Mafia capitalism takes the same route as the Titanic on its maiden voyage…

Capitalism with a dash of  socialism to add a restraining touch of morality  is, arguably, the least-worst economic option for running a country’s economy. Certainly better than Communism under inevitably self-perpetuating elites.

But shareholder-based capitalism is flawed and possibly doomed, because its aim is the short-term maximisation of profits for the shareholder rather than the long-term growth and health of businesses in which the shareholders invest. The aim is short-term profit-taking, not efficiency. In that sense, it has the same flaws as countries run by dictators or businesses run by criminal organisations… or, indeed, countries run by criminal organisations.

Which brings me to Italy.

I have just arrived in Milan for a couple of days.

I have blogged about the Mafia before…

According to a report issued two days ago, the Mafia is now “Italy’s biggest business”. But this is hardly news – ’twas ever thus in my lifetime.

Post-War Italy was, in effect, run by the secret Masonic lodge P2 (Propaganda Due) for around thirty years: an unholy alliance of politicians, big business, the military, the intelligence services and the Mafia. It was a conspiracy theorist’s most paranoid dream come true.

The real ‘new’ news story about the Mafia’s financial power seems to be that the current world financial crisis has particularly hit Italy and has partially unified the traditional Mafia groups.

In the current economic crisis, traditional banks are reluctant to lend, so many Italian businesses nationwide have been forced to borrow at crippling rates of interest from organised crime, including the three big Mafia groups – the Cosa Nostra, the Camorra and the ‘Ndrangheta.

As a result, the Mafia now have an alleged annual turnover of around £116 billion with reserves of 65 billion Euros, making them “Italy’s biggest bank”.

This is according to a report issued a couple of days ago by Confesercenti, a prominent employers’ association which represents 270,000 small-to-medium businesses. They simply called their report Criminality’s Grip on Business  and it says the Mafia account for around 7% of Italy’s Gross Domestic Profit – and we are talking very ‘gross’ here.

Marco Venturi, the president of Confesercenti, was quoted as saying: “According to our estimates, loan sharking caused the closure in 2010 of 1,800 businesses and destroyed thousands of jobs. Right now, Mafia Inc is the only business enterprise willing to make substantial investments.”

That sounds to me like a man with an eye for publicity.

But, basically, if you are running a small business facing ruin and potential closure in the current economic crisis where banks are only interested in short-term strategies, you have few options to try to save yourself except to borrow from the Mafia… which ironically may itself result in ruin and the potential closure of your business.

Small business owners with tight margins and limited cash flow also, as always, face extortion and straight robbery by the Mafia, at a reported rate of one crime every minute.

This week’s Confesercenti report says the influence of various mafias is now being felt not only in traditional strongholds such as Naples and Palermo, but increasingly in the wealthy north of Italy, in regions such as Lombardy – in other words, the country’s business capital of Milan – and the report says the mafias have expanded there with the “complicity” of some politicians, as well as lawyers and accountants.

Again – perhaps especially in Italy – that comes as no surprise.

Another report this week – by Libera, an anti-Mafia association – says the average adult Italian spends nearly 1,300 Euros every year on slot machines, bingo and other forms of gambling. This 76 billion Euro market is Italy’s third biggest industry and the Libera report claims the Mafia have also now moved into what the report calls ‘new’ areas of business such as public health, transport and logistics.

Milan is known for its fashion industry and now seems to have picked up the latest street fashion – criminal organisations running not just Big Business but the country’s infrastructure.

Well, that is the story.

In fact, I think, as I said earlier, this is hardly news – ’twas ever thus in my lifetime.

In Italy, traditions run deep.

Silvio Berlusconi and the Mafia man with easy access to the horses’ heads

(This blog was also published in the Huffington Post)

A couple of days ago, I blogged about Silvio Berlusconi’s resignation as Prime Minister of Italy and quoted an English friend of mine who has lived there for around 25 years.

Yesterday, she told me the national newspaper Corriere della Sera carried an interesting front page.

The Rubik’s cube of Italian politics is not exactly simplified by the fact that the secret masonic lodge P2 (Propaganda Due), in effect, ran Italy from the end of the Second World War until at least 1976 and possibly until 1981. Its all-pervading power lay in its membership and links, which included Cosa Nostra (the Sicilian Mafia), politicians, media, the police and the intelligence services.

It was a bit like the Groucho Club with attitude problems and access to armed force.

A list of P2 members, discovered in 1981 included Silvio Berlusconi.

“Right in the centre of Corriere della Sera’s front page today,” my friend told me yesterday, “there is a photograph of the two Sicilian judges Giovanni Falcone and Paolo Borsellino who were both assassinated within a two month period in 1992 after they led the Italian government’s anti-Mafia investigation.

“Corriere della Sera quotes Borsellino’s wife as saying he told her – only 24 hours before he was blown to bits in a car bomb outside his flat – that, if he was assassinated, it would not be the Mafia who killed him. Corriere della Sera presumably printed this article now because there is a current investigation into claims that the Italian State continues to be connected to organised crime in a big way.

“Ask yourself why,” my friend told me: “Ask yourself why – in this week of all weeks – on this day of all days – why this particular photo and story would be on the front page of a national newspaper that is otherwise all about Berlusconi…”

In his last video interview, given four days before Falcone’s assassination and two months before his own assassination, Paolo Borsellino spoke about the possible link between Cosa Nostra’s mafiosi and rich Italian businessmen including Silvio Berlusconi.

Borselino claimed that well-connected mafiosi Vittorio Mangano was the Sicilian Mafia’s link to its business interests in Northern Italy.

Somewhat bizarrely, Berlusconi employed Mangano to look after the horses at his villa in the small town of Arcore, near Milan, where Berlusconi lived. It has been alleged that Mangano’s real job may have been to deter kidnappers from targeting the Berlusconi’s children.

But there were also allegations made by Mafia supergrasses that Berlusconi was connected to the bomb blasts which killed Giovanni Falcone and Paolo Borsellino.

Magistrates in Caltanissetta spent almost two years examining these allegations and decisively rejected them.

The mafiosi supergrasses had also apparently wrongly alleged Berlusconi had had contact with Mafia ‘boss of bosses’ Totò Riina and arranged legislation favourable to Cosa Nostra in exchange for Cosa Nostra support for his political party Forza Italia.

Politics – in Italy perhaps even more so than in other countries – is a dark art involving smoke and mirrors.

It also reminds me of the ancient Roman saying Qui cum canibus concumbunt cum pulicibus sergeant.

It sounds very posh because it is Latin. But it has a more basic meaning:

“If you lie down with dogs, you get up with fleas”.

Something that applies to all politicians.

The Prime Minister, sex, sleaze, prostitutes and Boris Johnson

A friend of mine – an Englishman in Italy – used to work for a large international conglomerate and, in the 1990s, once had to take a briefcase stuffed with cash to Rome Airport and hand it over to a civil servant. Everyone accepted that was how the wheels were greased. That was how the Italian state worked.

I also used to know someone involved with an Italian TV show which had to employ a girlfriend of now-deceased Prime Minister Bettino Craxi on their series. In fact, that underestimates her role: she actually arranged orgies for Prime Minister Craxi. My chum thought, “Ooh, now there’s a big secret I know about!” But then he discovered everyone knew about the supposed ‘scandal’ and it was almost routinely printed in Italian newspapers and magazines; everyone just accepted it. That was how the Italian state worked.

So I am a tad surprised as well as being in moral confusion about the current Italian Prime Minister Silvio Berlusconi’s problems.

He is immensely entertaining, which is always a bonus in my eyes. A bit like London’s current mayor Boris Johnson but with dyed hair. My heart takes flight when I hear any news item about either Boris or Silvio. I just know it’s going to be knockabout laugh-a-minute stuff.

But now Silvio is accused of having sex with an under-aged prostitute. This is not good. He faces a court case and a potential 15 years in prison. This is definitely not good.

The age of consent in Italy is generally 14, though 13-year-olds can legally have sex with partners who are less than three years older. This seems much too low to me but, if that is the law in Italy, then that is what good Italians Catholics have decided is morally acceptable. As I understand it, the girl involved in the Berlusconi case was 17 when the alleged sex took place and, while prostitution is legal in Italy – just as it is in the UK – it is illegal in Italy for a man to have sex with a prostitute under 18.

So the girl involved was three years over the general age of consent but one year under the legal age for sexual consent as a prostitute. This seems a very complicated moral quagmire within Italy, though I can see why sex with a prostitute under 18 is proscribed.

However, both Silvio and the girl totally deny sex took place. If they both deny it, then quite how evidence can be presented that it did take place I don’t know. There was a payment of £6,000 but apparently well after the alleged sex allegedly happened and Silvio and the girl both claim the payment was connected to something totally different. He also got her released from police custody in a separate incident, but that is more abuse of power than directly relevant the sex charges. It’s all a bit murky but sounds too circumstantial for a prosecution.

They could be lying through their teeth, of course, though I’m not sure why a young prostitute would not admit sex took place if she is going to become rich on selling the whole story to the media.

There is also the question in my mind of why on earth Silvio Berlsconi would have to pay for sex with a girl. Call me cynical, but the man is a billionaire, he owns a string of high-profile populist TV stations so he can get anyone he wants onto TV and he is the most powerful politician in the country! Any one of those three facts, in my experience, would mean lithe young nymphettes would be throwing themselves at him for free every day! The casting couch stretches beyond the movie business.

Heavens! Nymphettes throw themselves at impoverished comedians in dodgy basement clubs on a nightly basis let alone powerful billionaires who can get them on several national television series.

BBC News reported that Silvio Berlusconi reckons he has been in court over 2,500 times during various cases over the years. He has been accused of tax fraud, corruption, infidelity, Mafia involvement, you name it. I’m surprised he hasn’t been accused of illegally importing birds’ eggs. At least once he was accused of paying bribes on behalf of his companies at a time when no large company in Italy could operate without paying bribes. It struck me as a purely politically-motivated prosecution. That was/is how the Italian state worked/works.

Last year he was accused of being a member of an alleged secret organisation allegedly called P3 – a revival, it was said, of the infamous Masonic lodge P2 – Propaganda Due which existed from 1946 to at least 1981 and of which Silvio really was a member.

I have no idea if he is guilty or innocent of the current charges. He is certainly not an innocent man in general. And Italy – run by P2 and the Mafia from the end of the Second World War to perhaps the mid-70s – is most certainly not an innocent country.

P2 comprised prominent politicians, industrialists, bankers, journalists and military leaders, the heads of all three Italian intelligence services and even the pretender to the Italian throne. In 1977, P2 took over the influential Corriere della Sera newspaper; it was rumoured to be involved in the 1982 killing of ‘God’s banker’ Roberto Calvi, who was found hanging under Blackfriars Bridge in London, and it even had rumoured links to the 1980 bombing of Bologna railway station and the 1978 killing of former Prime Minister Aldo Moro by the heavily-infiltrated Red Brigades (allegedly because he had started to talk about NATO’s secret Gladio network).

It feels to me that Silvio is being stitched-up at the moment. He may very well be a reprehensible, ageing sleazeball, but this is a case where every fact seems to swirl in very muddied waters indeed.

It is not as if Silvio Berlusconi was running a prostitution racket, is it…

Is it?