The investigation and trial of dozens of Barrio 18 members in El Salvador have revealed that the gang conspired with street vendors to siphon off pandemic relief funds, highlighting its infiltration of the informal sector for financial gain.
Members of Barrio 18 – the country’s second-largest street gang – allegedly collaborated with a union leader representing street sellers in downtown San Salvador to secure about $15,000 in public funds destined for families and businesses affected by coronavirus lockdowns, according to local press reports citing the country’s Attorney General’s Office and witness testimony heard in a late February trial against the criminal network.
The El Salvador government introduced its pandemic relief fund in early 2020 following the onset of the coronavirus pandemic and the announcement of strict quarantine measures. The $300 payment reached over a million families that year, according to a government statement.
The Attorney General’s Office has charged over 40 people in the case with money laundering, extortion and other crimes, including dozens of gang members and informal vendors.
SEE ALSO: Profile of Barrio 18
Government investigators alleged in court that union leader Norma Aguirre – accused of extortion and money laundering – worked with the gang to compile a list of Barrio 18 members, who posed as vendors, to receive the government’s pandemic relief payment. The so-called bonus was also available to those who had permanently or temporarily lost their job, including street vendors affected by market closures. The list was then delivered to the labor ministry with the aim of securing the funds, according to witness testimony and surveillance operations cited in the Attorney General’s Office indictment.
Prosecutors also presented intercepted phone calls that appear to show Aguirre and Barrio 18 members planning to use vendor stalls in San Salvador as a front for receiving the coronavirus funds.
“We have stalls,” a suspected Barrio 18 member told Aguirre in one conversation. “If there are 25 stalls, we’ll get $300 for each one.”
One government investigator testified that Aguirre worked with a labor ministry official to coordinate the payments. In the wiretapped calls, the union leader also mentioned Rolando Castro, the minister of labor and social security, by name, according to evidence presented in the formal indictment.
“If nothing comes up this week I’ll go and make a big fuss,” Aguirre told a suspected Barrio 18 member in the same intercepted call when asked about the money. In that call, Aguirre goes on to say that a check is being conducted on what she “sent to Rolando Castro.”
Castro has denied any links to the scheme, telling El Diario de Hoy that the labor ministry is not involved in distributing pandemic relief funds. Prosecutors have not charged any public officials in the case.
Last year, the US government blacklisted Castro for allegedly obstructing investigations into corruption and other misconduct.
InSight Crime Analysis
The alleged partnership between Barrio 18 and street vendors underscores how gangs in El Salvador have steadily usurped this informal trade to extend their political influence and criminal economies.
Both Barrio 18 and the MS13 street gangs have long preyed on street sellers for vital extortion revenue – no more so than in the sprawling informal markets of San Salvador’s Historic Center. But over time, the gangs have infiltrated the unions representing vendors by positioning allies in top positions or partnering with existing leaders like Aguirre.
In many cases, vendor unions now manage extortion rackets for the gangs. This includes Aguirre’s organization, which purportedly collected rent from informal vendors on behalf of the Barrio 18, according to an official from the Attorney General’s Office.
SEE ALSO: Investigation: Gangs, Vendors and Political Capital in Downtown San Salvador
But beyond extortion, the vendor syndicates also offer gangs connections to government officials. In 2015 and 2016, syndicate leaders became key interlocutors between the gangs and San Salvador city officials with the administration of Nayib Bukele, then the mayor of the city and currently the country’s president. The negotiations were to provide the administration space for a broad plan to revitalize the city’s Historic Center, according to a previous InSight Crime investigation. The gangs, though, used these negotiations to further their grip on the city center’s informal economy and to gain access to new businesses.
One of the interlocutors involved in the relocation process was later accused of relaying messages between imprisoned MS13 leaders and gang members in downtown San Salvador, highlighting the blurry line between gangs and vendors. Intercepted phone calls in that case also revealed how gang members contacted the syndicate leader in an attempt to position allies as vendor leaders, according to case files obtained by InSight Crime in a separate investigation.
The steady infiltration of the vendor syndicates is part of a long-term trend that has seen Barrio 18 and the MS13 leverage their political clout to broker deals with state officials, expand their criminal portfolios and consolidate territorial control throughout the country.
The gangs have also leveraged government connections amid the coronavirus pandemic. In some areas, the gangs directly administered state relief packages, in turn consolidating their territorial control.