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ANTICORRP Project Title: Anti-Corruption Policies Revisited This project is co-funded by the Seventh Framework Programme for Research and Technological Development of the European Union EU Grant Agreement number: 290529 Project acronym: ANTICORRP Project title: Anti-Corruption Policies Revisited Work Package: WP9 Organised crime and impact on vulnerable groups Title of deliverable: D9.1 Integrated report Due date of deliverable: 28 February, 2015 Actual submission date: 28 February, 2015 Organization name of lead beneficiary for this deliverable: European University Institute Project co-funded by the European Commission within the Seventh Framework Programme Dissemination PU Public Level X PP Restricted to other programme participants (including the Commission Services) RE Restricted to a group specified by the consortium (including the Commission Co Services)Confidential, only for members of the consortium (including the Commission Services) 1 This project is co-funded by the Seventh Framework Programme for Research and Technological Development of the European Union Table of contents Introduction 4 Executive Summary 8 Part I Chapter 1 Definitions, data and methodology 1.1 Defining the problem 23 1.1.1 The EU definitions of organised crime 1.1.2 The EU assessment of the link between organised crime and political corruption 1.1.3 The working definition of this study 1.2 Methodology: unit of analysis, measurement strategies and caveats 39 1.2.1 The study of organised crime and corruption: research strategies and problems 1.2.2 The research design of this report 1.2.3 Sources and data acquisition 1.3 OCC event dataset: how to explore the link 49 1.3.1 The criminal actors 1.3.2 The political and institutional actors 1.3.3 The link between criminal and political actors Chapter 2 Public policy sectors and the criminal-political nexus 2.1 Assessing the link between organised crime and policy arenas 58 2.2 Public procurement 60 2.2.1 Policy setting 2.2.2 Mechanisms of infiltration 2.3 Privatization of public services and assets 63 2.3.1 Policy setting 2.3.2 Mechanisms of infiltration 2.4 Management of EU funds 66 2.4.1 Policy setting 2.4.2 Mechanisms of infiltration Part II Countries reports 3.1 Bulgaria 86 3.1.1 Assessment of organised crime 3.1.2 Institutional policies and initiatives against organised crime and political corruption 3.2 Croatia 101 3.2.1 Assessment of organised crime 3.2.2 Institutional policies and initiatives against organised crime and political corruption 3.3 Hungary 112 3.3.1 Assessment of organised crime 3.3.2 Institutional policies and initiatives against organised crime and political corruption 3.4 Italy 138 3.4.1 Assessment of organised crime 3.4.2 Institutional policies and initiatives against organised crime and political corruption 3.5 Kosovo 167 3.5.1 Assessment of organised crime 3.5.2 Institutional policies and initiatives against organised crime and political corruption 2 3.6 Albania 181 3.6.1 Institutional policies and initiatives against organised crime and political corruption 3.7 Georgia 190 3.6.1 Institutional policies and initiatives against organised crime and political corruption Part III Chapter 4 Comparative assessment of the link between organised crime and political corruption 4.1 Organised crime groups in a comparative perspective 194 4.1.1 Pathways of emergence 4.1.2 Core business 4.1.3 Organizational models 4.2 Legislation and policies against organised crime in a comparative perspective 203 4.3 Policy arenas and organised crime infiltration in a comparative perspective 208 Bibliography 213 Appendix 1: Codebook 222 Appendix 2: Sample of in-depth case studies 229 The authors’ contributions to this Integrated Report have been as follows: Introduction, Chapter 1 and Chapter 2 by EUI (Salvatore Sberna and Alberto Vannucci); the chapter and the in-depth case studies on Bulgaria have been written by CSD (Tihomir Bezlov, Maria Karayotova, Atanas Rusev, Alexander Stoyanov);the chapter and the in-depth case studies on Croatia has been written by PSD (Ana He ćimovi ć and Iva Milanovi ć Litre);the chapter and the in-depth case studies on Hungary has been written by BCE (Szidónia Nagy, Zoltán Szántó and István János Tóth); the chapter and the in-depth case studies on Italy has been written by EUI (Salvatore Sberna and Alberto Vannucci); the chapter on Kosovo and Albania have been written by IKS (Edona Krasniqi); Chapter 4 has been written by EUI (Salvatore Sberna and Alberto Vannucci). 3 Introduction (a) Research goals This integrated report investigates the link between political corruption and organised crime, by examining the modalities, resources and strategies used by criminal groups to govern and/or capture the market of political corruption. On the one hand, the report looks at the infiltration of organised crime in three main policy sectors where public spending and regulations play a pivotal role: public procurement, the privatization of public services, and management of EU funds. Alongside this, the report also analyses the criminal penetration of electoral politics, by evaluating the influence that criminal organisations can achieve in electoral arenas. As a result, the report provides a general assessment of policy regulations, legal countermeasures and practices adopted to prevent and combat organised crime, especially in interaction with political corruption. The report is drawn from data collected in five European countries (Bulgaria, Croatia, Hungary, Italy, Kosovo) across the above themes, and includes two more countries for the assessment of anti-organised crime legislation and initiatives (Albania and Georgia). The methodology involves both extensive and intensive strategies of investigation. A quantitative assessment of the crime and politics nexus is based on the Organised Crime & Corruption (OCC) events database, in which events data about the link between criminal groups and political corruption have been gathered and assembled 1. A qualitative assessment involves in-depth understanding of the mechanisms of corrupt exchanges, presented as single case studies conducted in the countries covered by this study, inclusive of primary and secondary sources (interviews, legal proceedings, academic and policy-oriented reports). Data collection and analyses were conducted by five institutions across Europe (EUI, CSD, BCE, IKS, PSD). The main research goals of this study are as follows: (1) To explore the variety of resources, actors and mechanisms of interaction between organised crime and political corruption in electoral politics and three policy sectors: public procurement, privatization of public services, and management of EU funds. By collecting and presenting information on a wide range of criminal groups across European countries, it is hoped to achieve a greater understanding of both the possibilities and difficulties of a European monitoring exercise in respect of organised crime and political corruption; (2) To explain the variation in the type of exchanges, by examining (a) the structure and organization of criminal groups and their capacity to capture public decision-making; and (b) the characteristics of policy settings that affect the opportunities and costs of corrupt exchanges. According to this report, both the organization of criminal groups and the characteristics of policy settings in turn shape the nature and formation of corrupt exchanges and of the actors involved in these transactions; 1 All the data about OCC events collected in the five countries have been assembled in a single database of events. In the case of Italy (see the country report), we also present a preliminary analysis of the data to show the potential of this research strategy. 4 (3) To review the current institutional policies and practices adopted in the countries covered by this study to prevent and combat the infiltration of organised crime groups in the legitimate economy and the public sector. (b) Contributions of this study Before proceeding it is necessary to draw a distinction between what is and what is not under the lens of this study. This preliminary assessment will be useful to clarify the immediate contributions of this report. Firstly, previous research projects and analyses concerning the link between corruption and organised crime (see Table 4 for an overview) have traditionally taken organised crime as a cause of corruption, focusing on certain forms of corruption, such as police and judicial corruption, which are typically generated by the attempt of criminal actors to avoid conviction, to obtain impunity, or other specific advantages related to their illegal acts. Without any doubt, such an approach may well serve as a “laboratory” in understanding the strategies of criminal groups in preserving their illegal businesses and enabling them to flourish. However, this type of corrupt exchange only partially exemplifies those reciprocity mechanisms that certain criminal groups can trigger with institutional and political actors, achieving longevity and territorial control. The goal to neutralize investigations and law enforcement through bribing a police officer or a judge is only a part of the problem. Such a focus does not enable seeing organised criminality as a phenomenon recognizable by the reciprocal services it can perform for legitimate clients (politicians, bureaucrats, professionals, entrepreneurs in legal markets). In other words, organised crime can also be a resource for corrupt exchanges, when it becomes an integral and functional component of political corruption networks. This is the reason why this report focuses on the link between organised criminals and political corruption, and not primarily on other forms of corrupt exchanges. Secondly, data on organised crime groups in Europe are uneven, and often dominated by information from those countries that have traditionally experienced the presence of large and long- lasting organizations (IT and BG, for instance). There is, by contrast, a general lack of knowledge not only on the nature and extent of organised crime groups in new territories and other member states, but also, more interestingly, on the variety and evolution of criminal groups in the same traditional areas of operation.
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