By Ryan Berg
July 18, 2020
The coronavirus pandemic is causing tectonic shifts in Latin America’s organized crime landscape. Weak state institutions provide criminal groups an opportunity to fill voids of socioeconomic and security provision, while homicide rates have soared in several countries as groups contest territory and police presence has waned (or been directed away from combatting organized crime groups).
In the last few years, one group in particular has become a household name in South America due to its ubiquitous presence and persistent success—Brazil’s Primeiro Comando da Capital (First Capital Command, PCC). For the São Paulo-based PCC, the period since the pandemic lockdown in March 2020 has been full of momentous developments that serve to highlight its expansion campaign and deepening threat to security and rule-of-law in the Americas – and beyond. Most importantly, the PCC has evolved rapidly to become the most organised criminal group in South America, with extensive global operations.
In April, Brazilian Federal Police and the US Drug Enforcement Administration scored a major victory when they apprehended PCC kingpin Gilberto Aparecido dos Santos, alias “Fuminho,” in Mozambique. Fuminho’s presence over 5,000 miles from Brazil demonstrated the extent of the PCC’s growing criminal empire.
In a recent comprehensive report on the PCC for the American Enterprise Institute (AEI), I wrote: “The PCC has vanquished many of its domestic rivals, enjoys a footprint in every state in Brazil, runs operations in almost every country of South America, and is now more globally minded than ever before.” Thanks to the PCC’s efficient transshipment operations, Brazil now registers as the top point of embarkation for cocaine destined for Europe. Roughly one quarter of cocaine seized in major European port cities (Antwerp and Hamburg, for instance), arrived on ships originating in Brazil. Not even COVID-19 seems capable of slowing down this brisk trade in cocaine.
The PCC’s expansion has not been one seamless upward trajectory, though. The group has suffered a string of defeats in its effort to control water routes for drug trafficking through the contested Amazon region. What sets the PCC apart is its resilience and ingenuity, and several recently unearthed corruption schemes and money laundering operations reveal an evolving, sophisticated, and opportunistic group.
Competition for Territory
The PCC’s South American foothold stretches from Colombia to Argentina, but its operational stronghold remains its robust presence in Paraguay and Bolivia. However, as the group evolves to meet the illicit narcotics demands of its mostly African, Middle Eastern, and European clientele, the group has increasingly concentrated on the tri-border area where Colombia, Peru, and Brazil converge. Colombia and Peru are the largest coca growing countries in the world. Further, the coca leaf grown there is of higher quality than the variety grown in Bolivia.
Specifically, the PCC has concentrated its northern resources on contesting the so-called Rota do Solimões (Solimões Route). The Solimões is a major tributary of the Amazon River, comprised of largely unguarded rivers with terminal points near both Peru and Colombia. The Solimões provides traffickers with direct access to the Atlantic; alternatively, it also connects the Amazon region with the important port cities of Brazil’s northeast, such as Belém (State of Pará) and Fortaleza (State of Ceará), from which drugs can continue to their final destination hidden aboard containers on large cargo ships. The Solimões is one of the most important waterways in the world for the illicit drug market; a large chunk of the cocaine consumed on the planet traverses this riverine body.
Combined with its stronghold in Paraguay and Bolivia, PCC hegemony over the tri-border area could deal a fatal blow to its historic rival, the Rio-based Comando Vermelho (Red Command, CV). As such, an intense turf battle continues to play out in the Amazon region for control of this important waterway—even during the coronavirus pandemic. The PCC led the competition in the early stages, mostly through deft alliances with local factions and brutal tactics.
Since the publication of my report in March 2020, however, the PCC’s territorial dominance in the region has suffered setbacks. Whereas the PCC appeared to have much of the momentum between 2017 and 2019, beginning in late 2019 and early 2020 the CV came roaring back with a violent campaign of its own. The result was an uptick of homicides in both Amazonas and Acre states. The CV upstaged local rivals allied with the PCC, notably Bonde dos 13 in Acre state—and even its own erstwhile ally, the Família do Norte (Northern Family, FDN) in Manaus. Ostentatious fireworks displays punctuated the CV’s acquisition of new territory in a city that is one of the most ravaged by the coronavirus in the entire country.
Competition for the Solimões Route will remain intense. The PCC is by no means defeated—its dominance only slightly dented. It will likely regroup and devise a strategy to roll back the CV’s onslaught. Furthermore, the PCC’s setbacks in the Amazon have been offset by apparent gains in corruption networks and money laundering.
Corruption Networks and Money Laundering
In my AEI report, I warned that one of the greatest threats presented by the PCC’s expansion, besides the security implications, is its ability to sow robust corruption networks throughout the region. Public policies have lagged woefully behind the group’s nimble strategy, and PCC’s deep pockets mean it can infiltrate law enforcement circles, political institutions, and, of course, commandeer prisons as potent operational bases.
While local and regional governments are often no match for such a well-financed group, potential connections between major Brazilian political parties and the PCC demonstrate that the group has the ambition to influence politicians at the highest echelons of power. Further, recently unveiled money-laundering operations in health clinics focused on treating patients stricken with COVID-19 show the adaptability and opportunistic side of the group.
In the past, wiretaps revealed the PCC has leaned on connections to Workers’ Party (Partido dos Trabalhadores, PT) lawyers to try to earn better prison conditions for members (by filing a case with the Inter-American Commission on Human Rights). The latest controversy goes deeper, though. One of the group’s most famous pilots, who ferried drugs from the interior to Brazil’s ports, was discovered to have rented an apartment in Guarujá, a wealthy seaside town near São Paulo, from the wife of a former Workers’ Party minister. Former President Luiz Inácio ‘Lula’ da Silva also owns an apartment in the same building, with a unit very close to the one in question. (This apartment complex was at the heart of the criminal investigation against Lula). The developing story surrounding this possible connection between the PCC and the PT in Guarujá highlights the PCC’s potential to break into established circles and compromise politicians in the future.
Brazil’s struggle to contain and then treat the coronavirus has provided the PCC with further opportunities. Besides filling the critical void left by weak state institutions, the PCC has exploited new avenues for money laundering. Recent investigations uncovered 38 medical and dental clinics, all in the name of front men, that assisted the PCC in legally purchasing precursor chemicals for cocaine production under the guise of legitimate medical procedures. Clinics also laundered money from the PCC’s robust illicit activity.
Perhaps most importantly, PCC-owned and operated medical clinics allow the group to contest territory and clash with the police with fewer concerns for the often grisly consequences of factional disputes over turf. Hospitals are required by law to inform the police when a patient arrives with gunshot wounds. But the “PCC hospitals,” as they are known to members, elide these reporting duties. According to veteran investigative journalists Allan de Abreu and Josmar Jozino, to ensure this lack of compliance goes unnoticed, the PCC has cultivated connections with politicians, including possibly Federal Deputy Milton Vieira of São Paulo.
Regional Dominance…and then?
In my AEI report, I identified the PCC’s money laundering capabilities as one of the least sophisticated elements of its operations:
While the PCC’s first-generation money laundering efforts were rough and unsophisticated, the group now relies on a second generation of skilled operators, including the bank accounts of family members of PCC-affiliated inmates, used to launder millions… Highly polished businesses with the façade of legitimacy are the hallmark of the PCC’s second-generation financial operations.
What separates the PCC, a dominant and expanding criminal group, from the most sophisticated criminal organisations is the ability to launder money at ease (even with its second generation operations).
In many ways, however, recent events reveal the PCC has made significant strides in its march toward becoming one of the most sophisticated criminal organisations—certainly in South America, if not the world. What could be signs of the penetration of political networks, and the development of sophisticated front companies, demonstrates a self-assurance that is more important and perhaps more dangerous than its (ephemeral) setbacks in the campaign to dominate territory and control the Amazon region’s illicit markets.
Ryan Berg is a research fellow in Latin America Studies at the American Enterprise Institute in Washington, D.C., where he studies transnational organized crime, illicit networks, and Latin America foreign policy issues. You can follow him on Twitter @RyanBergPhD.