Mafia Revenues Much Lower Than Believed: Study

A government-funded study in Italy has revealed that the country’s infamous organised crime networks take in just 10.5 billion ($14 billion) a year, a fraction of previous estimates of their turnover.

The study, Gli Investimenti delle Mafie, by the Catholic University of Sacred Heart found that mafia revenues amounted to just 0.7 percent of Italy’s gross domestic product – much lower than a study by Milan’s Bocconi University last year that said criminal activity was responsible for about 10.9 percent of Italy’s income.

A government-funded study in Italy has revealed that the country’s infamous organised crime networks take in just 10.5 billion ($14 billion) a year, a fraction of previous estimates of their turnover.

The study, Gli Investimenti delle Mafie, by the Catholic University of Sacred Heart found that mafia revenues amounted to just 0.7 percent of Italy’s gross domestic product – much lower than a study by Milan’s Bocconi University last year that said criminal activity was responsible for about 10.9 percent of Italy’s income.

The report studied illegal activities like drug smuggling, extortion and business-world penetration and used criminal justice statistics, money laundering and tax evasion data, law enforcement reports and figures on asset seizures to come up with its findings.

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Ernesto Savona, lead author of the report, said at a press conference:

[quote] Crime pays much less than is thought. We need to debunk the idea that organised crime has a turnover of 10 percent of GDP. [/quote]

Savona did not give reasons for the differences in the figures but said past studies had not given full details of the methods used to make their estimates. According to Savona, getting the message out that the mafia is not performing as well financially – and is not as powerful – is important.

But the mafia still posed a significant challenge as the report showed that its influence was moving beyond its traditional stronghold in the south, reaching regions in the north including Lombardy which accounts for about a fifth of Italian GDP.

“A blood sucker goes where the blood is, and the money is here (in Milan),” the deputy head of Italy’s police Alessandro Marangoni told Reuters on the sidelines of the conference. “With the high cost of lending, the mafia is able to get a foothold in many businesses with its ready liquidity.”

According to anti-crime group SOS Impresa, the mafia has managed to take advantage of Italy’s recession, offering loans which are often extortionate to businesses struggling to borrow from equally cash-strapped banks.

SOS Impresa estimates that the mafia lends money to over 200,000 businesses each year, earning an annual profit of more than 100 billion euros and has an estimated liquidity of around 64 million euros. According to calculations by SOS Impresa, the mafia accounts for 7 percent of all economic activity in Italy.

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Despite the many studies into mafia money, Libera, an anti-mafia organisation based in Rome, said it is “not easy to quantify the turnover of the mafia.” Marcello Cozzi, vice-president of Libera, explained:

[quote] It’s not a business in which there are receipts and invoices. So any study that is made about the mafia business is [approximate]. We are speaking of an underground sector. We know that wherever there are big business possibilities, the mafia is always there. [/quote]

Savona’s report, however, said the mafia were far from brilliant businessmen: its criminal organisations focused on the construction, mining and catering sectors, where sophisticated management skills are not required. Additionally, mafia groups tend to invest in limited companies as well as sectors where technology levels were low.