Organized Crime Influence on American Economy and Politics - Research Paper Example

Influence of organized crime Organized crime influence on American economy and politics Introduction Organized crime refers to crimes that are committed by a group that has an organized structure, restricted membership, continuity, violence, corruption, illegal enterprises, and lack of ideology (Mallory, S.L. (2011). Organized criminal groups restrict their membership based on factors such as kinship, ethnicity, race, and criminal background and such groups continue even when membership changes or new leadership takes charge. The groups will profit from the illegal enterprises through infiltrating legitimate businesses. Mallory (2011) outlines that the organized crime groups seek to develop social control in particular communities and exert influence through corruption and violence in order to attain status and political power. Siegel (2012) points out that transnational organized crime is a significant threat to economic growth and political stability in the US since the criminal networks infiltrate the financial and security sectors of the economy through corruption and coercion. The criminal activities such as money laundering and racketeering undermine the free markets while corrupt deals challenge the rule of law, judicial systems and transparency (Mallory, 2011). The international drug trafficking organizations that operate within the US promote kidnappings for ransom and extortion activities in other countries and finance terrorism-linked organizations. Organized crime influence American politics and economy through corruption, gambling, racketeering, narcotics trafficking, cybercrime and political intimidation. The organized crime networks have facilitated illegal human smuggling in to United States since these groups smuggle terrorists, fugitives and criminals in order to expand their criminal activities. The smuggling of persons from South American countries to the US generates about $ 6.7 billion of illicit proceeds annually (Siegel, 2012). These groups are also responsible of weapon trafficking from the US to other instable countries such as Somalia, China and Mexico. The organized criminal groups have entered in to intellectual property theft that has seen imitations of the high-end devices and manufacturing processes intellectual property theft causes business losses and threatens US competitiveness in international trade (Albanese, 2014). The criminal networks pose a serious threat to the US financial and trust systems since cybercrime networks have led to billions of losses in the financial infrastructure. Cybercrime has eroded the citizens’ faith in the digital systems and electronic payment platforms thus forcing business organizations to incur additional costs in securing customer transactions (Siegel, 2012). Background Organized crime in the US originated in the 20th century and flourished during the prohibition period due to bootlegging. Before the passage of the 18th amendment, US citizens joined the temperance societies and progressive movements that petitioned the government for prohibition (Mallory, 2011). In 1917, many US states enacted laws that restricted the manufacture and sale of intoxicating beverages. The Congress then enacted the 18th amendment that prohibited the manufacture and sale of alcohol and supplemented the amendment with Volstead Act in 1919. During the First World War, the country was concerned with maintaining sober workforce and increasing grain production and thus many citizens expected the government to impose restrictions on the sale of alcohol (Siegel, 2012). The 1920s and 1930s witnessed an emergence of street gangs and violence due to illegal sale of alcohol and the 21st amendment was ratified in 1933 in order to repeal the prohibition. The bootleggers smuggled alcohol from Canada and Mexico and law defiance became fashionable among the largest smugglers who often engaged in intimidation of law enforcement authorities and corruption to sale the smuggled liquor in informal streets (Mallory, 2011). The gangs aimed at securing large territories where they could establish monopoly of distribution and the Mafia rose due to gangster groups and bootleggers in the early 1930s. The Al Capone criminal gang attained notoriety for its street violence and feuds with Colosimo mob led to numerous street murders of rival gang members. The culminating moment was on February 14, 129 when Northside gang members were killed thus leading the federal authorities to start a crackdown on Capone gang members. Capone influenced the political system by making large contribution in the election of Mayor in order to maintain control of the bookmaking, gambling and racketeering operations (Albanese, 2014). At the end of the prohibition era in 1933, the gangs in Chicago, Detroit, New York and other cities were still intact and were forced in other criminal activities in order to earn a livelihood and maintain their influence (Mallory, 2011). The crime kingpins were had a political connection experience and moved to different source of illegal proceeds such as narcotics trafficking, labor racketeering, and gambling. Abanese (1998) asserts that criminal gangs set territorial boundaries across the cities and members of a gang were predominantly from one race or ethnic group in order to maintain the trust and secrecy of the operations. The 1940s organized crime was controlled by the mafia (Cosa Nostra) that originated from Sicily Islands in Italy. The high arrival of Italian immigrants with little knowledge of English in the US forced the Italians to cluster in neighborhoods. The rivalry of the lucrative illicit gains led to the Castellammarese War that culminated in murder of top leadership of various gangs and reorganization of the crime networks to group of five Mafia families known as the ‘Commission’. The mafia infiltrated in to the construction, waste management, garment industry and labor unions and could raid businesses with threats of workers’ strike (Abanese, 1998). In New York City, the Commission participated in bid rigging and construction projects could not be approved without the authority of the Mafia families and often got loans from Teamster’s pension fund that they effectively controlled. Organized crime was perceived as a social problem that could easily be remedied and authorities were reluctant to eliminate it since the federal government did not understand the nature of the structure and operations of the Mafia. In 1942, Frank Costello was influential in New York politics since he often received calls from Tammany Hall and Judge Savarese (U.S. President’s Commission on Organized Crime, 1986). However, the Kefauver Committee marked a significant shift in the perception of the operations of the Mafia since investigators found that the Mafia posed a significant national problem that entailed complex political corruption, narcotics, gambling and labor racketeering. The findings indicated that Mafia was an alien conspiracy that subverted American social structure and later interviews with Joseph Valachi, a Mafia insider confirmed that ‘La Cosa Nostra’ controlled the organized crime and not the American Mafia (U.S. President’s Commission on Organized Crime, 1986). The organized crime proceeds ended up in gambling and match-fixing in various sports in the US such as Baseball and horse racing. In 1960, Frank Carbo and other underworld characters exerted excessive influence in US professional boxing and various scandals involving sports were uncovered. Kefauver Committee reported that Charles Binaggio, a leading Kansas City racketeer financed Forrest Smith as governor in return for appointment of two police commissioners that were acceptable to him. Joseph Valachi, a lower ranking member of Genovese crime family gave witness accounts to the Senate sub-committee on the power struggles that existed between Italian-American gangs and the Task Force proposed a witness protection program and wiretapping with the investigations concluding that largest criminal syndicates were gambling and loan sharking (U.S. President’s Commission on Organized Crime, 1986). The first step taken by the US Congress in combating organized crime was the enactment of Omnibus crime control and safe streets Act of 1968 that permitted the law enforcement authorities to wiretap the communications of the suspected criminals. The mafia controlled the labor unions and construction industry through enforcement of cartels that determined the costs of government contracts (U.S. President’s Commission on Organized Crime, 1986). The Organized crime control Act of 1970 strengthened surveillance since it allowed the authorities to wiretap communications and municipal policing was more vigilant in monitoring the activities of organized criminal groups. The Act also provided for special investigative grand juries and special sentencing for criminal enterprises. Accordingly, the legislators enacted the Bank Secrecy Act 1970 that aimed at curtailing laundering of the proceeds of illegal enterprises (Mallory, 2011). In 1972, the Knapp Commission detailed the connections between the New York City Police and organized crime and 1988 report on La Cosa Nostra revealed that bribing of public and union officials was used by the crime network to silence the officials (U.S. President’s Commission on Organized Crime, 1986). The first prove of existence of ‘Cosa Nostra’ in a court of law occurred in 1980 during the trial of Frank Tieri who was charged with racketeering and conspiracy. Jimmy Fratianno, a high-ranking member of the organized crime group had turned in to a FBI informant and detailed Frank Tieri used violence and intimidation to traffic narcotics, loan shark and engage in other criminal enterprises. Another breakthrough for the law enforcement agencies came in 1986 during the ‘Commission trial’ when the five bosses of the New York City crime families were charged with various organized crime offenses. The bosses admitted the existence of Mafia and its structure and were all sentenced to 100 years in jail (Mallory, 2011). The movements of the second and third generations of traditional Italian communities to other suburbs and conviction of top leadership removed the popular support that the organized crime figures enjoyed in the cities (Abadinsky, 2012). The control of Heroin markets was thus lost to Mexican and Asian groups that operated along New York Waterfront. The cocaine business was now dominated by Colombian cartels that were well financed and violent in suppressing any competition (Mallory, 2011). The proximity of the US to the instable Mexico facilitated the growth of organized crime in both countries and Colombian cartels could easily smuggle large quantities easily across the borders. Subsequent investigations found out that former Soviet Union gang groups had established partnerships with Latin American traffickers and Silician Mafia had allowed the Colombian drug cartels to access the European markets where cocaine would be sold at higher prices than in the US (Abanese, 1998). The organized crime was taking a transnational character due to reduction of trade restrictions, growth of international trade and integration of the global financial systems. Accordingly, the high number of Latin American immigrants and illegal border crossings fueled the cocaine trade and law enforcement authorities sought international cooperation (Abadinsky, 2012). Transnational organized crime emerges from the gaps that are available in law enforcement and is facilitated by the accountants, bankers, real estate brokers and attorneys (Abanese, 1998). The criminal networks rely on the shell corporations and offshore bank accounts to create front businesses that facilitate illegal activities and money laundering. The criminal obtain passports and visas fraudulently in order to illegally reside within the US borders. Organized crime groups started participating in financial markets and investigators revealed that organized crime groups controlled several brokerage firms in New York in 1980s and 1990s (Mallory, 2011). The movement of the funds through financial systems facilitated bribery and corruption legitimizing the proceeds of the illicit enterprises (Mallory, 2011). In 2001, the US government enacted the PATRIOT Act that extended the bank secrecy act to non-bank financial institutions and money transmitters like credit card companies. The longtime leaders of the Chicago outfit were convicted to life imprisonment in 2009 for 16 year-wave of murders while John ‘junior’ Gotti, a one-time boss of Gambino crime group was unsuccessfully tried in 2010 (Albanese, 2014). James ‘Whitey’ Bulger was later caputured and convicted for racketeering and participation in 11 murders when was the leader of Winter-Hill gang based in Boston during the 1980s. Although the La Cosa Nostra has almost disappeared due to a series of high ranking convictions, the investigators believe that the group is launching a comeback or has adapted by forming alliances with other street gangs in order to disguise its identity (Albanese, 2014). The Russian mafia, Yakuza, Chinese Triads and Fuk Ching are active in street violence, smuggling, human trafficking and undermining illegal businesses. In the recent years, Latino and Taiwanese ethnic groups have broken in to organized crime with white-collar crimes such as stock swindles, health insurance frauds and phony phone cards. The latest lucrative crimes are online extortion and identity theft (Mallory, 2011). Latin American political leaders have continued to argue that American population provides the demand for illegal drugs and Caribbean countries would not produce such large quantities of the illicit drugs if the US authorities combated the consumption of the drugs in their country. It is true that American has remained a large market for drug trafficking over the last twenty-five years due to its proximity to the South American countries (Mallory, 2011). Conclusion The transnational organized crime in the US aim at obtaining monetary gains, political influence and commercial gains through illegal means and protects the illegal activities through corruption or violence. The structure varies depending on the nature of the crime, the number of networks or cells. Organized crime continues to threaten the national security and economy of the United States since it has taken a transnational dimension due the expansion of the internet. Apart from the individual criminal activities, organized crime groups are now participating in human trafficking, labor racketeering, smuggling of contrabands, extortion, money laundering and drug trafficking. The organized crime groups have penetrated strategic US economic sectors such as energy and construction and use the US financial system to move illicit funds to tax heavens. The US economy has suffered from counterfeits and tax evasion scams that are made to finance the illegal activities. The criminal organizations also provide logistical and financial support to terrorism groups and use cyberspace to extort US citizens. Another trend of organized crime in the US is the manipulation of the securities exchange and use of violence or corruption to hinder investigations to their criminal activities. The crime has taken a transnational dimension and is closely linked with terrorism financing. References: Abadinsky, H. (2012). Organized Crime. New York: Cengage Learning. Abanese, J. (1998). Organized Crime in America, 3rd ed. Ohio. Anderson. Albanese, J.S. (2014). Organized Crime: From the Mob to Transnational Organized Crime. New York: Routledge. Mallory, S.L. (2011). Understanding Organized Crime. New York: Jones & Bartlett Publishers. Siegel, L. (2012). Criminology: Theories, patterns, and typologies. New York: Cengage Learning. U.S. President’s Commission on Organized Crime, The Impact: Organized Crime Today, Washington, D.C, April 1986. Read More