Examining the links between organised crime and corruption

Appendices

Annex 1: Case study—Italy

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Corruption and organised crime in Italy are connected in a variety of ways. With the political, administrative and private sectors particularly prone to engage in corrupt transactions, illicit conduct tends to spread to many other groups and actors. Upturning a liberal metaphor, one could say that the elite has promoted a ‘trickling down’ process of illegality. Organised crime is a participant in this illegality, at times aided by intimidation and at times sustained by the interests of legitimate actors who play a de facto role of partners. In such a situation resources are not used to satisfy the needs of communities, but are appropriated through personal initiative, individual risk, power, and the ability to achieve impunity by outflanking rules. Corrupt behaviour in Italy has slowly become acceptable at the social level and has gained legitimacy at the political, and finally at the legislative level. Corruption has played the function of foundational conduct, one that lends itself to be imitated. It has altered the perception of what citizens should expect, what they should pursue, and how. It has taken on a ‘founding force’, namely the capacity to impose lifestyles, to transform previous jurisprudence, to establish new laws and new types of legitimacy. Corruption and organised crime, in sum, are intertwined in a ‘criminal system’ that reproduces power, be it illicit or otherwise.

Annex 2: Case study—The Netherlands

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Organised crime in the Netherlands may best be described as ‘transit crime’, which does not need to dominate specific economic branches or geographical regions. Therefore, crime in the Netherlands is fundamentally different from many other countries. In the case of cross-border crime and the trafficking illegal goods and people, criminals are not dependent on police and custom corruption.

The general opinion is that corruption of the judiciary, national level politicians, police and custom officers is relatively rare in the Netherlands, which is reflected by the low number of convictions for corruption. Despite the existence of occasional cases the corruption-organised crime nexus does not yet pose a very significant threat.

The analysis of different institutions that are or can be targeted by organised crime shows that the private sector and the local administration and government are the primary targets of OC corruption. The low number of corruption incidents in the police forces can be primarily explained by the strict formal and informal controls and clear codes of behaviour within the organization, but also by the fact that the legalisation of drugs and prostitution is naturally accompanied by lower levels of corruption pressures on police officers.

Annex 3: Case study—Spain

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In Spain a variety of historic, socio-economic and criminogenic factors contribute to the increasing scope and complexity of organized crime. As Europe’s main entry point for cocaine and for cannabis resin (hashish), Spain continues to provide a fertile ground for drug trafficking with increasing seizures of cocaine and cannabis resin. Smuggling of migrants (comprising largely immigrants coming from the African continent) is another large playing field for organised crime and poses a serious humanitarian challenge. Organised criminal groups also profit from property crime, including by burglarising industrial estates, jewellery shops and dwellings.

Organised crime exercises serious corruption pressures on law enforcement, the local level administration and politicians. Recent cases of police corruption have involved extortion from prostitutes, bars and local businesses, participation in drug trafficking networks, and relationships of certain officers with local “red light district” clubs. Nevertheless, corrupt arrangements in the police are not likely to be long-lasting as internal affairs units investigate cases and can be rather effective in bringing charges against corrupt officials.

Spain’s coastline has long attracted criminals and money-launderers, which have exerted corrupt influence on local governance. This type of pressure has challenged the impartiality of the justice system, linking judicial corruption with political corruption.

Judicial corruption is singled out as a serious problem in Spain, whereas the courts are corrupted in order to delay or speed up proceedings, to conceal evidence or judicial records. Judicial impartiality is sometimes achieved in exchange for bribes but most often through political pressures. Politicians place key magistrates in judicial governing bodies and in case of investigations magistrates are able to pressure lower level judges so that their political patrons and related businessmen may be acquitted.

Political parties grant their affiliates access to power and protection (including protection from criminal prosecution) in exchange for loyalty and electoral support. Politics has therefore turned into a market where parties compete like businesses, inspired by personal benefits and supported by corruption. This political system, made up of a network of personal relations and particular interests, is at the core of the so called Spanish “ungovernance”.

Annex 4: Case study—Bulgaria

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The isolation caused by the wars in former Yugoslavia, together with the long and rough transition to market economy, weakened the state and led to a sharp decline in households’ incomes. As a result, for the first time in history, classic structures of organised crime emerged in Bulgaria. They got involved in trafficking heroin to Western Europe, in the trafficking of people, trading in stolen cars, etc. However, much harsher were the consequences of the criminal redistribution of national wealth (which was almost entirely state-owned until 1989), and the legalisation of all capital accumulated through criminal activities. Thus organised crime, political and economic elites formed a unique symbiosis.

As the country returned to political and economic stability (1997) and the process of joining the EU was launched (2000), structures of organised crime started to disintegrate and certain criminal markets began to shrink (i.e. the smuggling of consumer and excise goods, stolen cars, racketeering, etc.). When large multinational corporations entered the Bulgarian market, and the national economy got more integrated into the European market, Bulgarian economic groups that had benefited from criminal privatisation and were linked to criminal activities began to steadily lose importance, in particular in key sectors like banking, insurance, and retail. Despite the positive changes in the socio-economic and institutional environment, organised crime groups managed to adapt by concealing their criminal activities under the cover of legal companies. Mass violence got replaced by mass and systemic corruption.

Taking advantage of the culture of family and clientelistic networks in public institutions, organised crime retained its privileged access to national wealth via rigged public tenders and concessions, the cartelisation of gambling, tourism, real estate, etc.

Organised crime exercises its influence at all levels: at the political level, votes get bought at national and local elections and the passing of laws favouring certain business interests is negotiated through lobbying groups; at the magistrates’ level, selections, appointments and rulings are being influenced and paid for by middlemen; at the level of the revenue administration, employees of all ranks are being recruited and corrupted to ensure custom duties, income tax and other taxes are avoided; and at the law enforcement level organised crime invests both in horizontal and vertical structures to cover up crimes or to destroy competition. A new trend in the activity of Bulgarian criminal networks, after the country joined the EU, has been the attempt to corrupt officers of foreign administrations to make criminal activities abroad less vulnerable.

Annex 5: Case study—Greece

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The study findings suggest that it is at the political level that the links between corruption and organised crime—particularly white-collar crime—present the greatest dangers to the democratic functioning of Greek society. (...)

Although the size of illegal markets or criminal activities is moderate (as suggested by official OC reports), corruption is actively used throughout. Traditional organised criminal activities—such as drug trafficking, goods smuggling, etc—in some cases enjoy the covert and sometimes organised protection of politicians and/or civil servants at various levels of the administration, police, judiciary, customs and tax authorities.

The interviews have provided evidence on links between the so-called black and gray sectors of the economy, pointing to the difficulties in maintaining a conceptual distinction between the two. The significant levels of white-collar crime explain public perceptions in Greece that organised criminals are behind most corruption. In addition, the pervasive corruption practices related to the activities or ordinary citizens or legitimate companies establish an atmosphere which organised crime benefits from. In this situation, corruption provides a competitive advantage to those business structures—whether in the gray or black sector—which do not operate according to officially established rules.

Annex 6: Case study—France

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The personal experience of citizens with corruption in France (Eurobarometer 2008) places the country slightly below the least corrupt countries or Northern Europe or the UK, yet above its southern neighbours of Italy and Spain. Yet the regional differences within the country (southnorth), or specific regions like Corsica, as well as the cultural specifics of the business-political elite networks, create favourable conditions for criminals to use corruption. The often subtle nature of corruption, the passive media, and the high tolerance of the public have created an environment from which white-collar criminals could benefit.

The present research has indicated that in certain regions of France (Corsica and to some extent the south-west) local criminal elites use various forms of corruption on local judicial officials, police officers, and politicians. Although often these cases are not of the classic bribery type, but instead constitute trading in influence or favours, organised crime creates an environment where its activities continue uninterrupted. In other parts of the country sporadic evidence suggests that police corruption and occasional cases of influence over the judiciary occur but the scale is unclear. Political corruption, except in the above mentioned regions, seems to be limited to complex corporate crimes and corruption deals, especially in industries with significant public sector exposure (such as utilities). In these situations well established networks of the French elite, whether business or political, facilitate corrupt transactions. The lack of access of criminologists and social scientists to business and political elites or to low class traditional criminals from the ‘milieu’ has left a corruption knowledge gap. The lack of comprehensive government reporting could probably be explained by the fact that two successive French presidents—namely, Jacque Chirac and Francois Mitterrand—have been involved and prosecuted in a number of political corruption scandals. The shift of power from Mitterrand to Chirac in the late 1990s produced a spur of investigations, corruption trials, and a public debate that have since abated. Although a number of political party financing anti-corruption measures were introduced since the mid 1990s, the continuing lack of proactive anti-corruption mechanisms could mean that corruption networks have simply been transformed and that even subtler mechanisms are now being used.

Annex 7: Methodology

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Annex 8: Statistical analysis

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Annex 9: List of indicators and indexes used in statistical analysis

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Annex 10: Organised crime and corruption in Russia—review of literature

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Annex 11: Organised crime and corruption in the Western Balkans—review of literature

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