2ndlook

The Greatest Crime Wave … Ever?


Seven time Prime Minister, Giulio Andreotti, 83

Seven time Prime Minister, Giulio Andreotti, 83

Crime in the last 50 years

From the 1960-1990, the Big Issue for people across large parts of the world was Big Crime. The 1960-1990 peak in organized crime, globally, is interesting due to the synchronized time frames – across USA, Europe and India.

The Godfather series was emblematic of this phenomenon. The Godfather trilogy of films remained popular amongst critics and viewers alike. For years, Mario Puzo’s books remained on best seller lists. When the freed slaves of Cuba, led by Fidel Castro, tried to overthrow American-foisted dictator Batista, the US used the American Mafia, to attempt assassination of Fidel Castro. The mafia controlled trucking in the US – and a company like UPS had to pay of mafia to continue its trucking operations across USA.

In India, the rise of the underworld was delayed by a decade – as was its decline. India’s underworld, centred in Mumbai, at its peak, intruded into trade unions, films and entertainment, gambling, real estate, extortion and smuggling. The specter of Dawood Ibrahim haunts India-Pakistan Governmental relations – even today.

American Mafia

Chief of Police Thomas Byrnes.

Chief of Police Thomas Byrnes.

In May 1950, Special Committee to Investigate Organized Crime in Interstate Commerce, was formed with Estes Kefauver and four other senators as members. Between 1950-51, the Kefauver Commission informed the American public that the American Mafia was synonymous with Union Siciliana. FBI finally admitted to the Mafia’s existence as La Cosa Nostra in the 1960s. The testimony of Detective Frank Serpico to the Knapp Commission opened to public view, how deep Mafia hooks were, into the US police.

A 130 years ago, the legendary New York police chief (and ex-detective), Thomas Byrnes had a simpler solution to the mafia problem, “Let them kill each other.”

From Publishers Weekly
During the 1920s the Gambinos, members of the New York Cosa Nostra “Five Families,” which also included the Colombo, Bonanno, Lucchese and Genovese families, controlled many businesses … Among their strongholds were private carting, garment industry trucking and construction. The mob also had … in the meat and supermarket businesses … loansharking, extortion and pornography. Additionally, the dons, having forbidden trafficking in drugs to subordinates, could not resist the vast profits and became involved themselves. Mafia founding fathers Vincent and Philip Mangano were succeeded by Albert Anastasia, who was murdered in 1957. The most effective leader, shows Davis, was Carlo Gambino, who emerged supreme in 1970, reigned for 19 years and was succeeded by his cousin Paul Castellano until he was killed at the behest of John Gotti, who was sentenced to life in prison in 1992.

… during Carlo’s reign the whole Mafia/all 5 Familys prospered more than they ever did … (ellipsis mine).

While the Italian-American involvement in crime has received wide publicity, the inclusion of African-Americans (much smaller in size and scale) in organized crime is less noticed. Similarly, the involvement of the African-Americans in crime peaked during the same 1960-1990 period.

roughly 1968 through 1984, organized crime also flourished in many of the city’s African-American neighborhoods, most of it under the average Philadelphian’s radar.

“The Black Mafia ran the heroin trade in the city,” says Sean Griffin, a former Philadelphia policeman and the author of Philadelphia’s ‘Black Mafia’, a new book that combines gritty street reporting with extensive scholarly research. “They were ruthless and ultra violent. They ruled major sections of the city, and yet somehow today it’s as if they never existed.”

The Black Mafia was “founded” in 1968 by Sam Christian, “a thick-necked 215-pound bully” and former Black Panther with an extensive rap sheet. Christian built his reputation holding up craps games and extorting drug dealers, numbers men and illegitimate businesses.

In the early days, the Black Mafia’s organized command structure consisted of 14 men, all with extensive records, most for violent crimes. As Griffin points out in Philadelphia’s ‘Black Mafia’, a book that grew out of the author’s Ph.D. dissertation, the nature of their crimes made them difficult criminals to prosecute because their victims and witnesses so feared retribution.

Of course, in terms of size and organization, it never matched or came even close to the American-Italian mafia.

The Rise & Fall of Organized Crime in America

Meyer Lansky character portrayed by Lee Strasberg in “Godfather II” told audiences, “We’re bigger than U.S. Steel.” It was during that era that Las Vegas was born, with millions of mob dollars invested in the ‘Bugsy’ Siegel’s Flamingo Hotel, and Havana became the greatest adult playground in the world due to huge amounts of bribes paid to President Batista and his cronies; when the Teamsters Union became king of the road and began using their pension fund millions to finance newer and bigger hotels in Vegas; and when everything from garbage collection, to juke box distribution, to construction projects large and small, to linen supplies for restaurants, to garment unions and the production companies under their thumbs, to illegal gambling…to all the ancillary businesses connected to those already mentioned…became mob cash cows.

In his book, former mob boss Joe Bonanno outlined a Commission of organized crime leaders around the country who settled arguments and set policy for all its underlings. That confession led United States Attorney for the Southern District of New York, Rudy Giuliani, to initiate a criminal case, under the R.I.C.O. Act, charging the alleged bosses (it was later proven that Anthony “Fat Tony” Salerno was NOT the head of the Genovese Family, as he was convicted of being) of New York’s five traditional organized crime families as Commission members of a criminal organization, commonly known as LCN, or La Cosa Nostra. Each was convicted and sentenced to more than one hundred years in federal prison. Bouncing off Giuliani’s success in the Commission Case, federal authorities brought more charges and convicted more top mobsters in Philadelphia, Boston, New York, and Chicago. More recently, in early 2008, sixty-two alleged members of the Gambino Crime Family were arrested both in the United States and Italy.

There is no more national strength.

Traditional organized crime families are well on the way toward total dissolution, as they probably would have six or seven decades ago.

Italian Mafia

Simultaneously, across the Atlantic, in Italy too, the mafia was very powerful. Mafia power peaked in Italy also at the same time. The death of numerous judges and police officials was emblematic of the power and means that the Italian Mafia used against opposition.

Popularly, it is believed that the killing of the police commander, Alberto Dalla Chiesa, in September 1982 marked a turning point in the battle against Italian mafia. Before that, it was the kidnap and death of Aldo Moro, initially by the suspected Red Brigade. Later, it was found, that the kidnapping and murder was done by the Italian mafia, allegedly, at the behest of Guilio Andreotti, the seven time Italian Prime Minister.

The iconic Post WW2 Italian politician, seven time Prime Minister, Giulio Andreotti was himself investigated (first acquitted, then convicted on appeal and then finally the conviction was annulled) of links with mafia. This year, (2008) this story led to a film -which detailed the long running Andreotti saga – with some liberties. The Vatican weighed in on the side of Guilio Andreotti, and Cardinal Fiorenzo Angelini said, “Also Jesus Christ was crucified before his resurrection.”

Nixon and Andreotti ...

Nixon and Andreotti ...

The Italian mafia also traced the rise of the Indian underworld.

Their ascendancy was followed, in the 1970s and 1980s, by that of Toto Riina, who strangled, shot, bombed and poisoned his way to the position of capo di tutti capi. Successive Italian governments either stood aside, embarrassed by the lawlessness of western and central Sicily, or actually connived in the corruption. But in the 1990s, the mafia, and the Corleone clan in particular, misread the end of the cold war. Their political cover in Palermo and Rome was removed by the collapse of the Christian Democrat and Socialist parties and several huge domestic political scandals.

This wave of crime affected Europe with crime, terror, extremism – much like India is today. But whether it was the US or Italy, the real roots of the Rise and Fall of the Mafia lay in India. As we will see.

Underworld and terror – The Indian face

On March 12, 1993, India woke up a new phase in terror. Urban terror of a type not previously known. In the space of less than 1 hour, 13 important places, including The Bombay Stock Exchange, Plaza Cinema, and some other prominent places were subjected to synchronized bombings – killing more than 250 people and injuring more than 700. For the first time, plastic explosives, of the RDX type, were used in India.

Who is responsible for Mumbai Bomb blasts?

Many, starting with Indian police and the Indian Government, blamed India’s premier underworld figure, the fugitive Dawood Ibrahim. Wrong! An accomplice, Tiger Memon was also suspected. Wrong again.

Gold policy in modern India

The answer is Late Morarjee Desai – India’s ex-Prime Minister and Finance Minister. And with Morarjee Desai, were a whole lot of RBI and GOI officials who were behind 40 years of legislation, which created India’s underworld, corrupted 4 generations of India Government officials and reduced the value of Indian savings by Rs.1,20,000 crores. 4000 tons of gold purchased by Indian consumers, during the 1965-1995 period, at a 30% premium at today’s value – do your numbers.

These laws corrupted four generations of Indians – Government and politicians. It made gold in India very expensive – and the Indian buyer remained in poverty longer. Many gold control laws were enacted which stopped all legal gold imports into India.

These laws were derived from two sources. One, the British colonial policy legacy (motivated by exploitative aims). Two, motivated policy recommendations by US sponsored institutions like IMF, World Bank, Western Universities and academics, was continued by Indian Government and RBI. Had it not been for this policy framework, Bretton Woods system would have collapsed within 12 years instead of 25 years. For which Morarjee Desai was allegedly rewarded by the CIA. But, before that it enabled the establishment of the Bretton Woods system itself.

Roosevelt had earlier in 1933, during his New Deal years, nationalized all gold. This restriction was finally eased only on December 31st, 1974, with Executive Order 11825 by Gerald Ford. It was Roosevelt’s gold nationalization which allowed the US to wage WW2 and create the Bretton Woods system.

From 1939, (the start of WW2), gold imports into India, the world’s largest market and also the largest private reserve of gold, were controlled or banned. Not only the largest, but Indian reserves of gold, are also the only significant reserve in the world without a history of war, genocide, slavery or loot, (unlike US, UK, Canada, Australia) or to due nature’s bounty (unlike South Africa, China, Peru, Ghana, etc.).

Gold imports restriction & history’s biggest crime wave

The first effect of restrictions on gold imports in India was on prices. Indian gold prices, on an average, were 30%-40% higher than international prices. The other thing that happened was that gold imports went underground. Gold imports (illegal), called smuggling, spawned the biggest criminals that India has seen.

The common threads in this were, of course, America, drugs, underworld, war, corruption, warlords – but what made all this possible was Indian appetite for gold.

All this was made possible by the Indian hawala system of money exchange. Hawala made money transfers safe, instantaneous, at a low cost. Traditional Indian ships from a thousand ports in Goa, Maharashtra and Gujarat sailed with this contraband and brought back gold.

The countries comprising these Golden Triangle /Crescent are India’s neighbours. The Indian underworld transported drugs through India. These drug shipments originated, were acquired, grown and traded from the Golden Crescent and the Golden Triangle.

Tentacles of the Indian Underworld

Like the American and Italian mafia, the Indian underworld, also spread its tentacles, wide and deep. In trade unions, film industry, politics and legitimate businesses.

In 1982, Dr.Datta Samant, a trade union leader, called for strike by the textile workers in Mumbai. He was the leader of Magar Aghadi (Workers’ Front), with more than 300,000 members. The strike went on for a year – with 250,000 workers abstaining from work for 20 months.

Mumbai’s textile industry, tethering on the brink of collapse, went bankrupt – and was nationalized. Hundreds of thousands of workers became unemployed – and Mumbai started rebuilding itself. Dr.Datta Samant was notionally affiliated to the Congress party – and INTUC. Since, his connections were tenuous, he had little political protection or patronage. A ‘supari’ (Indian underworld jargon for a contract) was ‘put’ out and Dr.Datta Samant was killed – on January 18th, 1997. Mumbai police listed sixteen people as accused, including underworld dons Chhota Rajan and Guru Satam, of which nine, are absconding.

Similarly, on May 7, 1994, businessman and industrialist, Sunit Khatau, was shot dead in broad daylight. Having used various underworld figures for getting his way with the labour unions, politicians, et al, Sunit Khatau paid the price for running with the hares and hunting with the hounds. The killing of Thakiyuddin A. Wahid, Managing Director of East-West Airlines, was yet another case where industry and underworld tried coming together with disastrous consequences.

The killing of Gulshan Kumar, the owner-founder of T-Series, was evidence of the underworld’s grip on India’s Mumbai-based Hindi film industry. A few years later, after the killing of Gulshan Kumar, the underworld was dictating star casts, release dates, projects, directors – and the Mumbai-Hindi film industry was in the grips of the underworld.

Indian underworld figures

One of the founder figures of the Indian (also Mumbai) underworld was Ayub Lala, who headed the Pakhtuk Jirga E Hind, an Afghani Pathan association in Mumbai. These were all small time figures – compared to the later times.

The new breed – bloodier and nastier than the previous, were represented by Karim Lala, Haji Mastan, Varadarajan Mudaliar, Yusuf Patel, Tiger Memmon, Chota Rajan, and of course, Dawood Ibrahim’s – a biological son of a police constable Sheikh Ibrahim Kaskar, was spawned by Morarjee Desai’s laws.

What’s common in the Golden Crescent & the Golden Triangle

After WW2, traditional opium supplies from (Greater) China, by Government granted opium monopolies, from Yugoslavia and Italy, were replaced by Iran, India, Pakistan, Afghanistan and Mexico. It was the Golden Triangle and the Golden Crescent which dominated opium supplies from 1960s-1990s.

The fact that flows from these new supply sources coincided with the American ‘domino theory’ wars, against ‘under-your-bed’ Communism (in Cambodia, Thailand, Laos, Vietnam, Korea, etc.) is the subject of much research, significant evidence and many Hollywood films – which have suggested that the American armed forces and the CIA were behind the start of the drugs import into USA.

Interestingly, this period is also the background to the other chain of events – now dubbed as Yamashita Gold. Involvement starts with Douglas MacArthur and the Who’s Who of American politics, bureaucracy and military. They purportedly, extracted information from Japanese warlords and crime bosses about the fabled loot of the Japanese bosses, who ruled over Korea, China between WW1-WW2. Some writers allege that the link goes from Prescott Bush right upto the soon-to-be-the-ex-President George ‘Dubya’ Bush.

Counterfeit Currency

The other interesting feature of this great crime wave was fake Indian currency. The counterfeiting of US dollars is understandable. It is the world’s largest currency – and most acceptable. The GBP or the Euro are also reasonable targets for counterfeiting activity. Even counterfeiting the Canadian dollar!

But, the most unlikely target is the Indian Rupee!

India is a small, poor economy, (at least, till about 5 years ago). India does not have capital convertibility either. So, this huge counterfeiting operation raises more questions. Is this counterfeiting related to India’s Gold reserves?

The entire currency and security-grade printing is dominated by less than a dozen companies. These companies will not dare to support ‘counterfeiting’ operations – unless there is official cover or support given to them, by their respective Governments.

The invisible Indian connection

The US eliminated gold ownership restrictions in 1975. India followed. 20 years later. In 1992, India took its first hesitant steps towards legalizing gold imports. By 1995, these import control laws had been diluted to near non-existence.

Much like the fading away of the mafia in the US and Italy, in India too, after the gold trade was legalized, the mafia’s source of power, liquidity, earnings, profit were taken away. With it came the underworld’s loss of power and influence – globally. And that coincided with the reduction and control of organized crime from the US and Europe and India. And an end to the greatest crime wave in the modern history.

Today, the abatement in organized crime is ascribed to vigourous efforts by the police and legal systems. The earlier lack of success is conveniently forgotten. In India, many ‘encounter’ specialists claimed credit for the reduction in the power of the India’s underworld.

A paperback by Penguin, The Complete Idiot’s Guide to the Mafia By Jerry Capeci does not mention India even once. Another book, Cops Across Borders By Ethan Avram Nadelmann which details global, cross-border police co-operation, mentions India only 11 times – in more than 500 pages. These books are symptomatic of the world’s non-recognition of the genesis of the greatest crime wave in history.

Indian social system itself does not see organized crime having any logical existential reason. It is these values that gives India one of the lowest prison populations in the world – and practically very few positions in the Forbes ‘Most Wanted’ List. With the lowest police to population ratio.

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12 Responses

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  1. galeo rhinus said, on December 14, 2008 at 10:24 pm

    I think you are missing the woods for the trees… any “organized crime” is a response to laws that criminalize individual vices… so the “underworld” in any country will be specific what is made illegal…

    …India and other socialistic countries created (or continued) laws that restricted all kinds of things including gold… so India’s underworld filled that demand… in the US when alcohol was prohibited – the mafia filled the demand… this extended into other things…

    about drugs… in 1908 – the biggest cartel in the world was the English cartel – called as the Opium monopoly – yet there were no laws in the US to stop its import… once laws were enacted to restrict both Opium and Cocaine – the underworld got into it…

    …there are no real linkages between these other than if a commodity or cartels have presence in multiple countries…

    It comes down to the creating laws that feed the few… socialism created the biggest crime syndicates in India… “respectable” industrialists with government sanctioned monopolies… those – IMO – are the real mafia :-)

  2. Anuraag Sanghi said, on December 15, 2008 at 2:27 pm

    India and other socialistic countries create (d) laws that restricted all kinds of things including gold

    I thought that was the entire focus of my article – which laid it out the history of nationalization of gold in 1933, by Roosevelt in USA (the largest producer of gold then) to 1991-1995, when India (the largest market for gold) finally repealed gold control laws.
    You are missing out one very important element in this story. For roughly, 30 years, from 1940-1970, both Indians and Americans were restricted in their gold holdings.
    But gold control in the US did not spawn the kind of underworld activity that it did in India. Restrictions on drugs in India did not result in kind of gangsterism that was unleashed in USA when alcohol or drugs were criminalized. Very important distinction.

    there are no real linkages between these other than if a commodity or cartels have presence in multiple countries

    I wonder what is the basis of this statement. There is enough body of evidence which shows how drugs were routed out of India – and gold flowed into India.
    It is my opinion that the twin traffic of drugs and gold, together created a international crime monster. The drug problem has received greater attention – and the gold problem has received no attention.
    This focus on drugs was due to the US and European sensitivity to drugs (after all they had destroyed the Chinese economy with drugs) – and the silence on the gold was due to the Bretton Woods interests. If gold trade was allowed overground, it would have collapsed Bretton Woods and the dollar hegemony much faster.
    India did not understand this linkage – and paid a heavy price for this.

  3. galeo rhinus said, on December 15, 2008 at 3:59 pm

    I agree with what you describing as a basic point… perhaps I missed out the core of your post.

    Some other comments:

    >>”But gold control in the US did not spawn the kind of underworld activity that it did in India.”

    True – because Gold was never really a consumer item – like it was in India.

    >>”Restrictions on drugs in India did not result in kind of gangsterism that was unleashed in USA when alcohol or drugs were criminalized”

    True – because – there was never really a demand for the refined drugs in India. “Lesser” drugs are consumed in India… the taboo is largely urban on these lesser drugs. In fact festivals like holi allow people to vent their vices. If India had started cracking down on people and made large scale arrests for any one drinking “bhang” – that might be a different story.

    I would make and abstractions on this topic:

    An important factor is that when there is an inelastic demand for any commodity, if any any organized body steps into feeding that demand – you have a problem.

    This organized body could be the government or companies. As long as the supply is scattered – it remains a fair system.

    The government, the EEIC (or later English cartels) or the mafia – IMO – aggregated the suppliers to wreak havoc and maximize the producer surplus.

    Indic polity prevented any vices (including the love for gold) from being controlled by a few… until the English or later the Congress.

  4. Dsylexic said, on December 18, 2008 at 3:29 pm

    I dont agree much with your assessment of low Indian prison population.

    The extremely understaffed judiciary and a backlog of crores of cases only mean that justice is delayed and usually denied and the criminal gets away.India has the highest number of custodial deaths in the world and our govt even doesnt care to accept the International toture covenant(an eyewash -but nevertheless we dont even pay lipservice to it).

    Policing in India is abysmal and the courts are rickety and overwhelmed thats why our prisons are underpopulated.There is no need to underplay the vicious nature of those in power by pointing to low prison population especially when it is caused by woeful law enforcement.

  5. Anuraag Sanghi said, on December 18, 2008 at 4:31 pm

    - justice is delayed and usually denied and the criminal gets away

    In which case India should be a crime ridden society with criminals on the loose with a high crime rates. India after all in not the home of violent crime.

    – India has the highest number of custodial deaths in the world

    Since the overall number of such custodial deaths itself is small, it could alternatively be viewed as summary justice – especially in light of the recent trend towards encounter killings. To this add the low number of cases of capital punishment in India. Add custodial deaths to the capital punishment cases. Re-classify them – even then you get very low figures.

    – Policing in India is abysmal and the courts are rickety and overwhelmed thats why our prisons are underpopulated

    In which case there are criminals are on the loose – and India should have been the crime capital of the world, which is clearly not the case. Especially when you consider that country made revolvers can be bought for less than US$25.

    What you are reeling off are the Western interpretations of Indian social system. Take a 2ndlook.

  6. Dsylexic said, on December 19, 2008 at 10:43 am

    “Especially when you consider that country made revolvers can be bought for less than US$25.”

    Infact this may be the reason so many criminal acts dont even reach the police files.Revolver owners can protect themselves from thugs and ‘settle’ their issues outside the govt system.

  7. Anuraag Sanghi said, on December 19, 2008 at 2:07 pm

    The issue you are raising is under reporting of crime. That is a statistical issue in all countries – and not just India. It is called confidence intervals. I am sure there is a statistical error factor. Even if we grant a higher error factor, it cannot account for such a low prison population. India’s crime management is not a statistical manipulation.

    The other issue that you raise is about higher custodial deaths. Would you have some links on these?

    There are three elements that determine the crime level – prison population, police to population ratio and lastly the actual crime rate. In rest of the world, if one goes down the other one or two go up. Apart from India, no other country has a situation where all the three elements are lower than the norm.

    You have not said anything about the main subject of the post – which is the global crime wave, emanating from gold control in India. What was your reaction to that?

    Coming back to crime in India, there is a 4000 years of history and reasons for this. Click on the embedded a link in this comment.. It is not an accident.

    Take a 2ndlook on the reasons for India’s low crime rate.

  8. [...] – and creating making mayhem is in North East India. The North East is also the porous border where drugs from the Golden Triangle are smuggled into India, for transit through the Mediterranean, through small Indian fishing boats. This drug-related [...]

  9. Crime, Gun Ownership and India said, on January 7, 2009 at 12:39 pm

    [...] – and creating making mayhem is in North East India. The North East is also the porous border where drugs from the Golden Triangle are smuggled into India, for transit through the Mediterranean, through small Indian fishing boats. This drug-related [...]

  10. [...] gold policy has been examined in previous other posts – especially its contribution to: – One, the greatest crime wave ever in human history.; Two – the survival of Bretton Woods for 25 [...]

  11. [...] Gold (illegal) imports (called smuggling) spawned biggest criminals that India has seen. Karim Lala, Haji Mastan, Varadarajan Mudalir, Yusuf Patel, Tiger Memmon, Chota Rajan, and of course, Dawood Ibrahim’s – a biological son of a police constable Sheikh Ibrahim Kaskar, was spawned by Morarjee Desai’s laws. [...]

  12. [...] India has the lowest prison population in the world – and the lowest police-to-population ratio in the world. So, clearly, India is NOT a police state in any sense of the word – nor the crime capital of the world. [...]


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