Discussion 7
Discussion Topic
Available on Mar 25, 2024 12:01 AM. Submission restricted before
availability starts.
1) Why it is important for organized crime groups to become involved in
legitimate businesses?
2) How do organized crime groups use racketeering?
3) In what ways do labor and business racketeering differ?
Powerpoint information (2 attached) must be implemented and cited. Please utilize 1 of 2
references to the power point presentations if applicable (OR 1 outside reference), in addition
to the textbook excerpts included on this page. Total: at least 2 references.
Discussion is to be in APA Format
Initial Discussion posts must be at least 160 words. Quotes and references must have
appropriate attribution. Include “in-text” APA Citations, including page numbers.
Quotes and references must have appropriate attribution. Include "in-text" APA
Citations, including page numbers.
Tudor must be APA Orientated. I am a long-term customer. Do not train new employees
on my time. Rohan MO has repeatedly done a great job on my prior discussions in this
class. Requested, If possible.
Textbook Citation:
Lyman, M. D., & Potter, G. (2018). Organized Crime (7th ed.). Pearson Education (US).
https://ccis.vitalsource.com/books/9780134831763
Page 169:
Business Racketeering
Perhaps the most disturbing claim made against the more sophisticated organized
crime groups is the one suggesting that these organizations are infiltrating and
controlling large areas of legitimate business through business racketeering. Although it
could be argued that some illicit enterprises, such as gambling, enjoy more public
tolerance than others, there is widespread concern that underworld criminals are widely
involved in the ownership of legitimate construction, solid waste disposal, food processing, and trucking businesses, as well as restaurants, bars, racetracks, and
casinos.
Of great concern is that syndicates are using profits generated from their legitimate
enterprises to expand their illicit undertakings. Another concern is that organized
criminals, by combining their illicit and licit businesses, will make it difficult if not
impossible for legitimate businesspersons to compete with them. Furthermore, the
assumption by many law enforcement officials that the Mafia is a single, unified,
national criminal consortium makes this suggestion even more disturbing, since it
implies that much criminal involvement in legitimate businesses cannot be controlled.
Wealthy criminal organizations need new areas in which to reinvest newly made illicit
profits and thus have legitimate businesses. Buying, muscling into, or starting legitimate
businesses also permits organized criminals not only to evade their income tax
obligations but also to continue their illicit operations discreetly behind seemingly
innocent fronts. These assumptions are based on the premise that criminal syndicates
operate like any other legitimate business. That is, they are designed to maximize
profits through diversification of their activities.
Reasons to Seek Legitimacy
Organized crime groups seek both profitable and safe investments. Therefore, these
groups make calculated moves into a community's commercial life through ownership of
legitimate businesses. Anderson (1979a) suggests that participation in legitimate
business serves several needs. First, this participation offers concealment opportunities
for illegal activities, such as pickup points for gambling operations and disposal points
for stolen goods. Second, these businesses provide money-laundering opportunities for
illegal profits. The Pennsylvania Crime Commission (1980: 227–230) provides evidence
of laundering operations involving banks, beer distributorships, car dealerships, bars,
and nightclubs. Third, legitimate businesses are excellent sources of reportable and
legitimate income. Organized crime groups regularly use bars and restaurants as
legitimate reporting mechanisms because their high cash volumes are ideal for
concealing illegal profits (Pennsylvania Crime Commission 1984).
Finally, active participation in legitimate businesses enhances the integration of crime
group members with members of the business community. Chambliss (1978) reported
that distinctions between organized crime and legitimate businesses in Seattle were
nearly impossible to discern. In his Morrisburg study, Potter (1994) reported intense
intertwinement of legal and illegal businesses serving as gambling collection points,
pornographic film distribution points, fencing and loan-sharking operations, and street-
level prostitution operations. Organized crime provides lucrative services to some businesspeople in a community.
This does not imply that all businesses deal with organized crime or that all organized
crime activities are favorable for business but that, in a significant number of specific
situations, businesses avail themselves of the services of organized crime.
Relationships between fences and retail establishments are particularly good examples.
In fact, in her classic study of fencing, Walsh (1977) estimated that about two-thirds of
the fences active in the purchase and resale of stolen goods were also legitimate
business proprietors.
Page 170:
Organized crime's racketeering services provide businesses with potent weapons for
harassing competitors or securing favorable employee contracts (Chambliss 1978;
Pennsylvania Crime Commission 1980; Block and Chambliss 1981; Jenkins and Potter
1986). The literature includes numerous examples of this symbiotic relationship: the
automobile industry's attempts to suppress unionization (Pearce 1976), local industry's
collusion with the Teamsters (Chambliss 1978), the activities of the Roofers Union
(Pennsylvania Crime Commission 1980), and corruption in the garment manufacturing
industry (Block and Chambliss 1981). Business racketeering provides opportunities for
management to collaborate in efforts to gain control of unions and their pension funds.
The Teamsters union is an example of this relationship, as is organized crime's
extensive influence in Philadelphia area union health care plans (Pennsylvania Crime
Commission 1983).
Page 172:
One of the first to identify labor racketeering as a profitable venture in the early years of
the twentieth century was New York racketeer Arnold Rothstein. “Lepke” Buchalter and
Jacob Shapiro then developed labor racketeering into a major criminal enterprise in the
1930s and 1940s (Block and Chambliss 1981; Jenkins and Potter 1986). By the 1950s,
the Kefauver Committee was suggesting that organized crime groups played dominant
roles in the labor unions of eight industries: the hotel and restaurant industry, baking,
distilling of alcoholic beverages, trucking, garment manufacturing, carpentry, meat
packing, and construction (Moore 1974: 68–79).
Page 173;
Today, labor racketeering continues to be a major business of organized crime. The
three major activities by which organized crime realizes illicit profits are (1) sweetheart
contracts, (2) the misuse of union benefit funds, and (3) extortion, or strike insurance. A
sweetheart contract is a contract that an employer and union officials devise with
substandard terms for union members. This contract does immeasurable damage to the interests of union members. In return for a bribe paid to corrupt union officials, the
company is able to negotiate a highly beneficial contract with its workers. Union
demands for higher wages, better working conditions, and stronger benefit packages
are reduced to benefit the company. It increases its profits at the expense of workers.
The only winners in the negotiation of a sweetheart contract are the company and the
mob-controlled union officials themselves. In addition to reducing workers' legitimate
economic benefits, a sweetheart contract also usually allows the company to use
nonunion labor in specific circumstances, thereby reducing the opportunity for
employment of union members.
