The phantom and threat of organized crime

Organized crime is often perceived in terms of extended, hierarchical crime “families” that extend not only their activities but also their authority structures across national boundaries. However accurate such a view may or may not have been in the United States, where it originated, evidence from a Dutch survey of organized crime enterprises reveals a different picture. For organized crime in northwestern Europe, it is more helpful to think of crime markets of two kinds: those in which the goods and services are themselves forbidden, and those in which legal goods and services are handled in illegal ways. Case studies of the drug trade, and of organized crime in the business realm, offer a detailed look at these two kinds of markets. The evidence suggests that while organized crime enterprises conduct trade across national boundaries, they do not constitute an international authority structure. Crime entrepreneurs constitute a challenge, not to the basic structure of society itself, but rather a more subtle kind of challenge to basic values and morals, particularly when criminal enterprise is linked to power at higher levels of society.     

The enterprise “model” of organized crime: Assessing theoretical propositions

In recent years, the study of organized crime has been oriented around the enterprise “model.” This model is really an approach to studying organized crime, founded on the notion that legal and illegal businesses are quite similar. This notion provides the method used by enterprise theorists: theories established for studying formal legal organizations are applied to the study of businesses that provide illegal goods and services. The most noteworthy research based on the enterprise approach is that of economist Peter Reuter. Reuter used principles of industrial organization and marketplace dynamics to predict that illegal enterprises will be relatively small and shortlived, and that illegal markets will be characterized by competition, not by collusion. Here I seek to assess the degree to which Reuter's propositions were confirmed or disconfirmed by observations of the numbers gambling industry in New York City in the 1960s. Most of Reuter's propositions were not supported by the data used in this study.     

Market offenses and limits to growth

The purpose of this article is to explore various factors that may regulate or stabilize levels in market offenses. Instead of assuming that illegal markets are ‘out of control’, evidence is advanced to demonstrate, on the contrary, that there are indeed limits to growth in criminal markets. This is presented along three principal and interconnected arguments. First, social norms limit the ability of suppliers to shape demand for illicit goods and services. Using public opinion surveys, it is concluded that the more objectionable the moral status of an illegal market, the smaller the pool of potential consumers and sellers. Second, there are considerable obstacles that confront suppliers of illegal goods and services accumulating capital and upward mobility. The consequences of product illegality inhibit the organizational growth capacities as well as the geographic expansion of illicit firms. Third, while impunity via corruptible alliances do cancel some of the effects of product illegality, this impunity is not a constant that can always be depended upon. To the extent that corruption varies across jurisdictions and over time, illegal entrepreneurs may come to realize that impunity is intrinsically limited in scope and volatile in nature and over which they essentially have very limited control. This revised version was published online in July 2006 with corrections to the Cover Date.     

Illegal gambling businesses & organized crime: an analysis of federal convictions

Illegal gambling operations have been alleged to support organized crime and victimize participants, rather than benefit them. This is said to occur through cheating in the games provided, defrauding the government of tax revenue, and funding other illicit and criminal activities. What has been missing is a systematic analysis of actual cases involving illegal gambling businesses to determine precisely who is involved, how these businesses operate, the nature of the threat posed, and the law enforcement response to it. The analysis reported here examines all federal convictions involving operation of illegal gambling businesses during a single year. There were more than 80 persons charged and convicted of participation in illegal gambling businesses, centered around 40 distinct enterprises. The results indicate that illegal gambling businesses in the United States are long-term operations consisting of four general types, and that enforcement of existing laws, particularly related to illegal online sports betting, are not working effectively.     

The paradoxes of organized crime

The paper argues that the concept of organised crime inconsistently incorporates the following notions: a) the provision of illegal goods and services and b) a criminal organization, understood as a large-scale collectivity, primarily engaged in illegal activities with a well-defined collective identity and subdivision of work among its members. Against this superimposition, the author's contention is twofold: (1) The supply of illegal commodities mainly takes place in a `disorganized' way and, due to the constraints of product illegality, no immanent tendency towards the development of large-scale criminal enterprises within illegal markets exist. (2) Some lasting large-scale criminal organizations do exist, but they are neither exclusively involved in illegal market activities, nor is their development and internal configuration the result of illegal market dynamics.For Susan Strange: mentor and friend     

The new German Data Protection Act and its compatibility with the European Data Protection Directive

A substitution of the right to maintain mailing lists for marketing purposes (the so-called list privilege) by a strict opt-in requirement as proposed by the German Government for the amendment of the German Data Protection Act does not conform with European law. Making the use of relatively innocuous data like name and address for marketing purposes subject to the data subject's declaration of consent infringes upon the requirements of the European Data Protection Directive. The Directive allows for the use of personal data either on the basis of a data subject's declaration of consent or after a balancing of legally protected interests. Reducing this two-track model to a one-track model (based on the data subject's declaration of consent only) does not do justice to the idea of balancing of interests or free movement of goods and services which are a mandatory part of European law. The draft bill interferes drastically with the free movement of goods and services. A tightening of the opt-in requirements would be a severe burden for the German economy because it is impossible for businesses to distribute their goods and services without the help of marketing measures. The economic cycle would be hit at its weakest point, i.e. the link between businesses and consumers which is gaining more and more importance especially with a view to cross-border competition.     

The Triborder–terrorism nexus

The Triborder region of South America, where the borders of Argentina, Brazil and Paraguay intersect, comprises a population of approximately 700,000 inhabitants, among them 15,000–20,000 are Arabs, mostly of Lebanese descent. The region has gained a reputation as a hub of illegal activities, ranging from sales of pirated electronic goods and software to trafficking in drugs, weapons and illegal migrants. Also, the Triborder's relatively unregulated financial sector launders tens of billions of dollars of criminal funds and causes flight of capital annually. Reports that the region is a terrorist haven and staging area seem exaggerated; yet Arabs' extensive participation in the Triborder underground economy is believed to generate funds on behalf of Islamic extremists in the Middle East, especially Hezbollah and Hamas. Efforts to crack down on pirate businesses and alleged terrorist financiers have been constrained by government apathy, widespread police and judicial corruption and a lack of effective anti-terrorist legislation. Also, the dependence of many of the Triborder's inhabitants on the underground economy represents an effective constraint on enforcement action.     

‘No banquet can do without liquor’: alcohol counterfeiting in the People’s Republic of China

The illegal trade in alcohol has been an empirical manifestation of organised crime with a very long history; yet, the nature of the illegal trade in alcohol has received relatively limited academic attention in recent years despite the fact that it has been linked with significant tax evasion as well as serious health problems and even deaths. The current article focuses on a specific type associated with the illegal trade in alcohol, the counterfeiting of alcohol in China. The article pays particular attention to the counterfeiting of baijiu - Chinese liquor - in mainland China. The aim of the article is to offer an account of the social organisation of the alcohol counterfeiting business in China by illustrating the counterfeiting process, the actors in the business as well as its possible embeddedness in legal practices, trades and industries. The alcohol counterfeiting business is highly reflective to the market demand and consumer needs. Alcohol counterfeiting in China is characterised primarily by independent actors many of whom are subcontracted to provide commodities and services about the counterfeiting process. The business relies on personal networks – family and extended family members, friends and acquaintances. Relationships between actors in the business are very often based on a customer-supplier relationship or a ‘business-to-business market’. The alcohol counterfeiting business in China highlights the symbiotic relationship between illegal and legal businesses.     

MDPs May Be Dead After Enron/Andersen, But Subsidiary Businesses Thrive

While some commentators believe that the Enron and Arthur Andersen affair that came to light in 2001 is responsible for the demise of multidisciplinary practices (MDPs), the notion of law firms engaging in MDPs lost most of its momentum during the American Bar Association (ABA) debate of 1999 and 2000. Enron and Andersen weakened whatever support remained for MDPs after the ABA defeat, during which MDP opponents raised legitimate concerns. But Enron and Andersen did not derail all models in which law firms successfully provide nonlegal services. In fact, the law-related services ancillary business model (as referred to by the ABA's Commission on Multidisciplinary Practice) is much more relevant post-Enron. Ancillary businesses, or subsidiary businesses as they are referred to at the authors' law firm of Bingham McCutchen LLP, are not MDPs. When structured and managed in compliance with fundamental principles and regulations, subsidiary businesses give progressive law firms the ability to deliver a comprehensive bundle of integrated services in response to client needs .     

New estimates of U.S. currency abroad,the domestic money supply and the unreported economy

Despite financial innovations that have created important new substitutes for cash usage, per capita holdings of U.S. currency amount to $2950. Yet American households and businesses admit to holding only 15% of the currency stock, leaving the whereabouts of 85% unknown. Some fraction of this unaccounted for currency is held abroad (the dollarization hypothesis) and some is held domestically undeclared, as a store of value and a medium of exchange for transactions involving the production and distribution of illegal goods and services, and for transactions earning income that is not reported to the IRS (the unreported economy hypothesis). We find that the percentage of U.S. currency currently held overseas is between 30 and 37% rather than the widely cited figure of 65%. This finding is based on the official Federal Reserve/Bureau of Economic Analysis data which is a proxy measure of the New York Federal Reserve’s (NYB) “confidential” data on wholesale currency shipments abroad. We recommend that the NYB data be aggregated so as to circumvent confidentiality concerns, and be made readily available to all researchers in order to shed greater light on the questions of how much U.S. currency is abroad and on the particular location of overseas U.S. dollars. The newly revised official estimates of overseas currency holdings are employed to determine the Federal Reserve’s seigniorage earnings from 1964–2010, which have provided a $2950. Yet American households and businesses admit to holding only 15% of the currency stock, leaving the whereabouts of 85% unknown. Some fraction of this unaccounted for currency is held abroad (the dollarization hypothesis) and some is held domestically undeclared, as a store of value and a medium of exchange for transactions involving the production and distribution of illegal goods and services, and for transactions earning income that is not reported to the IRS (the unreported economy hypothesis). We find that the percentage of U.S. currency currently held overseas is between 30 and 37% rather than the widely cited figure of 65%. This finding is based on the official Federal Reserve/Bureau of Economic Analysis data which is a proxy measure of the New York Federal Reserve’s (NYB) “confidential” data on wholesale currency shipments abroad. We recommend that the NYB data be aggregated so as to circumvent confidentiality concerns, and be made readily available to all researchers in order to shed greater light on the questions of how much U.S. currency is abroad and on the particular location of overseas U.S. dollars. The newly revised official estimates of overseas currency holdings are employed to determine the Federal Reserve’s seigniorage earnings from 1964–2010, which have provided a 287 billion windfall for U.S. taxpayers. Overseas currency stock data are also used to derive estimates of the domestically held stock of currency as well as narrow and broad measures of domestic monetary aggregates. These domestic monetary aggregates are believed to be better predictors of future economic activity than traditional monetary aggregates and are tested to determine their ability to predict fluctuations in real output and prices. Domestic cash holdings are finally used to estimate the size of the U.S. unreported economy as measured by the amount of income that is not properly reported to the IRS. By 2010, we estimate that legal and illegal source unreported income” is $1.9–$1.9–2.4 trillion, implying a “tax gap” in the range of $400–$400–540 billion. Currently, we estimate that 18–23% of total reportable income is not properly reported to the IRS.     

(Un)Authorized: A Study on the Regulation of Street Vending in Latin America

This article offers an examination of the official rules that participate in the organization of street vending activities in Latin American cities. It does so by explaining the legal assemblages that serve to define how, where, and by whom certain Latin American public spaces may be occupied, and by empirically illustrating the way in which the legal status of street vendors—that is, whether or not they are willing or able to get official recognition to work in these public spaces—affects the way they use and occupy the urban landscape. The information gathered here suggests that securing access to official permission to work on the streets does significantly affect vendors' locations as well as their working modalities. The subsequent analysis also illustrates a significant relationship between vendors' legal status and specific interactions with urban authorities and other actors. These findings suggest that, although law cannot prevent the unauthorized occupation of public spaces for commercial purposes, it could certainty avert the reproduction of other illegal practices and, perhaps most importantly, protect the urban poor from the vulnerability they face before state and nonstate violence.     

A contractual perspective on succession in family firms: a stakeholder view

This paper analyses succession in family firms from a contractual perspective. A firm is regarded as a nexus of contractual relations with owners, employees, suppliers of goods and services and customers. These contractual parties are in differing degrees tied to the firm through asset specificities. Succession can affect the value of such assets. In this sense they become stakeholders with vested interests in the succession process. The theoretical discussion of affected stakeholders is backed up by a survey study of 143 Swedish family-owned businesses that have been subject to succession. The results show that the opinions of close shareholders such as family members and incumbent mangers as well as those of other stakeholders such as suppliers and customers are important.     

电影贴片广告的法律思考--评电影《英雄》的一起消费者诉讼

2003年杭州发生了中国首起有关电影贴片广告的消费者诉讼,通过对案件的分析,认为电影贴片广告本身并不违法,但目前的播放方式以剥夺知情权限制了消费者的自由选择权。同时对经营者应当承担何种法律责任进行了探讨。     

Escaping from the crime of inner cities: Church attendance and religious salience among disadvantaged youth

With the theoretical backdrop of social disorganization and “resilient youth” perspectives, we hypothesize that individual religiosity is protective in helping at-risk youths such as those living in poor inner-city areas to escape from drug use and other illegal activities. To test this hypothesis, we draw data from an interview survey of 2,358 youth black males from tracts in poverty in Boston, Chicago, and Philadelphia, conducted in 1979 and 1980. Results from a series of multilevel analyses indicate that church attendance (the frequency of attending religious services) has significant inverse effects on nondrug illegal activities, drug use, and drug selling among disadvantaged youths. Religious salience (the perceived importance of religion in one's life), however, is not significantly linked to reductions in juvenile delinquency. We discuss the implications of our findings, focusing on individual religiosity as a potentially important protective factor for disadvantaged youths.     

Cracking Pandora’s box: The Soviet breakup and the onset of Buccaneer Capitalism

With the breakup of the Soviet Union and the advent of globalization, an international buccaneer capitalism has developed. Criminal enterprises that were previously intra-border have expanded across borders and provided for the willing buyers services and products not legally obtainable. This paper explains how buccaneer capitalism (the development of criminal enterprises conducted in emerging markets into legitimate businesses) has evolved. Examples of American buccaneer capitalism are presented as is a chart showing the Historiography of Russian/Soviet Crime.     

Chinese Organised Crime

Secret societies have always been endemic to Chinese overseas communities, surviving on fear and corruption and prospering through their involvement in a wide range of legal and illegal businesses. For many years, Hong Kong was seen as the 'capital' of this worldwide Chinese criminal fraternity and, in the 1980s, many outside observers and analysts thought the gangs that were based in the then British colony would leave once it reverted to Chinese rule in 1997. In the end, the reverse turned out to be the case. Not only did the Hong Kong Triads make arrangements with the territory's new overlords, but in Chinatowns all over the world, close links were also forged with mainland Chinese interests. In China itself, where cutthroat capitalism has replaced the old, austere socialist system, new secret societies, both Triad-linked criminal groups and various syncretic sects, are also expanding at a breathtaking pace. An entirely new breed of entrepreneurs is emerging on the fringes of China. The businesslike and well-connected, pinstriped suit-wearing managers of the Sun Yee On Triad have shown where the future lies, while gangsters are breaking new ground in such new frontiers as the Russian Far East, which could have far-reaching consequences for the stability of the entire region.     

国际货物贸易中卖方权利瑕疵担保责任之比较--兼评我国《合同法》的相关规定

在国际货物贸易中,对于卖方的权利瑕疵担保责任非常容易产生争议和纠纷,它关系到买卖双方权利义务的范围和双方的切身利益,是合同法律制度中一个值得密切关注的重要问题。《德国民法典》、美国《统一商法典》和《联合国国际货物销售合同公约》中关于卖方权利瑕疵担保责任规定,我国合同法应借鉴前三者的长处。     

Business Development Support and Knowledge-Based Businesses

Knowledge-based businesses are vital to the economic development and revitalization of many regions, especially areas that have experienced a decline in traditional industries. Notwithstanding the importance of KBBs to areas with marginal economies, little is known about the business development support requirements of these firms and the extent to which their support needs are being met. Through the use of a telephone survey, this empirical study investigates the demand-side perspectives and experiences of entrepreneurs in a peripheral region of Canada to determine the types and sources of support used at various stages of business development, and to identify potential support gaps. Findings indicate support used by KBBs differs from more traditional firms and that support needs change as firms move through the life cycle. There appears to be a low level of awareness among firms in the study region of available support services and a perception that support beyond the start-up stage is generally lacking. These findings have important implications for researches and for agencies with a business development support mandate.