Understanding the intersections of organized crime with elites can help us understand the basis on which this criminal phenomenon arises, develops and survives. As outlined above, the elite interests are diverse and disputed. Staying in power allows them to promote these interests in several ways. This includes maintaining and exploiting weak states to position the interests of organized crime groups, by association with these groups, and by sabotaging reforms that could limit the penetration of criminal elements in the state.

This approach is also based on the premise that the elites are dynamic. They relate and interact with each other depending on their interests and the balance of power in which they are positioning themselves, and it is in that framework they also interact with criminal groups.

Vulnerable States, Powerful Elites and Corruption

To understand the perspective proposed in the project on elites and organized crime, the role of the Central American elites in the state needs to be put into context. This means understanding that the Central American elites have been essential to creating a system of interactions that ensures their control of the state and its institutions, with a view to perpetuating or at least extending their privileges as power groups. Operationally it is through the state that the elites exert their prerogatives, but they also use the state to “sell protection” to criminal networks involved in drug trafficking or embezzlement of public resources. This scenario is not exempt from the conflicts amongst elites who use influence peddling, corruption and impunity to service their ends. This becomes important once we look at governance in Central America and Colombia, and from there the vulnerability and fragility of the states and their institutions stemming from relations and the interplay with criminal networks with the elites in an environment of corruption and endemic impunity.

In this regard, the Corruption Perceptions Index (CPI) of Transparency International, which assigns a score and ranks countries according to perceptions of the degree of corruption in the public sector, ranked Honduras number 133 out of 175 countries in its 2012 report. This was the worst in Central America and the fourth least transparent in the hemisphere. Nicaragua (130) and Guatemala (113) were also counted among the worst evaluated in Central America. Guatemala, the best rated of the three countries, was located just twenty points ahead of Somalia, the least transparent country in the world according to the index, and was almost 70 points behind Denmark, the most transparent.¹⁰ In the 2014 index, Honduras improved slightly (126) but still ranked alongside Nicaragua (133) and Guatemala (115) as some of the least transparent in Central America. In the hemisphere they only ranked above Paraguay (150), Haiti (161) and Venezuela (161).¹¹

Regarding these governments’ high rates of corruption, a report by International Narcotics Control Board (INCB) was emphatic in indicating that traffickers take advantage of weak government institutions to establish new transit routes and finance corruption with the proceeds of their illicit activities.¹² A United Nations report on drug trafficking in Central America also indicated that although the trade has affected the region through violence, the region’s instability is rooted in fragile institutions that have encouraged the presence of non-state actors.¹³ Said non-state actors — in collusion with business and political elites as well as high military and civilian officials — have managed to implement sophisticated criminal operations, which exploit this environment of impunity and corruption.

Institutional fragility guarantees elites will tolerate grey zones operating in all types of illicit businesses that are oriented towards perpetuating their interests. In practical terms, elites look to control public politics and, when necessary and convenient, minimize interventions aimed at opening the state to public scrutiny and accountability. In this sense, the state is less a guardian and generator of common interests, and more an instrument of private groups with private interests. The mixing and interplay between elites and organized crime grows roughly in proportion to the state’s inability to enable processes that foster transparency and accountability. In the words of Joaquin Villalobos, the state’s weakness allows small groups to meet and form hierarchies, until they become large criminal organizations capable of coopting institutions. As a result, state weakness provokes the emergence of alternative and illegal powers, which fill power and order vacuums.¹⁴

In Guatemala — with all its modernization processes for adapting to the global economy — elites remain central actors in politics, since their economic power is based on their formidable ability to control the politics of the state. To cite just one recent example, President Oscar Berger (2004-2008), upon starting his term affirmed his identity by defining his presidency as a “Government for Business.” To secure control of the state, elites employ an array of formal and informal mechanisms, careful to project the ideals of a modern elite which is in sync with an agenda of open markets and liberal democracy, while trying to preserve their oligarchic roots and legacies. But power relations of elites with regard the Guatemalan state cannot be understood without referring to the performance of security forces in the erosion of the state and the fragility of that state as a result of requirements by the elites to make it an instrument serving their interests.

In every government administration, business people form pressure groups, familial or by industry, that look to win political power that provides protection and advantages in the opening of business opportunities. They do this by financing electoral campaigns, which affords them direct access to the highest authorities. They also do this through the selection of executives and trade union leaders who represent them via economic and financial ministerial cabinets in the central government.

In Nicaragua, the makeup of the elites should be seen through the lens of recent history. The Nicaraguan elite is mixed in composition with interconnection through economic, political or social links and a clear interest in occupying the state, exploiting its resources to consolidate its power. It is also willing to commit acts of corruption in order to strengthen or maintain its position. To operate, these power elites have reinforced the existence of a state with large “grey zones,” or functions and areas with little or no regulation and control which would otherwise present high risks for those committing acts of corruption. These grey zones allow state officials to use government resources, whether they be economic, material, institutional or political, for their own benefit or that of their power group, with little to no risk of consequences for those involved.

After 17 years of right-wing governments with a neoliberal bent, in 2007, Daniel Ortega regained the presidency. This indicates the economic strength of the political elite surrounding Ortega, his family group and what can be called the business side of his political party, Sandinista National Liberation Front (FSLN).¹⁵

In terms of the elite reconfiguration and management of the state, this implies: a) the construction of alliances with other groups to insert themselves in the main axes of the national economy, like large agricultural exporters, foreign investors primarily in the telecommunications and tourism sectors, financial sector business people, and high ranking military; and b) the “colonization” of all state power and spaces, such as control of the National Assembly, the Supreme Court, the electoral regulatory agency, local governments (municipal and regional) and all the bodies that control public administration, as well as maintaining an iron grip on the police and military.¹⁶ The strength of the elite that has formed around President Ortega has increased since 2007, and it has been able to secure power over other factions through private negotiations to establish economic alliances or by eliminating their political parties and movements so they do not compete in elections.

The configuration of elites in Honduras must be understood from the production model which began in the 20th century, which favored an enclave economy dominated by multinational corporations, and then from the elites’ capacity to control the service and banking sectors as well as the media and telecommunications.

The effect of so large a multinational presence were complimented by economic changes spearheaded by immigrants from the Middle East and Eastern Europe. These families helped open up Honduras’ economic landscape by investing heavily in the banking, industry and communications media, and other areas. In doing so, they gained influence in politics via both of the main political organizations: the National Party and the Liberal Party. Historically, politics had been the exclusive domain of Honduras’ traditional elites whose power stemmed from the control of land, livestock, mining, coffee exports and government office. The faces of the elite, be they old guard or more recently arrived, are known to the public through the society pages of newspapers and through seats on the boards of private sector organizations. Traditional elites have also bolstered their relevance in a modern world through an increased, public presence in politics.

The other element that characterizes the Honduran elite system is their lack of homogeneity. The contradictions, confrontations and struggles happen frequently as the different power groups vie for control of the state. This is because throughout Honduras’ history the state has been a source of legal and physical defense for these interests. State control has guaranteed the “rules of the game” and because of this disputes have been contextualized in the capacity that one elite has over another to obtain advantages through manipulation of public administration and its political power.

In its most visible expression, elites of all kinds have used the military and police to protect their property and businesses for years. Hence the elites’ said dependence on security forces to protect their businesses led to the emergence of military leaders as relevant political and economic actors.

But to understand the Honduran elites’ configuration, it’s also necessary to examine the role of high-ranking bureaucrats within the state. These powers arose from traditional politics and gravitated towards power centers within political parties. This Honduran bureaucratic elite is a wildcard. Their value depends on who has them in their hand, and their ability to become a key to “winning the game.” Bureaucrats themselves do not have great economic power, but their networks and social bases, their charisma, skills, talents and handling of electoral issues, represent capital that is hard to obtain with money alone. These activities put this elite in a position to make the decisions necessary to serve itself as a state facilitator, and when conditions are right, perpetuate the bureaucratic pattern of accumulating capital by weaving alliances with economic and military elites and, at same time, criminal networks.

Colombia’s elites have more in common with those from Guatemala than anywhere else in Central America. For decades, they concentrated land and industry in their hands, while paying little taxes and using the military to their advantage. They also concentrated their power in the capital city, Bogota, where they strove to maintain the status quo by controlling the political levers of power and the country’s two political parties, the Liberals and the Conservatives. To be sure, in the periphery, there were elites, but they were generally isolated from the central government and were largely left alone to settle their own disputes as they saw fit.

The configuration of elites in Colombia was also forged by violence. When a popular Liberal politician was assassinated in Bogota in 1948, fighting broke out along party lines. Hundreds of thousands were killed. But while the pretext of the fighting was political, the heart of the struggle was about land and control over the means of production. Over time, the two parties eventually found common ground, designing a power-sharing arrangement that put an end to the battles between them but opened the way for left-wing insurgencies. The guerrilla war gave the two parties even more common cause. It also fomented the development of a bureaucratic elite, mostly emanating from the police and military ranks. As a vibrant illicit economy emerged, it added yet another important layer to this fight that nearly every side — guerrillas, as well as political, economic and bureaucratic elites — sought to use for their own ends.

Endnotes