Understanding Organised Crime
What is organised crime?
Until 1963, Federal Bureau of Investigation (FBI) chief J Edgar Hoover scoffed at suggestions there was organised crime in the United States.1 In 1965, Australian MP (and later Minister of Immigration) Al Grassby dismissed the notion of organised crime in Australia as deluded, probably the product of “watching too much late night TV – perhaps Eliot Ness in The Untouchables.”2 Those denials now look farcical.
A few decades later, both nations – like virtually every country in the world – now have deeply entrenched organised crime networks, which touch all corners of their societies and economies.
The networks weave in and out of lawful society and business, and suck hundreds of millions of dollars a year out of the legal economy to concentrate it in the hands of wealthy criminals.
Those individuals live and move in high society, rubbing shoulders with the nation’s power elite.
While many, but not all, have chequered pasts, they now seldom, if ever, do their own dirty work.
But even though they can afford to keep their hands clean, make no mistake: their wealth and power is built on and maintained by extortion, intimidation, violence and suffering.
The wealth and power associated with organised crime brings corruption of police, politicians and Government officials.
Virtually every country in the world where organised crime has taken hold, including Australia and the United States, has found its law enforcement and other public institutions infiltrated and compromised.
That corruption helps to protect the criminals, facilitate further crime, and frustrate and pervert investigations.
Despite periodic scandals and Commissions of Inquiry, overseas countries have found it almost impossible to root out corruption.
The most deeply entrenched corrupt individuals are often the hardest to flush out – and they are the very individuals who can do the most damage.
The Police Association has grown increasingly concerned that many New Zealanders, including some of those who have a responsibility to act, are stuck in the same denial that allowed organised crime to become deeply entrenched in the US and Australia.
This means ordinary New Zealanders are increasingly becoming victims of crimes like drug dealing, fraud, dodgy investment scams, theft of credit card details, identity theft, burglary, stand over thefts, extortion and intimidation, which form part of our increasingly complex web of organised crime.
It’s not petty, small-time offending. At one end of the scale, recreational drug users are suddenly finding themselves trapped in debt and their assets systematically stripped by dealers they thought were friends.
At the other, respectable businesspeople are being compromised, then fleeced of millions of dollars under blatant threat of violence.
Key features of organised crime
To effectively tackle organised crime, the public, politicians, and policymakers have to understand and agree on what the problem is.
If they don’t, responses will be haphazard, unco-ordinated, and ultimately ineffective.
Knee-jerk, piecemeal responses to the ‘crime of the week’ never work. Law enforcement will keep on floundering and organised crime will keep on laughing, all the way to the (offshore) bank.
The Police Association’s work, drawing on overseas studies such as that conducted by Victoria Police and the Australian National University, has identified 10 key features of organised crime:
1. Organised crime does not begin; it evolves.
2. Organised crime is not gangs.
3. Organised crime is criminal enterprise.
4. Organised crime is networked.
5. Organised crime is profit motivated.
6. Organised crime is opportunistic andadaptable.
7. Organised crime seeks to hide and legitimise wealth.
8. Organised crime seeks to corrupt.
9. Organised crime networks are resilient.
10. Traditional policing is not enough.
This month, Police News explores the first three of these features.
1. Organised crime does not begin; it evolves.
Organised crime does not arise suddenly, for example with the arrival of a notorious crime group such as the Mafia.
Rather, it grows and develops as individual criminals and groups of criminals accumulate wealth and influence.
Criminal business interests drive links to be made between, and then beyond, local underworld peers.
Eventually, ad hoc acquaintances and connections mature into a growing and borderless network.
The network provides opportunity, strength, and resilience that is far greater than the sum of its participants.
While participants may not consciously think of themselves as being part of a network, let alone an ‘organised crime’ network, that is the reality of their business links. The beginning of this evolution is organic.
However, as the network matures, some participants begin to recognise their growing collective strength, and the possibilities for individual and joint accumulation of wealth.
They begin to act strategically, seeking to professionalise, and leverage opportunities
Specialisations emerge, and various groups develop reputations within the network as reliable providers of various criminal goods and services.
Means are found to manage or end traditional rivalries that get in the way of those opportunities.
These include truces, pacts, business deals, franchising, and hostile or negotiated takeovers.
The pattern of evolution of organised crime has been essentially the same in almost
The structure of outlaw motorcycle gangs (OMCGs) in New Zealand has changed radically in the past 10 years.
The gangs with the best offshore connections (the Head Hunters and Hells Angels) have grown more powerful as they have controlled the flow of ‘product’ (principally
Their networks have grown wider, and they have accumulated wealth and power.
Smaller OMCGs have been forced to become client or ‘feeder’ gangs, been ‘taxed’ out of existence, or simply decided they cannot fight to retain their power and closed themselves down, leaving open territory for major gang expansion.
Over the same period, the need to launder profits has seen drug gangs link up with shady businesspeople, who have long hovered around the fringes of the criminal underworld.
Arrangements are mutually beneficial: the gangs access skills to ‘clean’ and hide their money, and the businesspeople get the backing of ‘heavies’ to make sure business deals always go their way.
International links
Much black market product is either sourced offshore (like methamphetamine), or sold offshore (like paua).
The trans-national nature of organised crime deals links criminals in one country with those in other countries.
This in turn helps transfer power, wealth and expertise, allowing the networks to mature in strength and sophistication.
How quickly organised crime develops from ‘ordinary’ crime depends on a number of factors.
These include access to wealth, the influence of established overseas organised crime, and the dominant local criminal and civil cultures.
In Russia, for example, major organised crime development was extremely rapid because existing Soviet-era political, criminal and black market networks, wealth and influence were simply re-focused on the new, post-communist opportunities.
Existing crime groups were effectively given a steroid shot.
However, the growth of powerful, insidious and widespread organised crime networks has been replicated in one country after another – including Australia.
It was always inevitable that New Zealand, as a globally linked market economy, would also develop a similar organised crime problem.
Police Association investigations have established that multiple elements within New Zealand’s criminal underworld have already achieved a level of national and international inter-connectedness that puts it beyond doubt that New Zealand has a serious organised crime problem.
The wealth generated from methamphetamine during the 1990s provided the ‘missing ingredient’, enabling and encouraging growth and development of networks, knowledge, and organisation.
As a result of that growth, methamphetamine is no longer the key problem.
Methamphetamine is now simply one of a virtually unlimited number of commodities, which can be traded across organised crime networks.
Methamphetamine could disappear tomorrow, but organised crime is here to stay.
2. Organised crime is not gangs.
The term ‘organised crime’ was first coined by the Chicago Crime Commission – a group of concerned businessmen – in 1919.
It described emerging evidence of complex criminal racketeering, corruption,
Importantly, it described emerging patterns of systematic criminality organised between individuals or groups of individuals.
Since then, the phrase has morphed, and is now commonly used to describe complex and powerful criminal organisations that have had a long local history, and have long been known or suspected to exert considerable influence both in criminal and civil economic and political society.
Such organisations include the American Cosa Nostra, Sicilian Mafia families, Italian Camorra and ‘Ndrangheta (known in Australia as the Calabrian Mafia), Japanese Yakuza, and Chinese Triads, amongst many others.
Many such organisations trace their origins to centuries-old secret societies or orders, which originally evolved in communities to provide mutual protection for local interests against state authorities that were seen as repressive.
They were not necessarily originally ‘criminal’ in their objectives, though their existence and activities were often unlawful.
Over time, as the original purposes have faded, the underground networks have turned their focus to more sinister criminal enterprise, driven solely by profit motive and indifferent to the legality of their activities.
Even so, in some parts of the world, such groups often still maintain a local reputation as ‘Robin Hoods’ rather than ruthless gangsters.
New Zealand, as a young nation, does not have a history of shadowy Mafia-style crime groups.
Neither do we have a significant history of immigration from the communities where such groups are deeply entrenched, in contrast for example to the importation into the US and Australia of Mediterranean organised crime groups.
That has changed to some extent as our patterns of immigration have shifted in the last 20 years, with inevitable consequences.
In the historical absence of ‘Mafias’, the term ‘organised crime’ has become almost interchangeable with the word ‘gangs’ in New Zealand.
It is used to describe the ethnic gangs and outlaw motorcycle gangs (OMCGs) whose overt displays of anti-social behaviour and wanton criminality cause shock and outrage amongst the wider community.
This confusion of labels is wrong, and utterly unhelpful, because it obscures the underlying problems and misdirects attention, resources and policy responses to issues like patches and fortifications that are at best peripheral to organised crime.
Organised crime is not the same as gangs – even though many gangs, gang members, and associates are participants of greater or lesser importance in organised crime networks.
Often, the roles played by traditional gangs are as distribution outlets, and as ‘muscle’ for more powerful players.
3. Organised crime is criminal enterprise.
Organised crime is crime that involves the rational (as opposed to impulsive or spontaneous) co-operation of criminals in the planning or conduct of criminal activity, in direct or indirect furtherance of their economic interests.
To distinguish it from a one-off conspiracy, such co-operation is usually part of a continuing or systematic pattern of conduct. In other words, according to the SAGE Dictionary of Criminology: [Organised crime] may be defined as the ongoing activities of those collectively engaged in production, supply and financing for illegal markets in goods and services.
The US Department of Justice gives the following definition of international organised crime, which is equally applicable to New Zealand organised crime:
“International organized crime” refers to those selfperpetuating associations of individuals who operate internationally for the purpose of obtaining power, influence, monetary and/or commercial gains, wholly or in part by illegal means, while protecting their activities through a pattern of corruption and/or violence.
There is no single structure under which international organized criminals operate; they vary from hierarchies to clans, networks and cells, and may evolve to other structures.
The crimes they commit also vary. International organized criminals act conspiratorially in their criminal activities and possess certain characteristics, which may include, but are not limited to:
A. In at least part of their activities they commit violence or other acts, which are likely to intimidate, or make actual or implicit threats to do so;
B. They exploit differences between countries to further their objectives, enriching their organization, expanding its power, and/or avoiding detection and apprehension;
C. They attempt to gain influence in government, politics and commerce through corrupt as well as legitimate means;
D. They have economic gain as their primary goal, not only from patently illegal activities but also from investment in legitimate business; and
E. They attempt to insulate both their leadership and membership from detection, sanction, and/or prosecution through their organizational structure.” 6
In short, organised crime is essentially illegal business enterprise. Its ultimate objective is to generate and accumulate wealth, irrespective of the legality of the means employed to achieve that end.
Organised crime has one ultimate purpose: to make money. They do so at the expense of lawful society.
As they do, their power grows and their capacity to inflict misery grows with it. In the criminal world, the rich get richer, and the victims get poorer.
