Misha Glenny: The Mafia Has Integrated itself into the Licit World

The grand political criminal enterprise can only happen because of the intermediaries, like banks, lawyers and management consultants. This is something which we really need to understand—says Misha Glenny in an interview with Aleksander Kaczorowski.

ALEKSANDER KACZOROWSKI: International crime has disappeared from the headlines. It is no longer as popular a media topic as climate change, cyber threats, or risks to the liberal democratic order. Does this mean that gangs are not as dangerous as they used to be?

MISHA GLENNY: I don’t think these issues have gone away. I think they are struggling to find air in an environment where much of the oxygen has been soaked up by the political crises that started to unfold soon after 2011, 2012, and obviously reached a high point in 2016 with the election of Donald Trump. But looking at most of the issues that you raise, like climate change, cyber threats and risks to the democratic order, all of these have an organized crime component to them. So, for example, the destruction of the forests in Indonesia or Brazil is driven primarily by criminal conspiracies. Whether these are illegal loggers, people clearing land for illegal farms or for the planting of palm trees for palm oil, organized crime has a central role in that.

I think it is worth understanding and highlighting what happened with the transition, perhaps as a way of avoiding it in other places, for example in North Korea or Cuba, when the change happens there.

Regarding cyber threats, a lot of national security communities who use cyber have co-opted organized crime in order to assist them or to use organized crime groups as a cover for their activities. And the risks to the liberal democratic order in many parts of the world are the whole issue of funding, the whole relationship between Trump and various constituencies in Russia, and much of this is alleged to be mediated by organized crime. So what I see as having happened is that the Mafia has actually advanced and integrated itself into large parts of the licit world, and that makes the challenge even greater than it was before.

In your book, McMafia, you write that the breakthrough in the history of organized crime was 1989; after that date it became really global. Last year we celebrated the fall of the Berlin Wall, but I did not notice that on this occasion someone raised this embarrassing issue. What do you think is the relationship between the freedom of citizens and the frolics of criminals?

I don’t think that this is a full interpretation. What I was arguing for in McMafia was that globalization of organized crime took place for two fundamental reasons. One was the emergence for a decade or so of a largely lawless space in Eastern Europe, particularly in the Soviet Union and Yugoslavia. The second was the triumph of financial capitalism and a particular type of globalization and financial globalization in the Western world. These two phenomena combined to create a world of McMafia.

Essentially we have to remember that 1989 saw the end of undemocratic regimes in Eastern Europe and we cannot under any circumstances paper over the fact that this was a really important event in the advancement of freedom and democracy. And so we have to hold on to that even during this time of increasing populism. I think it is worth understanding and highlighting what happened with the transition, perhaps as a way of avoiding it in other places, for example in North Korea or Cuba, when the change happens there. But at the same time we shouldn’t underestimate what a marvelous, momentous moment 1989 was.

I am not trying to underestimate it. I would like to know what the development of crime on a large scale tells us about modern capitalism?

That is the question I alluded to in my last answer, that is the responsibility of financial capitalism for the spread of organized crime. The case of Isabel Dos Santos [Africa’s richest woman, accused of moving even a billion dollars from Angola] is a peculiar one. Her father emerged as the strong man of a Marxist regime in the 1970s and 1980s, but very quickly just turned into another political oligarch and looted his country in an entirely criminal sort of way.

And as the most recent case has shown this was facilitated by all manner of companies, lawyers, consultants, banks and hedge funds. And something which I think we really need to understand is that this type of grand political criminal enterprise can only happen because of the intermediaries that I call facilitators, as I said banks, management consultants and so on.

We see this going on in Nigeria with the oil industry, we see it going on with the deforestation in Indonesia, the corruption associated with the Lava Jato case in Brazil. And what we need to do in the West is to call out the fact that we are fostering and facilitating all of this. It is completely and utterly unspeakable, and governments around the world have ignored this, some governments more than others. The United States has a very good record on this, largely because of its Foreign Corrupt Practices Act, which the United States uses against American companies to prevent them from engaging in corrupt practices like bribery when doing deals abroad.

But Europe has actually been very slow on this and is only just picking up on it. We are seeing massive corruption cases, like the one involving Shell in Nigeria, that are being called out by non-governmental organizations like Global Witness and brought to the attention of the authorities. But this is an area where governments have been extremely slow, often of course under pressure from some of the interested parties. It’s very difficult to know where legitimate capitalist practices begin and criminal practices end and vice versa.

We are seeing massive corruption cases, like the one involving Shell in Nigeria, that are being called out by non-governmental organizations like Global Witness and brought to the attention of the authorities.

You devoted one of your recent projects to the President of Russia, Putin. He is one of the most powerful politicians in the twenty-first century, in power for 20 years. And yet you called him A prisoner of power. Why?

In terms of Putin being a prisoner of power, why do I call it that? There was some anecdotal evidence and some maneuvering, but at the last election Putin was trying to discover a way he could exit from his position as the single most important defining authority in Russian politics. But he couldn’t find a way out, and that’s because he has accrued so much power himself.

There are, broadly speaking, three big centres of power underneath him: the banking and technology industry, the natural resources (hydrocarbon industry)  and the military, which will try to replace him. And he is worried that if he departs like some sort of Mafia-style boss, there will be the most almighty chaos as people struggle for power in his wake. And that threatens his own personal position.

Organized crime has learned to adapt, to work with or within authorities in Eastern Europe and move around the European Union. They have benefited hugely from the chaos associated with Brexit.

What he really wants to do is to map a path out of power, which will enable him to keep his money and for him not to be threatened subsequently with jail or some such. So every time you come round towards an election or to a major shift in policy, you see that Putin sort of considers new ways and new strategies to try and create a smooth transition and always fails. He feels it necessary to stay and in that sense he is a prisoner of power. If you’re a Mafia boss and you stop being a Mafia boss, your personal security is almost always threatened and I think he feels that way now.

In the 1990s, which we both remember very well, Central European countries lived with reports of unpunished criminal Mafias dealing in drug trafficking, arms and live trade, racketeering and kidnapping. It seems that these times of overt crime were fortunately gone. And what does it actually look like to you?

Organized crime has learned to adapt, to work with or within authorities in Eastern Europe and move around the European Union. They have benefited hugely from the chaos associated with Brexit. The United Kingdom having left the European Union, it is no longer a member of Europol, which all means we are going to have severe issues, very damaging issues from a policing point of view, relating to things like data sharing.

You have to give Europol its due. It is turning into an interesting agency, it is tracking very effectively and they have some extremely good information on where the main criminal gangs are and how they operate. But doing anything about it remains extremely difficult, and particularly during the period of political turmoil and emerging from the regime of austerity, which has seen the wings of law enforcement agencies very severely clipped around Europe.

Brexit is not going to make the European Union or the United Kingdom any safer. Criminals with money and with power, they are the ones who are not intimidated by ordinary border regimes,  they always find a way to get across borders, to get a passport. We have a variety of Polish criminals in the United Kingdom and there are a lot of Italian criminals in Germany.

These are people who are well established now and they are running smooth operations, which are largely able to avoid the attention of police and the attention of the media. That shows you that we have sophisticated and well-oiled criminal organizations.

Eastern Europe is still used for smuggling goods, and in particular untaxed cigarettes, but because of Hungary’s position on the migrant issue fewer migrants come through Eastern Europe than was the case in the past.

Central Europe after 1989 took a fairly favourable place in the international division of labor. It is an important subcontractor closely related to the most powerful European exporter, i.e. Germany. But what does the region’s place in the global criminal network look like? Can this be somehow compared?

We know that Eastern Europe, particularly the Baltics, but elsewhere as well, is an important place for money laundering. But then again, if we look at the case of the money-laundering scandal in Estonia, that was because the Danska Bank, the main Danish bank, did not fulfil its oversight obligations over what was going on in the bank in Estonia. Estonia has always prided itself on being much more up-to-date compared to everything that was going on in Latvia and Lithuania, and the Danska Bank scandal is a very significant embarrassment to both Estonia and Denmark.

Eastern Europe is still used for smuggling goods, and in particular untaxed cigarettes, but because of Hungary’s position on the migrant issue fewer migrants come through Eastern Europe than was
the case in the past. But the idea that somehow it is an offshoot or subcontractor of German organized crime—I very much doubt that Germany is one of the places where people involved in organized crime want to get their goods. That’s one of the most lucrative markets, so it makes Eastern Europe important primarily in transit of criminal goods and services for the consumer zone of Germany, France, Scandinavia and elsewhere.

What is organized crime today? What brings it the most profits and who gets them? And who is its greatest enemy today?

There is one big issue that I haven’t yet mentioned, that is a huge shift in the most important criminal enterprise, which is the manufacture, production, distribution and consumption of illegal narcotics. That has been undergoing a huge change in the last ten years, in part because several states in the United States and all of Canada have legalized marijuana for recreational use and it is also being decriminalized in large parts of Europe.

What that means is that steadily marijuana is being taken outside of the hands of organized crime and put into licit businesses, so that is an extreme relief to police, who don’t have to go after what has become a very, very generalized consumption habit. Lots of people in the United States and Canada of all generations now smoke marijuana.

We haven’t seen the end of Western civilization as we know it as a consequence. In countries like the United Kingdom, that have relatively harsh laws against marijuana, you see that the production and distribution of it remains underground. It remains a very severe strain on police resources, and I think the move even in countries like the UK is going to be towards legalization.

There has been a significant increase in the consumption of synthetic drugs, which are purchased over the Internet, over the darknet.

One of the reasons for this is because there has been a significant increase in the consumption of synthetic drugs, which are purchased over the Internet, over the darknet. And those synthetic drugs are not manufactured or produced in countries like Colombia and Afghanistan, where the production of illegal drugs for Western markets results in significant violence and death of hundreds of thousands. These drugs are being produced in countries like Holland, Serbia, Bulgaria, Israel, Canada, and production of drugs is moving closer towards the zones of consumption, if not right in the middle of them.

So this is going to force governments to have at some point in the next 10 years a wholesale look at the way that illegal narcotics are managed and whether the war on drugs is worth it. In particular, because the most devastating drug of all in the past twenty years by a long, long way have been the opioid painkillers that were manufactured and distributed by legal organizations in the United States.

This is very, very significant for organized crime, because the drugs market is where most people first get involved in organized crime. You make a profit very quickly if you engage with the drug market. And so a fundamental change here is going to lead to a weakening of criminal markets all over the place. That’s one of the reasons why you are seeing as you are in every other sector a move away from traditional organized crime and supplying goods and services over to cybercrime, which is a very, very different area.

I want to ask you about the role of the media. Most newspapers in Europe can no longer afford months of journalistic investigations, while others simply do not want to mess with politicians or Mafias. Sometimes it is difficult to distinguish them from each other, as demonstrated by the case of the murder of the Slovak journalist Ján Kuciak and his fiancee. Many offices aresimply involved in political propaganda, professional falsifying reality. How do you see the future of journalism you do yourself?

The issue of the role of the media is an important one, very difficult, very complex. It is perfectly true that resources for large investigations are less available to traditional media than in the past, but we are seeing various organizations like the OCCPR in Sarajevo, Pro Publica in the United States, the Unifying Committee of Investigative Journalists, we are seeing all sorts of organizations get around the problem of funding by coming up with new structures, new ways of getting revenue, and we have had some spectacular successes. To wit, the Panama papers, that involve the cooperation of new media, old media and have exposed just how cancerous corruption and organized crime have become.

So I don’t feel so bad about investigative journalism at the moment, but I am very worried about the phenomenon of fake news and how you get people to learn how to read news in the current climate. I think you should have lessons in school, so that people are educated to understand what is political propaganda, a professional falsifying of reality, and what is proper reporting, that is upheld by recent standards, and that is a long-term project, but it’s one that I think we need to engage with.

At the moment we are seeing a lot of piecemeal, sometimes regulatory, sometimes self- regulatory ways of constraining what goes on with social media in particular. And I think we need to have a deeper sense of what the regulation should be and how you introduce regulation without curtailing freedom of speech. Because some things like the directive on copyright, which the EU passed last year, I think has a very damaging impact on certain aspects of freedom of speech.

Based on your book, McMafia, a television series was made that was also shown in Central European countries. I guess what satisfaction this is for you; you have been associated with our region for years, you have been an eyewitness to many important events, such as the memorable speech of Václav Havel from the balcony of the Melantrich house in Prague in the fall of 1989. What feelings do you have as you return to Prague, where hundreds of thousands of citizens again, like 30 years ago, are protesting against power?

I have a deep, deep affection for all of Eastern Europe. I don’t travel there as much as I would like now. I am particularly fond of Prague, because I lived there as a student during the period that I call
mature normalization in 81 and 82. I haven’t been to Poland nearly enough recently, or Hungary or indeed Romania, although I still try to travel to the Balkans now, because the issues in the Balkans
remain serious and delicate, and a return to some form of social conflict or even armed conflict can’t be entirely excluded.

I don’t feel so bad about investigative journalism at the moment, but I am very worried about the phenomenon of fake news and how you get people to learn how to read news in the current climate.

And so I think it’s important to work very hard, particularly in terms of integrating the remainder of the Western Balkans into the European Union. It’s important to work very hard on these issues. I’m obviously saddened to see what happened politically in Poland and in Hungary. And the issues which you actually asked me about in the last question, that I did not answer, on things like the murder Ján Kuciak. They are deeply, deeply disturbing, but it is also clear that Poland, the Czech Republic, Slovakia and Hungary are deeply divided in the way that the United Kingdom and United States are deeply divided.

So at least we know what the challenges facing liberal democracy are, and I believe that there are signs that the hour of authoritarian populism a la Kaczyński, a la Orbán, a la Trump, a la Johnson has probably reached its peak and it might be about to recede a little. I don’t know that for sure, but I certainly hope so. But Eastern Europe, particularly Czechoslovakia and former Yugoslavia—I suppose one says former Czechoslovakia now—will remain deeply embedded in my consciousness and my affections until I die.