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Christophe Bouquet: "How can we fight the mafias without the cooperation of the banks?

For Arte, the director has produced a third documentary series on organised crime, this time looking at its relationship with finance. He explains why these links continue to grow stronger, despite the stated intentions of regulators.

With " Mafias and banks "In his third documentary series on the world of organised crime, Christophe Bouquet takes a look at the links between the Corso-Marseille mafia and elected representatives, followed by drug trafficking. Following on from the links between the Corso-Marseille mafia and elected representatives, and then drug trafficking, his new series (co-written with Mathieu Verboud) looks at the long-standing collaboration between banking institutions and criminal groups. From the United States to Russia, via Italy, he interviews the leading experts in this sulphurous and discreet cooperation, such as the American Alfred W. McCoy and the French woman Clotilde Champeyrache.

At the end of this odyssey between crime and dollars, one quote sticks in the mind: the bittersweet one by the American mobster Meyer Lansky, nicknamed "the brains of the mafia": "I learned too late that it's easier and more profitable to steal money from people legally than illegally".

WHAT PROMPTED YOU TO LOOK INTO THIS SUBJECT?

It was simply a continuation of our previous work with Arte, following our documentaries on the Corsican mafia ("Mafia and Republic"[2]) and drug trafficking ("The Mafia and the Republic"[3]). History of drug trafficking "[3]). With the channel, we thought we'd keep digging that furrow.

It came about quite naturally: in the first series, we dealt with the French Connection, which led us to the second; and while working on the latter, it was the episode of the Italian anti-mafia judge Giovanni Falcone having his request to collaborate with the FBI rejected because the Reagan administration refused to lift banking secrecy, in the 1980s, that led us to 'Mafias and Banks'.

The crucial question here is: how can we fight the mafias without the cooperation of the banking system? So we asked ourselves how organised crime uses the financial system.

WHAT HAS HISTORICALLY FOSTERED THESE LINKS BETWEEN CRIMINAL ORGANISATIONS AND THE FINANCIAL SYSTEM?

We have to go back to the 1880s in the United States. From that time onwards, the world of finance created tax avoidance screens and systems, simply to enable its clients to avoid paying tax.

The system became truly industrial in the 1910s, when Panama's legal and financial architecture was entirely designed by Wall Street bankers and lawyers, even though the country remained sovereign. From then on, this system was adopted the world over. This marked the emergence of tax havens.

In the 1930s, American mobster Al Capone was convicted of tax evasion. From then on, most major criminals realised that it was time to hide their money. So they went to tax havens like Panama and Delaware, and also to Switzerland, where banking secrecy was enshrined in law in 1934. This coincidence between the indictment of a notorious criminal and this decision by a European state marks an important stage in the links between mafias and banks.

"AS SOON AS WE CREATE A WALL, CRIME TRIES TO FIND LOOPHOLES".

The next turning point came with the Bretton Woods Agreement in 1944, which aimed to stabilise the global financial system: the dollar became the world's reserve currency, the only one convertible into gold, while all other currencies were convertible into dollars.  

But as soon as you create a wall to contain crime, crime tries to find loopholes. After the Bretton Woods agreements, pure financiers set about dismantling them brick by brick. It would take them 40 years. These tax lawyers work for major fortunes, major companies and also major criminals. These lawyers are obsessed with circumventing financial rules for the benefit of their clients. The criminals are the ones most interested in circumventing the rules, since they cannot reveal the origin of their profits, so this system is absolutely essential for them.

There is nothing magical about this; it is based on a relationship of trust and belief. A banker and a tax expert get together, and together they devise circuits that encourage tax evasion. The bankers are highly responsible, because they are the ones who choose not to see and put the stamp of approval on the process. But they don't do this to attract criminal money: initially, it's the money of the rich that interests them, because at the beginning of the twentieth century, Rockefeller was richer than Al Capone.

"LAUNDERING AND INVESTING: THE DUAL FUNCTION OF BANKS FOR CRIMINALS

After the war, borders opened up, trafficking resumed, and the big Italian-American mafia families needed these circuits to move their money around, to launder it and to invest it. It's important to understand that the financial system has a dual function for criminals. By enabling them first to launder their money and then to reinvest it, the banking sector offers the mafia the opportunity to decriminalise itself (in appearance), to display a legal façade, to have a high profile and a seat at the table in the circles of power.

In the 1960s, the creation of Eurodollars, an alternative reserve currency to the US dollar, was encouraged by the City of London, which had lost its role as the world's leading financial centre. Thanks to this, it was back in the game. However, in my view, this decision also meant creating a financial 'no-regulator's land', a place free from any form of regulation.

The crushing blow for the control of illicit financial flows came a little later, in the 1980s, with the American Reagan and British Thatcher administrations. They completely deregulated the markets, which were computerised at the same time. Capital movements became even freer and faster. This was the moment when the world switched from industrial capitalism to financial capitalism: the stock market never slept, between London, New York, Tokyo and Hong Kong.

HAVE THE PROCESSES FOR COMBATING THESE MAFIA/BANK LINKS BEEN STRENGTHENED IN RECENT YEARS? ARE THEY EFFECTIVE?

Switzerland, for example, has made great efforts recently by ending its banking secrecy. There are now many tools available to combat tax havens, but the banks still have to apply the laws that have been passed. You might think that it would be difficult for them to agree to deprive themselves of such large sums of money. This is why a magistrate told me that the only way to combat criminal financial flows would be to put controllers inside the banking system.

Many bodies are fighting, but at the same time, there has never been so much criminal money in banking institutions. It's a permanent global race to attract cash to our shores: the United States is fighting to weaken the small tax havens.

The fight against organised crime money cannot be waged at national level, only at international level. But since the Americans refuse to play ball, there is no reciprocity between them and the rest of the world. It can therefore be said that they are the guarantors of this opacity.

"THIS FIGHT IS A QUESTION OF POLITICAL COURAGE".

Today, criminals choose small banks, in the Baltic States or Cyprus in particular, because they are less watchful and less supervised. By the time the money reaches the big financial centres like London, it has long since been laundered.

We know how to combat this: we need to attack tax havens. That's where it has to start: with international cooperation and international auditors. Because today, when the authorities crack down in one place, the money immediately flies elsewhere.

It's as if, for the time being, instead of attacking the roots of the evil, the regulators are mowing the lawn. It looks good, but it doesn't change the root of the problem. It's a question of political courage.

[1] Three-part documentary series by Christophe Bouquet and Mathieu Verboud (Arte, 2023).

[2] Three-part documentary series by Christophe Bouquet, written by Pierre Péan, Vanessa Ratignier and Christophe Nick (Arte, 2017).

[3] Three-part documentary series by Christophe Bouquet and Julie Lerat (Arte, 2020).