How to Do Business Like the Mafia: the Italian and American Mafia’s Role in Businesses Essay

Since the Mafia’s appearance in the 1800’s, these Italian criminal societies have infiltrated the economic and social realms of Italy and now play a large role in many countries throughout the world. Today the Mafia is considered one of the most notorious and widespread criminal organizations that has ever existed. The most prominent parts of the world that the Mafia exists are in Italy and America where they play a large role in these countries economies, most notably through their control of small and large businesses. Just like the origin of the word mafia, the history of Sicily, which is considered the birthplace of the Mafia, and its relationship with this organization, is very unique. Because of its geographic location, Sicily has always been a desirable location for trade and colonization. Generally speaking, the mafia is thought of as an Italian secret crime society, but the origins of the Mafia start way before the introduction and use of automatic weapons and illegal drugs. It was born long before it was given its name, through a long historical process in which the administration of justice was extremely fragmented and corrupt, guaranteeing impunity to the criminals. In a time of hardship and poverty, the Mafia began as a way of life: a way to protect one’s family and loved ones from the injustice of the government. Sicily’s violent and oppressive government history and its numerous corrupt and inconsistent rulers, especially regarding their justice system, fostered an atmosphere of self-reliance and cooperation among the Italian people. Through fear, inspired by threats and violence and supported by an organization of family and friends, the Mafia was able to gain and maintain this reliance and respect. It is important to acknowledge the origin of the Mafia because it is through these institutions and social structures that the Mafia was able to gain an immense amount of power and thus control businesses around the world today. In 241 BC the Romans gained control over Sicily in the first Punic War. The Romans introduced the economic and social system called the Latifundia, which created a hierarchy of people and a system of taxation that would be central to Sicily’s economy until Italian unification in 1861. Although the Roman’s actions in Sicily have no direct influence in the creation of the Mafia, they did set up the social structure of hierarchy from which the Mafia would emerge and eventually control areas of land and inadvertently control a large part of the Italian economy. In 826 the Roman Empire fell to the Arabs who brought an important aspect of life to the Sicilian people that would eventually become part of the Mafia culture; internal justice. Instead of having a system of authorities to deal with crime and misconduct, they used personal and internal justice to avenge crimes and set records straight in order to keep their businesses under their own control. The Normans were the next group to annex Sicily in the 11th century and they greatly magnified the feudal structure established by the Romans. The Spanish conquered Sicily in 1500 and they are considered the longest and most important foreign presence in Sicily. The Sicilian people were not represented by the government and eventually organized into guilds that acted as a judicial system. These guilds were unlike other European guilds and took care of their problems internally and did not include state or local authority. Internal justice led by these guilds was another step towards the formation of the Mafia (Servadio). In the late 1500’s and the early 1600’s Sicily’s feudal system went through some administrative changes. In the early 1600’s large landholders in Sicily lived in Palermo, handing over the command of their estates to estate managers called gabelloti. Appointed by the landlord, these men who were usually already prominent and respected within their region could use their power to control the people who inhabited the land. The use of the gabelloti continued through a succession of leaders and became the principle method of rule. The gabelloti, using the power given to them by the landlord, began to create entourages consisting of uomo di fiducia. The uomo di fiducia served as tax ollectors, and they had direct contact with the people. They were accompanied by campieri who were armed forces that kept the peace through fear. The emergence of these new groups also marks the creation of the middle class in Sicily, and from the middle class emerged the Mafia. All members of the Sicilian middle class used dissident tactics to gain power and money. Middlemen exploited peasants for money, artists kept people out of guilds to perpetuate their own success, and magistrates and attorneys delayed cases in an already twisted legal system. During the late 1700’s and early 1800’s these separate but powerful groups started to make contacts with each other. In addition to befriending each other, they also befriended local and regional magistrates. It is clear that as these groups began to unite themselves with the government to become a stronger and more formidable force in Sicily’s justice system, they were also gaining political ties that would allow them to carry out their business without interaction from the authorities (Servadio). Sicily’s long history with multiple judicially inept governments led to the creation and necessity of the Mafia. The Mafia was able to give people the business and protection that they not only wanted, but needed. These corrupt government institutions fostered an environment where those who were clever enough could manipulate the system to their advantage creating wealth, power and prestige through the exploitation of land, peasants and political officials in Italy as well as America. The Mafia was never just a group of gangsters, even from the beginning. There were those who carried out the dirty work, but the leaders, known as the godfathers, were often more political and business thinkers than gangsters. The Mafia used their power, gained through fear, to not only exploit the landowners and peasants but also used their political ties to carry on illegal activities without problems from local or state authorities. As the Mafia gained power and influence over the various regions and government officials, these illegal activities would expand greatly, inadvertently increasing their overall control as an organization. By the 1900’s the Mafia had become a very powerful and widespread organization throughout Italy despite an extensive amount unemployment and overty that permeated not only Sicily, but the rest of Europe as well. This is still true to this day when many countries around the world are suffering economically, the Mafia manages to stay afloat and even increase their success. Many underprivileged Italians began to immigrate to America to find better jobs to support their families. This is also when the Mafia formally entered America and began to set up small organizations throughout the country. By 1922 Mussolini and Fascism had taken a firm grip on Italy and began to crack down on the Mafia, either sending them to prison or assassinating them. Mussolini assigned Cesare Mori prefect of Italy in order for him to defeat the Mafia. Prefect Mori wanted to bring Sicily under control of the state so he suspended their rights, humiliated and arrested them and took women and children hostage in order to force the Mafia to surrender. Mussolini’s wrath pushed more and more Mafiosi out of Italy and into America (Servadio). The Mafiosi originally settled in large cities, like Chicago and New York, where industry was predominant and there were opportunities for crime, fraud and racketeering everywhere. Initially the American Mafia gangs focused primarily on â€Å"protection rackets†, but with the coming of Prohibition they began to expand to gambling, bootlegging and prostitution. It is in these fields that the American Mafia became enormously wealthy and powerful. One of the main reasons the Mafia in Italy, as well as America, has been so successful is due to its influence and heavy involvement in businesses around the world. These businesses allowed the Mafia to maintain a powerful presence in various regions by exploiting landowners, construction companies and other lucrative industries, such as drug trafficking, through fear. Despite the global recession that hit Europe in 2009, the Mafia was the one business that continued to thrive during this lean economic time. The Italian Mafia’s revenue for 2008 jumped 40 percent and sales increased to 130 billion Euros, or $167 billion, up from 90 billion Euros in 2007 according to figures supplied by Eurispes and SOS impresa (Harwood). Over the past 50 years, the main source of revenue for the Mafia has been drug trafficking, which brings in around 59 billion Euros a year (Harwood). â€Å"Studies show the criminal market never suffers during a crisis,† says Roberto Saviano, author of the best-selling book Gomorrah, the story of the Camorra crime bosses. â€Å"I’m convinced that this crisis is bringing huge advantages to criminal syndicates† (Harwood). The Italian mafia also relies on its â€Å"tried and true profit generating scheme: the protection racket† (Harwood). It is estimated that the mafia takes away over 6 percent of Italy’s Gross Domestic Product, GDP, through extortion. That’s 92 billion Euros a year, 250 million Euros a day, and 10 million Euros an hour (Harwood). Crime organizations have never been more powerful or more profitable. A small-business association called Confesercenti estimates that the Mafia collected revenues of â‚ ¬90 billion, $128 billion, in 2006, a sum equivalent to 7 percent of Italy’s GDP indicating that the Mafia’s influence as well as success continues to increase (Harwood). The Mafia does not only focus on exploiting businesses and trafficking drugs in Italy but has also extended its power to the UK; British cities are key locations in the Mafia’s vital money-laundering operations (Kington). In December of 2009, a British gambling company known as Paradise Bet Ltd was suspended when Italian police froze its assets. This action was an attempt by the Italian police to break up a Mafia clan who was in control of this company; members were accused of drug smuggling, money laundering and attempted murder. In an operation code-named â€Å"Domino†, police raids seized 227 properties, 680 bank accounts, 61 luxury cars, nine stables, 71 horses and 35 businesses said to be worth ? 200 million (Kington). Members of the Secondigliano Alliance, which is a group within the Camorra, are suspected of owning shops in London that turn out fake designer goods and act as hideouts for fugitives and fronts for drug trafficking. These are two prime examples of the Mafia’s control and dominance over businesses, land and other profitable assets. In 2000 it was reported that the Mafia controlled one in five business in Italy. Their profits were being invested in real estate, clinics, retirement homes, supermarkets, hotels and restaurants. The fortunes made by the mafia through these exploitations would be enough to pay off the public debt (BBC News) By obtaining power over these types of businesses the Mafia eventually gains authority over entire areas and even regions. The Mafia is notorious for gaining control of institutions by using a mixture of bribery and fear, and then murdering those that cross them. Control over businesses is the main reason why the Mafia is able to maintain its income as well as overall power. The Mafia uses discreet tactics to acquire land and businesses so they do not attract attention from authorities. By owning a group of small companies or even a restaurant, the Mafia is able to exploit money from them without being obvious, adding to the reasons why the inner workings of the Mafia are so secretive. Francesco Forgione, Italy’s leading expert in organized crime describes how the Nadrangheta’s Fazzari clan has two suspected members that are buying up property in London’s Wed End district. They have yet to kill but are instead investing in property and other companies to gain control over various areas in this region (Kington). Another example of the Mafia’s role in business is Antonio La Torre, a Camorra boss, who was arrested in 2005 for setting up a small commercial empire as a money-laundering operation in Aberdeen. This business included an olive oil and prosciutto-importing company and restaurant that offered jobs to Neapolitans (Harwood). It is here that you can see that the Mafia does not always resort to drug trafficking but is able to gain the same amount of power and money through what seem like legitimate businesses in order to cover up their corrupt actions. Recently, the Italian Mafia has also begun to infiltrate the wind farm business. Known in parts of Italy as â€Å"Lords of the Wind† the Mafia now owns many wind farms in Sicilian mob strongholds like Corleone (Schwartz). The reasoning behind this sudden takeover is quite simple; the power from wind farms is sold at a high rate because of generous government subsidies intended to expand the renewable energy sector. With 30 wind farms already built in Sicily and another 60 on the way, it is suspected that the Mafia will eventually control many of them. Not all 30 wind farms are owned by the Mafia but many are and locals are afraid to do anything to combat this issue, thus exemplifying the Mafia’s ability to maintain their influence and control over businesses through fear. Green energy could be the next big company that becomes a casualty of the Mafia’s criminal activity (Schwartz). Once the Mafia began to arrive in American in the 1920’s, it became clear that their initial business ventures were different from that of their homeland. Many who fled here in the early 1920’s helped establish what is known today as La Cosa Nostra or the American Mafia. Learning from their organizations back in Italy, the traditions of the Sicilian â€Å"honored society,† which absolutely forbade involvement in either narcotics or prostitution, the Mafia left the eroin business to the powerful Jewish gangsters who dominated organized crime in the 1920’s (Servadio). The Mafia was content with the substantial profits to be gained from controlling the bootleg liquor industry. By the 1920’s The United States and the provinces within Canada had adopted prohibition. It was during that era that North America gave birth to some of the largest crime syndicates, most vicious criminals, and mafia leaders. For the Mafia, prohibition meant employment, easy money and control over businesses and the people. The tainted money, prostitution, extortion and other criminal rackets did not make nearly as much money in comparison to the intake from bootlegging. Prohibition created an atmosphere that allowed crime to flourish; an atmosphere, which the mafia exploited and used to gain control over the people, businesses and subsequent regions of the United States. Prohibition was the first step that allowed the American Mafia to gain control over one of the most lucrative business America had ever seen. The leader of this Mafioso movement was Salvatore C. Luciana, known to the world as Charles â€Å"Lucky† Luciano. Lucky pioneered organizational techniques that are still the basis of organized crime today and forged an alliance between the Mafia and prominent Jewish gangs that has survived for almost 40 years. With the end of Prohibition in sight, Luciano made the decision to take the Mafia into the profitable prostitution and heroin rackets. This decision was determined more by financial considerations than anything else. The dominance of the Mafia over its Jewish and Irish rivals was built on its success in illegal distilling and rum running. Its continued supremacy, which Luciano hoped to maintain through superior organization and business, could only be sustained by developing new sources of income; drug trafficking (Servadio). Heroin was an attractive substitute to illegal distilling because it had recently become illegal. This in turn left a large market that could be easily exploited and expanded. Although heroin addicts in no way compared with drinkers in numbers, heroin profits could be just as significant: heroin’s light weight made it less expensive to smuggle than liquor, and its limited number of sources made it more easy to monopolize. Although illegal, this was a smart business venture for the American Mafia and enabled them to control a significant part of the liquor and drug trafficking business. Heroin, moreover, complemented Luciano’s and subsequently the Cosa Nostra’s other new business venture: the organization of a prostitution ring. Luciano found that addicting his prostitutes to heroin kept them quiet, steady workers, with a habit that could only be funded by this occupation. This also forced many small-time pimps out of business. By 1935 Luciano controlled 200 New York City brothels with twelve hundred prostitutes, providing him with an estimated income of more than $10 million a year (Servadio). Supplemented by growing profits from gambling and the labor movement, The Cosa Nostra was once again on a secure financial footing due to their influence and involvement with profitable and productive business ventures such as alcohol and drug trafficking as well as prostitution; they acknowledges what the people wanted and provided them with a service they would be unable to find anywhere else thus monopolizing that specific industry. It is clear that the Mafia has not only infiltrated the business of Italy but America as well and through these institution it has remained a dominant part of these societies. Although illegal in many aspects, the business ventures that Mafia undertake are incredibly lucrative and give them the opportunity to expand their organization on a large scale. Although governments are taking significant action in combating the Mafia, they continue to grow and dominate the economies of many societies to this day.