Event-Based (i.e., the Study of Criminal Events and Collective Action as the Basis for Conclusions)
We can conceptualize organized crime as a construct dependent upon specific groups or networks, that is, there are illicit activities committed by individuals acting as a criminal enterprise (e.g., racketeering). However, it may be more fertile to theorize about organized crime as inextricably entangled with criminal markets. Groups and networks may come and go, but the illicit market persists (Albanese 2012, 2).
While the United States and Italy have focused on criminal groups (e.g., mafia, racketeer influenced and corrupt organizations), England and Wales, for example, have focused on criminal activities (Sergi 2015, 183). Neither approach may encapsulate the continuing nature of organized crime, especially at the transnational level. Undoubtedly, organized crime consists of marketing illicit goods and services that are provided collectively across diverse jurisdictions, but focusing on the group, the network, or the crime itself does not include enough information to explain how illicit markets survive dedicated decades of law enforcement activity. The supply and demand endpoints seem to generate a circuit that replicates itself notwithstanding arrests, deaths, assassinations, imprisonments, and so on. The script reiterates independently of any one will, effort, and decision making.
Thus, the conspiracy model of England and Wales and the membership model of the United States and Italy, while useful legal concepts to impose lawful punishments, are not sufficient in scope to explain organized crime (cf. Sergi 2015, 197). Moreover, even the phrasing of the term “organized crime” presumes that the activity of organizing has occurred. Organizing is not peculiar within the human species; organizing to commit unlawful acts is not unusual, currently or historically. What needs attention are the events themselves embedded in their facilitating markets; that is, the types of wrongdoing may be fundamentally crude (e.g., issuing extortionate threats) or fairly sophisticated (e.g., boiler room operations comprising securities fraud). But the events share the characteristic of unlawful exploitation of another’s vulnerability to obtain profit, gain, and/or influence.
Traditionally and ironically, a distinction is made between lawful and unlawful exploitation to categorize and differentiate common white collar, socially acceptable conduct, at least in the United States (e.g., the use of sales puffery to bamboozle a customer) from prohibited organized crime conduct (e.g., the use of collusive fraud to bamboozle a client). The distinctions are nuanced, and the victim is conceivably equally impaired by both types of conduct. Thus, the study of events may make for intriguing narrative, but the study of markets yields fertile observations.
There is no organized crime without a market, and markets have the inherent potentiality of fermenting organized criminal conduct. Moreover, markets are imperfectly developed conceptions, that is, the observer cannot readily distinguish among legitimate, gray, and black markets. Moreover, markets are collusive in nature; groups of participants are needed to develop, sustain, and expand markets (e.g., custodians of funds and other assets, record keepers, exchanges, regulators in the public and private sectors, gatekeepers). There is no free market, but there are limits to state interventions over markets.
Properly, the market, and not the ethnicity of participants or other identity-based characteristics of these participants, should be the unit of analysis. The primary relevant issue is how can markets be used to further the interests of organized criminals, independently of whether the participants are wearing white collars and ties or jeans and t-shirts and independently of whether their ancestry can be traced to Palermo, Italy, or Greenwich, Connecticut. Criminal economic organizations prey on markets and exploit market participants in an unlawful network of undisclosed partnerships and informally shared incentives and financial interests.
Specifically, the criminal event is not comprised exclusively of the organized criminals’ conduct. It is the conduct in the context of an enabling market that is essential to grasp. Without the facilitating market, organized crime would be a minor problem; with the aid of the market, it becomes inherently a global phenomenon, extracting resources from victims—individuals and states—and diluting the positive effects of rule of law.
Organized crime is illegitimate collective action, notwithstanding the difficulty on occasion of drawing a line between the legitimate and the illegitimate (Levin 2013, 164). For example, Enron was characterized by organized criminal economic conduct, but it was viewed as a more or less legitimate entity. Thus, organized crime in the United States involves more than a conspiracy but also participation in an illegitimate enterprise or an enterprise that acts like an illegitimate enterprise, excluding hybrid organizations like Enron, WorldCom, Wells Fargo, and so on that act in part like criminal conspiracies intentionally creating unlawful conduct and in part like legitimate enterprise, properly filing financial reports and tax returns. Of course, the hybrid organization is the more harmful yet ambiguous collective as it is viewed as something it is not, viz., legitimate.
The essentially banal and common property denoted “collective action” is deceptive in its power to direct, control, or influence. Small groups of individuals acting in concert can wreak great harms (or accomplish wonderful goals and objectives). The peculiarity of organized crime groups is their inherent exclusion from propriety by the state; that is, collective action toward criminal objectives is not recognized as a legitimate group activity. There is no corporate limited liability from the law sourced in participation in organized crime groups; there are favorable schemes of tax administration resulting from obtaining funds flowing from their illicit activities. The collective of organizing criminals is not protected, unless it mimics successfully the legitimate organization. Thus, since directing financial flows to and from tax havens is consistent with tax avoidance strategies of legitimate business, the adoption of these practices and procedures by illicit collectives hiding underneath a shell or front company should be wholly expected.
The market creates opportunity for licit and illicit collectives. However, since the illicit organization cannot commit to transparency and accountability in reporting to regulators and the public at large, such an organization lacks rigorous and invariable definition. It is continually in flux, operating and presenting itself with as much legitimacy as practicable. Moreover, without robust mandatory disclosure schemes adopted by jurisdictions domestically and internationally, the opacity of beneficial owners that compose the cadre of high managerial agents of illicit collectives remains a vague shadow without real identity of the straw men. The rule of law does not permit accurate and complete attribution of the profits, gains, and assets in the accounts, which are protected by jurisdictions racing to the bottom for a small fee, to the cadre of high managerial agents and influential professional facilitators.
A focus on the errant collective would lead the criminal investigator on a worldwide pathway of obfuscation and legal niceties. Activity profitable for the lawyer but not so much conducive to truth of ownership, management, and control of the collective. There’s got to be a better way to know the network and vectors commonly referred to as transnational organized crime by criminal investigators.