Organized Crime & Fashion
Part III: Distribution & Sale – The Neapolitan Camorra & Retail
Anthony Mascarenhas
According to Mr. Saviano, the System’s men, companies, and products has reached every corner of the global while feeding the international garment industry, “the vast archipelago of Italian elegance” (37). Furthermore, the Secondigliano clan, named for one of the suburban Neapolitan towns, “gained control of the entire clothing manufacturing chain, and the real production zone and business center is the outskirts of Naples” (id). They stepped into the void created in Campania by the lack of regulations and enforceable laws. The System is able to maximize profits without worrying about the legal consequences because whatever cannot be done elsewhere can be done in Campania with callous disregard for employment, contract, and copyright laws (id). Legitimate businesses within Campania and elsewhere are impotent to compete because they lack the clan-like cartel structure of the Camorra. Using highly skilled experienced garment workers in their “interrelated textile, leatherworking, and shoe manufacturing,” the System is able to “produce garments and accessories identical to those of principal Italian fashion houses” (id).
They produce such quality work because the exact “same hands that once worked under the table for the big labels now work for the clans” bringing “decades of experience under Italy’s and Europe’s most important designers” (37). As already stated above, the auctions allow even the “losing” factories to use the exact same fashion designs and fabric as the “winning” factories whose products get tagged with the designers’ official labels. When the “losing” factories sell their products to the clans, they do not really lose because they are still able to make a hefty profit, which they would have to use to pay back the clan’s loan sharks, leaving little to invest in capital for the next order –resulting in a greater reliance on clan financing. The System is then left with compounded interest revenue coming from the contractors, greater control over the factories, and counterfeit garments indistinguishable from the real thing.
What makes the counterfeit garments indistinguishable from the authentic goods is that, “[n]ot only is the workmanship perfect, but the materials are exactly the same, either bought directly on the Chinese market or sent by the designer labels to the underground factories participating n the auctions” (id). Significantly, this means that the System’s “counterfeit” goods are not like the cheap imitations, copies, and knockoffs that one would find on Canal Street. The Camorra created a unique type of merchandise which is neither fully authentic, nor fully counterfeit. This “false-true” merchandise is only missing the imprimatur of the fashion houses, which the clans readily “usurp . . . without bothering to ask anyone’s permission” (id). A Versace Medusa head label matrix was found in a lab in Campania, evidencing the Camorra’s meticulousness when it comes to forgery (41). This business model has grown so successful because they satisfy the clients concerned only with quality and design, and “the clans provide just that –brand as well as quality –so there really is no difference” (id).
Not content to merely rest on their laurels after facilitating a shadow haute couture manufacturing industry, the Secondigliano clans invested their profits in distributing to fashion outlets and acquiring “entire retail chains, thus spreading their commercial network across the globe and dominating the international clothing market” (id). Furthermore, they maximize profits by not wasting anything, unlike the fashion houses that factor in the “loser’s” fabric as a cost of doing business. For example, the garments “of slightly inferior quality have yet another venue: African street vendors and market stalls” (id). To anyone who has walked around an Italian city marveling at the high-quality Gucci bags, the reason they are of such high quality is that they are essentially made by the exact same person who makes the Gucci bags on the Via Condotti, except that on that particular day, the workers was having a bad day and only put in 95% effort, not 100%.
Unlike the Sicilian Mafia, which relies on a rigid pyramidal command structure, the Camorra clans seem to divide their roles between the businessmen and the hit men. The Directory is how the Naples DDA (District Anti-Mafia Directorate) refers to the “economic, financial and operative structure of a group of businessmen and Camorra bosses in north Naples . . . with a purely economic role” (40). Regardless of their purely business agenda, they, “and not the hit men or firing squads, represent the real power of the organization,” which includes businessmen who run “companies such as Valent, VIP Moda, Vocos, and Vitec, makers of imitation Valentino, Ferre, Versace, and Armani sold all over the world” (id). It wasn’t until recently, when a German clothing store hired a Camorra boss who turned out to be the store’s unofficial owner, that the Naples DDA was able to reconstruct “each link in the Secondigliano clan’s production and commercial chain” (id).
This commercial chain includes every facet of garment production, distribution, and sale, including wholesale, retail, and second-hand. The Secondigliano’s established themselves across the United States by offering American retailers and shopping-center owners the designer haute couture garments at reasonable prices that would guarantee crowds of customers (41). Young Neapolitans immigrating to the United States were “inspired by the success of VIP Moda, whose jeans filled Texas stores, where they were passed off as Valentino” (id). To further illustrate the clans’ international pervasiveness, an Australian boutique became one of Australia’s top stores, the Secondigliano’s dominate the Brazilian apparel market, and they have been investing in the Arab world for a while (id).
The Directory achieved all of this while relying on the tradition of the magliari, the classical Neapolitan traveling salesmen, who applied “their age-old mercantile experience on a larger scale,” becoming “full-fledged commercial agents who could sell anywhere and everywhere, from neighborhood markets to malls, from parking lots to gas stations” (41). The Directory established a distribution system based on the use of warehouses as commercial hubs where the magliari could pick up merchandise to be distributed to the clans’ stores or other retailers; the best of them could sell directly to the retailers (id). It is important to remember that this merchandise consisted mostly of the “false-true” goods and some of the slightly inferior ones, not the cheap knockoffs that could never pass for the real thing. Prosecutors discovered that businessmen were organizing the distribution of merchandise, offering logistical support to the magliari in the form of hotel expenses, transportation, and legal assistance (id). This advanced system of counterfeit merchandise distribution earned each Camorra family approximately 300 million euros annually (id).
Once the clans solidified their control over the importing, manufacturing, selling, and distributing aspects of the Italian garment industry, they set their sights on the retail end. Using classic extortion and usury practices, the Camorra took advantage of the clothing retailers who needed ready access to capital while the banks were strict with credit (49). Shopkeepers who purchased from suppliers are offered a one-half to two-thirds discount if they paid in cash, benefitting both wholesaler and retailer (id). Both the legitimate and Camorristi wholesalers preferred cash because they not only didn’t have to declare their income for tax purposes, they also didn’t have to deal with letters of credit. However, the retailers, like the factory owners, did not always have enough cash on hand to purchase merchandise for the next season, but couldn’t borrow short term money from the banks. The clans stepped into this void becoming “hidden financiers, offering cash at 10 percent interest on average.”
By facilitating the cash transaction through short-term loans at reasonable rates, the Camorra provided a much-needed service to both wholesaler and retailer, while collecting interest and siphoning off government tax revenue. However, unlike the banks, who seize everything when someone defaults on a loan, the Camorra continues to charge higher compounded interest until the retailer is “eventually reduced to a straw man on a monthly salary” (id). This arrangement benefits the clan because they could “continue to utilize their assets by letting the experienced individuals who’ve lost their property continue to work” (id). This way, they could control the business in everything but name, while receiving all the profits and bearing none of the rinks. More importantly, the clans could then use the legitimate shops as fronts for illegitimate businesses, such as drug trafficking or counterfeit clothing. A 2004 Naples DDA investigation revealed that fifty percent of the shops in Naples are actually owned and run by the Camorra (id).
Surprisingly, the fashion houses are not only complicit in the counterfeit industry, through auction supplying the factories with free fabric and designs, they never initiated legal action or protest against the clans. Only after the Naples DDA discovered the German Camorra connection mentioned above did the designers begin to protest (42). Mr. Saviano contends that the brands never opposed the clans because:
“Denouncing them would have meant forgoing once and for all their cheap labor sources in Campania and Puglia. The clans would have closed down access to the clothing factories around Naples and hindered relations with factories in Eastern Europe and Asia. And given the vast number of shopping centers operated directly by the clans, denouncing them would have jeopardized thousands of retail sales contacts. In many places the families handle transportation and agents, so fingering them would have meant a sudden rise in distribution costs” (42).
Moreover, the author cynically believes that far from hurting the designers, the fashion houses believed that the clans actually helped promote their products by creating demand among consumers who could not afford the authentic products (id). For example, if consumers only see the garments on mannequins or on the runway, instead of worn by actual people on the streets, “the market slowly dies and the prestige of the name declines” (id). Similarly, the Neapolitan factories supplying the clans made “garments in sizes the designer labels, for the sake of their image, do not make (43).
Furthermore, the fashion houses did not believe the System was “ruining the brands’ image, but simply taking advantage of their advertising and symbolic charisma” (id). Most importantly, the clans’ garments, unlike their Canal Street knockoffs, did not disgrace the brands’ quality or image because they were not noticeably inferior to the authentic goods (id). Again, this is because the same garment workers, sometimes even in the same building or factory, create the garments using the exact same patterns, designs, supervision, and materials as the goods later stamped with the designers’ official label. In short, the author believes that the “clans were promoting the brand,” not harming it (id).
The genius of the Camorra is that they blurred the lines between legitimate and illegitimate businesses shuffling money back and forth to increase their legal and illegal holdings. For example, by using the profits from the “false-true business and income from drug trafficking, the Secondigliano clans acquired stores and shopping centers where genuine articles were increasingly mixed in with the fakes, thus erasing any distinction” (43). Once they blurred the lines, illegal profits from drugs, gambling, prostitution, and counterfeit goods could, in effect, be baptized through their legitimate investments in real estate, construction, retail stores, and shopping centers. Channeling their money in this manner is easier and cheaper than laundering it through offshore accounts. Interestingly, when the Italian fashion industry was in crisis when prices rose sharply, the Camorra took advantage of the situation while continuing to promote the “Made in Italy” concept throughout the world, sustaining the industry and reaping enormous revenue (43).
The Camorra was diversified enough to use their vast international distribution and sales networks to move drugs and garments along the same routes, soon realizing that their garment industry was even stronger than their narcotics trafficking (43). They could make a lot more off clothing than drugs because the average municipal police officer is not going to concern himself with counterfeit dresses when promotions were rewarded for the big drug busts. Therefore, counterfeit clothing is able to travel under the radar of most law enforcement, encouraging the clans to channel more and more resources into it.
Alarmingly, the Camorra combined their narcotics and fashion enterprises to feed off one another since they both use the same shipping and distribution routes. The Licciardi Family, who controlled the garment and retail industry in the Veneto, took the poor on the outskirts of Naples, in the towns, and “transformed what was merely a reservoir of cheap labor into a machine for the narcotics trade: an international criminal business. Thousands of people were co-opted, enrolled, or crushed by the System. Clothes and drugs” (48). These days, narcotics, inexorably linked with the international counterfeit merchandise trade, follow precise routes:
“Cocaine heads from South America to Spain, where it’s either picked up or sent overland to Albania. Heroin on the other hand, comes from Afghanistan, traveling through Bulgaria, Yugoslavia, and Albania. Hashish and marijuana cross the Mediterranean from North Africa by way of the Turks and Albanians” (57).
For example, the Di Lauro family had their hands in both narcotics and leather goods, establishing ties at every point of entry into the drug market (id). Paolo Di Lauro, the boss, had nationalistic designs on France, desiring that Italian fashion in France “to be shaped by his stores and transported by his trucks; he wanted the power of Scampia to be smelled on the Champs-Elysees” (id).
Closing the circle on the abovementioned Chinese connection, the Licciardi opened a clothing store in China, “a commercial pied-a-terre in Taiwan—to take advantage of cheap labor and move in on the internal Chinese market” (id). He was trying to beat the Chinese businessmen at their own game, in the true spirit of international free enterprise.
In the aftermath of the Cold War, with the privatizations and market openings in the former Soviet Union, Eastern Bloc, China, Albania, and Yugoslavia, organized criminal groups have been able to work together across borders in the face of newly Democratic, but impotent governments. The narcotics and counterfeit garments both travel the same routes, passing between organized crime groups in Italy, Colombia, Albania, Russia, Turkey, China, and the United States. Today’s flexible international economy “permitted small groups of manager bosses operating in hundreds of enterprises in well-defined sectors to control the social and financial arenas” (44). Similarly, the Camorra rose to power by combining small free enterprises with deadly force. The clans “rise to power through their commercial empires . . . allows them to control everything else” (47).
The genius of the Camorra is that they have taken advantage of Italy’s post-war economic liberalism to both vertically and horizontally integrate their garment industry. They begin with importing finished merchandise and fabric from China using Chinese businessmen, officials in Beijing, and Chinese gangs. Then, they control manufacturing by using the fashion houses’ auction system to gain financial leverage over the factory owners, who then ship the “false-true” merchandise to Camorra-controlled wholesalers. The clans then used their international and international narcotics routes to distribute the merchandise to retailers that they took over through usury. The industry is vertically integrated because the Camorra controls the importation, manufacture, distribution, and sale of the merchandise. They are continually expanding because they reinvest their profits from fashion into narcotics and other industries, creating a volatile and deadly mix of legal and illegal business that the Italian government seems powerless to stop.
For anyone who has grown to love Italy through travel, film, or just food, reading Gomorrah is truly depressing because under Italy’s ancient beauty, lies a modern curse that is not only poisoning the Buffala Mozzarella and mixing inferior wines and olive oil, but killing Italy’s soul. For anyone who has romanticized notions of the Mafia dons in Corleone or Brooklyn ruling like enlightened despots clinging to an ancient code of honor, family, and tradition, Gomorrah is a rude awakening. For anyone who worships Italian fashion and couture, Gomorrah exposes the brutal underbelly of the industry, where the suit you wear bears the stench of death, corruption, narcotics, and blood money. Sixty years after being freed from Mussolini and Hitler, Campania, and the rest of Italy, is under a dictatorship of the Camorra.
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