Why are we giving our economy away? Under-developed countries and states would love to have what we have – yet we treat it with such disregard.
We have allowed criminal organizations to penetrate every layer of government, the military, and policing / protection services available. Our inaction is alarming, and threatens our health, our safety, our way of life, our economy, our future, and our children’s future.
Just as the United States National Security Council has recognized, we should be viewing organized crime’s penetration into our economy as a threat to our National Security [source: USNSC]. Organized crime is rampant in Canada – over 900 groups – and it seems Ontario has become the place for them to ‘convert’ to legitimate business [sources: CBC News, Toronto Sun, National Post].
Organized criminals have long invested in legitimate business as both a base of operations and a means of laundering money from illegal activities such as drug trafficking, weapons dealing, prostitution, smuggling, counterfeiting and robbery [source: DailyMail, NY Times, Herald News, International Business Times]. It also helps them explain their wealth.
A national risk assessment by the RCMP recently identified the ’Ndrangheta (also known as Calabrian) Mafia in Canada as a priority threat [source: The Star]. The ’Ndrangheta is built on a confederacy of like-minded clans, each relying on family bonds. It is similar, but separate from the better-known Mafia of Sicily, called Cosa Nostra. Police around the world say the ’Ndrangheta has become the most dangerous and powerful Italian crime group.
As reported by the Post in 2010, Italian authorities said there were at least seven primary ’Ndrangheta clans in the Toronto area and that the organization had climbed “to the top of the criminal world,” by establishing a “continuous flow of cocaine.” [source: The Post].
Along with the ‘Ndrangheta, there are several other groups currently active in the United States. Combined, it is estimated that these groups have approximately 25,000 members total, with 250,000 affiliates worldwide. Beyond drug running, these groups are also involved in banking, illegal gambling, political corruption, extortion, murder, kidnapping, fraud, arson, loan sharking, racketeering, counterfeiting, prostitution, pornography, infiltration of legitimate businesses, stock manipulation schemes, bombings, and weapons trafficking. Industry experts in Italy estimate that their worldwide criminal activity is worth more than $100 billion annually.
Organized crime’s penetration into our government (intelligence agencies, military, and officials) and its operation represents a significant threat to economic growth and democratic institutions, and is accomplished through direct bribery (but also by having members run for office); setting up shadow economies; infiltrating financial and security sectors through coercion or corruption; and positioning themselves as alternate providers of governance, security, services, and livelihoods.
Economic Penetration
Organized crime has many forays into legitimate business, with perhaps the most known being their trash-hauling businesses [sources: Telegraph, NYTimes]. To prevent competition from driving down prices, they fix prices, rig bids, and allocate territories in such a way that customers can’t choose who picks up their garbage. One well established organized crime gang has controlled the industry in Naples for about 25 years [source: The Slate].
Their disregard for public safety and the environment is obvious with their having illegally dumped toxic, industrial waste in Naples and other parts of the country [source: Independent, BBC]. In parts of Taiwan, gangs dig into the riverbank for gravel and sell it to construction companies. Then, they fill up the holes with waste they’ve collected [source: How Stuff Works].
They harass legit competition and extort their money; while their own companies do a shoddy job. They work their way into the Teamsters union, allowing them to dictate which companies drivers could work for, effectively pushing out non-Mafia operations. This concept was also employed in other unions, allowing their control of the construction sector [source: CBC News, The Star].
During the housing boom of 2002 to 2007 several organized crime gangs got in on the action through corrupt construction companies and unions. In New York City, organized crime linked companies have been subcontractors on most of the major projects of the last few years, including highway repair, the midtown office tower boom, the massive water treatment plant in the Bronx, even the rebuilding of the World Trade Center [source: CNBC].
Organized crime run construction companies are known to include union rates in the bids and win the contracts — then pay far less to their workers. Inside the union, organized crime cronies get top jobs, shake down the legitimate crews and sell jobs to the highest bidders, and there are even threats of physical violence. They also invest in and own companies that provide materials like steel or cement to other construction crews. These companies pile on the costs, making the price of building expensive.
But organized crime is not restricted to just garbage collection and the construction business. I offer a few examples of the thousands available below:
– theft of credit card numbers via Internet sites, money laundering through an energy drink company called American Blast, and ownership of a bottled water company [source: NY Daily], with profits feeding investments in a phone company, a bank, and more than 64 shell companies and foreign bank accounts [source: Guardian, The Times, NBC News].
– the forming of a fake hedge fund which conned hundreds of wealthy investors into putting their money in bundled mortgage securities (one of the major causes of the economy’s collapse), the cashing in on the wave of foreclosures through house-flipping schemes when the housing bubble burst [source: NY Daily News].
– the running of a publically traded Texas-based financial company, “FirstPlus Financial Group” (FPFX), which was a one-time subprime lender that boasted former Vice President Dan Quayle as a board member and used NFL Hall of Famer Dan Marino in its advertisements. Thirteen people participated in the use of physical and financial threats to take control of the company in order to plunder the company for their own financial gain. The board of directors was replaced, and a lawyer helped them funnel millions back to the mobsters [source: US Department of Justice]. FirstPlus Financial Group and its shareholders lost at least $12 million due to the criminal activity [source: AOL, US Justice Department].
And their future is green, as around Europe organized crime invests in wind farms and other types of green energy as a way to launder dirty money, and take advantage of the environmental grants offered by governments. They take advantage of regulation in the industry, high prices for the product, and complicated financing [source: Telegraph].
In Rome, anti-crime units seized 27 restaurants and cafes, plus assets, worth $250 Million Euros. An estimated 70% of restaurants and bars in downtime Rome are controlled, or owned by, organized crime, producing more than $1.35 Billion Euro’s each year [Source: Daily Mail]. According to sources, organized crime controls one in five businesses [source: Explainer].
In looking at the bigger picture, organized crime is also heavily involved in the banking industry with ties to HSBC being widely known and publicized [source: Mafia Today, Rolling Stone, Le Monde, 60 Minutes]. From ties to the Mexican Drug Cartel [source: Thailand Business News, This is Money, HSBC Whistleblower, RT], to arms dealers [source: ICIJ], infringing Iranian sanctions [source: DailyMail], funnelling cash to terrorists [source: DailyMail], providing accounts to international criminals and corrupt businessmen [source: The Guardian], they are even being sued by families of Americans that were murdered by the Mexican Drug Cartels that they were laundering money for [source: Forbes]. Of course, while HSBC takes the focus at this time, it is known that other banks are also affected, Citigroup, Wachovia, and Western Union [source: Guardian].
Global Penetration
Even penetration into other countries or states offers organized crime a tactical advantage in that through time they build legitimacy and create ties to other economies through political means. As they expand, their networks threaten stability and undermine free markets as alliances with political leaders, financial institutions, law enforcement, foreign intelligence, and security agencies are built.
Organized crime’s existence exacerbates corruption, which undermines free governance, rule of law, judicial systems, free press, democratic institution building, and transparency, and is a movement towards the elimination of our freedoms. With this in mind they position themselves able to threaten legitimate government and free society’s economic interests and cause significant damage to the world financial system through its subversion, exploitation, and distortion of legitimate markets and economic activity.
Organized crime has become internationalized, with branches of organized crime establishing themselves in other countries and taking over, or amalgamating, with existing organized crime gangs (including Biker Gangs)[source: Vice News, Globe and Mail, Frontline]. In most amalgamating, territories are respected, with minor changes to reporting as per levels of support being offered. Criminal gangs are also diversifying, resulting in the convergence of threats having an explosive and destabilizing effect on our own, and the global, economy.
United States business leaders have advised that companies are being put at a competitive disadvantage by organized crime and corruption, particularly in emerging markets where many perceive that rule of law is less reliable. The World Bank estimates that $1 trillion is spent each year to bribe public officials, causing economic distortions and damage to legitimate economic activity.
Globally business costs are increasing as companies budget for additional security costs, having a negative impact on the global economy and foreign investments. Organized crime activities can lead to disruption of the global supply chain, diminishing economic competitiveness and the ability of legitimate industry and transportation sectors to remain resilient.
Organized crime groups leverage relationships with state owned entities and industries to gain influence over key commodities (such as gas, oil, aluminum, and precious metals), along with exploitation of the transportation sector.
Members of the American Mafia have been brought up on sex trafficking and prostitution charges, while the Russian Mafia is said to favor the high profit margins found in trafficking sex slaves from economically poor areas in the Ukraine and Romania [source: In Public Safety, How Stuff Works]. In all cases, all of the families use the Web to enhance their multi-million dollar illegal gambling empires through offshore betting shell corporations.
Other governments are also trying to infiltrate our governing bodies and influence them. A CBC National News segment discloses that governments are recruiting students from our schools. If aligned with a properly motivated organized crime gang, this would allow deeper penetration into our economy and greater steering capability [source: CBC National].
Joining with Terrorists
Organized crime has joined forces with terrorism – leveraging each others strengths. Organized crime is currently taking advantage of the threats posed by terrorist groups, which are being played up by the media, allowing them to continue to silently take a firm foothold into our economy [source: Security Intelligence, AWD News, Daily Beast].
Just as we are seeing with ISIS, developing countries with weak rules of law are susceptible to penetration, or even conquering by terrorists and organized crime. Reviewing the events in Somalia show how criminal control of territory and piracy ransoms generate significant sums of illicit revenue and promote the spread of government instability [source: US National Security Council, CNN]. This same happened in Iraq and Afghanistan, when rebels turned to organized crime for supporting in acquiring weapons, ammunition, communications devices, and shifting money.
In reviewing the trends of terrorist acts versus organized crime business penetration, I wonder as to whether there is a greater connection than has prior been discussed. Italy reports that the Mafia’s murder rate has fallen by 80 percent between 1992 and 2012 [source: Telegraph]. The rate has also fallen in the US. Yet terrorist activities have been increasing significantly since 2001 [source: WikiPedia]. With organized crime willingly doing business with terrorist groups, this makes me wonder if organized crime is funding terrorism and using them as a way to deflect attention away from them? [source: NYTimes, National Post].
Giving Our Economies Away
Our allowing this to happen is likened to giving away our economy and also silently sentences innocent individuals to harsh lives or even death – and this includes children [source: Mirror, Independent, International Business Times, I am Syria].
By allowing organized crime to flourish, knowing that they are connected to terrorist activities, we are therefore sentencing individuals to be ruled by terrorist groups or corrupt governments, with their ways of life being forced upon them; forcing them to leave their country for better lives and in the process leaving everything behind and often facing death in the process [source: World News, Spiegel, Guardian, International Business Times].
We turn a blind eye to those economies being strangled by organized crime groups, and even to our own slow, quiet absorption.
And it seems that the governments make it worse. Understandably investigations are kept secret in the hopes that the crime groups will be brought to justice and not become aware of their being monitored. However, due to the difficulty in bringing them to justice, and the time spent along the way, these organizations only continue to strengthen, making it even more difficult to be exposed.
I do not wish to support companies run by organized crime. I want to stop purchasing from companies in Canada and abroad that have been penetrated by, or are owned by, organized crime. I want to stop buying oil from those companies supporting the terrorist groups by not impeding its introduction into their supplies [source: CNBC, International Business Times, Observer, Financial Times]. But without any advise as to whom these companies are, I purchase products blindly.
I also want to stop selling known state sponsors of terrorism our airplanes [source: US Department of State, Bloomburg]. Why and how this could be legitimized is beyond my understanding, but clearly outlines the allegiance of those in favor of the deal.
