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Mafia Threatens Italy's Economy

The economic survival of Italy is dependent upon defeating the Mafia according to Emma Marcegaglia who heads the business trade group Confindustria as reported by Adnkronos:  "the Mafia squeezes businesses large and small for so-called protection money, floods the economy with knock-off manufactured goods and otherwise competes with legitimate firms."

The Mafia is Italy's biggest industry according to the annual report on organized crime released last January by business federation Confesercenti, and its victims last year included about one million or 20% of the country's businessmen.

The parasitic Mafia is only hindering the ability of Italy to overcome its economic woes which include high unemployment, massive debt and depressed productivity.

The Mafia Is Economic Powerhouse In Italy

Surpise, surprise.

The Mafia is Italy's biggest industry according to the annual report on organized crime by the business federation Confesercenti.

Mafia rackets accounted for 140 billion euros -- that's $204 billion -- or 7% of Italy's GDP last year as reported by AGI, and Mafia victims included about one million or 20% of the country's businessmen who have been extortion, loansharking and robbery targets as reported by ANSA. 

Unfortunately, the credit crisis in Italy has made businesses especially vulnerable to the Mafia as reported by Adnkronos:  "out of desperation they turn to mobsters who provide loans at crippling interest rates."

The mobsters got a lot of cash -- 65 billion euros or $83 billion -- to lend as reported by ABC News, and they increasingly are using white collar professionals as fronts as reported by Reuters: 

Old style gangsters handing out cash in bars and pool halls had been replaced by apparently respectable bankers, lawyers or notaries, the report said. "This is extortion with a clean face," it added. "Through their professions, they know the mechanisms of the legal credit market and they often know the financial position of their victims perfectly."

The Mafia "controls everything from gambling to construction and the disposal of industrial and household waste," and has "also moved into new areas of business such as public health, transport and logistics" as reported by The Telegraph.

Italy's four major mafia groups are Cosa Nostra in Sicily, 'Ndrangheta in Calabria, Camorra in Naples, and Sacra Corona Unita in Puglia.

The mob's power in Italy now extends beyond the south to the more prosperous northern regions, and the infestation is worse than the bubonic plague which decimated Europe in the Middle Ages.  Black Hand.  Black Death.  It all comes from vermin.

God bless this wicked world.

Never Let A Serious Crisis Go To Waste

A new report by Italy's small business and shopkeepers' association known as Confesercenti alleges that the country's organized crime groups profitably have exploited the economic recession and banking crisis as reported by Stephen Brown and Paolo Biondi for Reuters:

Italy's mafia crime syndicates bucked the recession in 2009 to raise 'profits' by almost 8 percent with the financial crisis making companies and even the stock market even more vulnerable to cash-flush mobsters. * * * [T]he report said mobsters had also been able to launder their earnings by buying up cheap assets and had found a cheap and willing workforce among the newly unemployed. "In times of crisis the Mafia's money, even though it is dirty, makes people's mouth water," the report says. Confeserscenti's research arm SOS Impresa . . . said the boom had been so strong that organised crime may target the bourse to launder its money. "There is a risk the Mafia could take advantage of the difficulties of some large business groups who are undergoing a liquidity crisis to attempt to get into the stock market behind the scenes in a big way," said the report.

Italy's Mafia groups "boosted their profit by 12 percent to more than 78 billion euros ($110 billion) between 2008 and 2009" according to Confesercenti as reported by Steve Scherer for Bloomberg:

Estimated revenue by Italy's main mafia groups rose 4 percent to 135 billion euros. That exceeds the revenue of oil company Eni SpA, the country's biggest company by market value, and is almost 9 percent of Italy’s gross domestic product. * * * The mob has flourished during the economic crisis in part because its criminal enterprises are cash-based. Loan-sharking activities gained last year -- encompassing 200,000 businesses and 20 billion euros -- because credit dried up as the economy struggled, the group said. Italy's economy probably contracted 4.8 percent last year, the government estimates.

Cash Rich Mafia Provides Liquidity To Financial Markets

As the banks in Italy increasingly tighten the purse strings the Mafia is stepping further into the economic breach according to a story in today's Washington Post:

"It's a fantastic time for the Mafia. They have the cash," said Antonio Roccuzzo, the author of several books on organized crime. "The Mafia has enormous liquidity. It may be the only Italian 'company' without any cash problem." At a time when businesses most need loans as they struggle with falling sales, rising debt and impending bankruptcy, banks have tightened their lending to them. * * * That is great news for loan sharks. Confesercenti, the national shopkeepers association, estimates that 180,000 businesses recently have turned to them in desperation. Although some shady lenders are freelancers turning profits on others' hard luck, very often the neighborhood tough offering fat rolls of cash is connected to the Mafia, the group said. * * * Many experts say organized crime is already the biggest business in Italy. Now, Fara said, the untaxed underground economy is growing even larger. "Certainly I am worried," he said. "The banking system doesn't work, and the private one that is operating is often managed by organized crime."

Of course, everything has its cost:

The consequences for Italy and its 58 million people are huge, Fara said: "Stronger organized crime means a weaker state." Nino Miceli, an adviser to Confesercenti, said the Mafia's goal is to take over the struggling businesses. When the loans, typically at interest rates in triple digits, are not repaid, the threats of violence begin, and restaurants, grocery stores and bars become the property of criminal gangs. With a burgeoning portfolio of properties and businesses, the Mafia becomes more entrenched in the economy and has more outlets to "clean their money," Miceli said.

In addition to providing juice loans to local cash-strapped businesses, the Mafia and drug cartels further have been providing much-needed liquidity to the international financial markets through the  North American and European banks which launder their drug money.  Antonio Maria Costa, executive director of the U.N. Office on Drugs and Crime, warns that "cash-rich mafia groups have been channelling funds into banks desperate to survive the global credit crisis":

"Consultations I've had with prosecutors and law-enforcement officials around the world show there is ample evidence that the banking system's illiquidity is providing a unique opportunity for organized crime to launder their money," Costa told Reuters. "Just about every financial centre can be characterised as part of the problem," Costa said in the interview, but declined to name countries or banks involved, saying that was for prosecutors and other law-enforcement bodies to do. * * * "You have the supply -- an organized crime industry with enormous amounts of cash, estimated at $322 billion in 2005, not any more stored in banks -- and the demand, a banking sector strapped for liquidity," said Costa. "This is a supply- and demand-driven situation. Our intuition, based on logic, is now supported by ample evidence." Asked where cases were occurring, he said: "Traditionally, Europe and North America are the places where, as financial centres, most money would be laundered."

Costa further adds:  "I insist that the (globalised) crime industry has become so gigantic, destabilizing so many countries, that it is emerging in areas where we have not seen it before. They're buying more than just industry, real estate, elections, power," he said.

Roberto Saviano, author of the international bestseller Gomorrah exposing the Camorra or Neapolitan Mafia, previously has accused the European Union -- and Britain in particular -- of turning a blind eye to the laundering of organized crime drug money.

News: Stopping Payment of Pizzo in Sicily; Organized Crime Classes in Serbia; Anti-Mafia Courts in Croatia; & Operation Cleanup in Mexico

***  Italian police have arrested "10 Sicilian businessmen who had allegedly been paying Mafia 'protection money' for over 40 years":

Giuseppe De Riggi, who spearheaded the operation, described the arrests as "a winning move" that could encourage more businesses to go to the police. "Today's arrests are a surprising result that will be of future help and encouragement to business people paying 'protection money' who want to report their extortionists to police," he said. * * * In July this year, 18 businessmen who became victims of the Mafia's protection racket or 'pizzo' chose to identify their suspected extortionists in court. * * * The Italian private employers organisation, Confindustria, last year decided to expel members found to be paying Mafia protection money.

***  Belgrade University in Serbia now offers a course on organized crime:  "Officials say the course was designed to offer future law professionals in Serbia a greater legal understanding of the complex threat posed by transnational criminal elements operating in Eastern Europe."

***  Croatia establishes Special Anti-Mafia Courts: 

Authorities decided on Thursday (November 27th) to establish special courts that will begin hearing cases involving corruption and organised crime in January. * * * The move follows a series of brutal mafia-style murders in Zagreb recently, including the killing of a prominent journalist and the daughter of a prominent lawyer.

***  100 days after the implementation of "Operation Cleanup" targeting public corruption and the drug cartels, Mexican President Felipe Calderon has presented an interim report citing some gains but warning that much more work remains.