Abstract
Public policies in the last 20 years have promoted in Italy the investment in renewable energy sources within the framework of climate change policies. Investment in renewables received generous incentives, leading also in Sicily to a rapid expansion in the capacity installed. We analyse whether rents from wind investment may have attracted Sicilian mafia. We argue that the wind business is particularly attractive when a criminal organization invests in the regular economy. We find that the probability of observing a wind farm in a municipality is higher, once controlled for geographical and political factors, if there is a mafia family embedded, identifying a causal link from mafia presence to wind investment. Moreover, the involvement of mafia groups adapted to the changing regime in incentives around 2012, moving from large investments, direct involvement or the provision of intermediation services to small scale investments in the municipalities where the families are rooted. These results are consistent with the episodes unveiled in judicial inquiries in Sicily. We compare these results with the case of Apulia, where large wind investments have been supported by an environmentally committed regional government and where the judges did not find evidence of a massive penetration of the local organized crime in the wind business. We show that the location of wind farms in this region depends on favourable geographical conditions but is not correlated with the presence of organized crime, consistently with the negative evidence from judicial inquiries.
This is a preview of subscription content, log in via an institution to check access.
Source: GSE database
Source: GSE database
Similar content being viewed by others
Notes
Looking at the last decade we can mention the Renewable Energy Directive (2009/28/EC) who set the targets for 2020 in the development of renewables and required Member countries to draft National Renewable Energy Plans. A further step in December 2018 was the release of the revised Renewable Energy Directive (2018/2001) with new binding targets for 2030, requiring the Member States to draft a 10-year National Energy and Climate Plan. See also https://ec.europa.eu/energy/en/topics/renewable-energy.
See for instance Sciarrone et al. (2011) and https://www.helpconsumatori.it/servizi/via-col-vento-cnel-energia-eolica-a-rischio-di-infiltrazioni-criminali/.
See Polo (2013). We do not review in this section the arguments related to the origins of criminal organizations in the mid-‘800, focussed on the supply of protection in a historical phase when the Bourbon regime collapsed and law enforcement was weak. On these issues see Gambetta (1996), Bandiera (2013), Buonanno et al. (2015a, b), Acemoglu et al (2019).
The presence of criminal groups belonging to Mafia, ‘Ndrangheta and Camorra has been discovered in cities in Val d’Aosta, Piedmont, Lombardy, Liguria and Emilia Romagna. See Sciarrone (2019).
DL 27/2011, art, 26 allows to receive a contribution of 40% of the investment cost for plants up to 200 KW, of 30% for plants up to 1 MW and of 20% for plants of 10 MW capacity. See https://www.gazzettaufficiale.it/eli/id/2011/03/28/011G0067/sg.
Incentivazione della produzione di energia elettrica da impianti a fonti rinnovabili diversi dai fotovoltaici, PROCEDURE APPLICATIVE DEL D.M. 23 giugno 2016, GSE, 2016.
For instance, both Suwind and Enerpro srl submitted a project for a wind farm in the municipality of Mazara del Vallo (Trapani). Although Enerpro initially obtained the environmental authorization from the local council administration, the mafia representative intervened manipulating the documents and ultimately making Suwind win the project. (See: Eurispes, Agromafia: 2° report on agro-alimentar crime in Italy (2013) p. 129).
See Sciarrone et al (2011), pp. 205–216.
The investigation named “Eolo” unveiled that a single individual, Vito Nicastro, was involved as facilitator in a very large number of projects. He was known as “the king of the wind”, procuring authorizations for wind farms and being a bridge between entrepreneurs and public administrations. The prosecutors confiscated personal properties for an overall value of 1.3 bln €, and Mr. Nicastro was then condemned as supporter of the Mafia chief Matteo Messina Denaro (https://www.avvenire.it/attualita/pagine/maxi_operazione_mafia_eolico).
Europol (2013), p.15.
In a telephone tapping a member of a mafia family of the province of Trapani claimed “Concrete, concrete… there is the money for us”. See Sciarrone et al (2011), p. 211.
In a telephone tapping within the Eolo investigations the boss of the Tamburello family, that controls a firm specialized in the construction of wind parks, claimed: “In the municipality of Mazara del Vallo no one can construct a wind turbine without my permission” (http://ww.malitalia.it/2010/02/mazara-ancora-un-sequestro-ai-mafiosi-complici-dimessina-denaro.
In 2012 Santo Sacco, former city councillor, was arrested and convicted for mafia association and racketeering following the request of a kickback (pizzo) to the Danish company Baltic Wind. (https://www.ilfattoquotidiano.it/2014/04/01/mafia-condanna-a-12-anni-ultimo-dei-pizzinari-di-messina-denaro/933903/).
See Terna (2018).
These data refer to 2017, the latest available on http://www.terna.it/it-it/sistemaelettrico/statisticheeprevisioni/datistatistici.aspx.
For plants of 200 kW the incentives for wind plants in the Italian regulation (both the DM 6/7/2012 and DM 23/6/2016) are by and large the highest in the European Union while for plants of 10 MW capacity the Italian regulation (6/7/2012 ranks third after Wallonie and Romania. See GSE (2017).
Rapporto Statistico FER 2017, energia da fonti rinnovabili, in Italia: settore elettrico, trasporti e termico. GSE, p.55.
2004 is the starting year in the database recorded by GSE on wind plants.
AtlaImpianti is part of GSE (Gestione Servizi Energia), the administrative body that pays the renewable energy producers the incentivized tariffs and therefore the list includes all the active plants.
Regarding the Messina province, when we construct the variable on mafia presence in 2012 we use the DIA 2014 report since in the 2012 review there are no detailed information for the 12 municipalities in this province. The 2014 report is the closest one to 2012 to provide information at the municipality level for the Messina province.
See for instance ISTAT (Statistiche Giudiziarie Penali) that include data on extortions, threats, damages, fencing, laundering and usury.
In order to test the correlation between the judicial data on reported crimes and the DIA indicator we have aggregated the latter by province (thus defining the share of infiltrated municipalities) and then computed the correlation with an aggregate index of reported crime obtained through factor analysis. The share of municipalities in a province with a positive value of DIA indicator is strongly correlated with the combination of denounced activities obtained from the first principal component (correlation index 0.85).
See Gennaioli and Tavoni (2016), p. 270 for a discussion on measurement errors in mafia-related issues.
The coefficients of the geographical controls interacted with dummy 2012 are never significantly different from zero, suggesting that their effects on the location of wind farms is the same for investments before and after 2012. We do not include these estimates to save space.
A specific example is the “Eolo” investigation conducted in 2013, that led to a confiscation of a value of 1.3 billion euros and to the arrest of Vito Nicastri for his involvement in several inquiries on mafia and renewable sources. He was a facilitator, known as the “King of the wind”, procuring authorizations for wind farms and being a bridge between entrepreneurs coming also from outside Sicily and the public administration. Another investigation, called “Broken wings”, focused on the figure of Salvatore Moncada, one of the most important entrepreneurs in the wind sector. He denounced the requested payment of 70.000 euros by Vincenzo Nuccio for obtaining the necessary authorization for the realization 7 parks. Vincenzo Nuccio was found to be a figure linked to Vito Nicastri and has been arrested.
For instance, the simplified procedure to release authorization was extended to larger plants up to a capacity 1 MW.
See for instance https://www.lagazzettadelmezzogiorno.it/news/puglia/520338/vacanze-tangenti-a-funzionario-puglia-per-si-alle-pale-eoliche.html?refresh_ce. The corruption episode was related to the false assessment by the public official on the size of the plant being just below 1 MW, in order to avoid the more complex procedure of authorization.
References
Acemoglu D, De Feo G, De Luca G (2019) Weak states: causes and consequences of the Sicilian Mafia. Rev Econ Stud (forthcoming)
Alesina A, Piccolo S, Pinotti P (2019) Organized crime, violence and politics. Rev Econ Stud 86:457–499
Bandiera O (2003) Land reform: the market for protection and the origins of Sicilian Mafia: theory and evidence. J Law Econ Organ 19:218–244
Barone G, Nargiso G (2015) Orgnized crime and business subsidies: where does the money go? J Urban Econ 86:98–110
Buonanno P, Durante R, Prarolo G, Vanin P (2015a) Poor institutions, rich mines: resourse curse in the origins of Sicilian Mafia. Econ J 125:175–202
Buonanno P, Prarolo G, Vanin P (2015b) Organized crime and electoral outcomes: evidence from Sicily at the turn of the XXI century. Eur J Polit Econ 41:61–74
CG Carabinieri (1987) Relazione del Comandante Generale dell’Arma dei Carabinieri alla Commissione Parlamentare sul Fenomeno della Mafia
CSDCM (1994) Mappa approssimativa delle famiglie e degli associati di stampo mafioso in Sicilia. Università di Messina
Daniele G, Dipoppa G (2017) Mafia, elections and violence against politicians. J Public Econ 154:10–33
De Feo G, De Luca G (2017) Mafia in the ballot box. Am Econ J Econ Policy 9:134–167
Dimico A, Isopi A, Olsson O (2017) Origins of Sicilian Mafia: the market for lemons. J Econ Hist 77:1083–1115
Eurispes (2013) Agromafia, second report on agro-alimentar crimes in Italy
Europol (2013), Threat assessment: Italian organize crime
Gambetta D (1996) The Sicilian Mafia: the business of private protection. Harvard University Press, Cambridge
Gennaioli C, Tavoni M (2016) Clean and dirty energy: evidence of corruption in the renewable energy sector. Public Choice 166:261–290
GSE (2017) ll punto sull’Eolico, Documenti, disponibile su: https://www.gse.it/documentisite/Documenti%20GSE/Studi%20e%20scenari/Il%20punto%20sull’eolico.pdf
Lavezzi M (2008) Economic structure and vulnerability to organized crime: evidence from Sicily, mimeo
Mirendo L, Mocetti S, Rizzica L (2019) The real effect of ‘Ndrangheta: firm level evidence, mimeo
Pinotti P (2015) The economic consequences of organized crime: evidence from southern Italy. Econ J 125:203–232
Polo M (2013) Mafie e economia. Dizionario Enciclopedico delle Mafie in Italia, C. Camarca (a cura di), RX Editore, pp 321–324
Sciarrone R (ed) (2011) Alleanze nell’ombra: Mafie e economie locali in Sicilia e nel Mezzogiorno, Donzelli
Sciarrone R (ed) (2019) Mafie del Nord: strategie criminali e contesti locali, Donzelli
Sciarrone R, Scaglione A, Alida F, Vesco A (2011) Mafia e comitati di affari. Edilizia, appalti e energie rinnovabili in provincia di Trapani. In: Scaglione R (ed) Alleanze nell’ombra: Mafie e economie locali in Sicilia e nel Mezzogiorno, Donzelli, pp 175–222
TERNA (2018) Rapporto mensile del mercato elettrico. Terna, Dicembre
Acknowledgements
We thank Daniele Checchi, Gervasio Ciaccia, Francesco De Carolis, Giacomo De Luca, Sauro Mocetti, Gaia Nargiso, Giovanni Pica, Paolo Pinotti and two anonymous referees for helpful comments and suggestions. Usual disclaimers apply.
Author information
Authors and Affiliations
Corresponding author
Additional information
Publisher's Note
Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.
Rights and permissions
About this article
Cite this article
Checchi, V.V., Polo, M. Blowing in the Wind: The Infiltration of Sicilian Mafia in the Wind Power Business. Ital Econ J 6, 325–353 (2020). https://doi.org/10.1007/s40797-020-00126-z
Received:
Accepted:
Published:
Issue Date:
DOI: https://doi.org/10.1007/s40797-020-00126-z