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Corruption and Organized Crime: Bridging Criminal and Economic Policies
(summary of discussion)

On 23-24 June 2006 the Center for the Study of Democracy held an international conference Corruption and Organized Crime: Bridging Criminal and Economic Policies. The conference was organized with the support of the European Commission, the Austrian Know How Transfer Center, Friedrich Ebert Foundation and the Governments of Norway, the Netherlands and the UK.

The main focus of the event was on the complementarity between law enforcement and economic policies in the fight against corruption and organized crime. The conference aimed to review the range of effective policy instruments and propose integrated solutions to governments, international institutions and civil society. The discussion focused on the methods to make the criminal justice policy and institutions effective and to engage the use of socio-economic instruments and initiatives in the fight against organized crime. The conference was attended by law-enforcement officials, academics, public and private sector experts, policy makers and researchers.

The conference was opened by Dr. Ognian Shentov, Chairman of the Center for the Study of Democracy who elaborated on the need to harmonize economic and criminal policies.

During the first day of the event two sessions took place. The First Session put forward the question on proofing legislation against economic and organized crime. Prof. Ernesto Savona, Professor of Criminology at Università Cattolica del Sacro Cuore, Italy, and Director of Joint Research Centre on Transnational Crime (TRANSCRIME) presented a new methodology for analysis and evaluation of national legislations in order to improve their effectiveness in the fight against organized crime. Among the aims of this form of crime risk assessment is to identify, if present, the unintended criminal implications of existing or forthcoming legislation.

Dr. Friedrich Hauptmann, former Prosecutor General of Austria, spoke on the needs and gaps that corruption and organized crime in the New Europe pose of criminal justice systems. He outlined the problems that the prosecution offices in Europe face and the existing gaps in international cooperation that prevent efficient crossborder delivery of justice.

Mr. George Hardy of the US Department of Justice presented US experience in prosecuting and successfully convicting for corruption by acquainting the participants in details with the notorious case of US Congressman Randy “Duke” Cunningham, who was implicated in corrupt defense procurement deals as member of the US Congress Defense Appropriations Committee.

Mr. Mahmut Cengiz, Chief Inspector at the Turkish National Police shared the Turkish experience on anti-smuggling and organized crime policy and described the main routes for smuggling of drugs, precursors, synthetics, etc.

Mr. Assen Dyulgerov, Senior Fellow at CSD’s Economic Program gave an insight on the corruption in the sphere of public procurement and the involvement of organized crime figures in public procurement as a means of legalizing illegally gained assets. The measures that he suggested for fighting this trend include adoption of a new Criminal Code, decrease the procedural opportunities of the state to use criminal justice as a tool for defending private interests, systematic and parallel training of staff, efficient application of ethics rules for public procurement officials, more effective control by NGOs, etc.

During the discussion the Romanian representatives shared their experience in fighting corruption, providing examples of corruption within the defence public procurement system, and highlighting the difficulties in investigating corruption when it concerns classified contracts, and investigators are denied access to important information. Mr. Hardy noted that in the US such cases are dealt with through a special statute for confidential information, which includes a series of procedures. He also highlighted the personal role of the prosecutors in initiating investigation based on news reports and the need to be able to decide whether the information is reliable and emphasized the difficulty in having clearly transparent process in procurement. Mr. Hardy gave examples of incentives to strengthen anti-corruption measures by giving incentives for whistle-blowers to share parts of the damage recovery.

Representatives of the National Forensic Science and Criminology Institute at the Bulgarian Ministry of Interior shared some of the difficulties law enforcement officers encounter in providing evidence on organized crime. They highlighted how Bulgaria’s new Criminal Procedure Code introduced the “control delivery”; the under-cover agent; and confidential deal and questioned the overlap between police investigation and preliminary proceedings.

The Second Session of the conference focused on topics such as the social and economic costs of organized crime to society, the organized crime and development: informal labor, criminal entrepreneurs and their social environment, issues of social embeddedness, etc.

Dr. Paul Larsson, Associate Professor at the Police University College of Oslo, spoke on the prevention of organized crime. He presented the Norwegian experience, which includes turning abroad to other intelligence units and their work with international threat assessments. However, the Norwegian specialists discovered that the quality of the work of their foreign staff was also lacking. They had the same problems in getting information of quality and relevance especially in the field of organized crime.

Prof. Petrus van Duyne from University of Tilburg, presented an analysis of organized crime taking the perspective of various licit and illicit crime markets. He gave the examples of the organization of the illicit labor market in the Netherlands and the VAT fraud market, and the parallels that could be built between analyzing legal and illegal markets.

Dr. Tihomir Bezlov, Senior Analyst at CSD European Program, described the structure and origin of the organized crime in Bulgaria, its development and the tendency of shifting from the black and grey sector to the white one.

In the second part of the session, Mr. Ger Homburg from Regioplan (the Netherlands) described the development of the organized crime structures in his country, focusing on the “regulation of illegal markets approach”. He stated that activities of organised crime in the Netherlands were rooted not in the attempts of organized crime structures to gain control over legal industries (such as construction) through racketeering. Instead, it was primarily focused on delivering goods and services in illegal markets, drugs, illegal gambling, and prostitution.

Ms. Kristin Höltge from the Free University of Berlin spoke about the corruption and the informal institutions as a challenge for the European Neighborhood Policy. She described the flow of bribes and the relationships between the different agents in the corruption process, as well as the causes of corruption. Ms. Höltge focused in particular on the case of corruption in the Georgian higher education sector.

The last panelist in the second session was the Senior Fellow at CSD, Economic Program Dr. Konstantin Pashev. His speech was on countering organized VAT fraud in enlarged Europe. As VAT fraud is the leading challenge encountered by the Bulgarian revenue/tax administration on the doorway to enlarged Europe, he drew several conclusions from the Bulgarian experience, providing ideas as to the legislative and administrative measures that could be taken in preventing VAT fraud in the Europe’s single market.

The Third Session on the second day began with the presentation of Mr. Vincenzo Ruggiero from Middlesex University, London. He examined some definitions of organized crime in an attempt to clarify the most appropriate approach in fighting organized crime. Mr. Ruggiero described the difficulties that scholars encounter when researching and defining these phenomena.

The following speaker, Dr. Jens Andvig from the Norwegian Institute for International Affairs presented regulation patterns and characteristics of rational crime, also including international aspects. Mr. Brian Donald from UK’ Serious Organised Crime Agency (SOCA) introduced the agency and stressed on the importance of the capability/capacity of the agencies that investigate organized crimes in order to be effective against the ever evolving criminal groups.

In the last part of the third session, Prof. Jan van Dijk, Pieter van Vollenhoven Chair in Victimology and Human Security, University of Tilburg and Senior Fellow of United Nations Interregional Crime and Justice Research Institute presented detailed data on indexes of organized crime, regional mean scores of composite indexes, together with world and European map of organized crime. The proposed approach included integrating data on perceptions of organized crime, corruption, money-laundering, the extent of the shadow economy, and the rates of unsolved murders.

Dr. Dina Siegel from the Faculty of Law, Vrije Universiteit - Amsterdam, talked about the migratory criminal groups, and the threats that such groups pose in an enlarged Europe.

Mr. Hugo Brady, Research Fellow at the Centre for European Reform, UK talked on the EU’s criminal justice policies and efforts to fight organized crime.
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