In the world of illegal markets and organised crime, money is the prime mover. Legal or not, if someone’s willing to buy, odds are someone else is willing to supply.
In the two decades or so since the fall of the Iron Curtain, continued integration of world markets has presented new business opportunities for legal and illegal businesses alike. Not sure how best to distribute your product overseas? Don’t worry – let a local retailer take care of that while you focus on wholesale production! No more consumers in your domestic market? No matter – start focusing on exports! Even better, let tourism bring the consumers to you!
There’s just one problem: expanding your market share can get ugly.
Mergers and executions
In legitimate business, hostile takeovers are a serious threat. In illegal markets, they are a deadly one. While organised crime in the 21st century is organised more by the invisible hand than by clandestine gatherings of gangsters, there is still big money in mergers and acquisitions.
If a rival organisation wants your share of a market, then taking it by force is often one of the only ways to do it. This lesson was learnt the hard way in Eastern Europe in the 1990s, when Russian gangs took over Eastern European markets by force. Once the dust had settled and the bodies were buried, these gangs contracted jobs back to the locals while taking a share of the profits.
Effective as this may have been, and important as shows of strength are in establishing a reputation and making credible threats, actual violence can also attract unwanted attention, particularly from law enforcement. Sometimes a peaceful merger may be preferable to armed conquest.
But for this to work, each party has to have something the other wants, and a reason to take advantage of a mutually beneficial agreement rather than to take something by force. For example, take recent news about the potential merger of the Finks, an Australian Outlaw Motorcycle Gang (OMCG), with the US-based Mongols.
Why are they embracing each other with open arms instead of opening fire on each other with smuggled AK-47s like the Comancheros and Rebels in Melbourne? The merger has been reported as a move by the Finks to avoid the efforts of Queensland Police to have the club declared a criminal organisation by the Supreme Court, though Queensland police minister Jack Dempsey maintains such a move won’t help them .
Whether or not this is the case, there are other advantages.
Strength in numbers
In illegal markets the most fundamental business is protection. Without protection from rivals, traitors in your midst and/or law enforcement, you can’t operate an illegal enterprise for very long. Because the courts are unlikely to protect any illegal interests or property you have, that protection has to be provided through the use of (or willingness to use) coercive force.
Whatever the illegal market, however diversified the production of the good or service, whether you just want to take a cut for protection or get directly involved, there is money to be made controlling the turf on which illegal activity takes place. And because controlling even just a part of such markets requires using (or threatening) violence, exerting your influence over larger transnational markets is easier when there are more of you.
The high revenues associated with Australian drug markets are well-known, and local OMCGs are already said to be heavily involved in or associated with the drug trade, along with smuggling other goods such as illegal firearms . The Mongols do not have a history of operating in Australia, and bringing the Finks into the fold will allow them to exert their influence here, offering a potentially lucrative piece of the action.
While some Australian-based OMCGs such as the Comancheros and the Rebels show signs of expanding overseas, the Finks do not have much of an international presence. The merger with the Mongols (who already have well-established operations in both the US and Europe) offers them this. Given the Mongols’ prominence, signing up with (or “patching over” to) them also promises to boost the reputation of Finks members.
The enemy of my enemy
The merger also offers each group the ability to improve their strength and position relative a rival gang and common foe – the Hells Angels (another OMCG originating from the US). The Mongols have been fighting with the Hells Angels since at least the 1970s, and the conflict continues today. There have been several high-profile clashes between the home-grown Finks (they hail from South Australia) and local chapters of the Hells Angels.
For a relatively small club like the Finks (they are not a club with international chapters), the support of a global gang such as the Mongols carries weight and access to resources. For the Mongols, absorbing a club that is allied with them against the Hells Angels allows them to put more pressure on the Hells Angels here without having to deploy their own manpower directly.
While globalisation has brought substantial gains, it has also presented great opportunities for transnational crime, whether expanding through conquering, colluding or combining with other groups.
This latest merger may not last forever (in illegal markets when power shifts or interests change, alliances break down), but for now it presents real potential benefits for both the Mongols and Finks, and a real problem for tackling OMCG-related violence and crime in Australia.
This article was originally published on The Conversation as "Murders and acquisitions: the corporatisation of global organised crime".
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