Humans as Money

Trafficking, Demography and Soft Currency: the political economy of changing structures of organised

crime

BILL TUPMAN

DIRECTOR, UNIT FOR RESEARCH ON COMMUNITY SAFETY

UNIVERSITY OF EXETER

Where am I coming from?

• Crime = illicit business [bit of social labelling, bit of neo-liberalism]

• Measuring and evaluating...how? [policy studies]

• Interview offenders to discover motivation [Walsh, Maguire]

• Gambetta and D.C.Smith

Smith, D.C. [1978] Organized Crime and Entrepeneurship International Journal of Criminology and Penology 6 1978 pp161-77

Smith D.C. [1980] Paragons Pariahs and Pirates: A Spectrum-based theory of Enterprise. Crime and Delinquency,

26, 1980:pp358-86Haller M.H. Illegal Enterprise:

A Theoretical and Historical Interpretation Criminology, 28 [2], 1990,: pp207-35

Gambetta D. [1994] Inscrutable Markets Rationality and Society,6[3]: 353-68

[1993] The Sicilian Mafia: The Business of Private Protection, , Harvard University Press, Cambridge Mass 1993

Tupman W.A. "Violent Business? Networking, Terrorism and Organised Crime"

in I. McKenzie [ed.] Law, Power and Justice in England and Wales Praeger 1998

Don’t panic!

• http://www.people.ex.ac.uk/watupman/Tupman/

• http://www.people.ex.ac.uk/watupman/tandoc/workpaps.htm

DEMOGRAPHY

• Ageing European Population

• Skill shortage

• High price of labour

• Demand for labour in various areas

• Including illicit business/organised crime

• Chevenement estimated shortfall of 75 million by 2050

Statistics

• Need to distinguish between smuggling and trafficking. Most sources don’t

• UNODCCP estimates 4 million people being moved annually, generating $5-7 billion gross IOM estimates $10 billion

• $30-50,000 per person for Australia

• $15,000 for New Zealand and for US, but additional $25,000 demanded on arrival

GAO report July 2006

• Accuracy of all figures questionable, especially estimate of 600-800,000 trafficked annually across borders. Original work from one individual who did not document how he did it!

• There is no reliable and comparable country data

UNPFA Report Sept 2006

• 95 million women and girl migrants annually: 49.6% of total

• They repatriate much of their earnings. $232 million repatriated by all migrants

• Human trafficking nets $7-12 billion annually in initial profits

• $32 billion further per annum from those already trafficked

All acts involved in the recruitment, abduction, transport (within or across borders), sale, transfer, harbouring, or receipt of persons,

by the threat or use of force, deception, coercion (including abuse of authority), or debt bondage,

for the purpose of placing or holding such person, whether for pay or not, in involuntary servitude, forced or bonded labour, or in slavery-like conditions,

in a community other than the one in which the person lived at the time of the original deception, coercion or debt bondage.

Illegal Transnational Businesses

• Drugs• extortion• auto theft• prostitution• alien smuggling• “traffic in people”• contract murder

• Bank fraud• tax fraud• stock fraud and

manipulation• metals/minerals

smuggling• illegal arms dealing

Money Laundering is a misnomer

• Organised crime is cash heavy

• wrong to assume it always wants to legitimise ill-gotten gains

• money now goes where the rate of return is highest: often that is into illegal business

• moving money from soft currency economy to hard currency area not laundering but hardening

Soft currency problems

• Roubles don’t buy BMWs. Dollars do.

• Drugs buy dollars• sex buys dollars: in all

its varieties- straight, bent, paedophilia, photos, videos

• slaves buy dollars• peons buy dollars

Three angles

• Recruitment• transportation• targeting potential

employers

Schloenhardt/Grayson

• Three stages of organisation:• Amateur: Smuggling only…where organisation

either has a means of transportation e.g. a boat. Or a lorry. Migrant delivered and left to own devices

• Professional: Second stage: access to document creation service: either forgers or stolen passports or corrupt officials. Migrant delivered to immigrant community and takes it from there

Players in the enterprise

• Arranger/investor• recruiter• transporter• corrupt public officials• guides and crew

members

• Information gatherer• enforcer• support• debt-collector• money-mover

Enforcers = organised crime

• Easier for existing structures to provide all these roles simultaneously with existing illicit activities

• Very expensive to set up from scratch, but drug smugglers and traffickers cash heavy, have transportation networks and have corrupted officials already

How is this organised?

• Not a huge Weberian pyramid

• Lots of small independent groups

• Some cash transactions, some barter

• Problems of contract enforcement and trust

• Who provides the coercive apparatus?

• How are prices set?

• Russian precedents?

Krysha or obshak?

• Obshak a shared violent group• Krysha= “roof”: system of patronage and

structured corruption “protection”• Requires connection with bank• Deep penetration of government structures• deploys armed force, either illegal, “private

security” or a local or national government unit of militsiya [30% of personnel involved] or army

Who wants people?

• Sex industry obviously

• domestic service

• hotels and catering

• places ignoring safety regulations

• seasonal: fruit-picking etc.

• Horrible places: Siberia, Brazilian jungle

• dodgy hospitals [for organs]

Areas requiring study

• Exchange of prostitutes for goods. Standard measure of exchange?

• Drugs as currency

Mission statement for organised crime

• Provide customers with services required in an area secure from police and petty criminal interference

• Maximise quality at reasonable price

• respond quickly to changing market conditions via franchising and secure agreements with suppliers

• improve quality of work force

Mission statement [cont]

• To establish clear regulated framework within which non-violent competition can take place

• concentrate on core business: leave niche markets to the specialist

• minimise risk

• ensure that profits can be used as investment capital in both legal and illegal businesses

Comment

• In changing market conditions, customer can become employee and provide greater added value

• problem of new groups trying to penetrate market

• problem of movement into activities which appear to offer low risk and high profits

• Problem of contract enforcement

Careers for trafficked humans?

• Can you move on from sexual exploitation to another aspect of the business?

• Yes. Cleaners, maids, madames• Lower profits for organisers but may offset costs

elsewhere• Must come a point where it is cheaper for the

organisation to allow trafficked person to find own work and continue to pay. No profit in a dead person…except maybe organs