//Why organized crime can only benefit from the coronavirus outbreak: Mafia activity during and after the lockdown

Why organized crime can only benefit from the coronavirus outbreak: Mafia activity during and after the lockdown

The coronavirus outbreak in Italy brought the lives of its citizens to a standstill. The mafias were no exception, limited in their movements and required to find alternative ways for conducting criminal activities. It is believed that they have been moving though: to prepare for the re-opening of the economy, where they are believed to be able to increasingly infiltrate into the struggling economy, while facing lower opposition from local communities, which they supported during the lockdown.

di Felix Molterer

At the present date, it has been sixty-one days since Italian prime minister Giuseppe Conte signed the legislative decree that changed the Italian’s lives for the next weeks and months. As the diffusion of the novel coronavirus in Italy seemed unavoidable and a containment of the epidemic to the Lombardy region and 14 nearby Italian districts no longer feasible, Italy became the first European country to extend quarantine regulations to its whole territory. Since then, the daily lives of most Italians have been limited to staying at home and occasional grocery shopping, with everything else closed. Containment measures became even stricter when citizens were even prohibited from going for a stroll or exercising outdoors. 

While the number of confirmed cases and deaths soared, media attention mainly concentrated on the containment of the coronavirus and the ongoing, lengthy negotiations between the EU member states for financial aid. After the discussion about economic aid through mutualization of debt brought old political conflicts to the surface, an opinion article published by the German newspaper “Die Welt” had emotions run high. The German journalist writing that Italian mafias would probably only wait for a new money rain from the EU, advocating for Angela Merkel to stay contrary to unionwide “coronabonds”, caused even the indignation of foreign affairs minister Luigi di Maio. 

In these days, it was quite easy to get lost in the flood of news about the coronavirus and lose track of other relevant topics. When reading the broad criticism about the article of “Die Welt”, one might have thought: well, while it is clear that the effects on the legal economy will be severe, how about its illegal part, represented by mafia organizations?

As so many other topics still relevant to Italian politics and society, the mafia had received less attention by the press after the outbreak of Covid-19. This was not a wonder, though: on the one hand, the healthcare emergency dominated the news similarly in other countries, and there was also less to report about, as the strict stay-at-home measures also applied to organized crime. Frequent roadblocks by the police and omnipresent controls, with citizens obliged to carry with them a printed self-certification document describing the reasons for leaving home, limited the mafia’s freedom of movement. Criminal organizations rely highly on individual mobility to conduct their operations, and even if they found a way to justify going from one place to another, they were at higher risk of getting caught in the empty streets. As a result, the number of reported criminal offences declined by 64% in the first three weeks of March. 

Although regular operations were reduced inevitably by a certain extent, some movements were still necessary. In Southern Italy, several bosses have been at large for many years and command their respective groups from hideouts in inhospitable positions. Apart from regular supplies with groceries, some even need medical aid or continuous assistance, like Francesco Pelle, who has been sitting in a wheelchair for years. No wonder that the ‘Ndrangheta boss and the mobster responsible for taking care of him got caught in March. The police simply started following the criminal’s movements after he was stopped at a checkpoint and raised a suspect by giving little convincing explanations about his reasons for circulating.

Apart from getting caught, the mafia bosses were also at increased risk of getting infected with the virus, as the novel coronavirus of course makes no exceptions for mafia members. Some of the places where the coronavirus could spread easily were prisons: already when the situation was much less severe, prisoners rebelled nationwide, with the authorities struggling to keep control. In Foggia, an initial number of 50 prisoners managed to evade from prison. Somewhat later in April, a mafia boss died in a hospital at Bologna after having contracted Covid-19 inside the prison where he was waiting for his process. Since the rebellions began, the mafia has been suspected of having organized them, as they occurred quite contemporaneously in 22 prisons nationwide from March 7th to March 9th.

In the meantime, not all mafia activities came to a standstill. The recent series of violence by the Società Foggiana, one of the most blood-thirsty mafia organizations of the last years that is based in Puglia, continued. Videocameras filmed a man who placed a piece of dynamite at a shop’s entrance and rode away on his bicycle before it exploded. He was not wearing one of the usual ski masks, but only one of the normal face masks as recommended by the authorities. A similar act of menacing occurred in the province of Naples, when the car of a representative of the antimafia association Libera was hit by several gun shots as an act of intimidation. Indignant reactions followed the diffusion of a picture that showed dozens of people following a hearse to the cemetery in Messina, Sicily. While funerals and all related cerimonies were prohibited in the whole country and the more severe hit regions in Northern Italy struggled to find space for the coffins of the victims of Covid-19, the brother of a local mafia boss was accompanied to the cemetery after having deceased for causes other than the virus. 

So what about the real change in drug dealing during the lockdown, one might ask. Did the main liquidity source of the mafias dry out? Will they be in a weaker position after the lockdown? The answer is: probably not. It is admittedly true that the restrictions on individual movements hit the mafia’s traditional business model quite hard, but there are several factors indicating that the effects will be rather temporary. The mafias have been usually very creative in reorganizing when police operations hit their distribution networks, so it is likely that they found an alternative also here. It was hypothesized that more dealings took place in supermarkets or also outside where people expected their turn to enter, while reported drug deliveries through drones rather fell in the category fake news. Instead, it is likely that, exactly as whole supermarkets were almost emptied by anxious customers trying to buy extra supplies for the lockdown, drug dealers observed similar things happening. The newspaper Il Fatto Quotidiano cited police officers who arrested dealers moving with amounts equal to almost the triple of what would have been normal in the days before the lockdown, and the Financial Times observed similar effects in Germany. Also reduced international traffic of goods through shipping ports and air freight will not be an issue in the mid and long term, as there are lots of discretion in diluting and adultering (“cutting”) drugs, and it is always possible to raise prices. A real problem would be if the mafia were to lose part of their territory, but this won’t happen, as everybody else who might like to take it is also in quarantine. So the most likely consequence is that mafias will see their affairs somewhat compromised, but probably still yielding decent profits. 

Another traditional source of the mafias’ income is certainly money from racketeering and extortion activities. Through the domination of the territory, mafias can instruct an alternative force besides the state’s monopoly on the use of force, constraining entrepreneurs to pay a monthly sum in change for “protection”. During the lockdown, this source has very likely dried out much stronger than the income from drug dealing. On the one hand, the risk of being caught by the police is much higher for those collecting the so-called pizzo, while most entrepreneurs were also forced to close and cannot be encountered in their shops. An article by the online newspaper Fanpage reported that some camorra families in Naples were facing a liquidity crisis for this reason and would even cut the financial support for prisoners and their families, which is one of the main measures to prevent them from confessing and entering a leniency programme.

It would be surprising, though, if mafia families did not have high enough liquidity reserves to pay their very specific “bills” in the months of the lockdown. It is more likely that they will cover their losses while sitting back and thinking about what is to come once the emergency ends. A Sicilian proverb is calati junco, ca passa la china, suggesting to stay calm during a difficult situation wait until it gets better – which it will. The evidence suggests that following this kind of strategy will pay off most for organized crime, as Italy will likely face considerable difficulties when trying to reopen its economy. This is due to the high burden of sovereign debt that was already among the highest in the European Union. Issuing new government debt to provide a fast crisis response is difficult, and therefore Italy is still hoping to convince the rest of Europe that it is best to mutualize the Eurozone’s debt. Many short-time allowances and financial support for self-employed people are still waiting to be distributed, with many households facing a financial crisis. And even if that worked, there is still an estimated 3.7m people who work in the shadow economy (ISTAT, 2017 report). The respective percentage is way higher in in the regions that are dominated by the traditional mafias. This gives them a valuable opportunity to strengthen one of the factors that has ensured their long-term survival: obtaining approval from the population by showing to be on their side during a crisis, which translates in fewer reports to police and higher acceptance of racketeering.

The mafia therefore steps in where the state is absent. In Palermo’s neighbourhood Zen, the brother of a local mafia boss distributed food supplies to the population living mainly in community housing, which is especially hit by the crisis. The responsible mobster even posted on Facebook that he was “proud of being a mafioso if he therefore can help the population in a moment like this”. Similar happenings were reported from Naples, where people with ties to the local camorra organized home deliveries. Referring to the previous argument about the limitations on racketeering due to police controls, it might even be fit into the mafia’s strategy to suspend it during the most acute phase of the crisis. Federico Varese, professor of Criminology at the University of Oxford, remembered in a recent Webinar that this strategy was also adopted by the American mobsters Lucky Luciano and Al Capone during the great depression of 1929/1930. This all fits in the traditional strategy of Italian organized crime: presenting themselves as benefactors willing to support the local population and staying on their side, thus obtaining control over the territory. When they come back to ask for more in return, it is already to late. The mafias will find little opposition to increasing racketeering, while having higher possibilities to influence elections by asking for votes from the ones they supported during the crisis.

Also on the more economic side of the emergency, organized crime is set to benefit. As a recession appears to be unavoidable, many firms are expected to go bankrupt or at least face severe liquidity issues. Italy’s economic landscape is dominated by small- and medium-sized firms, in which most of their owner’s capital is invested and emotional ties are highly relevant. When all legal sources of liquidity have dried out, only the local mafia boss remains, always looking for an opportunity to invest his liquidity. Several mafia experts such as Nicola Gratteri and Federico Varese expect an increase in usury, where liquidity is lent at interest rates that no business can support in the long time. This is a common way of criminal organizations to slightly acquire control over firms operating in the legal economy, forcing them to sell the business to them or enter a money laundering agreement, masking future income from criminal activities as legal business income and distributing it back to the mafias. 

Moreover, mafia will find opportunities for infiltration also where the government is able to provide funds for facing the emergency. First irregularities have been reported regarding the procurement of face masks, where contracts are awarded to companies in a rather obscure manner, which is of course due to the urgent need for medical equipment. As politicians have started to like defining the emergency a “war” against the coronavirus, some have also been asking for a “reconstruction of the economy”, just like after World War II. Consequently, some suggested to suspend part of the regulations for awarding public contracts. The president of the Liguria region demanded even the suspension of the paragraph requiring antimafia certificates for firms that tender for public contracts. The declarations were heavily criticized for a good reason: as L’Espresso states, every disaster on national level has been followed by mafia infiltration and speculation, citing the earthquakes in the Irpinia area and the Abruzzo and Emilia-Romagna regions in 1980, 2009 and 2012, respectively.

In the end, it can be said that mafias will mainly benefit from the coronavirus outbreak, despite they might see their activities and business volume compromised during the lockdown. After all, the German journalist’s argument about the possibility that European funds raised through “coronabonds” and destinated to Italy might end up in the hands of organized crime could be actually unnecessary. The consequences of nothing happening are equally clear, and they see the mafia regain particularly strong positions in their traditional regions, with the efforts to install movements against racketeering like Addiopizzo becoming void. Maybe the question should be rewritten as follows: in which situation does organized crime benefit less?