Sunday, Aug 23, 2009

Gulf News

Dubai: The Italian Mafia is expected to generate 200 billion euros (Dh1.04 trillion) in revenue this year after 170 billion euros in 2008.

This amount was estimated by Italy's anti-Mafia prosecutor Piero Grasso in a recent report to the Italian parliament published in newspapers in Italy last week. According to Grasso, it seems that the Mafia's business model is "one of the few that are working very well in a financial crisis."

A big part of the income originates from the international arms and drug trade, which shows no signs of slackening, Grasso said. Rising unemployment and financial worries seem to prompt people to use more drugs than before, the figures show, providing a stable income for those who deliver the drugs.

Pushed by the crisis, another very lucrative field became important: With many banks in difficulty and people in debt, Mafia financiers meet booming demand from desperate firms and individuals whom they eagerly grant loans with extortionate interest rates.

Last year, the organised crime organisations of the Mafia in Italy generated some 35 billion euros in revenue out of such usurious interest rates alone, Italian daily Il Sole-24 ore cited estimates of the anti-Mafia commission in Rome.

In many cases, this makes it easy for Mafia members to take control of debt-ridden companies which sooner or later become unable to pay off their piling debts and can find no legal way - e.g. a bankruptcy filing - out of the situation.

According to private Italian economic research organisation Eurispes, particularly small and medium businesses in financial troubles are prone to accept Mafia loans because they simply have no other choice.

Eurispes estimates that almost 50 per cent of those who take such loans are smaller trading companies, and another 25 per cent are smaller manufacturing businesses. There is a high risk of being taken over by the Mafia eventually, the report says, and then being integrated into the Mafia network, making the syndicates even stronger and more influential.

But also big projects in Italy that need billions of funding, such as the planned bridge across the Straits of Messina between mainland Italy and Sicily, the reconstruction of the earthquake-hit Abruzzo region and several upcoming big trade fairs, especially the huge Expo 2015 in Milan, are all in danger of being infiltrated by Mafia groups operating in construction and the financial sector.

This applies to all of the four groups, Cosa Nostra in Sicily, 'Ndrangheta in Calabria, Sacra Corona Unita in Apulia and Camorra in Naples.

In an interview with Italian daily Gazetta dello Sport last week, Grasso said that the Mafia clans also have started to invest into football clubs for money laundering purposes. They don't use bigger and more famous clubs as those in Italy are mostly public companies under control of the exchange commission, but smaller clubs from the second league downwards, mainly in southern Italy. Combined with the infiltration of sports betting companies, the Mafia is able to launder billions of euros through these channels, Grasso said.

These deceptive practices supply the Mafia organisations with plenty of liquidity, which makes them even more dangerous, added Giuseppe Pisanu, president of the anti-mafia commission, in a recent warning address to the Italian parliament.

"They move enormous amounts of capital around and are particularly dangerous at times of crisis like now," Pisanu was quoted by Italian papers. When there are no funds available for normal businesses, caused by frozen bank credit lines, the Mafia can easily step in, he said.

By investing enormous amounts - laundered through sophisticated financial instruments - on the stock exchange, they even are able to take significant influence in or even control of the big companies.

Behind the scene

35b euros generated out of usurious loans in 2008

4 groups dominate the Mafia economy in Italy

La dolce vita

In the latest attempt to tackle the Mafia problem at the end of July, Italian authorities seized assets worth millions of euros of the Calabrian 'Ndrangheta crime syndicate.

The assets included the famous Cafe de Paris in Rome, immortalised by legendary director Frederico Fellini in the 1960 film La Dolce Vita starring Marcello Mastroianni and Anita Ekberg.

The Cafe alone, in Rome's upmarket Via Veneto, is valued at 55 million euros, anti-mafia prosecutor Pietro Grasso told a news conference in Rome after the police operation.

Including other assets like apartments and luxury cars, the entire value of the seizure amounted to 200 million euros, Grassi said. The money originated from profits from drug and arms trade, protection money and usurious loans.


By Arno Maierbrugger, Staff Reporter

Gulf News 2009. All rights reserved.