Enterprise Crime targets nation's Economy
The image of organised crime etched deep in the public
mind by continuous projection in the media is of graphic and gratitude
violence. The response to this macabre challenge, quite naturally, is
predominantly conceived of in terms of glamourised "encounters"
between the armed might of the state and the irregular armies of crime.
These images, no doubt, have a sound basis in fact. To the extent, however,
that they exhaust or dominate our entire vision of organised crime today,
they are both false and misleading. The emergence of global financial
and trading systems, and the progressive dismantling of trade barriers
and, internal restrictions on businesses within the country over the
past decade, has fundamentally changed the context in which criminal
organisations operate. Capitalising on increased cross-border flows
of goods, money and people, criminal organisations have expanded their
territorial reach and augmented their wealth and power relative to national
governments, introducing new uncertainties into the political environment.
To their traditional spheres of activity, such as prostitution and murder
for hire, organised crime syndicates have now added terrorism, money
laundering, transportation of illegal immigrants, and a wide variety
of dubious financial transactions. But these are only a list of their
manifestly criminal activities.
An overwhelming proportion of organised crime, today,
is not predatory but collusive based on a continuing and symbiotic relationship
of acquiescence between criminal enterprises on the one hand and, on
the other, Government agencies, officials and enterprises whose primary
businesses lie within the ambit of the law. "Enterprise Crime" now engages
in a mixture of cooperation and competition both with governments and
the larger business community. Their growing power is based on their
capacity to exploit (rather than disrupt) legitimate business and financial
activities, and their ability to corrupt Government and law enforcement
agencies. As Boutros Boutros Ghali, the then Secretary General of the
United Nations, declared in 1994, "The danger is the more pernicious
because organised crime does not always confront the State directly.
It becomes enmeshed in the institutional machinery. It infiltrates the
State apparatus, so as to gain the indirect complicity of government
officials… (it) poisons the business climate, corrupts political leaders
and undermines human rights."
This contemporary blend of Corporate and criminal cultures
is not susceptible to the solutions of the past. The "encounter'' may
be highly gratifying as spectacle, but it targets only low level—and
easily replaceable-operatives. We also find that our criminal Justice
system fails consistently to incarcerate or incapacitate those who are
arrested for any significant length of time—and even these, once again,
are only lower or middle level operatives.
The fact is, crime syndicates have now gone transnational.
The primary organisations have established themselves in safe havens
abroad; in India's case, these are provided by nations distinctly inimical
to our interests, or whose sympathies remain ambiguous. These transnational
criminal organisations (TCOs) operate through a variety of franchise
alliances and subsidiary groupings that are strengthened immeasurably
by the financial clout and subversive affiliations of their principals.
National enforcement agencies ordinarily confront only the numberless
retailers of crime. The "prime movers" have remained fully
out of their reach. As a nation, moreover, we appear to lack the willingness
or ability (or perhaps both) to carry out covert operations to "decapitate"
major crime conglomerates abroad. In any event, even if this were done,
replacement tends to be easier than was previously the case with the
predatory monoliths of the past. With the "corporatisation" of organised
crime, the elimination of a leader would cause only temporary disruption.
We must correctly define the nature and functions of
organised crime syndicates in the contemporary world if we are to devise
effective strategies of confrontation. One of the critical elements
to be understood is that these syndicates provide a wide network of
connections and access to Government and help evade Government controls;
in the absence of stringent commercial codes and a viable judicial system,
mobsters provide protection to businesses and a mechanism for regulation
of disputes; they also provide a range of services including the systematic
evasion of taxes, the transfer of money across borders, the collection
of outstanding loans, possession of disputed properties, control of
recalcitrant labour unions, and outright violence to intimidate or eliminate
business rivals; TCOs are also an apparently limitless source of finance
for a wide range of otherwise legitimate enterprises. In many ways,
they progressively supplant the failing State in these areas, guaranteeing
a consistency of outcome in activities and disputes that is otherwise
elusive. Crime cartels now provide a modicum of "justice" and stability,
a set of rules that are more or less inflexibly implemented to protect
their own. This order, within the growing anarchy and uncertainty of
outcome that attends the processes of official agencies, makes them
Under the circumstances, directing enforcement operations
and legislation exclusively against the visible operatives of criminal
networks will prove both frustrating and futile. It is necessary, now,
to "criminalise"—that is, to attach severe criminal penalties to—all
agencies and activities that cooperate with and benefit from crime.
There has to be a logical escalation in the legal means used to combat
the increasing scope and power of organised criminal activity, and this
will have to be directed primarily at stripping criminals and their
associates of their assets and blocking their penetration into the legal
economy. Existing systems of documenting economic activity and our criminal
records system are simply too primitive to cope with this challenge
and will have to be enormously upgraded. The continuous blurring of
lines between legitimate and criminal enterprises—not only in the more
obvious instances such as the "bumping off" of rivals or of union leaders,
but in less visible day to day transactions—has to be made relatively
impossible. The pathways of untraced profits from criminal and quasi-criminal
enterprises must be disrupted by a rigorous system of mandatory documentation
and increasing transparency in all legal financial transactions, and
the clear and definite identification of all agents in such transactions
through a comprehensive system of identity numbers (the Income Tax Department's
system of PAN numbers could constitute the basis of such an identification
system, but its present and projected coverage is woefully inadequate).
This must be backed by the imposition of severe criminal penalties,
including harsh terms of incarceration and seizure of all assets disproportionate
to known sources of income, for tax fraud, and for concealment.
The nexus between criminals, "convenient" Government
servants and politicians has been discussed to death. But the nexus
with unscrupulous lawyers and other professional advisors needs equal
attention. Where evidence of collusion, of deliberate suppression of
evidence and calculated distortion by defence attorneys exists, the
latter should be made criminally liable as well.
The one element that is not replaceable in the criminal
enterprise—as in legitimate enterprises—is profit. Systems that facilitate
the identification and seizure of assets and capital originating in
crime—even where they have been transferred or laundered to flow into
legitimate activities—would eventually destroy the super-normal profits
that create overwhelming incentives for the penetration of organised
criminal activity in the nation's economy.
version published in Pioneer, January 1, 1999.)