Italy Struggles to Remove Mafia Ties From Promising Renewable Energy Industry

Certain regions in Italy are promising for successful wind and solar business but the mafia infiltrating the industry might be hurting the sector overall. (Photo: Shutterstock.com)

It's not the first time people with ties to the Italian mafia have been pegged with involvement in the renewable energy sector, but a report by the Washington Post shows that the country is still trying to rid organized crime from its wind and solar industry, especially as it calls into question government subsidies.

In 2010, the businessman Vito Nicastri -- also referred to as the "Lord of the Wind" -- was arrested for associations with the Sicilian mafia, which is called the Cosa Nostra. The $1.9 billion worth of assets seized from Nicastri at the time included 43 wind and solar companies. Here's a bit more history from Time magazine showing how far back the mafia's involvement in the renewable energy sector dates and issues faced by investors:

One legitimate investor in alternative energies, Moncada energy CEO Salvatore Moncada, twice denounced mob interference in his business — once in 2002, when he refused to be extorted and lived with a 24-hour police escort for 18 months, and once in 2009 when he alerted police to a mafia buy-up of the land around one of his wind-power plants. Moncada says his biggest worry today isn't the mob or the threat of violence. It's wringing out permission for the construction of his power plants from allegedly corrupt bureaucrats. "The mafia used to shoot," says Moncada. "Today it doesn't. So it's become a lot less of a threat than the white-collar criminals."

A report published by the global information company IHS stated that between 2007 and 2011 there were 125 arrests and investigations in Italy for mafia ties to the renewable energy sector.

The Washington Post reported that with governments worldwide subsidizing or creating incentives for renewable energy companies, cases of "eco-corruption" continue to emerge, especially in Sicily which is a popular location due to its geography for solar and wind operations. Here's how the Post put it:

As the Italian government began offering billions of euros annually in subsidies for wind and solar development, the potential profitability of such projects also soared — a fact that did not go unnoticed by Sicily’s infamous crime families.

[...]

“The Cosa Nostra is adapting, acquiring more advanced knowledge in new areas like renewable energy that have become more profitable because of government subsidies,” said Teresa Maria Principato, the deputy prosecutor in charge of Palermo’s Anti-Mafia Squad, whose headquarters here are emblazoned with the images of assassinated judges. “It is casting a shadow over our renewables industry.”

Economics Professor Michele Polo at Bocconi University in Milan went so far as to blame the mafia for "contaminating the economy" as it entered more legitimate markets.

In addition, other legitimate investors looking to get into the industry in the area as well have come under attack:

[Salvatore] Moncada said he entered the sector in the late 1990s, eventually rolling out six wind farms, 10 solar parks and one solar panel factory amid the sloping vineyards and sleepy farmhouses of the Sicilian countryside. But as he attempted to sidestep a push by organized crime to control the renewables sector– eschewing efforts to use mob-connected developers and refusing to make a customary payments of 2 percent of profits — his business came under attack.

[...]

In 2007, arsonists set fire to one of his wind farms, causing $4 million in damages. In 2009, the Terrasi crime family attempted to block one of his company’s new wind farms by claiming ownership rights to the land, eventually prompting 14 arrests and forcing Moncada and his family into two years of police protection.

The Post reported that subsides for renewable energy are being cut as the country faces debt. It also noted a requirement for developers to sign affidavits that they have no ties to the mafia.

Sicily's energy minister Nicolo Marino told the Post the country has lost a "vital opportunity for development" in renewable energy.

Be sure to read the Washington Post's full article for more details about the Italian mafia's involvement in the renewable energy sector here.

Featured image via Shutterstock.com.