How Drugs, Guns, And Dark Money Move Around the Globe

We talked to the guy behind 'McMafia' about how organized crime groups work in 2018.

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Feb 15 2018, 5:54pm

Photo via Pexels.

Most people tend not to think of criminal organizations outside of watching Netflix.

Up here in Canada we have the Hells Angels, the Montreal Mafia, and simple smalltime petty crooks, but, in the end, they are all connected tightly to their international couterparts. To put it simply, the criminal market has, like every other market, adapted to globalization. At first it can be hard to wrap your head around but that is where Misha Glenny comes in.

Ten years ago Glenny, a British investigative journalist, published McMafia, a book that mapped the globalized criminal market and attempted to show how we got to here. The book was published in over 30 languages and was a hit. Now, a decade later, the BBC has turned the book into a mini-series. The show just had it's season finale in the United Kingdom and will be airing across the pond on AMC starting on February 26.

The show, starring James Norton (Black Mirror, Happy Valley), is a globe-spanning gangster drama that has been compared to another BBC production, The Night Manager. Glenny, who serves as an executive producer on the show, was in the writer's room to assure the mini-series has the authenticity of the book, as some of the show's plotlines are based on real-life cases Glenny reported on.

VICE Canada sat down with Glenny in a Toronto coffee shop to talk about where Canada fits into the global criminal market, adapting a non-fiction book into a fictionalized TV show, the opioid crisis, and using toilets to smuggle books across the Iron Curtain.

VICE: So, to start, can you explain the globalized criminal market and how we got here?
Misha Glenny: It can kinda be traced back to two major events. The first was in 1986 with Thatcher and Reagan introducing financial measures that would facilitate globalization—so all of a sudden multinationals could move huge sums of money at speed across the world and incentivize countries in emerging markets that previously had been resistant to outside investment to build up their domestic capacity.

Misha Glenny. Photo supplied.

That was important, but the importance of it doesn't come clear until the implications of the second event, which was the collapse of communism in the Soviet Union. The key thing about that is that capitalism emerged from the planned economies in a very haphazard way because there were no state structures that could regulate capitalism. So without state regulators or commercial justice systems that would arbitrate business disputes and things like that, the new entrepreneurs taking the opportunities had to create their own support mechanism with what sociologists refer to as privatized law enforcement agencies, but we know more colloquially as the mafia. This is exactly what happened in southern Italy in the mid-19th century. Suddenly in this huge swath of territory, this capitalistic organized crime emerged in eastern Europe.

So what they're doing is they're protecting markets, and they're protecting entrepreneurs active in those markets. What happens with most mafias is they look at the markets themselves and say 'why don't we get involved in this because we can make money out of buying and selling stuff.' They became involved with licit and illicit markets.

They were looking for market opportunities everywhere. Conveniently for them, they had on their doorstep the European Union, the largest consumer market in history. One that through the late 90s, in particular, was increasingly wealthy and the population liked to spend some of their spare cash sleeping with prostitutes and sticking 50€ notes up their nose and smoking untaxed cigarettes. During the Yugoslav war, the criminal syndicates, under the fog of war, used it to channelling all this stuff—whether it was heroin from Afghanistan, women from Ukraine, blood diamonds coming from Africa, coke from South America—into the European Union.

A screenshot from McMafia. Photo via AMC.

It was that experience that saw Russian criminals, Eastern European criminals, Balkan criminals, Turkish criminals link up with people from elsewhere in the world to satisfy demand and create new markets and all sorts of things. There was a similar process going on in Asia at the same time as partially a consequence of China and India opening up which itself goes back to that 1986 business. So all these things were coming together at the same time, Afghanistan was rocking and producing huge amounts of heroin, the entire state of Columbia was subverted by the cartels, and all this came together in the 1990s.

Organized crime was the industry that best appreciated the methods of globalization, how you could launder money through all of these new financial pathways that were opening up around the world. If you're in places like the former Soviet Union, parts of Africa or South America, then you have got to have some state officials in your pocket. Because the profits you make in this industry is so vast, you can basically by off prime ministers and presidents if you want to.

Where does Canada fit into the global crime market?
For a time and, of course, that's changing now because of the legalization of recreational marijuana, Canada was an incredibly important hub and will remain so still for the production and export of marijuana into the United States. It got going in BC, but it went country wide. Vancouver is important because it's a port and people found that moving stuff across the border from Canada to the US was easier than just trying to get it into US ports. It wasn't just marijuana that was being shifted but cocaine as well which was coming up to Canada and then going south, partly with the Hells Angels.

What you're beginning to see is a slow and steady shift from the production of narcotics from the organic narcotics from the traditional areas like Afghanistan and moving into zones of consumption. So Amsterdam, the Balkans, Israel, to an extent the United Kingdom, but also Canada and Japan, are becoming zones of production for methamphetamines for MDMA and for a whole range of other synthetic drugs. Not fentanyl though, which, as far as we know is exclusively produced and developed in China.

You also have in Canada a fairly lively market in money laundering and currency exchange for money laundering purposes. Interestingly, Vancouver is starting to become a real centre of this now because you can create companies in Canada or outside of Canada whose beneficial owners remain unknown to the state. So, I think the top 100 properties in Vancouver in terms of market value, [nearly half of them,] are owned by anonymous companies. This is something that plagues London hugely and why London has become a centre in the money laundering trade is the fact that you can buy property without revealing who you are.

Essentially, you have three areas in Canada that are important. First of all, you have the consumption zone—Canada is a target for good and services of transnational crime. Then you have the production zone that is increasingly creating synthetic narcotics and is using the discrepancy in prices between the US and Canada on the whole range of goods. Then you have the facilitation industry, the money laundering, the lawyers, people facilitating major operations, so on and so forth. It, like all western countries, is a fairly lively place in organized crime but it does have that unique aspect of being seen by criminals as an easier entry point into the United States.

That 49th parallel, that border with the States, it's just very easy to penetrate. It's a big country and, you know, big countries provide opportunities. It's sparsely populated and that's difficult to police.

How has the war on drugs affected this industry?
The overwhelming problem, both from an economic and moral point of view on the war on drugs is it leads to undeclared civil wars in countries of production and distribution—Brazil, Mexico, Afghanistan. If you take Brazil for example 62,000 people were killed at the hands of human beings and over 50 percent of those deaths are directly attributable to the consequences of the war on drugs.

Hundreds of thousands of deaths every year in South and Central America because of demand by countries like the United States, Canada, and Western Europe for decades because of the war on drugs. You’re starting to see death in the West with the opioid crisis but that is very small compared to the overarching numbers. When you work down there and you see the consequences and you know that a great majority of those killed are desperate, unemployed, black males between 16 and 30 you begin to see this is just an outrageous strategy and policy that needs to change and which is slowly changing.

If you're an ordinary voter in the United States, you cannot see this unless you live in Miami or somewhere like that. I think the war on drugs has been a demonstrable failure since the 1920s and I'm glad we're finally starting to see the beginning of revisions of this although there is still a long way to go.

You mentioned the opioid crisis. Portugal has decriminalized drugs and some in Canada have been discussing that as a way to tackle the opioid crisis. How would a policy change like this impact the globalized criminal market?
Within [Portugal] what you have seen is a reduction in crime because people have easy and cheaper access to recreational narcotics and because market prices have come down it's become more affordable for people so they don't have to break into stores in order to get that money for their dope. You've seen, fascinatingly in Portugal across the board, is a reduction in consumption.

The problem with decriminalization is the wholesale market remains a criminalized market, so how can you allow people to have access to a market which is at a wholesale level criminal? It's a very difficult circle to square and one that the Dutch have been puzzling over for decades and never quite succeeded. That's why everyone is looking at the US and Canada with intense scrutiny right now. We have seen it in Portugal, in Holland, we have seen it in the Czech Republic—where marijuana is de facto decriminalized—and in Switzerland on the whole pretty positive results.

On the whole, that seems to be working but there are very significant changes afoot in terms of narcotic distribution—the dark web. In the UK it's huge, the dark web is absolutely huge, especially in towns and cities with a big student population there is a huge turnover on these sites. The quality of narcotics is increasing because of the peer review system and habits are changing. It's through these websites that you see these habits changing away from organic narcotics to synthetic narcotics. The thing about that it's an unregulated market like everything else and you can infiltrate material like fentanyl in it.

This is now, partially due to the shift in distribution over the dark web, a full-blown social crisis the like of which we haven't seen in terms of drugs anywhere, ever in the western world because the number of deaths is so high.

McMafia first came out ten years ago. How much has changed in this world since the book was initially published?
You had up until quite recently two parallel tracks of criminality, you had the traditional organized crime dealing with services, product, and protection—things like that—and you had cybercrime and there was a gap between them. That gap existed because in traditional organized crime in order to be in the game you had to have a convincing capacity for violence or the threat of violence and in cybercrime, you don't need that—you can be at home attacking someone 5,000 miles away.

vaWhat we've seen over the last five years is we've seen the emergence of younger people in traditionally organized crime syndicates who are digital natives. So they're much more amenable to using and exploiting cyber in a way of making their business more efficient and engaging in strictly cybercriminal activities and so that's happening on the traditional crime syndicate and on the cybercrime syndicate a lot of the script kitties and opportunistic operations are being shed and you get a lot more organized cell-like structure. Where you have somebody coordinating the whole thing, you have a malware writer, you have someone responsible for malware deployment, you need a good social engineer for the phishing operation, then you need mules, money launders, that sort of thing and it's become a much more structured, institutionalized operation. As a consequence of this, that gap between the two types of crime has been narrower.

The fact that you ended up doing so much reporting on smuggling is kinda poetic…

Oh really? (laughs)

Yeah, well correct me if I’m wrong, but back in the day you used to smuggle books across the Iron Curtain, didn’t you?
I did do this myself!

I was a part of democratic opposition groups of Eastern Europe. We were actually a part of a leftist network who were engaged in this activity. So, for example, going from Vienna to Budapest you would have a whole variety of carriages, some from the Austrian railways some from Romanian railways and we would scope it out beforehand. And I discovered that in the Romanian carriages you could unscrew a panel on the toilets in the back of the base. I would unscrew it, put all the documents in there and then screw it back up so no one would know. Once I was over the border I

A screenshot from McMafia. Photo via AMC.

would go back to the loo and put it back in my luggage and that was done. Mainly I took stuff through in a car into Czechoslovakia, into Prague. I would take stuff back across with me as well.

I was just out of my teens and it was a very sort of idealistic thing and I learned a lot. The documents were sort of political debates, magazines, and so on and so forth because of the state control of the media was very, very extensive but into Hungry I would also take in Xerox machines so they could copy material and distribute it in Budapest.

While I have you here I would be remiss not ask you about the TV show...
You sure would! (laughs)

How has the process been?
The book, as we discussed was written many years ago, and it did have a real impact amongst law enforcement, amongst people engaged in organized crime, amongst policy makers, people doing long-term security planning but it was limited. It did well as far as books go, it was sold into 30 languages but you're always restricted to a few hundred thousand copies at best. The impact that we've had with the show has been quite astonishing.

It is in the newspapers, it is on the television all the time. We have something now that's being referred to as the “McMafia law” which is unexplained wealth orders where the government has said people with assets of more than £50,000 have to explain where it comes from if they're foreigners living in London. We've had real estate pages explaining McMafia houses. Articles about the beneficial owners of anonymous companies. It's been massive, I mean in the UK and it feels like there hasn't been a show that has had this political impact in years. I am particularly pleased that these issues about organized crime and money laundering have you know moved over to the mainstream and you can only really do that through television.

Why that name, why McMafia?
So I called it McMafia first of all because of the association with McDonald's and their strength globally. When I was interviewing Mark Galeotti, who is a Russia specialist, early on in the research, he said to me that the Chechen mafia in Moscow had franchised out there name to groups elsewhere in Russia so they could call themselves the Chechen mafia whether there were Chechens in them or not. They had to pay a tribute A and B they had to maintain the ruthlessness that the Chechens were famous for in Moscow. He said it's a McMafia if you like so there two things came together, my idea of the globalization and his idea of the franchising came together and I thought this was the right title.

Although a lot of people in Scotland were disappointed because they thought it was about the Scottish mafia.

This interview has been edited for length and clarity.

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