A new Europol report cites an “emerging trend” of Mafia involvement in the wind and renewable energy industry across Europe, the Americas and Australia. The attraction is clear: huge subsidies, guaranteed markets and prices – and a serious opportunity for money-laundering.
The report Threat Assessment: Italian Organised Crime, describes the activities of a variety of Mafia organised crime groups (OCGs) as both a “clear and present threat to the European Union” and a threat “unparalleled by any other European organised crime group”.
The authors are also at pains to point out that this is a “threat assessment, not a historic study”. It shows how, since the early days of 1920 and 30s shootouts with law enforcement modern crime lords prefer to go ‘legit’, favouring “infiltration in the legal economy”. And that, the study states, is being achieved through “careful investments in particular sectors” and “sophisticated money laundering schemes”.
One industry singled out above others as being targeted is the “alternative or green energy market, for example investments in wind energy farms”.
In particular, the families are finding easy pickings among “generous MS and EU grant and tax subsidies”. Schemes which, apart from “exploiting eco-friendly incentives for financial gain”, create front companies that enable them “to launder the proceeds of crime via legal business structures”.
According to the report, one of the problems is that OCG’s are “presenting themselves on the market as strong competitors who can afford to operate ‘at a loss’, creating in the long run a situation of quasi-monopoly that undermines the basic principles of the free market”. And it anonymously quotes a “well-known Italian prosecutor” as explaining, “Italian OCGs today are the only EU economic competitors that suffer the opposite problem of all other entrepreneurs: too much money and not enough possibilities of reinvestment.”
“Fat returns”
Mafia involvement in the wind industry was first identified as long ago as 1996 when the so-called “Lord of the Wind”, Vito Nicastri, was convicted of making improper payments of €15 million and bribing public officials in connection with windfarm fraud.Not that that prevented Nicastri from obtaining further licences. In 2010, Nicastri had nearly $2 billion in corporate assets sequestered. These holdings included 43 wind and solar power companies, 100 properties, 66 bank accounts, seven sports cars and luxury yachts.
Several branches of the Mafia are believed to be heavily involved in wind and renewable projects in Europe with holdings in Spain, France, Germany and the Netherlands. An earlier report in 2009 connected Nicastri, Oresto Vigorito, the alleged boss of the Cosa Nostra, and the state-forfeited Italian Vento Power Corporation with two wind energy companies based in Boston in the United States.
Spelling out a key strategy for the modern Mafia, one Italian law lecturer told Al Jazeera, “It invests anywhere there is a reasonable opportunity and likelihood of fat returns.” Canadian anti-money laundering specialist Christine Duhaime points out that the European Regional Development Fund (ERDF) has allocated a massive €295 billion in grants for renewable energy. But she also found that while the EU requires each member state to have an audit authority to perform a regulatory function for legality and payments, in practice in most states it is paid lip-service, being “left by the wayside”.
According to Duhaime’s investigations, “An estimated 50 percent of the subsidies paid by the ERDF for wind energy related infrastructure projects involved fraud and other irregularities.” Wind energy projects, in particular, she considers a “high risk” especially when it comes using renewable energy front companies to launder ill-gotten gains.
The fact is that, as shown in a separate study, The Performance of Wind Farms in the UK and Denmark published by the UK Renewable Energy Foundation, the wind industry should by now be “mature”. Instead, after decades in operation, it is still completely dependent on the lifeline of public subsidy, remaining commercially unviable and unattractive to private investors without major government guarantees. But the days of government largesse may be numbered. Last year the UK Public Accounts Committee called for the axing of “generous” and long-term licensing deals. And it slammed the government for granting a cool £17 billion to just two engineering companies.