A parallel contagion:
Is mafia entrepreneurship exploiting the pandemic?
Global Initiative Against Transnational Organized Crime (GI-TOC) . A parallel contagion: Chapter I – 22 April 2020 Concerned with reports of the Mafia’s exploitation of the current global crisis, the Global Initiative Against Transnational Organized Crime (GI-TOC) has had the privilege of bringing together four leading figures in Italy’s fight against the mafia for a virtual roundtable to discuss how the mafia is repositioning itself during the pandemic, what the implications are and how the Italian government is responding; Chapter II – 11 June 2020 With regard to mafia activity in the context of the pandemic, the Global Initiative Against Transnational Organized Crime (GI-TOC) has carried out research into mafia involvement in three key sectors: Healthcare system, Prisons, Welfare provision ; Chapter III – 11 June 2020 In these interviews with Italian anti-mafia and organized-crime experts, we explore various ways in which mafia groups in Italy and overseas are exploiting the economic conditions created by the COVID-19 pandemic – from providing so-called mafia welfare services to capturing sectors of the legal economy, drug trafficking and money laundering. The interviews are a sequel to our virtual roundtable with four leading figures in Italy’s fight against the mafia, which discusses how the mafia is repositioning itself during the pandemic. We feature interviews with: Roberto Tartaglia, anti-mafia magistrate and the Deputy Head of the Dipartimento Amministrazione Penitenziaria, Italy’s prison administration department; Raffaele Cantone, anti-mafia magistrate and former President of the Italian Anti-Corruption National Authority (2014–2019); Giuseppe Cucchiara, Director, anti-drugs services at Italy’s Department for Public Security, part of the Interior Ministry, a role he has held since 2017; Marcello Minenna, Director of the Italian Customs and Monopolies Agency. The interviews were led by Sergio Nazzaro, a journalist, writer and adviser to the Parliamentary Anti-Mafia Commission. Since November 2018, Nazzaro has served as the spokesperson for both the president of the Parliamentary Anti-Mafia Commission and Italy’s Deputy Minister of the Interior. In January 2020, he was appointed voluntary spokesperson for Italy’s Deputy Minister of Health for the duration of the COVID-19 crisis. Nazzaro is a member of the GI-TOC Network of Experts.
A PARALLEL CONTAGION c. III Exploiting the pandemic, the mafia way
From c.III : Interview with Giuseppe Cucchiara, Director anti-drugs services -Dep. Public Security- Interior Ministry-Italy.
NAZZARO: What has happened to drug trafficking while the world has been disrupted by the pandemic? Has the drug trade stopped, or has it merely changed its spots?
CUCCHIARA: The virus’s rapid diffusion throughout much of the world is influencing lifestyles, economies, institutions and many other factors, which have negative consequences both for the people’s everyday life and for governments. The virus has also affected drug trafficking which, although an illicit activity, is a trade whose performance largely depends on the normative functioning of legitimate economies around the world. When an interruption occurs along the global supply chains and transport networks, as is happening now with COVID-19, major criminal organizations and their drug-trafficking activities are affected. Think, for example, about drug manufacturing processes in clandestine labs that need specific products as inputs, which are hardly accessible even in normal market conditions. Another problem facing criminal organizations is related to the transportation phase and its mechanisms. The main drug trafficking routes to Europe are from Latin America for cocaine, and from the east, especially Afghanistan, for opiates. In my opinion, cocaine trafficking is still the major source of income for Italian criminal organizations, especially the ‘Ndrangheta. For this reason, I pay special attention to cocaine trafficking, which is predominantly shipped by sea. The cocaine shipping traffic has contracted, as has trade in legal commodities from Latin America, owing to the pandemic. Given the current restrictions, criminal organizations are looking to different modes of transport. As for street-level drug dealing, restrictions on people’s freedom of movement have led to the development of new ways of operating for dealers and their markets. In Italy, we have witnessed dealers disguised as delivery drivers, others using car-sharing or taxis. While street drug dealing is developing new dynamics, the international drug supply trade has found itself in deep trouble, mainly because the routes for shipping drugs from one hemisphere to the other have been cut off. Containment measures adopted by numerous governments following the pandemic have resulted, according to our data, in a substantial decline in trafficking.
NAZZARO: In Italy, given that the legal economy can slowly begin to resume now, will drug trafficking pick up again too?
CUCCHIARA: It is still too early to tell, but it is not unreasonable to assume this might happen. And, as I mentioned, the Giuseppe Cucchiara Courtesy of the author 6 drug trade relies heavily on the healthy performance of licit trade. During this period, legal activities have almost ground to a halt, and this has had repercussions for drug trafficking as well. We need to be circumspect here. The so-called phase 2 of lockdown is currently in place in Italy, but drug trafficking is affected by controls and restrictions in other countries too. For instance, in Peru, security measures adopted in regions where there is a large concentration of cocaine plantations have made it much more difficult for criminal organizations to source chemical precursors that are used in cocaine production. This has caused production to drop. There is a market surplus of coca leaf production, but a shortage of precursors that are needed as inputs for cocaine production, and this has led to a drastic decrease in prices for coca, from about 60 euros to 10 euros for 1.5 kilograms. This has repercussions for the trafficking business: before the pandemic, the wholesale cocaine price in Peru fluctuated between $900 and $1 000 per kilogram; today it currently stands at around $400 per kilogram. So, we will have to wait for other countries to begin easing their economic restrictions to get a better picture of what will happen to drug trafficking here in Italy. What we do know about the trafficking market is that cocaine that is already in circulation in the supply chain in Italy – and in Europe in general – has increased in value because of the current reduced supply in the production markets. We have recorded a 30% rise in the price of cocaine both already present in Europe and for the small amounts that do manage to get shipped from Latin America. In the near future, we expect that the reduced supply of drugs will prompt a further increase in prices. We will be able to see it in the coming weeks.
NAZZARO: Given the disruptive effect the pandemic has had on the drug trade, is this an opportunity for national and international law enforcement to deal a heavy blow to criminal organizations?
CUCCHIARA: International law-enforcement agencies do play a role. But the truth is, the problem first needs to be addressed in the countries where drugs are produced. What concrete action can international agencies take? In Europe, for instance, we deal with product that passes through our borders, but the heavy blow you refer to should be dealt by the producing countries in Latin America – and this lies outside of our scope. Interestingly, Albanian organized-crime groups have stepped up the trafficking of drugs to Italy using routes across the Adriatic. On 10 April, 20 kilograms of heroin and cocaine concealed in a truck were seized in Bari, while, more recently, the authorities intercepted another sizeable shipment of cocaine coming from Albania. In cases like these, when countries are geographically close, collaboration between the police agencies that specialize in countering organized crime is easier and more effective. However, when the commodity is coming from more distant countries, things get complicated.
NAZZARO: In this context of cohabitation with the virus, how are criminal organizations adapting and taking advantage of the emergency situation?
CUCCHIARA: Criminal organizations are extremely flexible. In Italy, mafia groups have made canny, timely investments in, for example, the agriculture and food sectors, the provision of medicines, medical equipment and healthcare products, as well as the funeral industry, cleaning services, waste management and road transport. Mafia groups are known to be highly adept at restructuring and adapting. However, the COVID-19 health emergency has given law-enforcement agencies the opportunity, once activity fully resumes, to have a considerable impact on the drug supply chain. And that means making life difficult for criminal organizations. Although the transnational drug trade depends on a number of external factors, domestic distribution has different dynamics, and in a period of tighter controls, it could suffer a tough blow.
NAZZARO: With regard to drug trafficking, what role does the Italian market and, more generally, the European one, play in the global context?
CUCCHIARA: Italy is predominantly a drug destination market, not a production market; it has high levels of consumption, from synthetic drugs to traditional ones. Italy’s geographic position in Europe makes its ports key sorting centres for traffic destined elsewhere, thus making Italy a transit country too. However, this is true for most coastal European states. Large criminal organizations such as the ‘Ndrangheta – which is considered the global broker of cocaine destinated for Europe – move huge amounts of drugs destined for European states. The ‘Ndrangheta could be behind shipments arriving at any number of Italian or other European ports – Gioia Tauro, Genoa, Antwerp or Rotterdam, for example.
NAZZARO: According to some, during the financial crisis of 2007–2008 the proceeds of drug trafficking allegedly helped sustain a portion of the Italian economy, increasing the level of underworld infiltration into the legal economy. Do you believe there are, at present, the preconditions for a similar situation to recur?
CUCCHIARA: This is a risk that exists, and I would extend it from the threat of drug trafficking to the threat of the mafia presence more generally. It is evident that in the postemergency phase, the threat posed by the mafia could really escalate. Mafia organizations have at their disposal an enormous amount of illicit resources that they can inject into the legal economy at a time where the private sector, in particular small and medium enterprises, are facing a liquidity crisis. Here, the so-called mafia welfare, widely discussed elsewhere, could become a reality. I agree with those who believe the current period brings a genuine risk of further criminal infiltration into corporate structures and the legal economy in general, by providing the necessary liquidity or through loan sharking. In the post-emergency phase, mafias may very well consolidate their presence in the legal economy, and at the same time leverage the level of social consensus that they enjoy.