Mafia making money in the recession

Marketplace Staff Apr 9, 2009

Mafia making money in the recession

Marketplace Staff Apr 9, 2009


Kai Ryssdal: Businesses all over the world are pulling back. They’re selling down inventories and cutting costs to help hang onto their money. In Europe, though, there is one group that has cash to burn. Megan Williams reports now from Naples that recession is a growth opportunity for organized crime.

MEGAN WILLIAMS: Forty-four-year old Angela is greeted by her lawyer as she steps into a second-floor apartment that faces a busy street in Naples. Beside the door, a discrete name tag reads “Associazione Anti-Racket” — The Italian Anti-Extortion Association.

Angela is a regular. She comes in for legal advice. The trouble started when Angela was no longer able to run her cafe because of health problems. Knowing the bank would turn her down, she went to a local man for help. He lent her $10,000 and temporarily ran the cafe. But a few months later when Angela wanted to go back to work, she found out he had backing from the mafia.

ANGELA: Three men from the Camorra came in and told us how things would go. That we’d have to let one of them run the cafe. That if we didn’t do this, they would close it or blow it up.

If she wanted her cafe back, they told her, she’d have to pay $40,000 — four times her original loan. In the meantime, the men transformed her business into a literal den of vice.

ANGELA: They used the bar as a cover for all their illegal activities. They sold drugs out of it. It became a clubhouse for all these mobsters.

Tano Grasso is the long-time head of the Italian Anti-Racket Association. Until recently, Italian organized crime stayed away from loan sharking. Its cash flow comes from the drug trade and extortion.

And crime pays. Italy ‘s four main organized crime groups account for 9 percent of the country’s GDP. Now with banks no longer lending money to small businesses, Grasso says the mafia sees new opportunity in loan sharking.

TANO GRASSO: In this phase of the recession, there’s only one group that doesn’t have a liquidity problem and that’s the mafia. It’s a huge opportunity for them to take over businesses. First to recycle dirty money and especially to gain control of a new territory.

But anti-mafia activists say it’s not all bad news. With the economic squeeze on small businesses, more of them than ever are reporting the mafia.

Silvana Fucito was one of the first to finger clan members in court seven years ago, after they burned down her paint store.

SILVANA FUCITO: There’s been a seismic shift. This past year alone 1,800 small business reported the Camorra.

But Fucito says while it’s encouraging the number is up, it’s not clear it’s because people are feeling braver, or fed up with the double pinch of the recession and the mafia.

Either way, she says until credit starts to flow from banks, the mafia will use its cash to keep expanding.

In Naples , I’m Megan Williams for Marketplace.

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