<i>McMafia: A Journey Through the Global Criminal Underworld</i>

On Thursday, April 17th the West European Studies Program along with East European Studies and Africa Program held a discussion with Misha Glenny, former BBC World correspondent and Wilson Center Fellow on his new book McMafia: A Journey Through the Global Criminal Underworld.

Glenny began his discussion by noting how unprepared most governments were for the fall of the Berlin Wall in 1989 and the subsequent increase in the globalization of economies. Eastern Europe, along with other regions, would quickly follow in market liberalization leading to both an increase in private wealth for some, along with a rise in a new type of global mafia as well. This new "McMafia" would form primarily from a "perfect storm" of three phenomena including the end of communism in eastern Europe, the increase in globalization, and organized crime. Glenny followed up by stating that the new "McMafia" included government corruption, tax evasion, corporate fraud, as well as cyber-crime.

To highlight this rise in global organized crime since the end of the Cold War, Glenny discussed a number of key examples. The first included the case of Bulgaria in which two years after the fall of the communist regime 14,000 members of the police had been fired by the state. With few economic opportunities in the struggling new market economy a large segment of these officers formed there own organized crime unit which began trafficking illegal drugs throughout Europe by developing connections with the Escobar cartel in Colombia. A second example was the case of Japan and the land speculation bubble that had developed in the late 1980's and early 1990's in which the Yakuza or Japanese mafia benefited, laundering money in businesses and property in Hawaii and East Asia. Finally, Glenny noted the case of African militias, which had lost the backing and subsidies given by the United States and Soviet Union during the Cold War. These states now turned to the sell of minerals throughout the world to prop up often corrupt regimes throughout the continent.

Misha Glenny also elaborated on the starting point for the development of the new "McMafia" which occurred in the former Yugoslavia in 1991. As the region was subject to an arms embargo by the United States and European states, a significant proportion of the world's illegal arms trafficking converged here. As the former Yugoslavia had also been a traditional place for heroin smuggling, a new drug trafficking mafia would develop. Here it would receive a significant inflow of cocaine, trafficked women, and cigarettes, which were then dispatched throughout western and southern Europe. Glenny also pointed out that in some cases the United States and other European states would back known organized crime leaders due to their political alignments. This would be the case with Milo Yukanoviÿ, who while being involved in cigarette trafficking, nonetheless received backing from the US and the UK due to his opposition to the Milosevic government.

Another organized crime or "McMafia" stronghold is Moscow. Glenny notes that one of the primary reasons organized crime is so prominent in Russia is the state's dismantling coincided with the introduction of capitalism. As a rising business class could no longer count on the state for support, it turned to mafia protection instead. This in turn gave way to a dispute resolution system known as "protection racket". A second feature that made Russia such a profitable place for the mafia is the access it provided to vast natural resources, specifically oil reserves, which gave rise to a new Russian oligarchy of oil tycoons. The author stated that in order to avoid having their money seized by the state, these oligarchs sent it to foreign banks and offshore accounts. This task was rather easy because, as Glenny puts it, the 1990's were "the great decade of money laundering," as globalization was increasing and there was very little banking regulation. As a result, drug trafficking would also pour into Israel, which hosted a huge inflow of Russian immigration during this period.

Additionally, Glenny described how the backbone of transnational organized crime remains drug trafficking. Currently, the most important transit destination for this type of crime is British Columbia, where huge amounts of marijuana are produced or held before moving into the United States. Glenny noted that these large quantities being trafficked have not given way to a greater allocation of resources for law enforcement making it almost impossible to effectively slow the flow into the United States. Another area in which drug production is at record levels remains Afghanistan, where the Taliban continue to increase their resources thanks to high yields in opium crop production. There the farmers have also benefited from a shift in military and government resources by the United States and coalition partners to the Iraq War beginning in 2003.

Glenny concluded by discussing the increasing rate of cyber criminality, which has quickly become the second fastest growing illegal sector around the world. He discussed how, with the increase in "hacking" technology it has become much easier to perform since a single spam email can result in thousands of replies providing passwords and vital financial information. There has also been a critical shift from "ego hackers" to "criminal hackers" in the past five years. The majority of them coming from the BRIC countries, including Brazil, Russia, India and China. Key to the increase is the large proportion of youths who suffer from high poverty in these nations, despite being well educated and having access to some of the benefits of increased economic growth. In particular, Glenny qualified China as "the future of organized crime" and noted the serious problem with the continued explosion of counterfeited goods being exported to the west.

In follow-up questions Misha Glenny briefly addressed how difficult it remains to develop solutions, on the part of national and local government, in their efforts to curb organized crime. In his opinion law enforcement agencies cannot continue to address the problems alone. He noted that an efficient solution requires political vision, and the current political elites actually seem to lack this. In particular, the author called for an open dialogue on drugs and the recognition that the current policies have failed, especially in the US; legalization of the markets, especially where illegal practices have public health implications, like drug trafficking and prostitution; tighter regulation of the banking sector; and finally efforts at poverty reduction on the part of the West.