The untouchables
Apr 19th 2001
From The Economist print edition

The profits from organised crime are soaring, and its bosses are invulnerable. That is why so many top policemen want new laws, of the sort America used against its mafia

FOUR months ago, Tony Blair summoned the heads of Britain’s intelligence and law-enforcement agencies to a meeting at Downing Street. The purpose of the unprecedented summit was to discuss the alarming growth in organised crime. All that resulted from the meeting, at least in public, was a bland statement that the government was determined to crack down on organised crime. But the threat is regarded as so serious that ministers are wondering whether to introduce a law like America’s Racketeer Influenced Corrupt Organisations Act (RICO).

Aimed at those who engage in “a pattern of racketeering activity”, RICO helped smash the New York mafia families in the 1980s. Bosses received long sentences for offences ranging from extortion to murder, after a surveillance operation involving 171 court-authorised wire-tapping and bugging operations monitored by hundreds of FBI agents. In its evidence to Lord Justice Auld, who is examining the case for criminal-law reform, the Association of Chief Police Officers (ACPO) is arguing that Britain should have something similar. ACPO is calling for a new, all-embracing conspiracy law, a prosecution right of appeal from court rulings, and better protection of intelligence. The law as it stands, says Sir David Phillips, chief constable of Kent, is “out of step” with the methods needed to tackle organised crime.

The targets of a RICO-style law would be a group of so-called super-criminals. Police chiefs say that, as the law stands, it is virtually impossible to convict these people. Part of the problem is that they distance themselves from the stuff that goes on in the streets. “They don’t commit crimes themselves, they manage criminal enterprises,” argues Sir David. He says that the number of untouchables is growing.

The director-general of the National Criminal Intelligence Service (NCIS), John Abbott, admits that there has been “ a huge increase” in the reach of organised crime over the past decade. The NCIS’s latest review, a classified document, says that the number of “core nominals”—officialese for top-rank criminals—has risen, on average, by a third every year for the past five years. There are around 150 of these top criminals. A group of around 750 lieutenants working for them are known as “current nominals”. The Home Office estimates that, in all, about 1,000 organised criminal groups are operating in Britain.

Between them, they are making a lot of money. One reason is the steady growth in the market for drugs. The Office for National Statistics estimates that the illegal drugs market alone accounts for nearly 1% of national output, equivalent to £8.5 billion ($12 billion) a year. The profit margins are generous. Heroin can be bought in Pakistan for £850 a kilo and sold in Britain for £24,000. The falling street prices of drugs in Britain (see chart) suggest that more and more is being imported.

Criminals, feuding over profitable markets, are increasingly resorting to violence. The number of drug-related murders and kidnappings has risen sharply. More than 50 murders had links to organised crime in 1999, according to the police. Kidnap and blackmail are also on the increase. In the past three years, the number of such crimes, often linked to turf feuds over illegal drugs, increased four-fold, the NCIS says.

The growing trade in illegal immigrants is also helping the growth of organised crime. It is almost as profitable as importing hard drugs, and the penalties for being caught are lighter. The Home Office admits that the dozen gangs which control the trade have “infrastructures, communications and surveillance capabilities far in excess of anything that the law-enforcement agencies in transit and source countries can muster.”

But bootlegging is the fastest-growing criminal activity of all, because of the increasing disparity between alcohol and tobacco taxes in Britain and Europe, and the ease with which the stuff can be imported. According to one chief constable, “There is not a housing estate in Britain where someone is not selling bootlegged cigarettes and spirits.” More than £2.5 billion is being lost in tax revenue each year from tobacco smuggling alone, nearly a third of the amount lawfully collected. Bootlegged sales now account for 80% of the domestic market in hand-rolling tobacco. The illegal tobacco trade is estimated to be worth more than £500m to criminals, big and small.

This trade used to be left to entrepreneurial individuals, the men in the white vans. But the bigger the business became, the more tempting it looked to organised crime. Now it is run by professional organisations using lorries, false documents and large warehouses.

Counterfeiting of credit cards is another useful earner. The association which represents the credit-card companies, APACS, says the involvement of organised crime led to “frightening losses” of more than £100m last year, double those of the previous year.

Many of the “core nominals” who control these criminal rackets have been under police surveillance for years. Few have been successfully prosecuted, because they keep their distance from the actual crimes. Even their key lieutenants are difficult to prosecute, according to the NCIS. Big trials of organised criminals all too often end in failure because of flaws in police procedures and failures to disclose surveillance evidence. Brian Doran and Kenneth Togher, described in court as “two of Britain’s biggest gangsters”, were freed last year after their 24-year sentences for importing 300 kilograms of cocaine were quashed. The Appeal Court ruled that information that the suspects’ hotel rooms had been bugged without authorisation had been improperly withheld.

An unpublished Home Office research study supports the view of policemen that they are being outpaced by a new, highly professional breed of criminals. The author of the study, Michael Levi, professor of criminology at Cardiff University, says “there are significant areas of organised criminality that are effectively immune from prosecution.” His paper points out that, once criminals have acquired big business interests, it is almost impossible to tackle them effectively. The British judicial system aggravates the problem, he says, because it is “so poor at protecting sensitive information and sensitive techniques, as a result of the ever-growing pressure on judges to disclose.”

The biggest obstacle to convicting the “core nominals” is the ban on the use of evidence acquired by tapping telephones, known as wiretap evidence, in British courts. This is a curious anomaly, since evidence acquired by much more intrusive methods—bugging somebody’s house, for instance—can be used in court, and its consequences are serious. Without wiretap evidence, it is hard to connect the man who ordered a crime with the man who committed it. Unless and until this is changed, a RICO-style law would probably achieve very little.

The ban on wiretap evidence, confirmed by the Regulation of Investigatory Powers Act, passed last year, has undoubtedly resulted in major criminals escaping prosecution. One of Britain’s biggest heroin dealers, Curtis Warren, was subject to years of intensive surveillance by Merseyside police without being prosecuted. It was only when he unwisely moved to the Netherlands, in the mid-1990s, that he got jailed for 12 years, thanks to wiretap evidence.

Most other European countries, along with the United States and Canada, permit wiretap evidence to be used in court. Lord Lloyd of Berwick, who reviewed Britain’s anti-terrorist legislation in 1995, recommended that the government should follow their example. But the intelligence services are determined that wiretap evidence should not be disclosed. It seems that they do not want the extent of their surveillance networks to be revealed.

Until now, the police have gone along with this peculiarly British restriction. But, as organised crime grows, there are signs that attitudes may be changing. A senior police officer says, off the record, that wiretap evidence is bound eventually to be used in court, because it is by far the most effective way of tackling organised crime.

If wiretap evidence is to be made available, it will have to be used sensitively. At present, the law demands details of the origins and pedigree of every piece of evidence. Some wiretap evidence is acquired by the intelligence services, in ways that they do not want the world to know about. If it is to be revealed, the rules on disclosure may have to be made more flexible. So be it. Wiretap evidence is a powerful weapon in the fight against organised crime, and the criminal justice system should be able to use it.