Lecture
Organised Crime and Corruption
Dr Kartikeya Tripathi
Structure of the lecture
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Definitions
Organised Crime (OC)
Corruption
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What factors facilitate the OC-corruption link?
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Why does OC like corruption?
Why does OC invest in business?
Where does it invest?
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The role of the state
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Case study: Real estate market in Mumbai
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Challenges in studying OC-corruption link
A little bit about me…
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Lecturer
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PhD on Train Drivers’ response to reports of suspicious items (possibly
IEDs) on urban commuter trains
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Cybercrime against older people, Sexual harassment on public
transport, Police response to runaway children, Recording crimes in
informal neighbourhoods, Theft of mobile phones, Tiger conservation
in national parks
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MSc in Criminal Justice Policy, University of Oxford
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Journalist with The Times of India in Mumbai covering court cases
against organised crime and terrorism suspects
Definitional issues
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OC
Continuity, Coordination, Hierarchy
Street gangs to Oligarchs
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‘Essentially business’ (UK Parliamentary Research Paper, 2007)
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Corruption
‘Abuse of entrusted power for private gain’ (Transparency International)
Bribes, Nepotism, Influence
A moral issue or ordinary, every day and all pervasive fact of life
• Market model
Subvert regulation
Use regulation as an opportunity
OC-Corruption Link: Simple Explanation
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Allows OC to carry on its work
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Removal of ‘obstacles’ and ‘hassles’
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‘Business as usual’
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‘Look the other way’
OC-Corruption Link: Simple Explanation
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Freedom from censure and prosecution
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Reduces costs of doing business
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Ensures continuity
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Let’s not forget the officials and politicians: they get rich
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Example, beggars’ mafia in Mumbai
OC-Corruption Link: Complex Explanation
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Corruption helps OC meet larger instrumental goals than just survive
and function
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It is the route towards legitimisation
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It ensures continuity/survival
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This has been a learning curve for OC (certainly in case of Mumbai)
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Most importantly corruption allows OC to gain legal protection
What factors facilitate OC-Corruption links?
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Weak states and weak economies
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‘Ghost from the past’ of regulation
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Neo-liberalism
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Globalisation
What factors facilitate OC-Corruption links?
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State policy is myopic and relies on over-regulation
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OC provides essential commodities for survival
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Client-patron relations with the local community
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Political corruption and elections
Karim Lala
Gold, Silver, Electronics, Zanjeer
Vardarajan Mudaliar
Illicit liquor, Settling disputes, Nayakan
Why does OC invest in business?
Why does OC invest in business?
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Concealment of criminal activities
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Profit maximisation
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Control of territory
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Building social consensus
Why does OC invest in business?
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Money laundering and placement
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Cultural reasons
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Stepping stone to politics
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Diversification
Haji Mastan
Smuggling, Deewar
Why does OC invest in business?
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Legitimisation
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Gain legal protection
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Long term survival
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Turns the tables on the state
Dawood Ibrahim
‘D Company’, Company
Real estate, Narcotics, Bollywood,
Music companies,
Mobile phone spectrum
Forbes lists him as 5th richest fugitive
India, Pakistan, UAE, South Africa
Where does OC invest through corruption?
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Protected markets (government tenders, railways)
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‘Grey businesses’
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Fragile industrial, commercial, financial support (Bollywood)
Where does OC invest through corruption?
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Businesses that are traditional, low tech and labour intensive
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Unorganised sector
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Businesses with high-risk and high profitability (Bollywood, Real
estate)
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OC survives vagaries of the market much better
Haseena Parkaar
Fresh vegetables,
Haseena Parkar
The role of the state: Simple Explanation
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State is weak
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State institutions are heavily compromised
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Corruption is endemic
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Poor training, poor salaries, poor morale
The role of the state: Simple Explanation
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Very poor Transparency International ratings (India: Ranked 81 out of
180, Score 40/100)
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Frequent public scandals
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OC operates and flourishes with little or no risk
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Officers, regulators and politicians make money
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Anything goes
Chhota Rajan
Real estate, Vaastav
The role of the state: Complex Explanation
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The state maintains its overall pre-eminence
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Compromised institutions are common but not the rule
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The state constantly hits back at OC (that too very hard in Mumbai)
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‘Encounters’
The role of the state: Complex Explanation
The role of the state: Complex Explanation
The role of the state: Complex Explanation
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Changes in laws – MCOCA
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OC bosses are extradited from other countries
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Regulation of businesses, banks
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International cooperation to freeze bank accounts
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Action against corrupt officials – mostly transferred to side jobs
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Controlled chaos
Why does the state hit back?
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Maintain its legitimacy
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In Mumbai the political class wants to safeguard its status
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In a democratic system the political and executive government remain
supreme
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The state controls the nuances and ‘rate card’ of corruption
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The police considers itself the most organised of all organised entities
Case Study: Mumbai Real Estate Market
Case Study: Mumbai Real Estate Market
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Booming property market – paucity of land
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For decades real estate has been over regulated
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Government policy on redeveloping real estate hugely problematic
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Market has all the elements that attract corruption and OC
Case Study: Mumbai Real Estate Market
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OC in Mumbai has been well entrenched in slums and informal
neighbourhoods
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Providing essential services at a price, settling disputes
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Involved in local politics
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Bribe civic and police officials to carry on its business
Case Study: Mumbai Real Estate Market
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In 1990s government started a process of economic liberalisation
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OC lost several smuggling markets
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At the same time Mumbai’s real estate was opened up for
development
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Huge amounts of money started flowing into the economy
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OC saw this as an opportunity to reinvent itself
Case Study: Mumbai Real Estate Market
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Threats
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Violence
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Bribes
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Labour unions (mill lands)
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Squatters (slums)
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Redevelopment plans
Arun Gawali
Real estate, Gambling,
Politics, Daddy
Khushi Developers Private Limited
Sujata Nikhalje, Chhota Rajan’s wife
Case Study: Mumbai Real Estate Market
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Beyond a point the process takes a legal form
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Sara-Sahara case
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Case exposed large scale corruption in the police, municipal
corporation
Iqbal Kaskar
Challenges of studying OC-Corruption link
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Definitional issues
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Where is the data?
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‘Victimless crime’
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How do you operationalise certain concepts?
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Account for the complexity of the phenomena
Abdul Karim Telgi
Counterfeiter, Fake stamp paper, Estimated at $2.5 billion, Ran in several states
350 arrests, One police inspector amassed wealth worth USD 14 million
Property bought and sold all legal
Thank you for your time
