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Easier to Move Money : Mafia May Benefit From Economic Unity in Europe

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Special to The Washington Post

It’s a multinational that boasts staggering profits, gilt-edged connections, managers with advanced degrees, a vast work force known for ruthless efficiency--and, like many other enterprises, a hungry eye for the profits to be had when Europe unites economically in 1992.

Most people know it as the Mafia.

Long classified as a “local problem” of southern Italy, the Mafia is increasingly recognized today as a powerful criminal and economic phenomenon that not only threatens the rest of Italy but also all of Europe and beyond.

European authorities fear that the planned deregulation of their markets by 1992, aimed at freeing the flow of goods and capital, will make it all the easier for organized crime to move its own capital and contraband across the borders.

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“The Mafia bosses in their dark double-breasted suits are getting ready for 1992,” said Carlo Azeglio Ciampi, head of Italy’s central bank and the first in a string of top Italian officials this spring to sound the alarm about the mob’s potential for investing its considerable “dirty” money in Europe.

“These gentlemen have realized that what they need is greater room for maneuver,” he said. “Banking structures and requirements must be unified throughout Europe to prevent the Mafiosi from laundering their money.”

Ciampi’s call to arms was largely a response to an international agreement signed by banking and justice officials last December to crack down on money laundering, as well as to continued U.S. government pressure to stem the flow of drugs and dirty money. Similar warnings have followed almost weekly from government ministers and representatives of law enforcement and the secret services.

They tell of billions of dollars in drug profits being recycled through European banks and the insidious infiltration of Mafia money into legitimate businesses, rampant speculation in the Milan stock market that could potentially undermine the exchange or interest rates--and even investment in government bonds. Milan police recently cracked a crime ring that was planning to issue fake European securities in 1992.

Pino Arlacchi, a sociologist who is Italy’s premier expert on Mafia finances, has long warned about their growing sophistication in business matters. He predicts that the fall of European barriers in 1992, combined with widespread confusion over this year’s massive overhaul of the Italian justice system, “will open a new golden era for Mafia Inc.”

Arlacchi pointed to the devastating consequences of the collapse of Franklin National Bank in 1974 and Italy’s Banco Ambrosiano in 1982, both attributable to illegal financial deals and tax havens involving the Mafia.

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“Illicit capital, by bringing entrepreneurs linked to the world of large-scale crime into the system . . . threatens to trigger the explosive worldwide financial breakdown that so many people now fear,” he said.

A Western law enforcement official concurred: “We’re talking about drug profits that would balance the budgets of a lot of countries, whole areas of Italy where the Mafia is more powerful than the government, even the Mafia within some parts of government. That’s a disturbing equation . . . especially looking to the loosening of controls in 1992.”

Just how much money does the Mafia make? There are varying estimates, all impossible to verify--and all impressive.

Profits of $71 Billion

The state-run Censis statistical agency calculates Italian Mafia profits at close to $71 billion a year. Other officials put Mafia-linked drug profits in Italy at between $21 billion to $42 billion. In the United States, the FBI figures the leading Mafia families make some $142 billion each year in the drug trade.

Mafia profits come overwhelmingly from drugs, mostly heroin but increasingly cocaine, police say. Extortion and kidnaping remain lucrative ventures, but the Mafia has also extended its tentacles into a vast variety of legitimate businesses.

In Sicily, for example, it has penetrated everything from the citrus and wine industries to hospitals and soccer teams, consolidating its local power in the process. Elaborate scams to rip off Common Market agriculture subsidies are popular, Italian officials say.

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The European union of 1992, in which border checks will disappear along with trade barriers, “is going to drive law enforcement nuts, not just with drugs and money but, with technology transfer, arms,” predicted one U.S. official. “How are you going to inspect? Where is the border? I can’t imagine how it’s going to work.”

Most authorities believe that the main trick is zeroing in on the Mafia where it hurts most: its money and property. But Italian laws make the chase a difficult one.

U.S. Tracks Money Flow

In the United States, new laws have allowed successful tracking of suspiciously large flows of money through American banks via a central data collection. That option isn’t open to Italian magistrates, who must go from bank to bank and who must have a subpoena against a certain individual, a job complicated by the recent liberalization of capital and currency controls.

The United States has asked Italy to help set up a new international currency control agency to monitor capital transfers in dollars.

Italian officials say improvements are on the way.

Although calls to totally eliminate banking secrecy are unlikely to emerge, the Italian Banking Assn. last week decided to have banks demand mandatory identification from all people making a banking transaction above 10 million lire ($7,143). The move, effective July 1, cuts the present ceiling in half.

Legislation to allow investigators easier access to bank information is being studied in Parliament, while passbook accounts, a notorious vehicle for laundering, could be phased out. Government and other securities, in which there is apparently a thriving secondhand market that masks the true owner, also will receive closer scrutiny.

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But without international cooperation and coordination, Italian officials warn, such measures are bound to have a limited effect.

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