How Mafia Money Helps Drive The Global Art Market
"The global art market is
worth between 58 and 60 billion euros." -
Valuable pieces of art have a
special appeal to people in organized crime, both as trophies — conveying power
and prestige — and as a means to launder ill-gained earnings.
Maria Berlinguer
LA STAMPA
ROME — Gioacchino Campolo,
Italy's video poker king, loved art. Among the 300 million euros worth of goods
confiscated from him were about 100 very valuable works of art: paintings by
Salvador Dali, Giorgio Morandi, Renato Guttuso, Mattia Petri, and Giorgio de
Chirico.
Collections in the tens of
millions of euros were also confiscated from: Nicola Schiavone, son of Franceso
Schiavone, boss of the Casalesi clan within the Naples-based Camorra crime
syndicate; and from Gianfranco Becchina, art dealer to Matteo Messina Denaro,
boss of Sicily's Cosa Nostra.
Let's not, of course, forget the
two Van Gogh oil paintings — Congregation Leaving the Reformed Church at Nuenen
and View of the Sea at Scheveningen — which were stolen in 2002 from the Van
Gogh Museum in Amsterdam and later found by Italian financial crime unit
officers in Castellamare di Stabia, Naples, in a cottage linked to drug
trafficking kingpin Raffaele Imperiale.
And then there are the
'Ndrangheta investments in 17th-Century paintings in Lombardy, and the
collections of Gennaro Mokbel and Massimo Carminati, active figures on the
piazza of Rome, at the center of the must-see documentary Follow the Paintings
by Francesca Sironi, Alberto Gottardo and Paolo Fantauzzi.
Are criminals and mafia bosses
really this passionate about art? Hard to imagine. More likely it's a sign of
just how much the art market has become a phenomenal money laundering and
investment tool for organized crime. It's a sector that allows dirty money to
be hidden, safe and sound, with a guaranteed protection against devaluation
over time.
And this isn't just about
laundering. Artwork offers the certainty of an investment that won't have
inflationary repercussions, and with a guaranteed return to boot, provided the
money is invested in masterpieces destined to securely maintain their value
over time.
The global art market is worth
between 58 and 60 billion euros. It's a worldwide boom that doubled in size in
the last 10 years, and which shows no sign of imploding. And not just thanks to
those evergreen works, the masterpieces. It's also due to the exponential rise
in prices for works by skyrocketing young artists, pieces that can in some
cases top $100 million. All anomalies, according to experts in the sector.
In the past decade, galleries and
auction houses have beat record after record, succeeding in placing both
masterpieces and works by artists launched from semi-anonymity to worldwide
commercial success.
It's a sector that has benefited from an
absolute lack of regulation.
But not all that glitters is gold, because
passionate collectors aren't the only ones driving the market's wild expansion.
Also fueling the frenzy is the ease with which mob interests have so far been
able to use this commercial bubble to recycle illicit funds. We're talking
about a sector, in other words, that has benefited from an absolute lack of
regulation.
"It's a flow of cash coming
above all from the drug trade," explains Gen. Allesandro Barbera,
commander of Scico, the central investigative service on organized crime of the
Guardia di Finanza.
Roughly 18 billion euros (or 1%
of Italy's GDP) is the colossal value of real estate and goods confiscated by
the Italian financial authorities from criminals between 2015 and 2019.
Seizures that confirm the importance of what is seen as a strategic choice of
the mob to invest in safe-haven assets: principally diamonds, precious metals,
paintings and archeological finds.
These treasures aren't all
stolen. Many are acquired legally on the art market, above all at auction.
"The mafia enterprise moves
indiscriminately between the two words, legal and illegal, which makes it
particularly tricky," Barbera explains. "For the clans, safe-haven
assets like works of art are desirable because they are convenient. It's a business
with branches all over the world, very difficult to reconstruct. We find
ourselves constantly facing a two-faced Janus, and it requires ever more
sophisticated investigative techniques to find where the illicit funds are
hiding, and to map out all the money transfers."
Barbera adds: "When you find
yourself facing a mafia organization that moves in the legal art market, you
don't need sharpshooters so much as business-minded investigators who know how
to read financial statements."
Works of art and safe-haven
assets, he explains, are today's "cashier's checks: exchange goods with
stable value and a double advantage — masking the provenance of the
investments, and guaranteeing the availability of the good in real time on the
global market."
They are like trophies to exhibit as
demonstrations of power.
The criminal chain operates, furthermore, like
a value chain that, in its various phases, succeeds in raising and sustaining a
constant growth in value.
Investigators have also succeeded
in documenting a "reverb effect" enjoyed by the chief clans that own
artistic masterpieces with universally recognized value. The extremely coveted
items are trophies to exhibit as public demonstrations of power, prestige and
dominion over their territory.
"For a mafia boss, having a
painting or a sculpture by a major artist at his disposal is not just a
money-laundering scheme. Being able to exhibit a masterpiece confers prestige
and reputation," the general says. "It contributes to spreading the
idea of supremacy that a hegemonic group wants to express in a geographic area,
or an in a specific sector of illicit traffic."
Thus the possession of art
becomes a sign of power and socio-cultural investiture. A status symbol. It's a
well-oiled machine. Over the years, the clans have perfected the methods of
hiding money trails coming from drugs and various other rackets and trades.
"Organized crime, in its
different expressions, have an interest in investing in goods that can help
hide their net worth," says Federico Cafiero De Raho. "Works of art
with astronomical values are thus used as instruments to safely deposit huge
sums of wealth."
And with a specific advantage for
clans. "These investments in paintings, sculptures and archeological
treasures effectively cover up the economic entity concentrated in the
object," he adds.
A way, then, to muddy the waters,
to not give any certainty as to how much illegal money has been laundered along
the successive gears of the "artistic laundry machine." The price of
an artwork remains secret. To determine how valuable it is, one must turn to a
market that is based on subjective valuations.
The national anti-mafia
prosecutor reconstructs a constantly updated case study that points
unequivocally to a method of hidden payment via art. In hundreds of cases, in
fact, paintings, sculptures and frescoes guarantee money transfers from one
mafia group to another, protected from any risk.
With a piece of paper, with a
private agreement, an exchange of virtual currency is implemented and secured
between criminal organizations without a single masterpiece, and in some cases
even entire art galleries, needing to be transferred from one location to
another.
The artwork remains where it is
kept — perhaps in a free port or duty-free zone, inaccessible to all — and
passes from one buyer to another.
And this is one of the new
frontiers on which attention is being focused, by investigators and
legislators. Meanwhile, the fifth directive of the European Union on anti-money
laundering imposes on art sector operators the same regulations of transparency
currently applicable to banks, notaries and accountants.