Mafia Cash in on Lucrative EU Wind Farm Handouts

Views on BG | September 5, 2010, Sunday // 09:11|  views

From The Guardian

By Nick Squires in Trapani, Sicily, and Nick Meo

An ill wind is blowing over Italy's green revolution, as the Mafia seek to capitalise on generous grants for renewable energy.


They rise up high above the sun-scorched countryside, looking out over hilltop villages, palm trees, neatly-tended vineyards and olive groves.

But for all their promises of a clean, green future, Italy's windfarms have now acquired a somewhat dirtier whiff - as the latest industry to be infiltrated by the country's mobsters.

Attracted by the prospect of generous grants designed to boost the use of alternative energies, the so-called "eco Mafia" has begun fraudulently creaming off millions of euros from both the Italian government and the European Union.

And nowhere has the industry's reputation become more tarnished than Sicily, where windmills now dot the horizon in Mafia strongholds like Corleone, the town better known as the setting for the Godfather films.

"Nothing earns more than a wind farm," said Edoardo Zanchini, an environmental campaigner who has investigated Mafia infiltration of the industry. "Anything that creates wealth interests the Mafia."

It is not just Italian criminals, however, who have spotted the potential for corruption. Recent research by Kroll, the international corporate security firm, has discovered examples all over Europe of so-called "clean energy" schemes being used to to line criminals' pockets rather than save the planet. Some involve windmills that stand derelict or are simply never built, while others are used to launder profits from other crime enterprises.

"Renewable energy seems like a good thing, run by saintly people saving the world," said Jason Wright, a senior director with Kroll, which performs background checks on renewable energy schemes on behalf of legitimate investors, and which has documented a sharp rise in the number of wind farms with suspect ownership.

"But a lot of people want to jump on board a sure-fire revenue spinner. I wouldn't say the entire sector is corrupt, but there is a small percentage of corrupt projects."

The level of fraud has prompted calls for tighter restrictions on the use of public money in funding renewable energy, for which EU bureaucrats have grand ambitions. Brussels has ordered all 27 EU nations to ensure that one-fifth of their energy is renewable by 2020, and in recent years has given out an average of ?5 billion (?4.1 billion) annually in loans and grants. The levels of subsidy allow some wind farm owners to claim generous premiums for every watt of electricity they generate.

In Italy, for example, power from wind farms is sold at a guaranteed rate of ?180 per kwh – the highest rate in the world. In a country where the Mafia has years of expertise at buying corrupt politicians and intimidating rivals, the result is perhaps inevitable, creating a new breed of entrepreneur known as the "lords of the wind".

Around 30 wind farms have been built in Sicily, with another 60 planned, often to the anger of local people, who say they blight an otherwise picturesque landscape. Dino Leggio, 33, a barman in Corleone, claimed that many of the turbines that now dotted the island made money only for politicians and the Mafia.

"Nobody consulted ordinary people about putting up these huge great things," he told The Sunday Telegraph. "They are very tall, and very ugly. Before they start pumping millions of euros into wind farms, they should fix the roads, which are in a terrible state."

While many of the wind farms in Sicily are in legitimate hands, some have already attracted the attention of the police. Last year, detectives launched a major investigation into suspicions that Mafia clans had colluded with corrupt businessmen and local politicians to secure control of a project to construct wind turbines in the Trapani area of western Sicily.

Eight people were arrested in Operation "Eolo", named after Aeolus, the ancient Greek god of winds, on charges of bribing officials in the coastal town of Mazara del Vallo with gifts of luxury cars and individual bribes of ?30,000-70,000.

Police wiretaps showed the extent of the Mafia's infiltration of the wind energy sector when they intercepted an alleged Mafioso telling his wife: "Not one turbine blade will be built in Mazara unless I agree to it."

In another operation last November, codenamed "Gone With the Wind", 15 people were arrested on suspicion of trying to embezzle up to ?30 million in EU funds. Among those arrested on fraud charges was the president of Italy's National Wind Energy Association, Oreste Vigorito. He has not been convictued of an offence and denies any wrongdoing.

Further afield, scandals have emerged in Spain, Romania, Bulgaria and Corsica, among others. In one alleged scam on the Canary Islands, a mayor, five officials and two developers are fighting criminal charges that include abuse of office, bribery and misappropriation of land in an attempt to secure EU subsidies.

One case in Spain, meanwhile, involved a solar energy plant which claimed, miraculously, to be generating electricity at night. Investigators found that that the power was in fact being produced by diesel generators - the "green" subsidies paid for the plant were so generous that the owners still made a handsome profit.

As well as the prospect of fraudulent grant money, wind farms are also attractive to criminals seeking to invest money from illegal activities such as drug dealing, prostitution and illegal waste dumping. Some Mafia clans have illicitly secured licenses to build a wind farm and then sold them on to legitimate firms who have invested in good faith.

"Foreign investors are often not aware who they are dealing with," said Mr Wright. "You start to be alarmed if the shareholders have a background in something like pizzerias."

John Etherington, a former professor of ecology at the University of Wales and author of The Wind Farm Scam, said the industry was vulnerable to corruption because of poor regulation. The EU, which has an anti-fraud unit, currently has no criminal proceedings on any wind farm cases, insisting it is the responsibility of member states to monitor funding.

"It has been a matter of policy in the wind farm industry to make the financing of it both opaque and complicated," said Mr Etherington. "In all countries across Europe the customer is not told how much they are paying for it, and the whole financing of the industry is coming out of subsidy on electricity generation."

Despite the scandals over Mafia infiltration, there have been very few protests against wind farms in Italy. Instead, farmers have leapt at the chance to rent out their land for wind farm construction at a time when the price of agricultural produce such as grapes and tomatoes has plummeted.

"Why get up early every morning to work the land, and run the risk of not being able to sell your crops for a good price, when you can sit at home and take 10,000 euros a year in rent?" said Nicola Angelo, a Sicilian businessman. "People here have swallowed the idea of wind farms, even though they have ruined the landscape."

But David Moss, a British building contractor based in the Sicilian hilltop town of Salemi, which is surrounded by whirring turbines, suggested that was not the only reason for the absence of wind-farm "Nimbyism".

"In the UK, if a company proposed putting up 100 turbines across the countryside, there would be an uproar," he said. "In Italy, everyone keeps quiet because they are afraid to stand up to the Mafia. 

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Tags: wind energy, wind parks, mafia, Italy, Sicily


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