We habitually think of crime in terms of a battle between 'goodies' and 'baddies'. In this conception the legitimate world, consisting of the the law enforcement agencies, the political system, business, communities, legitimate society as a whole, is unambiguously threatened and disrupted by criminal activity of all types and therefore has a simple interest in repressing it. Some types of criminality do indeed approximate this perspective. But when we turn to the types of criminality we are discussing in these lectures, things are much more complex. In recent years we have come to understand something of the normality of crime, not simply as an everyday event, but even as part of the political and economic structure of society, part of the way the system works rather than simply something which disrupts normality. The relationship between powerful and profitable systems of organised crime and the legitimate world is highly complex and variable.

Some aspects of this we have already touched upon. We have seen, for example, the old Sicilian Mafia being able to capture a measure of political economic power in the face of a weak central state.

In this lecture we shall try and widen out this theme and look at the diversity of relations that exist, in various contexts, between organised crime and legitimate society (sometimes known as the 'upperworld' in contrast to the criminal 'underworld'). For our purposes we can take two key institutions of legitimate society; the state and business, and investigate the type of relations with organised crime that may exist. It is not being suggested that all these types of relationship exist in all cases and situations. They are determined by historical and social circumstances. Our aim here is rather to map out the possibilities. The following table sets out the main dimensions we shall discuss. They are ranked in terms of increasing degrees of contact and interconnection between the legal and illegal sectors beginning with simple evasion, in which organised crime attempts to minimise its connections with the legal sector--and concluding with substitution, in which organised crime substitutes and displaces key elements of the legal sector. While we are here separating these possibilities in order to assess the dynamics of each, in real-world situations they frequently appear together and intermixed.

Evasion

In modern societies like those of Western Europe and North America it is often taken for granted that 

• the state apparatus (in particular the security and law enforcement agencies) is stronger than even the most powerful organised crime groups 

• is itself free of any tendency to engage in illegal activities. That is to say, politicians, and state employees (including police officers, magistrates and lawyers) are committed to ethics of honesty and integrity.

• that the business elite is similarly committed to public probity, democracy, the rule of law and 'good governance'

• that the public have reasonable confidence and trust in the law enforcement agencies and are willing to provide information to them about crime

Weak, inefficient, corrupt states, dubious business practices are often seen as things which exist but are only significant activities 'elsewhere'

Much that has happened in recent years renders such a view rather precarious but let us begin by starting from such a model and asking how organised crime operates in such circumstances. The answer is 'with great difficulty'. The public, including legitimate business, has no qualms about reporting evidence of organised crime activities to the police. The latter relentlessly pursue organised crime. The main defensive strategy of criminal groups is to disguise as far as possible their organisation and activities from the state. 

In doing so they can expect little protection from the legitimate business sector. While organised crime groups attempt to set up some legitimate enterprises as 'front' organisations to launder money and otherwise make plausible their income, the legitimate sector has no sustained interest in any form of illegality since acceptable profits can be made within the constraints of legal business activity. In such circumstances organised crime as a form of money-making activity caters largely to segregated markets for illegal goods and services (drugs, pornography, vice etc) and the running of protection rackets. The legal sector of business has no interest in these activities. Indeed some of them, such as paying protection money, increases costs and insecurity and is directly inimical to the interests of legitimate business enterprise.

We have noted in the previous lecture that in the early stages of industrialisation areas existed where the state was weak and where organised crime could operate with a degree of freedom. We mentioned nineteenth century Sicily and also the expanding North American cities in the early part of the twentieth century. These areas of weak state power can be regarded as 'sanctuaries' for organised crime. They are areas where it has to pay less attention to disguising its activities to hide them from the state, because the latter only operates ineffectively. Frequently in such regions organised crime, as we have seen already, takes over some state functions. We shall return to this issue presently.

As the modern state becomes more powerful and its techniques of surveillance become more sophisticated, so organised crime can find fewer areas of sanctuary within the national terrain. It has to turn more to techniques of disguise. Some of these such as money laundering (disguising the criminal origins of income) we shall deal with in more detail in another lecture. 

As the arsenal of surveillance and investigation techniques at the disposal of the law enforcement agencies become more sophisticated so, it might be felt, organised crime is at least being kept in check. However, it must be noted that one of the most important effects of globalisation is to provide much more effective ways in which organised crime may disguise its activities 

Newer flexible forms of criminal organisation and methods of work, highly adapted to the new fast moving global electronic networks which have grown exponentially over the last decades. Organised crime both finds new forms of disguise through increasing integration into financial networks and sophisticated money laundering processes and at the same time finds a new 'virtual sanctuary' in the interstices of the global society of nation states and law enforcement agencies. The use of encrypted electronic mail, anonymous Web sites and the myriad of instantaneous transactions which constitute the Internet in general and financial markets in particular, the legal and the illegal are increasingly indistinguishable and where distinguished, unpursuable by national law enforcement agencies. Criminality is normalised by the networks. Many of the key activities of organised crime are increasingly indistinguishable from those of legitimate business. As the sociologist Manuel Castells points out,

“The technological and organisational opportunity to set up global networks has transformed, and empowered, organized crime. For a long time, its fundamental strategy was to penetrate national and local state institutions in its home country, in order to protect its activities… This is still an important element in the operational procedures of organized crime: it can only survive on the basis of corruption and intimidation of state personnel and, sometimes, state institutions. However, in recent times, globalisation has added a decisive twist to the institutional strategy of organised crime… the high mobility and extreme flexibility of the networks makes it possible to evade national regulations and the rigid procedures of international police cooperation.” (Castells 1998: 202 see also van Duyne 1997)

This is more or less the orthodox view. Within this debate the key issue is the technological 'arms race' between the 'baddies' (organised crime) and the 'goodies' (the law enforcement agencies). However this only tells part of the story. Things get much more complicated when elements of the business elite or the state apparatus (either the law enforcement agencies themselves, or other groups which are part of the state apparatus, such as the security services, or governing political parties) discover that they have interests in common with some sections of organised crime.

This brings us to the issues of collusion and corruption. In practice it is often difficult to distinguish between these two phenomena: they are frequently different sides of the same coin. A rough distinction could be made as follows:

• collusion is where the state or business corporations form covert and instrumental relations with organised crime groups for their own particular purposes. Organised crime acts in the subordinate role of service provider or subcontractor. The state or the business corporation retains the initiative and decides the services it will pay for. Organised crime accepts the 'contract' and delivers the goods.

• corruption is where organised crime forms more lasting covert relations with elements of the state or business corporations which are of mutual benefit to both sides. Organised crime groups may penetrate the state organs (e.g. police and judiciary) through techniques of bribery and intimidation and use their power to deflect state agencies from their legal and democratically established goals. At the same time important political groups within the state may benefit from and use organised crime to secure their own political dominance within the state. 

This is a rough and ready distinction in particular because what starts off as collusion may end up as corruption depending on a variety of factors such as how long the relationship continues, the power of the respective organised crime and political groups etc. 

We shall now discuss some examples

Collusion

But even relatively well organised powerful states and legitimate business corporations may have rather more complex relations with organised crime. Both states and business corporations may perceive certain benefits from connivance with organised crime groups. Similar considerations apply on occasion to relationships between states and terrorist groups.

state collusion with organised crime

Situations arise where the state authorities, police and perhaps the security services (like the British MI6 or the American CIA) may develop relations with organised crime groups as part of its own covert operations. The criminologist William Chambliss identified what he called 'state-organized crime' as "acts committed by state or government officials in the pursuit of their job as representatives of the government". 

The American criminologist William Chambliss coined the phrase "State-Organized Crime" which he defined as "acts committed by state or government officials in the pursuit of their job as representatives of the government" (Chambliss, 1989). In Chambliss' view governments often engage in such activities as arms or drugs smuggling, assassinations and even terrorist acts, in furtherance of their foreign policy objectives. Covert collaboration may be established with organised crime or even terrorist groups for these purposes

A major example in this area concerns collusion by state agencies with the drugs trade. In the years following the second world war French counter-espionage financed part of its struggle against Vietnamese national liberation movement (in Vietnam which was at the time still a French colony known as Indo-China) through the sale of heroin. There is a considerable body of material emanating from the US on, for example, CIA involvement with organised crime groups. A major source of information is a well known book by Alfred McCoy (1991) entitled The Politics of Heroin in Southeast Asia. He traces the beginning of US involvement with the collusion with the Sicilian Mafia in the closing stages of world war II. He continues that during the Vietnam war American intelligence agents permitted allies of the US (the Hmong tribe in Southeast Asia, for instance, which was vital to the CIA's secret war in Laos and which sold heroin to American GIs) to expand their lucrative drug trade. Then, following the Vietnam War, McCoy contends, a similar relationship developed between American authorities and the right wing groups in Latin America. For example the Nicaraguan Contras  struggle to overthrown the government of that country was supported by US covert operations aimed at stopping the spread of Marxist inspired governments in the region. The problem was that the US Congress had prohibited the channelling of funds to armed groups such as the Contras. Despite this, during the mid 1980s the Contras were allegedly receiving $1 billion a month from US sources. The money was laundered through a variety of covert operations led by Lt. Colonel Oliver North. He "initiated serveral schemes: fraudulent insurance transactions, illegal bank loans, fake security sales, insurance fraud, money laundering etc." (Napoleon 2003: 23)

Drug-enforcement agencies sought the arrest of drug merchants often associated with the contras, while the CIA, and North, viewing the contras as indispensable ideological allies in the war against Communism, did their best to thwart the vaunted 'war on drugs.'

In this example different branches of the state apparatus appeared to be pursuing different policies. The law enforcement agencies were concerned to stem the flow of illegal drugs into the United States while the CIA was concerned to obstruct the emergence of left wing governments in Latin America.There are other examples which could be taken from other parts of the world. Some of these can be seen by following the links to state organised crime. Some examples are

• alledged collusion by British military intelligence agencies with loyalist paramilitary groups in Northern Ireland

• Russian military illegally selling armaments to organised crime groups. In fact during the Soviet period, organised crime provided many useful functions to state officials.

• Authoritarian states using organised crime groups to destabilise democratic opposition movements. In South Africa, during the apartheid regime, the police frequently used criminal gangs to disrupt meetings and other activities of the anti-apartheid movements (Cawthra 1993)

business collusion with organised crime

Business corporations periodically engage in criminal acts. Usually, such activities are regarded as a distinct area of study: white collar or corporate crime. But the overlap with organised crime can be considerable. A legitimate corporation which habitually engages in criminal activity can be regarded as a form of organised crime. However, our concern here is with legitimate businesses 'outsourcing' or subcontracting illegal activities to organised crime groups, or otherwise availing themselves of the activities in which organised crime groups engage. Some of the main examples of such activities are

• Toxic waste disposal: environmentally conscious governments may legislate to require businesses which produce dangerous toxic wast products to dispose of it in ways which minimise harm to the environment. This is more costly than normal garbage disposal. There have been cases throughout the world in which organised crime groups have been paid secretly by companies to dump such waste on open ground or in other ways harmful to the environment. The advantage to business is that the payments to the criminals are less than the cost of properly treating the waste products

• Arms smuggling: an important feature of the late 20th century up to the present has been the number of small wars occurring, mostly but not always (e.g. the Balkan wars of the 1990s) in the southern hemisphere. Such wars create markets for small arms and munitions (automatic rifles, grenades, mortars, mines etc) Armaments manufacturers can profit from the export of arms to such regions. However, the United Nations and many western governments may attempt to contain such conflicts by making illegal the export of armaments to the participants in such conflicts. Armaments manufacturers may attempts to evade these restrictions by providing false 'end user' certificates: selling their products to what appear to be legitimate purchasers who may be in fact front operators for banned purchasers. Organised crime groups may participate in the onward selling of arms to the conflict participants. Organised crime groups may be particularly well placed to perform this function because heroin and cocaine may be used as payments by the arms purchasers. A cursory glance at the global distribution of cocaine and heroin growing on the one hand and areas of armed conflict on the other will illustrate the plausibility of this process

• People smuggling: a major activity of organised crime, as we have already noted, is the smuggling of illegal migrants. Many of the latter may be young women coerced by traffickers into prostitution and vice. However, some are seeking work in manufacturing or agriculture. Employers in these areas, particularly agriculture which requires a larger labour force at certain times of the year, may benefit from the employment of an unregistered clandestine workforce. Wages can be lower as the workers are in a very weak bargaining position due to their illegality. Employers also do not pay insurance contributions for workers they do not admit to employing.

some more material on these areas can be found by following the links
 

links to business collusion with organised crime toxic waste key reading: Alan Block and Frank Scarpitti (1985) Poisoning for Profit: the mafia and toxic waste. New York: William Morrow. Andrew  Szasz, (1986) Corporations, Organized crime and the Disposal of Hazardous Waste. Criminology 24:1 pp 1-27 . Article from the American magazine Business Week  (2003) on Sicilian Mafia involvement in toxic waste dumping European Union: 'Organised Environmental Crime in Member States ' review by Klaus von Lampe of Italian study of illegal waste trafficking in Italy and Spain 2003 Article in Guardian newspaper about 'Ndrangheta (Neapolitan Mafia) involvement in nuclear waste  arms trading A useful book in this area is: Lora Lumpe (ed.) (2002) Running Guns: The Global Black Market in Small Arms. London: Zed Press Peter Lock (1998) Pervasive Illicit Small Arms Availability: A Global Threat  (requires Acrobat Reader) Australian Institute of Criminology Transnational and Organised Crime web page has a couple of downloadable articles which give a useful overview on arms smuggling Nicholas Marsh (2002) Two Sides of the Same Coin? The Legal and Illegal Trade in Small Arms (requires Acrobat Reader) Very useful article entitled 'The Arms Fixers'

At the same time legitimate business may provide services for organised crime. The most important of these in the present period is undoubtedly money laundering. This is the subject of a separate lecture

In a major piece of research in this area Vincenzo Ruggiero (1996) distinguished between:

• 'work as crime': the criminal activities of legitimate business corporations. These are generally grouped under the heading of 'white collar' or corporate crime.

• 'crime as work': traditional organised crime activities such as protection rackets, drugs dealing, and many activities in the 'informal economy'

• 'offers that can't be refused': services to legitimate business offered by organised crime such as arms smuggling, illegal toxic waste disposal and smuggling of illegal immigrants for use as cheap labour; money from drugs sales as sources of funds for legal business etc. In the same way workers, especially migrants, may find themselves working in both the illegal and legal sectors of the economy, crossing the boundaries without even knowing it. (see also Ruggiero 1997)

Corruption

Corruption of state agencies by organised crime groups is a widespread phenomena. It occurs at a number of levels. As we have seen, organised crime needs to protect its assets and activities. Where the state is powerful and uncorruptable criminal groups must rely purely on strategies of evasion. It is rare however that some element of corruption is absent. The more powerful and democratic the state and political system, the more corruption is pushed down to city and street level rather than the level of national government. Thus for example in the United Kingdom it would not be said that any politicians, senior members of the police or judiciary have links to organised crime. But at a local level police corruption is recognised as a problem. This is true also of the United States and most European Countries.

political

More powerful organised crime structures can extend up to the leading echelons of the state apparatus. Political corruption is a complex phenomena. It concerns far more than the activities of organised crime. The study of political corruption is an important area of political science. The most important European case of political corruption involving organised crime able to penetrate the heart of the state apparatus is Italy. A long term relationship was forged between sections of the Italian political elite and the Mafia in which the latter helped secure the political domination of key elements of the Christian Democratic party, particularly in Sicily and southern Italy, in return for protection from police investigation and judicial process. Follow the links for more material on Italy

Business 

Business corruption can be defined as situations in which organised crime penetrates legitimate business and uses it for its own purposes. In a previous lecture we noted how the Sicilian Mafia and other Italian organised crime groups were able to penetrate the small business sector by providing finance and loans (from money derived from the drugs trade) to small firms who otherwise would have found it difficult to secure bank loans. This can be seen as a variety of loansharking. In return organised crime demands services such as money laundering or, as in the case of restaurants, acting as distribution points for drugs and other illegal commodities. This activity can be considered an aspect of the informal economy of most poor areas in large cities where, in the absence of substantial purchasing power or willingness of financial institutions to grant loans, money from drugs dealing, protection rackets, vice etc. functions as an important source of capital and funds. It is invested in small scale enterprises such as take-away food outlets, taxi-cab companies, night clubs etc.

Substitution

Substitution is the polar case in which organised crime does not simply corrupt, or collude with the state or business corporations but actually replaces them. That does not mean a society or region is entirely run by organised crime, but that the latter participates in doing the same sorts of things as legitimate organisations: such as fulfilling law and order and dispute resolution functions, and operating as a central, rather than a peripheral, part of the economy.

We have already considered the role of organised crime in the political control of areas in which state institutions are weak and actually become dependent upon organised crime for their effective functioning. Nineteenth century Sicily is the most important historical example. However more recently a similar situation arose in Russia following the collapse of the Soviet regime at the beginning of the 1990s in which organised crime, benefiting from the largescale privatisation of state assets by the new Russian government--in particular under Boris Yeltsin--was able to buy into substantial sections of the economy. At the same time it was able to function as a private protection force for those who could pay, enforcing contracts and assisting in the elimination of competitors. For more material follow the links

references

Castells, Manuel (1998) End of the Millenium (The Information Age: Economy Society and Culture. volume III.). Oxford: Blackwell.

Cawthra, G (1993) Policing South Africa: the SAP and the Transition from Apartheid. London, Zed Press.

Chambliss William (1989) State Organized Crime. Criminology 27:2 pps 183-207.

McCoy, Alfred (1991) The Politics of Heroin: CIA complicity in the global drug trade. New York: Lawrence Hill Books. 

Napoleoni, Laura (2003) Modern Jihad: Tracing the Dollars Behind the Terror Networks. London: Pluto Books

Ruggiero, Vincenzo. (1996) Organized and Corporate Crime in Europe: Offers that Can't Be Refused. Aldershot: Dartmouth

Ruggiero, V. (1997) Criminals and service providers: Cross-national dirty economies. Crime, Law and Social Change 28: pp 27-38.

van Duyne, Petrus (1997) 'Organized Crime, corruption and power'. Crime Law and Social Change 26: pp 201-238.