Business Versus Business? Grupos and Organized Business in Colombia

Latin American Politics and Society, Spring 2005 by Rettberg, Angelika

Thus, in contrast to the view that the Colombian state is captured by business interests, the grwpo-state relationship is one of mutual constraints (Rettberg 200Ib). While the state relies on the gmpos for jobs, investment, and taxes, and individual presidential administrations are indebted to the grwpcg for campaign support, grMpos depend on the availability of tangible and intangible state resources for their economic operations. As a result, gmpos have a strong incentive to protect their relationship with the state by supporting those who have discretionary control over state resources and state coercive capacity. In a presidentialist system like Colombia's in the mid-1990s, that figure was Ernesto Samper. During the Samper years, grupos were willing to accept the cost of political and economic crisis in exchange for well-justified expectations of long-term benefits. This explains why grupos supported the president.

At the same time, grupos were not exempt from the pressures facing the rest of the Colombian business community, notably the U.S. threat to adopt economic sanctions against specific firms as well as countrywide (Crandall 2001). Several grwpo firms, especially those in the financial sector and those with external ties, were likely targets. Such was the case of Avianca, the Bavaria-controlled national airline. The company would have been hard hit if the U.S. government decided to withdraw landing rights, as the airline's profits derived mainly from its international operations." Similarly, Sarmiento's financial activities relied extensively on operations in the United States. If financial transactions between the two countries were restricted, the gmpo would be considerably affected.

Therefore, while the need to protect their ties with the state provided grMpos with an incentive to support Samper, the likelihood of becoming objects of U.S. sanctions prompted grwpoj to maintain their links with associations, which were saving business's public and international face by demanding the resignation of a presumably corrupt president. The grMpoj" double bid permanently damaged the ability of Colombian organized business, ns represented hy associations, to confront the crisis through collective action.

THE UNEASY GRUPO-ASSOCIATION RELATIONSHIP

When asked what explained this failure of a collective response, association leaders, business executives, state officials, scholars, and journalists almost in unison pointed to the grupos' failure to support the Consejo Gremial. Even a Bavaria executive acknowledged that effect: "The support of Samper by the cacaos weakened the voice of the business associations" (Bavaria 1998b).9

Publicly, the grupos disregarded the Consejo Gremial only once, to express solidarity with the president. In December 1995, the Accusations Commission of Congress declared that it had found no grounds to open a case against President Samper on charges of illegal campaign funding.10 Leaders of the four main Colombian grupos sent the president a letter stating that they "saw in him a ruler who avoided an institutional crisis" (El Tiempo 1995b). Published along with a photograph of smiling grupo leaders shaking hands with Samper in the presidential palace, the letter showed that Samper had the backing of the country's largest owners of capital. Samper himself later described the situation bluntly: "We talked to the owners of the circus" (Samper 2001; 2000, 34).