United States (e.g., Al Capone, the “Five Families”)
Traditional organized crime folklore posits the five families’ (viz., individually, the Gambino, Lucchese, Colombo, Bonanno, and Genovese networks) influence predominating in New York City since 1931, depicting a highly coordinated and integrated system of allocation of illicit financial flows from criminal activities; this superstructure was substantially enervated by the so-called Commission case of 1986 (Raab 2019). However, during the mafia or la cosa nostra peak era of the 1960s, the business of organized crime as mediated through the five families in New York City, was thought impregnable due to inadequate criminal laws not sufficiently extended in scope of application and severity of punishment. There was no effective, pervasive, sustained law enforcement criminalizing the organization of individuals for the purpose of obtaining illicit economic gains and power through the instrument of the illicit enterprise in and of itself (separate and apart from conspiracy charges and predicate criminal activities such as bribery and kickbacks). Additionally, supported by corrupt public officials and the creative talents of lawyers and accountants, the enterprise of organized crime persisted notwithstanding changes in leadership (Cressey 1969, 90).
By way of memorializing specific instances of mob influence in New York City from 1968 through 1973, the following observations are provided:
• Some have considered the 1960s to contain the heyday of the five families’ illicit control in New York City (cf. Anglen 2019). While the peaks and valleys of mafia control and influence are difficult to measure accurately, the 1960s of New York City and other geographies in the United States offered many opportunities for lawful and unlawful economic exploitation. The United States was the unquestioned economic leader, and New York City was the financial capital of the world. Financial flows, licit and illicit, could be directed and siphoned by those with muscle, whether originating on the streets like brute extortion or from legitimate industries like the record business.
• Traditionally, the organized crime families in New York City, aka la cosa nostra (LCN), are five in number (viz., Bonanno, Colombo, Genovese, Gambino, and Lucchese) and have exercised significant influence in the region (and others) since the 1920s, persisting to this day with apparently reduced influence. The LCN is notorious for infiltrating businesses and governments (i.e., bridging the upper- and underworlds) (Albanese and Reichel 2014, 32).
• Moreover, local law enforcement was not consistently an effective deterrent to organized criminal activity (Holland 2019). The strong guardians necessary to protect the vulnerable from organized criminal exploitation were not in place in NYC during this period. Even as late as 1968, little was really known about the inner workings of the mob, and it was not until the early 1970s that some law enforcement actions began to have a noticeable effect on the influence of organized crime (Baud n.d.).
• Also problematic was the infrequency of media attention dating from early conceptions of organized crime disseminated in the mass media in describing criminal conduct in Chicago. In fact, the New York Times beginning during the late 1960s through the mid-1980s rarely covered the concept of organized crime; largely, it was invisible (Von Lampe 2001, 100). Thus, knowing about the reality of organized crime was not an empirical concern absent the conceptual framework within which to account for and measure it. The independent reality of organized crime was not empirically, systematically, and rationally investigated and presented to the public at large as a coherent conceptual framework. Organized crime has structure (e.g., bureaucracy with horizontal and vertical dimensions), means and methods (e.g., extortion, murder), and specific goals and objectives (e.g., profit and power).
• Talented musicians such as Jimi Hendrix would comprise an essential part of the mafia’s supply chain and profit center. The method of operation was to control income-producing properties where vulnerabilities combined with profit margins made the industry an opportunity in the particular venue. Musicians starting out in NYC were often inexperienced, and access to distribution of the product (e.g., live performances at clubs) was directed and controlled by collectives of corrupt individuals using graft and related corrupt schemes.
• In brief, the general form of the illicit so-called payola transactions was cash from the record company to the independent promoter (later, the artist) to the radio station program directors, that is, this was payola. Sometimes, assets other than cash was exchanged by the promoter to the program director (e.g., drugs, prostitutes) (Byron 1990, 11).
• A related form of payola was comprised of independent promoters affiliated with organized crime who would obtain cash not only from record companies but from illegal operations such as narcotics trafficking, forming a network from which payments would be issued to radio station program directors as payola to promote specific artists’ recordings (Holden 1990). Joseph Isgro (though acquitted but associated with the Gambino crime family) was federally charged in 1989 of using this form of payola (Weinstein 1989).
• Allegations of links between organized crime and the music industry are not new, including accusations against CBS Records of having an illicit drugs-cash-extortion racket with members of the Genovese crime family (e.g., Anthony Fat Tony Salerno and Pasquale Falcone) in New York City (Lichtenstein 1974).
• Bootlegging (pirating or counterfeiting) recordings have long been a significant source of revenue for organized crime dating from the 1970s, if not earlier (Holloway 2002).
• As late as the 1980s, the music industry, including players or would-be players in New York City, was allegedly dominated by organized crime (Barron 2014).
• By 1976, the Gambino crime family led by Carlo Gambino was allegedly among the powerful criminal organizations in the United States and New York City (Gold 2019).
• Carlo Gambino significantly influenced the construction and trucking industries in New York City, as well as the unions that controlled the supply of building materials into New York City. He was a partner with casino magnate Meyer Lanksy, who held significant offshore financial interests, including in the Bahamas and Cuba (Schladebeck 2016). Thus, legitimate businesses in New York City were vulnerable to mob extortion at the front end through a variety of pathways such as construction and redevelopment of real estate, requiring not only building materials but the cooperation of truckers bringing the materials to the construction site, which, of course, would include the delivery of supplies necessary for daily operations of businesses. Moreover, the mob’s grip on the waste hauling business would adversely impact businesses on the back end.
• A dispersed workforce was and is vulnerable to exploitation by organized groups, criminal and lawful (Jacobs and Project Muse 2006, 256). The music industry was and is populated with individual musicians or small groups that may not be (or have been) inadequately protected and are vulnerable to overreaching and exploitative efforts by organized criminals, including promoters, managers, and others in the supply chain. The guardians did not include law enforcement agencies generally, popular culture, and the mainstream press as the individuals comprising these sectors were absent from any stimuli to enforcement action. It was not a recognized problem. Moreover, the so-called private guardians (e.g., lawyers, accountants, company formation agents, promoters, agents, managers, and so on) were not always adherents of professional ethics and the letter and spirit of the law.
• The music industry during the 1960s (and later) was also exploited by organized crime. The Genovese family and partner in crime Morris (Moishe) Levy, aka the “Godfather of Rock and Roll,” were known for assisting eager young talent only to control the copyrights and royalties of their recordings. The rags to riches to rags to drug overdose story like that of Frankie Lymon, who died in 1968, is notorious. Levy died in 1990 (Sucher 2014).
• Other musicians such as Jimi Hendrix fell into a series of troublesome relationships with managers and promoters, including individuals such as Michael Jeffrey, whose integrity and network of connections inside and outside of the music industry have been subjected to debate. Indeed, the profile of Hendrix’s business issues have been characterized as a legal and accounting nightmare unresolved to date (Fricke 1992). Artists seeking fame and riches without the protection of a traditional network of lawyers and accountants were and are vulnerable to the predation of organized crime. Allegations against Jeffrey for misdirecting the receipts of income earned by Hendrix into a shady tax shelter in the Bahamas (viz., the Yameta account) are still unexplained under traditional conceptions of legitimate promotion and management activities (Wells 2009, 5).
• Broadly, organized crime (including the Gambino and Genovese families) had exercised a significant pernicious racketeering influence in New York City during the 1960s, adversely affecting the construction, garbage, and music industries (Finckenauer 2007).
• However, if one event could separate and summarize the material differences between the effectiveness of the mafia in relation to the commission and power of organized crime in the 1960s and prior periods versus the 1970s and later, it would be the enactment of the federal RICO Act in 1970 (History 2019). Combining legal powers with the federal Wiretap Act enacted in 1968 and formalizing the legal process of obtaining electronic communications for use in courts and administrative proceedings, the legal context became prepared for the challenges with intrusive criminal investigative techniques and punishing prosecutorial powers (Justice Information Sharing 2013).
• Together, RICO and the Wiretap Act empowered and facilitated federal law enforcement agencies in their efforts to control and prosecute organized crime networks, presenting both a higher likelihood of detection and a severer range of punishment (e.g., prison terms, fines) to organized crime figures. Thus, the strategies and tactics of organized crime pre-1970s had to adapt or perish under the harsher federal criminal law enforcement regime.
The series of anecdotes, data points, and observations noted above provide a sketch of the background of the political economy and state action necessary to understand how it is that criminal activities generally associated with organized crime (e.g., drugs, firearms and human trafficking, counterfeit goods) occurred then and now, largely unabated, notwithstanding the debilitation of mafia moguls and their crime families. Specifically, can globally distributed (transnational) criminal activities occur without directors, officers, and commissioners of the purported stature and reputed influences of the Gambinos, Luccheses, and so on?
Overview of Transnational Organized Crime
The seriousness and formal conceptualization of the problem of transnational organized crime may be observed in the United Nations adoption of a series of legal instruments (treaties) beginning with resolution 55/25 in November 2000 (United Nations Office on Drugs and Crime 2018). Wrongful conduct, including trafficking in persons, smuggling of migrants by land, sea, and air, and trafficking in firearms and ammunition, became recognized as an issue that required the intervention of nations, that is, no one nation could independently remedy these harmful acts.
The widely encompassing concept of transnational organized crime developed from decades of actual case studies, criminal investigations, and public prosecutions implicating numerous crimes and domestic and international jurisdictions. Both criminal and civil sanctions have been implemented (see FBI n.d.). In brief, the nature and impact of transnational organized crime implicate more than one country (Albanese 2012, 1). From the perspective of organized criminals, this makes some sense as the jurisdictions may be divided and avoided, and the race to the regulatory bottom may be pursued.
Discussion and analysis of transnational organized crime requires not only consideration of historical practices contributing to the quantification of risk (e.g., quasi-frequency analytics) but the persistent motivation— profit-seeking by licit and/or illicit means (Rosenblum, Bjelopera, and Finklea 2013, 8). Thus, profit is seen as the primary motivation, making organized crime part and parcel of the market, albeit black and gray. Of course, development of reliable statistics on transnational crime rates and trends is difficult.
Moreover, transnational organized crime is comprised of amorphous, cross-national, and adaptable networks (White 2016, 89). Whether discussion focuses on, for example, Latin American cartels (e.g., Sinaloa cartel based in Mexico) or the financing of terrorism (e.g., the Islamic Revolutionary Guard Corps based in Iran), the global nature of the organization is essential for its success as cash proceeds need offshore laundering both to conceal their source (e.g., drug trafficking) and to hide their use (e.g., firearms trafficking). The financial resources (i.e., funds) flow into and out of correspondent and depositary banks under shell companies and straw men without positive identification of the beneficial owners and real account controllers. In fact, the underlying transactions comprising transnational organized crime are largely hidden as private, confidential, and proprietary information.
The differences in motivation (e.g., to impair the influence of the target government in the case of the terrorist organization; to realize and secrete revenues and profits from trafficking in illicit services/goods), while relevant to the design and implementation of governmental and social controls to inhibit such unlawful conduct, are secondary for the purpose of this manuscript to the shared means and methods deployed to succeed clandestinely in obtaining and using funds. The key criminal objective is to obtain much profit, gain, and influence, which may be evidenced by the control, albeit often covert, of pools of financial resources distributed in domestic (e.g., Delaware, United States) and offshore havens (e.g., Cayman Islands).
Like realization of domestic organized crimes, the means and methods of transnational organized crime are shadowy and based in intransparent networks (e.g., the dark web). Without the big man (e.g., Gambino), against whom the focus of wrongdoing may be affixed, there seems no one person to hold legally responsible, notwithstanding the arrests, prosecutions, and convictions of numerous individuals from South and North America, Asia, Europe, Africa, and so on. Transnational means wider and more frequent criminal opportunity, and with the advent of sophisticated and powerful information and communications technology funds and messages may be delivered rapid-fire across the globe among individuals who may or may not know one another. The impersonal nature of transnational organized crime reduces its vulnerability, as a whole, to law enforcement agencies, though a cooperative of intelligence agencies has significantly more tools to develop the foundational evidence for parallel criminal investigations (Office of the Director of National Intelligence 2020). Of course, this formal power housed in transnational governmental (and likely non governmental, too) secretive agencies pose threats to civil liberties, privacy, confidentiality, governmental sovereignty of target nations, and so on that may dwarf the gravity of threat created by transnational organized crime. For example, the spying apparatus may be used to thwart transparency of governmental and sponsored operations that are inimical to the public interests of not only the hosting nation, but obviously the targeted nations too.
Just as a given domestic legal authority may overstate the gravity and extension of the threat of locally based organized crime, such an authority may disseminate similar messages to the public at large, domestic and international, to justify or excuse other agendas (e.g., imperialism).
As noted above, transnational operations take advantage of, if not actively create, a race to the regulatory bottom. Organized crime organizations and gangs adapt to these conditions and make contacts and extend their networks to wherever they can operate without high inherent risk to their assets, income streams, and special relationships of influence (e.g., compromised politicians and business moguls). Technology and digital currencies have made the globe a situs of opportunity, licit and illicit.
Parenthetically, the efforts to combat transnational organized criminal activities through such means and methods as the deployment of the powers of partnerships such as the Five Eyes has made the world a hotbed of opportunity for extortion. Whether via obtaining evidence of bad conduct of politically exposed persons such as participation in sexual activities with children or use of tax havens to secrete funds embezzled or diverted from the public treasury, the intelligence agencies may have the goods to fight organized crime with (s)extortion. What goes around, comes around; karma can be brutal and vengeful.
Also, the development of transnational organized crime is, in a sense, a natural corollary to the growth of transnational organized economic crime committed by lawfully established corporations (e.g., externalizing the social harms of pollution, exporting of dangerous or tainted medications, exporting of firearms to foment insurrections). To the opportunist, criminal, criminaloid, and law-abider, it’s like having a bigger playground.
Overall, perspective and humility are needed in properly conceiving of and theorizing about transnational organized crime. After all, American-style organized crime has been traced more or less to Sicilian-style organized crime, both of which were preceded by Japanesestyle organized crime. Really, it’s always been a transnational problem.