ROME — In 2012, Ignazio Di Vincenzo, a farmer in the Sicilian town of Tortorici, received an unwelcome summons: a high-ranking member of the local mafia clan needed a favor.

Gino Bontempo wanted to rent Di Vincenzo’s land to claim lucrative EU subsidies in his daughter’s name. It was, as they say, an offer Di Vincenzo could not refuse.

In a police interview in 2017, he explained how he went along with the request, though he never saw any rent. “Chi pecora si fa, il lupo se la mangia,” he shrugged regretfully. He who behaves like a sheep gets eaten by the wolf.

Over the past decade, crime syndicates have siphoned off millions in EU agricultural funds, according to a vast investigation in Sicily involving 600 police officers, which culminated in 94 arrests on January 15. Bontempo was among those detained, accused of fraud, extortion and mafia association. A document from the Italian Senate listed him as a mafia boss, but his lawyer said he maintained his innocence over the grounds of his arrest.

Besides strong-arming farmers, the clans leased thousands of hectares of publicly owned land put up for tender by the state.

Criminal organizations have increasingly diversified from the traditional family businesses of racketeering and robbery in favor of EU subsidies that provide a more lucrative income stream.

The investigation reveals "a marked evolution" in criminal activity, investigators wrote in a 2,174-page detention order, obtained by POLITICO. "While maintaining classic criminal activity such as drugs and extortion … their main business has become the great business of defrauding the EU, more rewarding and less risky."

Easy pickings

There is no longer any need to rob a bank, said General Pasquale Angelosanto, head of the ROS, the specialist anti-terrorism and organized crime police force.

"They have found new paths to riches that arrive comfortably in their coffers without risk," he told POLITICO.

Besides strong-arming farmers, the clans leased thousands of hectares of publicly owned land put up for tender by the state. Honest farmers avoided these auctions, so explicit threats were rarely needed.

"A simple surname is enough to provoke fear, there is no need to shoot," explained Col. Gerardo Mastrodomenico, head of the Guardia di Finanza fraud police in Messina.

EU subsidies are based on possession of land, rather than production, so the criminal gangs rarely bothered to farm. The result is a "devastating phenomenon," investigators wrote in the detention order. Honest farmers are losing out on vital funds, and the EU is, inadvertently, subsidizing the clans' other criminal activity.

The EU pays out about €60 billion in farm subsidies every year, about 37 percent of its entire budget. This money is intended to support agriculture and livestock breeding, and help keep farming communities alive. But across the Continent, lax controls have left the subsidy system, which is mainly administered by national or regional governments, vulnerable to exploitation.

Mismanagement of farming funds has elicited grumbling from the EU's big net contributor states amid negotiations on the bloc's next seven-year budget. But while the European Commission has shown little capacity to tackle corruption and implement better safeguards, national police forces are starting to turn their attention to the issue. The four-year investigation in Sicily, the first of its kind in Europe, is likely to provide a blueprint for other countries.

January's raids targeted two mafia clans based around Tortorici in the Nebrodi mountains, an area of protected land covering 86,000 hectares.

The Bontempo Scavo and Batanesi families are alleged to have defrauded approximately €10 million from the European Agricultural Guarantee Fund and the European Agricultural Fund for Rural Development.

Sicily has received about €5 billion in EU funds over the past seven-year EU budget cycle.

The clans could rent land for as little as €36 a hectare per annum, while claiming €800-€1,300 a hectare in subsidies. One thousand hectares could yield €7 million or €8 million over one seven-year EU budget cycle, meaning profits of 2,000 to 3,000 percent.

The arrests dismantled the entire clan hierarchy, investigators say, and included white collar insiders, politicians and officials, who allegedly identified plots in the EU’s land databases that had never been subject to claims. This reduced the risk of duplicate requests for subsidies being made for the same land, which could have set alarm bells ringing.

The accused were often brazen in their fraud. Subsidy applications were made for land not actually owned or leased by the applicants at all, including a plot owned by the Catholic Church, and another on which a railway had been built.

One alleged Mafiosa, Katia Crascì, claimed subsidies for land on which she claimed to be rearing buffalo. In reality, the land was used by the U.S. navy to host satellite communications, according to the indictment. Another woman claimed to have leased land from 500 people on the same day, including 77 dead people.

Family farms

The two Tortoriciani families are characterized by close blood ties with strong roots to the land. They had fought bitter turf wars, with 45 mafia-related executions and disappearances between 1986 and 1993 alone.

But the EU-funded good times appear to have put the clans in the mood for peace. They reached an amnesty with an agreement to divide the land and spoils.

"We documented [the subsidy claims on] the terrain and found it was divided into a virtual map between the clans, with each respecting each other's territory," Mastrodomenico said.

While the clans have always, to some extent, had their hands in the soil, the methods are new, and their adversaries in the criminal justice system need to develop new tools to counter the burgeoning subsidy business. One problem is that single incidences of fraud are not punished severely in Italy.

Mastrodomenico said: "We have to show there was systemic fraud and mafia methodology. Then we can get decent sentences."

Authorities in the Nebrodi first became aware of subsidy fraud around 2012, and in response compulsory background checks were brought in for anyone leasing public land in 2016, a reform which has now become national law. The man behind this key reform, Giuseppe Antoci, then-president of the Nebrodi national park, was the target of an assassination attempt in 2016, the most serious mafia strike on an institutional figure since the murders of prosecutors in the 1990s.

Antoci now lives under protection of armed guards, the price for striking the mafia where it hurts them the most, in their wallets.

"We are taking everything from them, their money, their land, and the most important thing they have, the respect of the people through the land that they control," he said.

The latest operation shows police how clans have reorganized using prestanomi, frontmen. They circumvented rules on the allocation of public money to criminals, with one clan believed to have controlled 15,000 hectares.

For Antoci, the investigation is the tip of an iceberg. “This is just two families,” he pointed out, while Sicily has received about €5 billion in EU funds over the past seven-year EU budget cycle.

Abuse of the system is not restricted to Italy. Journalist Ján Kuciak was murdered in 2018 while investigating allegations of mafia involvement in subsidy fraud in Slovakia. Mobsters have also been caught on wiretaps planning to export the fraud model to Romania, according to investigators.

Until now, farm subsidies have been a sacred cow of the EU, and were a decisive foundation in building a borderless economy. So as discussion on reforms to agricultural policy continue, the EU may be happy to portray it as a few bad apples rather than rotten to its core.

The Italian police are willing to cooperate internationally, but often, they admit, the Mafiosi are one step ahead and the culture in some areas seems ingrained.

Cleaning up the abuse of EU funds needs massive resources, however. As investigating judge Salvatore Mastroeni told the Gazzetta del Sud: "At Tortorici we need to wiretap even the air and the trees."

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