Accounting for the Cartel

Accounting as Tinted Glass – How Cartels Use Accounting to Normalize Violence and Buy Legitimacy

Accounting is usually pictured as a neutral technique for recording transactions and reporting performance. In cartel-affected environments in Mexico, however, accounting works less like an impartial ledger and more like tinted glass: it makes certain things legible – revenues, payrolls, property transfers – while obscuring the violence and coercion that sustain those figures. The study, “Accounting for the cartel” (Critical Perspectives on Accounting, 2026), shows that accounting in cartel contexts does far more than enable money laundering. It actively shapes organisational identities, moral horizons, and public narratives by combining framing and routinising into a practice the author calls systematisation.

Framing: accounting decides what counts and what is invisible

Framing refers to the selective visibility created when accounting categories and language determine which aspects of cartel activity are presented as economic facts and which are pushed out of sight. Across interviews with business owners, cartel affiliates, tax officers and police in Mexico, the study finds a consistent pattern: the same accounting terms used in legitimate commerce – “expenses”, “liabilities”, “payroll”, “inventory” – are deployed to describe extortion payments, coerced services and even the handling of kidnapped individuals. Calling extortion a “security fee” and logging it as an expense both normalises the payment and distances the payer from the moral reality of coercion.

This framing serves internal and external functions. Internally, it stabilises routines and identities: cartel members and collaborators come to see themselves as business actors managing costs and assets. Externally, the use of conventional accounting language makes illicit operations legible to bureaucracies and markets that privilege formal economic categories, reducing the risk that violence will be recognised or investigated as such. News coverage and official discourse often mirror these framings, reproducing the hybrid accountings that obscure harm while emphasizing apparent economic productivity.

Routinising: accounting makes the extraordinary ordinary

Routinising is the embedding of those framed categories into everyday practices. The study documents how business owners who are extorted begin to budget, accrue and report “security fees” as regular line items; how cartel accountants keep meticulous ledgers for collections, safe houses and arms; and how collectors treat payment notebooks as critical performance records – losing them can mean lethal consequences. Over time, repeated recording and budgeting detach the actors from ethical reflection. What started as coerced payment becomes a predictable, bureaucratised cost of doing business.

Routinisation also alters risk perception. Traders, brokers and service providers integrate cartel-linked revenues into their models and investment decisions, which can dull awareness of illegality and produce moral disengagement. For cartel organisations, routinised accounting supports operational efficiency and discipline: measurement enables enforcement and sanctions, reinforcing the logic that what is counted can be controlled.

Bastian Schwind-Wagner _Follow

"Accounting practices in cartel settings do more than record transactions – they reshape perception by making economic activity visible while concealing the violence that sustains it. Recognising accounting as a mechanism of selective visibility helps investigators and policymakers identify when routine bookkeeping is being used to normalise coercion and launder legitimacy.

Addressing cartel finance therefore requires combining financial forensics with contextual, linguistic and organisational analysis to detect euphemisms and routinised entries that mask extortion. Training, policy design and risk models must reflect these hybrid realities so that interventions target both the ledgers and the social orders that produce them."

Mimicry and hybridity – adopting and subverting formal structures

The study situates these mechanisms within a postcolonial frame that highlights mimicry and hybridity. Mimicry describes the strategy by which cartels adopt formal corporate structures and the language of modern accounting to gain legitimacy and evade scrutiny. But this imitation is not mere camouflage: it simultaneously conforms and subverts. Cartel accounting can be more elaborate than many legitimate small businesses – precise payrolls, inventory control, property acquisition through lawyers – and this over-performance is intentional. It works both to launder funds and to claim the status and rights that formal economic actors enjoy, despite the violent base of those gains.

Hybridity emerges where formal accounting vocabularies meet vernacular terms and local practices. Words such as “security fee” and “merchandise” coexist with ledger entries and tax forms, producing an organisational identity that is neither purely criminal nor purely commercial. This hybrid identity is sustained by accounting’s selective visibility: the economic face is legible and auditable, while the coercive machinery behind it remains largely off the books.

Accounting as technology of selective visibility – moral and policy implications

The study argues that accounting in cartel settings functions as a technology of selective visibility and moral ordering. By translating violent processes into economic categories, accounting can render violence administratively invisible or collateral – visible only when it can be captured by economic metrics. This has three practical consequences for financial crime practitioners, regulators and policy makers.

First, anti-money-laundering (AML) approaches that treat accounting only as a laundering channel risk missing its broader role in legitimising and normalising illicit economies. Detection efforts focused solely on transactional anomalies or suspicious transfers must be complemented by attention to the ways accounting language and routine record-keeping reframe coercive practices as ordinary economic activity.

Second, enforcement and regulatory responses that rely on conventional indicators of illegality may be blunt tools in hybrid contexts. Cartel actors deliberately adopt and adapt formal accounting practices to blend into regulated spaces. Effective disruption requires integrating social, linguistic and organisational signals – for example, recurring ledger items labelled as “security”, or businesses systematically budgeting for unexplained recurring cash outflows – into risk models and investigative heuristics.

Third, financial institutions, auditors and tax authorities need to be aware that legitimate-looking bookkeeping can conceal coercion. Due diligence frameworks must consider contextual red flags: businesses with disproportionate cash inflows from high-risk clients, unusual repetitive expense categories tied to local vernaculars, or consistent underreporting of personal wealth despite visible consumption. Training for field officers and auditors should include how accounting language is repurposed in coercive settings and how routinised entries can indicate embedded extortion schemes.

hat investigators and compliance teams should watch for

The study’s evidence points to tangible features investigators can incorporate into red flags and typologies. Recurrent entries for “security”, “protection”, or similar euphemisms that are paid to unknown third parties and budgeted regularly deserve inquiry. Sudden normalization of large cash outflows in a sector previously free of such costs, or systematic reclassification of cash payments into liabilities without corresponding contractual documentation, are markers of routinised extortion accounting. Equally, businesses showing accounting sophistication disproportionate to their size or sector – detailed payroll structures, complex property ownership routed through legal intermediaries, or unusually tight inventory controls for minor retail operations – may be engaging in mimicry to launder or legitimise illicit proceeds.

Policy and educational responses

The study recommends rethinking policy and education. In policy terms, a narrow “kingpin” strategy or strictly militarised responses fail to acknowledge how accounting embeds cartels in local economies. Combining financial investigations with socio-economic interventions that reduce communities’ dependency on cartel-provided cash flows may be more effective. For educators and professional training, the study calls for critical accounting pedagogy that exposes students and practitioners to ethical complexities in illegal contexts and to the postcolonial dynamics that make accounting a tool of selective visibility.

Limits and paths for further research

The study relies on interviews and media triangulation in Mexico and faces limitations typical for sensitive research: interviews were not recorded and the sample is context-specific. Future work could use longitudinal designs to trace how framing and routinising evolve after shocks – arrests, leadership changes or enforcement campaigns – and compare cartel-accounting dynamics across different countries and criminal markets. Cross-border comparisons would also clarify how accounting mediated by different regulatory regimes affects mimicry and hybridity.

Final takeaway for the financial crime community

Accounting is not merely a passive instrument of concealment in cartel contexts. It is an organising logic that frames what can be seen and routinises what can be tolerated. For investigators, compliance officers and policy makers, recognising accounting’s active role – its language, its routines, and the hybrid identities it creates – is essential. Tackling cartel finance therefore requires more than transaction monitoring: it requires reading ledgers as cultural documents, decoding euphemisms and routinised entries, and integrating organisational and linguistic analysis into financial crime detection and disruption strategies.

Dive deeper

• Research ¦ Miguel Gil, Accounting for the cartel, Critical Perspectives on Accounting, Volume 103, 2026, 102835, ISSN 1045-2354, https://doi.org/10.1016/j.cpa.2025.102835 ¦ Link ¦ licensed under the following terms, with no changes made: CC BY 4.0