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Free riders: the economics and organization of outlaw motorcycle gangs

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Abstract

This paper investigates the organizational structure of the Hells Angels Motorcycle Club, one of the largest and best known North American motorcycle gangs. Within the first few decades since their establishment, the Angels developed a hierarchical organizational form, which allowed them to overcome internal conflict and exploit the gains from their involvement in criminal activities. This organizational form, I argue, played a central role in the rapid success of the Angels in the North American (and international) criminal landscape.

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Notes

  1. The first victim, Marc Dub, was killed immediately by the explosion.

  2. Below, I refer to the Hells Angels as “Angels”, “HAMC”, or simply “the club”.

  3. In its report on organized crime to the California legislature, the California Bureau of Investigation and Intelligence, writes that “once perceived as groups of troublemakers and social rebels, [OMGs] evolved through the years into sophisticated criminal organizations” (CDOJ 2008, p. 14).

  4. In the academic literature on outlaw bikers, these organizations are alternatively referred to as OMGs, Outlaw Motorcycle Clubs (the preferred phrasing by OMGs themselves), and “One-Percenters”.

  5. Varese (2010) defines Organized Crime Groups (OCGs) as the result of “attempts to regulate and control the production and distribution of a given commodity or service unlawfully” (Varese 2010, 14). Varese also introduces a distinction between organized crime groups and what he refers to as Mafia groups, that is, “a type of OCG that attempts to control the supply of protection” (Varese 2010, 17).

  6. OMGs are also very peculiar criminal organizations in that, unlike prison gangs, they do not operate

    within a small, well-defined space like a correctional facility, and, unlike the mafia, they are not based on a kinship group.

  7. The academic literature identifies alternatively four, five, and even six major North American OMGs (Barker 2005, 2007, 2010; Veno and Gannon 2009; Quinn 2001). Other than the Angels, lists usually include the Outlaws Motorcycle Club (MC), the Pagans MC, the Bandidos MC, the Sons of Silence MC, and the Mongols MC.

  8. The AMA is the largest association of the kind in the United States.

  9. The saloon society “traditionally consisted of places where patrons and employees tended to be armed, and no one wanted to involve the police, regardless of what occurred…. Most topless and nude bars are part of this milieu, or at least on its fringes. So are many white, blue-collar taverns and fancy nightclubs. Crimes ranging from drug sales and prostitution to murder and extortion are endemic here, although their expression may be subtle or blatant” (Quinn and Forsyth 2009, pp. 12–13).

  10. See also Barger et al. (2001).

  11. According to the NGIC, “Motorcycle Gangs have evolved over the past 67 years from bar room brawlers to sophisticated criminals. OMGs, which were formed in the United States, over the last 50 years have spread internationally and today… are a global phenomenon. The Hells Angels in particular stands out for its international connectivity” (NGIC 2015, p. 22).

  12. In their analysis of more than 600 newspaper articles mentioning one or more of the four largest North American OMGs between the years 1980 and 2005, Barker and Human (2009, p. 177) find strong evidence of the HAMC’s involvement in criminal activities. During this period, the Angels had been involved in at least ten criminal incidents pertaining to the market for narcotics in the United States (including the production and distribution of methamphetamine and the distribution of cocaine), three episodes in Canada, and three episodes in Australia.

  13. The first international chapter of the HAMC was established in 1961 in Auckland, Australia. The Australian HAMC is today one of the largest organized criminal groups in the country (Barker 2007, 2011; Lauchs et al. 2015).

  14. See Holmstrom and Roberts (1998) and Barzel (1997) on the problem of identifying the nature and.

  15. See also Barker (2010, p. 112).

  16. “Individual chapters’ presidents usually run the day-to-day operations of their chapters, [with] important decisions made at regional, national, and international levels” (Barker 2010, p. 91).

  17. See NGIC (2009, p. 8) and Barker (2005, p. 111).

  18. For surveys, see Hart (1989), Barzel (1997) and Williamson (2002).

  19. To simplify the discussion, I assume that size is constant across chapters.

  20. According to Barger’s recollection of the first years of the club, “Hells Angels in SoCal, San Francisco, and—before they became defunct—North Sacramento were only loosely affiliated” (Barger et al. 2001, p. 31). See also McGuire (1987, p. 2).

  21. Barger et al. (2001, pp. 42–47) provide an insider’s discussion of these rules.

  22. That is, joining the HAMC and therefore sew the Angels’ patch instead of the old patch of the club.

  23. According to Marsden and Sher (2006, p. 40), “[petty crime] turned into professional profit-making in the late 1960s—and it transformed the organization forever. Over the next decades, drugs and crime came to define the Hells Angels around the globe”.

  24. The Oakland chapter assumed its prominent position in the club after an internal struggle against the San Francisco chapter in 1961 (Barger et al. 2001, pp. 147–149).

  25. So-called “Nomad Chapters being the only exception. Nomad chapters are employed to sound out the possibility of expansion into a new territory. These chapters are also exceptional in that they are not bound by the club’s rule requiring a minimum of eight members per chapter” (Marsden and Sher 2006).

  26. The bylaws also regulate the internal organization of local chapters (Wolf 1991; Veno and Gannon 2009, pp. 73–87).

  27. Different sources identify the length of this process from a minimum of 6 months to 4 years (Barker 2010; Droban 2009; Veno and Gannon 2009).

  28. This process is described in Barker (2010) and Wolf (1991), while Droban (2009) and Dobyns and Johnson-Shelton (2010) recount the experience of a group of informants and undercover agents’ attempt to infiltrate the Mesa, Arizona, HAMC chapter.

  29. According to Barger et al. (2001) in the case of one contrary vote, the dissenter is asked to motivate his decision and share the relevant information behind it. If he can convince at least one other member to change his mind, the candidacy is rejected automatically. Two contrary votes always suffice for immediate rejection. See also Veno and Gannon (2009).

  30. Barger himself has claimed that the rule does not imply that the club “[either]sanctioned or disapproved of drug dealing by club members” and that “it’s no longer a rule” (Barger et al. 2001, pp. 46–47).

  31. See Marsden and Sher (2006, p. 230) and Barker (2010, pp. 139–140).

  32. “Blood in, blood out” provisions are a common feature among criminal organizations. See Gambetta (1996) and Skarbek (2011, p. 704).

  33. “In the major [outlaw motorcycle] clubs with large scale criminal enterprises there is virtually no way out of the organization other than death by natural causes and death because you know too much to be allowed to leave the organization. In only a handful of cases are members allowed to walk away from the club…. Those who are permitted to leave are watched carefully for the slightest sign of weakening allegiance to the club” (McGuire 1987, p. 11).

  34. I thank the anonymous referee for pointing out this potential implication of my discussion.

  35. “Outlaw motorcycle gangs have had close criminal associations with members of the traditional organized crime families. The La Cosa Nostra (LCN) is afforded security and transportation in narcotics deals in exchange for narcotics and contract killings. For example, the Hells Angels in New York have been criminally linked to the Gambino organized crime family; and in New York, the Buffalino family” (Richardson 1991, p. 15).

  36. Such as the Outlaws in the Midwest, the Pagans in the Mid-Atlantic, the Bandidos in the South and North-West, and the Mongols in California.

  37. The conflict between Mongols and Angels in Southern California is still lively today, as the Mongols have been identified as the likely responsible for the murder of the president of the HAMC San Francisco chapter (CDOJ 2008, 15).

  38. Some examples are cash (Droban 2009, pp. 38, 154), connections with other criminal organizations (Barker 2011, pp. 207–208), as well as carrying out a murder for the club (Droban 2009, p. 65).

  39. Since 1979, the Angels have been tried repeatedly, sometimes unsuccessfully, under the Racketeer Influenced and Corrupt Organizations Act, popularly known as RICO (Marsden and Sher 2006).

  40. These events are recounted in Droban (2009) and Dobyns and Johnson-Shelton (2010).

  41. See Lauchs et al. (2015, p. 2) and Barger et al. (2001, p. 36). Wolf (1991) discusses the similarity between the different OMGs’ bylaws. That book also reproduces the texts of many such bylaws, including those of major OMGs, such as the Hells Angels and the Pagans.

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Acknowledgements

In writing this paper, I particularly benefited from comments by the Editors, an anonymous referee, Peter J. Boettke, Alexander Salter, Bryan Cutsinger, David Lucas, Julia Norgaard, Paola Suarez, Solomon Stein, and by participants at the 2016 Southern Economic Association meeting. All errors are my own.

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  1. Department of Economics, George Mason University, 4400 University Dr, Fairfax, VA, 22030, USA

    Ennio E. Piano

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Correspondence to Ennio E. Piano.

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Piano, E.E. Free riders: the economics and organization of outlaw motorcycle gangs. Public Choice 171, 283–301 (2017). https://doi.org/10.1007/s11127-017-0437-9

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