Colluding, old S American riots (2,7)
I believe the answer is:
in cahoots
'colluding' is the definition.
(I've seen this before)
'old s american riots' is the wordplay.
'old s american' becomes 'inca' (I've seen this before).
'riots' becomes 'hoots'.
'inca'+'hoots'='IN CAHOOTS'
(Other definitions for in cahoots that I've seen before include "Associated with" , "Conniving" , "Working with" , "what conspirators are" , "Colluding" .)