Mafias on the Move: How Organized Crime Conquers New Territories

It took the two assassins just six minutes to enter one of the finest hotels in Moscow, move past armed guards, shoot their victim in the head with silencer-equipped pistols, and make their escape. The boss of the Russian mafia's outpost in Rome was called immediately. "What, did they kill him?" he asked. "I am not surprised; he has stolen money from half of Russia."

So begins Frederico Varese's "Mafias on the Move: How Organized Crime Conquers New Territories." The murdered man was a Russian who had immigrated to Italy and who was conducting what appeared to be a legitimate business—but he was actually a member of the Solntsevskaya Brotherhood, Russia's most notorious mafia.

The assassination alerted authorities that the Solntsevskaya was setting up an Italian outpost, an alarming development considering the brutality of the Russian mafia. But could an organized crime group, like a transnational business, simply open a foreign branch? This high-stakes question prompted Mr. Varese to write his book about how mafias transplant themselves to new territories.

Mr. Varese's quest leads him from Prohibition-era Manhattan to mid-century Italy to modern-day China. His presentation is academic and heavy on numbers, but it tells a compelling story that is as much about politics as crime.

Mr. Varese's definition of a mafia challenges conventional wisdom: "providers of extralegal governance . . . groups that aspire to govern others by offering criminal protection to both the underworld and the 'upper world.'"

To transplant, a mafia must "operate . . . over a sustained period outside its region of origin or routine operation." A transplantation has not necessarily occurred even if a mafia engages in transnational dealings like drug smuggling, human trafficking or money laundering.

Given these definitions, it's hardly surprising that mafias have a better chance of transplanting when economic liberalization outpaces political reform. A Hungarian authority explains that where a legal and judicial system are lacking, "it is not surprising that businessmen, some law-abiding and others not, try to defend themselves and find other non-legal or semi-legal ways to defend their interests, without legal support from the state. The defects of state law enforcement have opened the field to organized crime, and their 'violence' organizations have simply taken control of this area."

In other words, mafias thrive when there is a demand for their services. They adjudicate disputes between employers and employees, enforce agreements and punish those who do not honor their commitments. All this helps the market, whether legal or illegal, run smoothly. But demand is only half of the equation. There must also be a supply of violent people adept in offering and enforcing protection. It's no coincidence that recruits often come from organizations like the KGB, where violence is culturally ingrained.

The study is at its most relevant examining the triads in Macau, Taiwan and Hong Kong, and their failure to transplant into the mainland. Given the shortcomings of the Chinese legal system, why haven't they permeated the People's Republic? The answer is simple: Corrupt government officials are performing mafia-like services so competently that the real mafias can't compete. Bribe-taking Communist Party cadres act as a "protective umbrella" for all kinds of businesses.

"Since any economic activity in China is subject to intrusive inspections and requires several permits, and independent courts are not effective in protecting the victims of officials' harassment, even entrepreneurs producing legal commodities, such as light bulbs, can benefit from entering into such arrangements," Mr. Varese writes. "The umbrella system ensures continued control over the economy by officials, albeit one that distorts incentives and produces significant waste."

That's not to say Chinese officials are shy about skimming from illegal activity too. Prostitution, illegal in China, is a prime example. Prostitutes are caught, judged and punished by the police under administrative law—they can be sentenced to severe fines or imprisoned without ever facing a judge. Practically, this means police protecting brothels can coerce prostitutes and brothel owners.

When any one group holds the power to establish law, judge offenders and punish them, it becomes extraordinarily difficult to uproot. It matters little whether this group is a mafia or a corrupt ruling party. Even giving citizens the vote is not sufficient to shift the balance of terror, Mr. Varese says—mafias have traded in votes, too, and politicians can gain by using thugs against their opponents.

The real key is protecting the rights and property of citizens. Where states fail in this responsibility, criminals always move in to fill the void.

Thanks to Jillian Kay Melchior