Italian Mafia targets European Crisis Recovery Fund

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Criminal enterprises – like their legitimate counterparts – suffered during the economic crisis induced by the pandemic. But the Italian mafia has already laid the groundwork for a huge salary.

Last year, when countries were seized by lockdowns, the Mafia began infiltrating cash-strapped businesses with the aim of siphoning money from the European Union. recovery fund and the 1.8 trillion euros ($ 2.2 trillion) that, in part, will start pouring into struggling businesses later this year, according to Maurizio Vallone, Italy‘s leading organized crime investigator.

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

“The mafia has chosen the companies best positioned to participate in the turnaround 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 will try to take everything. We have to make sure they don’t even get a euro. “

Covid Impact to the Mafia

The pandemic has changed the framework of mafia crime

Source: DIA

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 shaping 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 system of state-guaranteed bank loans has been too complex and limited to be effective, Vallone said.

As a result, companies with fragile solvency have received little state aid, he said.

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

Mafiosi typically seek to bolster 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”, a- he declared.

The European Anti-Fraud Office, known as OLAF, will review Member States’ spending plans to ensure that they meet control and anti-fraud requirements, and will conduct its own investigations in the future, according to a spokesperson. The organization will also team up with national authorities and partners, including Europol.

New checks

Vallone wants stricter anti-mafia control of public works. Under the current system, police forces assess the winner of a tender before a project begins. Under a proposal Vallone announced 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 project duration.

“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 with red tape, is already failing to spend a large part 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 controls would also risk blocking recovery funds.

‘Mad and hypocrite’

In the Sicilian capital, Palermo, many face a difficult 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 even 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.

– With the help of Viktoria Dendrinou and Giovanni Salzano

(Updates with OLAF commentary in 10th paragraph.)

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