CARACAS, July 18 (Reuters) - "Leave the area! Get the kids out!" screamed gang members walking through western Caracas' El Cementerio barrio with megaphones the morning of Thursday, July 8. The warning told residents in Venezuela's capital shooting would not soon stop.
By then barrio residents had already been sheltering in place for more than half a day, whole families prone on the floor to avoid unrelenting gunfire. But for the next 48 hours, El Cementerio and five nearby neighborhoods were paralyzed by an unprecedented display of firepower by gangs, known by neighbors as "the boys."
The pitched gun battles between police and a collection of gangs at least 300-strong based in a cluster of barrios in western Caracas are another sign President Nicolas Maduro is losing control over parts of Venezuela, which is suffering from a deep economic crisis and a protracted breakdown of the rule of law.
A similar process is taking place in border states, where Colombian rebels meting out justice in rural areas spent weeks battling Venezuelan troops in standoffs that killed a dozen of soldiers and forced thousands of residents to flee. In Venezuela's interior local gangs also control territory and set laws.
"It is becoming more evident that Maduro is losing control in and out of Caracas," said Alexander Campos, a researcher at the Central University of Venezuela who studies violence and politics. "The capacity and ambition of criminal groups from gangs to guerrillas is growing."
Security experts say violent police operations that Maduro launched in 2015, dubbed "Operation Liberation of the People," helped consolidate groups of rival gangs initially operating out of the Cota 905 neighborhood and nearby areas by giving them a common enemy. Rights groups said it led to hundreds of extrajudicial killings. Violence persisted.
In 2017 the gangs struck a deal with the government to operate without police in certain sectors in exchange for lowering violence. Streets became safer, residents said. But the gangs became even more powerful through increased drug trafficking and targeting children as recruits, according to residents, who say the gangs are now armed with grenades and assault rifles.
Gang members curried favor by handing out food and hosting parties with slaughtered pigs and live music amid the country's devastating economic crisis, residents say.
Teenagers outfitted with short-wave radios earn about $100 a week - more than 30 times the minimum wage - to man checkpoints on most corners of the neighborhood, said Jose Antonio Rengifo, a 34-year-old teacher. In areas overlooked by state institutions, neighbors approach the checkpoints to seek resolution for disputes from domestic abuse to robbery.
"Up there, it's family," said Catholic Priest Wilfredo Corniel, 45, pointing to houses sprawling the hillside. "The government is losing ground and credibility."
Despite four leaders, according to residents, the group is referred to as "El Koki's gang," in reference to the best known leader, Carlos Luis Revete.
Security experts believe the gangs' expansion in the past six months into neighborhoods near El Cementerio and the Cota 905 in the city's southwest is a strategy to control the highway linking Caracas to the west - which would allow them to control shipments into the capital.
The government arrested opposition leader Freddy Guevara and accused exiled anti-government activist Leopoldo Lopez of working with the gangs to organize the shootings in a plot to destabilize the government. Both deny the accusations.
Venezuela's information ministry did not respond to a request for comment.
Neither the gangs nor government has said what sparked the standoff, but it apparently began with police officers shooting a gang leader allied with El Koki, according to a source close to the situation.
By the evening of July 8, the government had issued wanted posters for gang leaders, offering a $500,000 reward for information leading to their arrest. By then, residents said, they were gone.
Security forces, normally only seen in El Cementerio's commercial thoroughfare, flooded the area. Lights in the Cota 905 were cut.
From Thursday to Sunday, representatives of nonprofit Mi Convive, which runs soup kitchens throughout gang-controlled barrios, hid inside homes surrounded by kids, said Hector Navarro, a coordinator. All they heard was gunfire.
For three days in the Cota 905 they were without electricity. By Saturday they had run out of water. Some fled with suitcases.
Residents say police ransacked homes, stealing food and household goods. Some showed photos of broken windows and possessions strewn across rooms.
Operations left 26 dead, the government reported. NGO Victim's Monitor documented 37 deaths, including four officers and 22 alleged non-gang members killed by stray bullets or police. No main gang leaders were detained.
By Monday, El Cementerio's main avenue was bustling. The only signs of gunfights were scattered "Wanted" posters and windows cracked by stray bullets.
Reuters saw teens at a gang checkpoint in El Cementerio near what residents say is one of El Koki's houses. In the Cota 905, police continued operations.
Some in El Cementerio prefer the gangs. "I'd choose a thousand times to live with El Koki than police," said one resident.
