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Insights on the corruption threats posed by organised crime

In the latest podcast in our corruption prevention series we chat with Dr Anna Sergi, an international expert on organised crime, with a particular focus on the Italian mafias. Dr Sergi shares her insights on the corruption threats posed by organised crime and how the public sector might respond to these threats.

Dr Anna Sergi holds a PhD in Sociology (2014), with specialisation in Criminology, from the Department of Sociology at the University of Essex. Her research specialism is in organised crime studies and comparative criminal justice. She has published extensively in renowned peer-review journals in criminology on topics related to Italian mafias both in Italy and abroad as well as on policing strategies against organised crime across states.

Our podcasts feature experts discussing a range of corruption topics. Episodes are released on our website and through Twitter @ibacVic.

  • Music intro

    INTERVIEWER: Hello and welcome to latest IBAC podcast. Today we are talking with Dr Anna Sergi, an international expert on organised crime, with a particular focus on the Italian mafia. Today Dr Sergi will be sharing her insights on the corruption threats posed by organised crime and how the public sector might respond to these threats.

    Good morning, Dr Sergi.

    DR ANNA SERGI: Morning.

    INTERVIEWER: Dr Sergi, can you summarise your research into organised crime, particularly in relation to corruption?

    DR ANNA SERGI: I started my research in Italy five years ago now, at the moment based in England. My research is mostly on the Calabrian mafia. I come from Calabria, so I have quite a personal interest in it. I do not believe in the distinction between organised crime, especially mafia type organised crime and corruption; I think they are the same phenomenon, may be two sides of the same phenomenon. Therefore, my research into the mobility of the Calabrian mafia, the way they hijack public economy and public life, not just in Italy but in other countries, has been pretty much overlapping with my research on the ways in which they corrupt the societies they settle in.

    INTERVIEWER: So how does corruption fit into the organisational and business models of organised crime groups, of the groups you've looked at?

    DR ANNA SERGI: That would depend on the sophistication level of the group. If a group is a sophisticated organised crime group, meaning that they have a paternal criminality which is not only long lasting, but is reproducing itself no matter how many people you arrest, so it keeps going on. Then you will see a spectrum of corruption which is functional to the group, but also on the other side you will see that corruption becomes systemic and endemic to certain sectors more than others, because certain sectors are key for organised criminals to proceed in their criminal activities. So, I'm talking about obviously law enforcement is key to getting away with things, but in the same way, public construction, public contracts is key to hold a certain power in the territory they live in.

    INTERVIEWER: So, can you discuss in a bit more detail how these organisational and business models are applied to exploit the vulnerabilities in public administration?

    DR ANNA SERGI: Public administration is where organised criminals need to have a foot into. And the more sophisticated the organised crime syndicate is, the more they need public administration. This means, in practice, trying to place key individuals in each sector that might be helpful to cover up their activities and to proceed in their activities. Because you never have to forget that the main purpose of organised crime, apart from financial profit, is to actually clean the financial profits. You do that through contracts into public sector and public administration is key for that in that sense.

    But at the same time, there is an element of territoriality, so organised crime needs to have an understanding of how the system around them works, so it needs to have a say in the way the society they live in works. This is the control of the territory that they need. So, we are not talking about military control, we are talking about commerce and trade controls. They need to understand what's the next opportunity, where is the next opportunity going to be, where is the next sum of money going to be invested into, because they need to tap into that.

    In that sense, you will have either direct control, so placing key individuals who are more or less close to the crime syndicate into key positions in a long-term basis, so you have someone who works in the local council with close to, in some way, to some of the clans or someone in the clan and that is a long-term project. Or you have someone who can be easily corrupted, you identify who can be easily bribed or corrupted and that is more difficult for law enforcement to figure out, obviously, because the links will be indirect and they will be even more problematic because sometimes the corruption does not happen with someone showing at your door with a bag of cash. But it will happen in trafficking a favour, in the kind of manner which is the typical modus operandi of organised crime and especially mafia-type sophisticated organised crime groups.

    INTERVIEWER: Is there anything specific that organised crime groups are trying to access or influence?

    DR ANNA SERGI: There are some ‘evergreens’, so some sectors are more vulnerable than others. Construction is definitely the one that every jurisdiction everywhere in the world will have problems with when it comes to organised crime, for a number of reasons. One is very probably even mythological, so criminals do like cement, the cycle of cement, so the idea of having some things stable, because that's one of the main ways to launder money. But then I don't think any sector is free from vulnerabilities for a number of reasons. Public contracts is the easiest thing to corrupt in a big understanding of corruption and that's where influx of money comes from, from the government. That's never going to end. Whenever there is investment, there will be organised crime attempts to hijack the investment. So, I would say yes, construction, easy one to spot.

    Law enforcement, police, obviously, you need to know whether someone is investigating you so that you know how to move. Not just police, the judicial sector is highly problematic because that goes through private sector, so your lawyer will have connection within your jurisdiction, with the judges, with the other counsellors, with the crown. If you have a good lawyer and the lawyer is on your payroll as an organised crime syndicate, that will provide a springboard to reach out for other people in the judicial sector. That's a highly problematic one.

    INTERVIEWER: Can you share your observations about what the recent corruption trial in Rome tells us about the tactics of organised crime?

    DR ANNA SERGI: The Rome case, the Mafia Capitale case, as it's known, is an operation from the anti-mafia district prosecutors since 2014. The first trial has just ended and people have been convicted for organised crime via corruption, so for organised crime activities, facilitated through corruption. It is a case of systemic corruption. The purpose of the organised crime group was not necessarily a mafia group or a traditional mafia group, as you could imagine in Italy. It was piloted around two main characters. One was a political lobbyist, close to political parties and another one was a former terrorist, convicted terrorist, right wing terrorist.

    Through the underworld command of the former terrorist guy, Massimo Carminati was being convicted for 20 years with 20 years in jail. The other guy, Salvatore Buzzi, was able to promise certain things in the upper world. So these never-ending process, this fluidity from the underworld to the upper world essentially meant they could say in each and every public sector that they identified as potentially key for their activities in many ways, I'll give you some examples later, to go there and say, we have a reputation, you can trust us because we have already corrupted others before you and these other corruptions were successful. So we use the reputation of other corruption to corrupt more.

    So it was, in this case, it's a mafia method used, instead of threatening violence, you threaten corruption. So obviously identifying people's vulnerabilities is one thing, but these vulnerabilities don't have to be criminal. So in some cases where people who wanted to buy a house in a certain part of Rome and Rome is very expensive, obviously, for real estate, so you just needed a tip or an advice or a hand to access the real estate market in a more favourable way, in a privileged way, so you accepted the criminal network, what we know is a criminal network now, suggestion. But that puts you in a very problematic position; if you are in the public sector, you are basically a borderline unethical corrupted behaviour. So eventually you will be able to help out in return the criminal network when and if the occasion arises.

    It's not just about paying someone off, it's about trafficking favours. So, I'll do this for you today, it's totally free, one day I might need a hand. It's going to be the same level of help, so it's nothing too serious, but this is done over and over again, provides a systemic entry points into pretty much every public sector that we have identified in this specific group, which was pretty much every public sector of the management of the City of Rome.

    INTERVIEWER: You've talked about some Italian examples. Do you think there are cultural, regional or national differences in the way in which organised crime groups seek to corrupt public administration, or do you see common threads or approaches across borders?

    DR ANNA SERGI: I think we always want to see - to think that there are cultural differences. It's easier, probably and there are some cultural differences. Obviously the tighter certain communities are, the more enclaved certain communities are, the easier it is to use family connection, blood ties and instrumental friendships to acquire certain privileges and certain benefits. On the other side, in certain countries, in certain cultures, certain behaviours are not seen as problematic, or as even criminal, which is something we need to be aware of. So the idea that you can exchange favours is not necessarily a criminal conduct. The criminal conduct happens when from these trafficking of favours, these exchange in favours, you are discriminating someone else, so whenever there is a damage to someone else, to get into the same position.

    I don't think that there is a cultural element to corruption. I think we are all the same, so every person is similar to each other, therefore we are similar also in this, the systems of family ties and the way family ties or instrumental friendship, business friendships work to acquire privilege positions are always the same.

    INTERVIEWER: Dr Sergi, you are the international keynote speaker for IBAC's upcoming Corruption Prevention and Integrity conference. What key lessons do you think delegates can take away from your research and consider applying to increase their own organisation's corruption resistance?

    DR ANNA SERGI: I think that the key lesson is what we were saying before, no one is immune. But the other key point of what will be my talk in October is that you don’t need to look for the infiltration. Infiltration from criminals into the public sector is not a one-way street, so if you keep looking for the infiltration, you expect something that happens almost in a hidden way, which is not what happens really. What happens is that the system provides certain vulnerabilities and these vulnerabilities are exploited, but not just from evil criminals who want to launder money or get their foot into society and exploit public funds, it's also the other way around. There are people at every level, in every position private sector or public sector, who are happy to behave unethically, not just criminally, unethically and these will provide a pattern of corruption.

    It's not that the criminals will want to instigate the criminal activity, sometimes it's the other way around. It's the public official who doesn't realise that his behaviour might be leading to a certain type of increased vulnerabilities. My lesson would be don't look for the ‘bad guys’, there is no ‘bad guy’ here and definitely do not look for the serious offences. There is no point of raising the bar of investigation to serious offences only. Most of what happens and most of the damages that you can do to public funds happens at a very lower level.

    INTERVIEWER: In such complex environments, are there any strategies to detect or repel corruption that you've seen as being more successful?

    DR ANNA SERGI: I think definitely the scope of investigations in corruption has to understand the fluidity of certain relationships and personal relationships as well. I understand obviously, I'm a lawyer by training, so I understand the necessity to protect people's innocence from too-quick assumption of criminal guilt. You cannot say that someone is guilty because someone in the family is guilty obviously, but this kind of personal relationship, for example, can be exploited in ways that people do not necessarily understand. Prevention has to go a long way in that sense to identify key behaviours before criminal behaviours are unethical behaviours, even before being unethical behaviours, are behaviours which are normally considered as normal.

    The problem with prevention in corruption is that it doesn't recognise the normality of corruption, the fact that we will always try and help someone that we know, or someone that is our relative, if it doesn't cost us much. That is the problem, I think, recognising that corruption is normal, it's not something ‘wow’ that happens elsewhere, it's totally normal and it's totally depending on certain daily practices.

    INTERVIEWER: What role would you say that structure, policies and procedures play in corruption prevention and resistance and what role does organisational culture play?

    DR ANNA SERGI: An enormous role. I think one of the problems is the lack of political will, not just obviously in Australia, I'm not talking specifically about Australia, it's about everyone else, every other jurisdiction, Italy is at the forefront. To understand that corruption is not only shaping the way organisations work, but sometimes is so entrenched in the way these organisations work, not to be institutionalised. Things like nepotism or clientelism, at the level we see in Italy, for example and not just in Italy, it's just that Italy has had much quicker turnaround of the damages that these things bring. I'm talking about the simplicity of, again, relationships. It can happen, even in a university environment. If I go for a vacancy, as a lecturer in criminology at university, the fact that I have a reputation as an international scholar or that I'm friends with the people on the panel, will necessarily and not in a criminal way, impact on their decision.

    The way obviously this is approached needs to be skilfully understood at the political level and make sure that integrity comes not just from ‘I don’t do anything unethical’ or anything criminal, but from the recognition that what you do, the kind of decisions that you take are informed by your own bias. You have to be able to say, I'm making this decision and in this decision there might be a bias because I know this person. This is already good enough, I think, as a starting point. It doesn't have to be criminalised, it just has to form a culture of within the organisation, each organisation. Because if you understand where the bias comes from, then you avoid the extreme opposite of the behaviour, which is nepotism and clientelism, which do start from this bias. I think recognising the bias at the very first level, does help the organisational culture.

    Politics has a key role in this, local politics as well, state politics as well, recognising that there is nothing too serious about corruption, it's not that serious. Whenever it's serious, it means that it has escalated to the level, but it always starts, in my experience, with very simple personal transactions and personal bias. So, lower the level that would be my advice. Just stop saying “it's a serious base and you have to have a serious ground to go for an investigation”. No, it's much earlier than that and it does work with prevention rather than criminalisation.

    INTERVIEWER: So, looking at those low-level conflicts of interest and declarable associations.

    DR ANNA SERGI: Absolutely, yes.

    INTERVIEWER: Do you have any other tips for the Victorian public sector to avoid the pitfalls you've identified in other jurisdictions?

    DR ANNA SERGI: I think it's a very complex answer to give. I work especially on organised crime and corruption, but then organised corruption, in a way. What I see is from a much larger scale proportion. My first comment would be that it's great to have anticorruption watchdogs, but these watchdogs need to be identified, their scope needs to be integrated with other law enforcement efforts. You cannot investigate corruption without investigating organised crime. The two things go together. It just doesn’t make sense to me to say that there is one organisation that looks at organised crime, but that organisation doesn't look at corruption and vice versa. There is an anticorruption agency that cannot look at organised crime type corruptive behaviour.

    I don't think the two things can go separate, but obviously this is a much larger discourse and I'm sure I will have more to say in October, but so far that's all I can say.

    INTERVIEWER: You've mentioned complacency on a couple of occasions. What would you say to public sector agencies or employees who might think that corruption, particularly from organised crime groups, isn't likely to affect them?

    DR ANNA SERGI: That's absolutely not possible that it is unlikely to affect them. When organised crime groups or systemic organised crime activity gets at the level of public administration, this is a sign that the group is sophisticated enough to have reached those levels. But more importantly, it means that there are some political connections in place that provide a roof for the criminal organisations to act. Political connections are not just roof for immunity, but are, again, the roof for identifying more opportunities, criminal opportunities or opportunities in the financial sector that can be exploited.

    Now there is no sector that is immune, as we said, because corruption is normal, is a normal behaviour, it comes from normal behaviour, okay? But more importantly, organised crime groups that reach certain levels of infiltration in the public sector, they try to clean themselves up or clean their proceeds of crime up, are already at a level of sophistication in the underworld that allows them to proceed in the upper world. That, by definition, affects everyone.

    It's not just about drugs, it's not just about how much drugs you can traffic or import in the country, it's about where the money goes and the money, most of the time, doesn't go in some fancy account in some tax haven, its stays here; the money circulates here and by here I mean the state, the city, the local council, social investment, investments in sports sponsorship, investments in charities, investments in social sector. Anything that makes any sort of proceed of crime likely to be cleaned up and reinvested is already a sophisticated level and that sophisticated level harms everyone because it means that there is a level of exchange between the upper world and the underworld, which is complete, basically. It means that the success of the organised crime in the underworld is complete and that is damaging for everyone.

    INTERVIEWER: Dr Sergi, thank you so much for your time today and your insights into how organised crime groups use corruption and target the public sector.

    DR ANNA SERGI: Thank you.

    INTERVIEWER: Thank you for listening. To hear more IBAC podcasts, visit our website at www.ibac.vic.gov.au where you can also subscribe to IBAC Insights to get the latest news and events, heads up on new reports, expert commentary, early research findings and information on conferences and events.