Debt consolidation

How the Italian Mafia targets the European crisis exit fund

Criminal enterprises – like their legitimate counterparts – have suffered from the economic crisis caused by the pandemic. But the Italian mafia has already laid the groundwork for a massive salary.

Last year, when countries were gripped by lockdowns, the Mafia began infiltrating cash-strapped businesses in an attempt to siphon money from the European Union’s stimulus fund and $ 1.8 trillion. euros ($ 2.2 trillion) which, in part, will start pouring into trouble later this year, according to Maurizio Vallone, Italy’s top organized crime investigator.

Criminal groups, including the N’drangheta in the southern region of Calabria and Cosa Nostra in Sicily, have sought to gain a foothold in legitimate businesses that will be the first to obtain EU aid, such as those in the sectors environmental and digital, said Vallone of the Antimafia. Investigations Directorate, which brings together investigators from the main police forces.

“The mafia has chosen the companies best positioned to participate in the stimulus fund tenders, especially in the health and infrastructure sectors where a lot of money will be spent,” Vallone told Bloomberg on Tuesday in his Rome office. “He’s going to try to take it all. We have to make sure they don’t even get a euro.

And Italy is a prime target for criminals as it is poised to be the biggest recipient of EU grants.

Prime Minister Mario Draghi’s new government is crafting a spending plan for its € 209 billion share of EU funds as it struggles to emerge from the worst recession since World War II. Italian businesses are particularly vulnerable because a state-guaranteed bank loan program is too complex and limited to be effective, Vallone said.

As a result, companies with fragile creditworthiness have benefited little from state aid, he said.

Mafia gangs have seized the opportunity, along with regional and national lockdowns, to reach out to desperate small and medium businesses seeking cash in an economy that contracted 8.9% last year.

Mafiosi typically seek to take a company’s share capital, finance struggling businesses through usury, or exploit them through a hidden partner, Vallone said. The number of suspicious financial transactions reported by the Bank of Italy increased by 7% last year to 113,000. “This makes us strongly suspect that there is an interest in organized crime,” he said. he declares.

The European Anti-Fraud Office did not immediately return an email seeking comment.

New checks

Vallone wants tighter anti-Mafia controls on public works. Under the current system, police forces assess the winner of a tender before a project begins. As part of a proposal Vallone said he would send to the Home Office later this month, anti-Mafia investigators would automatically monitor money transfers as well as contractors and suppliers during the entire duration of the project.

“The stimulus fund is the priority, but this procedure should apply to all public works contracts,” said Vallone.

Stricter rules are also needed due to pressure from Brussels. “The European Commission does not wait for the biblical deadlines of traditional public tenders, it wants to donate money and see the results within a reasonable time,” Vallone said.

However, there may well be a downside to more anti-Mafia checks. Italy, plagued by bureaucracy, is already not spending much of the structural funds it receives from the EU. The country had only used 30.7% of the funds allocated at the end of 2019, according to an EU report, against 66.2% for the Finnish leader and an average for the bloc of 39.6%. More checks could also risk blocking recovery funds.

“Mad and hypocritical”

In the Sicilian capital Palermo, many face a tough choice, according to Patrizia Di Dio, head of the 13,000-strong local branch of the Confcommercio business lobby.

“When a businessman can no longer support his own family, he will find organized crime ready for him with his doors wide open,” said Di Dio. “If the state wants to protect the legal economy, it should make loans more accessible and it should suspend taxes. It’s crazy and hypocritical not to help you and threaten you with taxes at the same time.

Leave a Reply

Your email address will not be published. Required fields are marked *