The Mafia Gains Ground
by ilene - June 20th, 2009 4:00 pm
She dropped a coin into the cup of a blind man at the gate
And forgot about a simple twist of fate.
The Mafia Gains Ground
Italian organized crime is profiting from hard times, using cash and violence to defy Berlusconi’s government and dig deeper into the economy.
By Steve Scherer and Vernon Silver
Bloomberg Markets, July 2009
In the southern Italian port city of Palermo, home to bustling outdoor markets and Arab-influenced architecture, prosecutor Roberto Scarpinato has hunted Mafia money for two decades.
Now, as the rest of the world tightens its belt in the global recession, he’s tracking how the mob is profiting by lending and investing what’s become a scarce commodity these days: a growing hoard of cash.
Scarpinato points to the 2.7 billion euros ($3.8 billion) of assets he’s seized on the island of Sicily, where Palermo is located, since the start of 2008. In one haul, he confiscated 12 businesses, 220 buildings, 33 plots of land and a 25-meter (82- foot) yacht from grocery-chain owner Giuseppe Grigoli…
Unlike overleveraged companies burned in the credit crisis, the Mafia and its cash-based, debt-free business model are breezing through economic hard times. With young, savvy leaders at the helm, organized crime is poised to expand as legitimate companies founder.
“There’s a risk that Mafia organizations can profit from the current crisis by buying control of struggling businesses, infiltrating all regions of the country,” Italian President Giorgio Napolitano cautioned in May…
“There’s a credit crisis that’s putting many businesses in a difficult position,” says Scarpinato, 57, whose dark suit sets him apart from his jeans-wearing bodyguards who tote pistols under their black-and-blue windbreakers. “The banks have tightened the purse strings, and many companies risk going bankrupt. Then there’s the Mafia world, which has vast amounts of cash.”…
“The Mafia is ramping up its investing,” says Antonino Di Matteo, a fellow Mafia prosecutor whose bodyguard stands watch outside his office door in the Sicilian capital’s fascist-era courthouse. “The Mafia’s financial managers are trying to invest now, while the time is right, so that they can launder their fortunes once and for all.”
Italy’s cash-depleted banks may be helping the Mafia become even stronger, says Antonio Maria Costa, executive director of the United Nations’ Vienna-based Office on…