The family firm making a killing in the crunch

As Italy’s economy declined 5 per cent, its largest crime groups raked in billions of euros. An anti-racketeering group has drawn up accounts for ‘Mafia Inc’. Nick Clark reports

Drug running, extortion and armed robbery have done a roaring trade during the downturn, and if one company is well placed to benefit, its Mafia Inc. As the Italian economy tottered last year, the country's five biggest organised crime clans went from strength to strength, raking in a staggering €135bn.

A new report released this week charts the rise of Mafia Inc to Italy's "number one company", and has mocked up a balance sheet of the earnings from its range of – mostly illegal – business interests. Sos Impresa, a group that advises small businesses on the Mafia, also pointed out in its research that crime has soared with business owners across Italy subjected to 1,300 crimes a day.

This week Italian prime minister Silvio Berlusconi hauled his cabinet down to Reggio Calabria, the heartland of the Ndrangheta clan, to outline his plans to take on the mobsters.

He unveiled a 10-point plan to battle the clans, revolving around seizing assets, cash and property. "To fight the Mafia you need to attack mobsters' assets and this will be the focus of the fight against organised crime," he said.

Organised crime in Italy is made up of regional and local clans, predominantly, but not exclusively, in the south. Among the largest are the notorious Cosa Nostra from Sicily, Ndrangheta in the toe of Italy, the Sacra Corona Unita in Puglia, the Basilischi in Lucania and the Camorra, the Neapolitan group and focus of last year's feted film Gomorra, which is the biggest of the lot. Between them their revenues are larger than oil group Eni, Italy's largest company. The government hailed the capture of €550m in assets from the mob last week, believed to be from Cosa Nostra boss Matteo Messina Denaro. This came as convicted Camorra boss Paolo Di Mauro was caught near Barcelona after seven years on the run.

But as Sos Impresa's mocked-up accounts for the five biggest crime clans show Mafia Inc's revenues continue to strengthen, equal to about 9 per cent of GDP in a year the Italian economy shrank 5 per cent.

Revenues rose over €4bn on the previous year, a performance that would leave many FTSE 100 chief executives green with envy, with profits up 8 per cent to €78bn. The 60 per cent profit margin is enough to have those same chief executives brushing up on their Sicilian dialect. "Mafia Inc doesn't know fear or crisis," Sos Impresa said, adding the dirty money was "mouth-watering".

The seventh annual results statement for Mafia Inc takes its information from sources ranging from government and police reports to informants and Sos's own extensive research, and it makes for extraordinary reading. The accounts would have any Capo dei Capi (boss of bosses) delighted with the performance of their drug-trafficking business, its standout business. Revenues rose by €1bn over the previous year to €60bn, mostly from selling cocaine. Other illicit trade included a lucrative €5.8bn in gun-running, as well as a €1.2bn sideline in smuggling goods, above all cigarettes, a business that returned to growth last year.

Yet it was loan-sharking that proved the real growth area during the credit crunch, becoming Mafia Inc's top growth business with revenues of €15bn. Sos Impresa said the clans had so much "liquidity" of ready cash to provide loans that many banks had stopped offering during the crunch. With interest of up to 10 per cent a day the business proved very lucrative last year. Sos Impresa said: "In time of crisis, when legal credit is hard to come by, usury boomed." The returns from demanding money with menaces remained more or less flat at €9bn. The report said the lack of annual growth in extortion was down to the tough economic conditions as small businesses suffered. Other traditional Mafia Inc businesses including prostitution, as well as armed robbery, also remained flat with revenues of €1.6bn.

The clans are often linked with waste management, the front business that Tony Soprano operates in the eponymous show about an organised crime boss in the US. The so-called "Ecomafie" raked in €16bn for the Italians last year, also flat on 2008, a stable income that would have Mr Soprano himself exclaiming "Badda Bing".

The organisations have made diversification a watch word, with money-spinning operations such as theft, smuggling and fraud complemented by gambling, farming, illegal building and dumping waste.

The largest families have invested heavily, with €26bn put into assets ranging from vehicles and properties to the stock market, which SOS Impresa called an "ideal parking spot" to hide ill-gotten gains. The clans are believed to have laundered €19.5bn in 2009.

In terms of business model, the report said Mafia Inc were led "conservatively" and despite the booming profits, it has looked to emulate big business with cost-cutting best practice. There may be a fairly regular turnover of staff, but the organisations have also slashed wages. This year's €1.1bn payouts in salary for the bosses, the consiglieri and the "made men", as well as a further €390m set aside for those behind bars or on the run, marks a decline of a third on the previous year.

The report said there was a monthly wage for the different ranks in organisations, and pointed out the companies have no unions or strikes or even contracts to worry about. The most modest wages go to the lookouts, set at between €1,000 and €1,500, about the same as a debt collector. This rises to between €3,000 and €6,000 for a deputy district boss, and between €2,500 and €25,000 for those that carry out attacks and murders. The bosses themselves earn between €10,000 and €40,000.