Nouriel Roubini, internationally acclaimed finance pop star, demands the introduction of a new discipline at the universities of the world, that of "criminal economics." Together with Roberto Saviano, the investigative journalist from Italy who has been a presumed target of Mafia godfathers for the past four years, he presented a lecture titled "Italy and the United States -- Two Perspectives on the Crisis" at New York University.
While Saviano pointed out the vulnerability of some U.S. banks for money laundering and economic crime, and then established a connection to the financial crisis and the Italian Mafia, Roubini declared social inequality as the fundamental evil of the financial crisis and showed solidarity with the young protesters of the Occupy Wall Street movement.
Security arrangements for Roberto Saviano's performance are thorough. Saviano is an Italian national hero, and he knows it. Two security guards follow him in a conspicuously inconspicuous manner while the reverent murmur preceding his entrance turns into surging applause. The audience consists largely of Italians living in New York City. Many left their home country because of a lack of opportunity or political exhaustion from 10 years of Silvio Berlusconi's questionable leadership. This evening they have not come out to listen to economist Nouriel Roubini, rather they want to celebrate the charismatic Roberto Saviano.
"I am a complicated guest," Saviano says apologetically, "all the more I admire the courage of my hosts." The author, who has been in hiding since 2006 and never sees daylight without security guards seems relieved this night. He smiles a lot although the international press describes him as having a great seriousness about him. Considering his situation, that doesn't come as a real surprise. The evening is a home game for a refugee who doesn't seem to fear the solitude that accompanies the fight for uncompromising truth.
Saviano focuses first on the machinations of financial institutions in the U.S. and the money that is laundered every year. Approximately 500 billion to one trillion dollars, profits from criminal activities like drug and human trafficking, are paid annually into various bank accounts around the world. Experts estimate that half that amount reaches the United States. Saviano is citing statistics from the DEA, the U.S. Drug Enforcement Administration.
Since early December, a group of Republican Congressmen have been investigating the DEA, whose agents allegedly washed several million U.S. dollars in an undercover investigation of Mexican drug cartels. The investigators tried to find out what pathways the illegal profits were taking, though the Mexican government does not consider this method as useful.
"Citibank, Wachovia, Wells Fargo." Saviano names the U.S. financial sinners with pleasure and finds himself in good company of U.S. politicians and scientists, who also have been dealing with this topic extensively. The linguist and activist Noam Chomsky, U.S. Senator Carl Levin, and sociologist James Petras have already published stories regarding the involvement of some U.S. banks in illegal financial transactions.
In 1998, the Supreme Court of the United States issued a critical report titled "Raul Salinas, Citibank, and Alleged Money Laundering" that questioned the procedures of Citibank. The brother of former Mexican President Carlos Salinas, Raul, had paid approximately 100 million U.S. dollars, drug money, into Swiss bank accounts with a little help from his friends at Citibank. Citibank had tried to obliterate the traces by using complex transactions and never verified the source of Salinas' assets.
"The willful blindness, and the ignorance of bank clerks and some authorities allow these illegal transactions to happen," Saviano adds while moving on to the next scandal, which he calls a "terrorist attack on the international financial system."
Wachovia, which had merged with Wells Fargo in 2008, was according to U.S. federal prosecutors, involved in the laundering of Mexican drug cartel money, to the amount of approximately 379 billion U.S. dollars. "The scandal only broke because one person in the system carried out their duty and reported it," says Saviano, citing Attorney Jeffrey Sloman, "Wachovia's blatant disregard for our banking laws has issued international cocaine cartels a blank check to fund their illegal actions."
These types of financial cartels often operate with the support of authorities who contribute to the impairment of the global financial system, according to Saviano. Its credibility is affected from negatively, to an extremely high degree, while the peoples' trust in their governments and financial institutions is weakened. Saviano is naming large American banks and the Camorra mafia clans, Cosa Nostra, 'Ndrangheta, and Sacra Corona Unita in the same breath just to clarify that there are no qualitative differences in breaking the law.
"At the same time, an organization such as Camorra is benefitting immensely from the financial crisis. The mafia helps small businesses in nee, if the banks do not grant more loans. The money will be paid even if there is little chance of compensation, because in the long run the company belongs to organized crime."
In 2008, the Italian employers' association, Confesercenti, published the report SOS Impresa (SOS Company) and explained that about 180,000 Italian traders owe their godfathers and are paying more than 12 million euros in interest annually. The Mafia also has access to enough cash to buy up property and companies in need at bargain prices. "If they ever should be running out of cash, they kill each other," says Saviano. A lack of cash flow doesn't seem to be a pressing issue for the Italian Mafia lately, since the combined turnover of all Italian "families" amounted to about 110 billion U.S. dollars in 2008, turning the Mafia into Italy's most flourishing business enterprise.
The situation in the U.S. looks similar: The FBI brought a total of 127 mobsters from New York, New Jersey, and Rhode Island into custody in January of this year. Greg Smith, author of Nothing but Money -- How the Mob Infiltrated Wall Street, explained in an interview, "Mafiosi always find new ways to earn money no matter what state the economy is in. After the real estate market had collapsed in the U.S., they simply shifted their business from the corruption in the construction industry to mortgage fraud."
The Roubini-Saviano panel was not a night of stringent, economic analysis, but very trenchantly Saviano, the brave, provided an overview of criminal activities by "legitimate" financial institutions, who in many instances share the same ignorance towards the law as organized crime.