Cartels

September 3, 2011

These days, I have garbage and economic cartels on my mind.  And Wall Street, of course.

In New York, the Department of Sanitation picks up residential garbage, but commercial waste is disposed of by private carters.  In the 1950s, the Department still picked up commercial waste on residential streets, i.e. streets that mixed apartments and businesses, but they discontinued that policy which opened up a vast market for private carters.  The Mob saw a great opportunity and moved in with force.

Until the late 1990s, the Mob controlled the collection and disposal of commercial waste with a cartel that all businesses were required to join.  Refusal was not a viable option.  It was, as they said, “A beautiful thing.”  Recalcitrant trash haulers were intimidated, firebombed, or beaten to a pulp.  Members of the club charged businesses exorbitant rates:  three, four, five, ten times what the cost would be in a market with competitive bids.  If any business protested, mom and pop grocer or Fortune Five Hundred multi-national, the answer was the same:  “Pay up!  Who youse gonna call?”

If a carter got out of line and actually submitted a bid for service that was below the cartel price, the Mob came down hard.  If the carter actually won the job, taking the “stop” from a cartel member, howls of protest were heard:  “He stole my stop!”  Restitution would be paid, or the stop would be forfeited.  The heavies in the cartel would try to set the rebel straight.  Submitting low bids did nobody any good.  It only ‘educated’ the customer that the price structure was simple gouging.  “And when that happens, who wins?  The customer wins”  Can’t have that!  It was the American way.  As the gangsters liked to say, “Hey, it’s a free country!”

I learned all this from a book called Takedown:  The Fall of the Last Mafia Empire.  It’s an in-depth recounting of a three-year NYC undercover operation that resulted in the complete destruction of the mob cartel.  It began by chance, when a detective interviewed an honest carter who just wouldn’t knuckle under:  some thugs walked in and asked who he was.  The carter, thinking fast, and knowing that being caught talking to a cop was a death sentence, said “That’s my cousin Danny.”  Thus was Rick Cowan, Irish NYC detective transformed into Danny Benedetto, member of a large Italian-American family that had been in the wastepaper business for generation.  He carried a wire and worked himself into the cartel for years, living a double life that I cannot imagine.  As Danny, he paid enormous amounts of extortion to the Mob, and got it all recorded.  The principals, among the Alphonse “Allie Shades” Malangone at the top, were convicted, fined, imprisoned, and debarred from the industry in perpetuity.

Reading this book, I reflected on the similarities between the mob cartel and the wall street cartel.  They both have beautiful things going.  Wall Street buys the politicians, makes the rules, comes up with derivatives that serve no purpose other than to generate massive fees, produces junk mortgages, and it’s all legal.  Transparency is anathema them all.  But what really got me, was a certain catch phrase.  When a cartel member was bumped from an account by an honest low bid, the cry was,  you have to make me whole! That is, pay me extortion to compensate me for loosing my good deal.  I thought I heard that during the Bear-Stearns debacle.

“In this room are people who have built this firm and lost a lot, our fortunes,” one Bear executive said to Mr. Dimon with anger in his voice. “What will you do to make us whole?”

After the takedown, prices for commercial waste collection in NYC fell by 40%, and in some cases much more.  The service vacuum left by the exit of the mob outfits was filled by big companies coming in, and they promptly began to raise their prices.  As a friend of mine who is an expert said on an NPR production about the topic a few years ago, prices are nearly back where they were under the cartel.  And the carter who started it all remarked, “The only difference between the Majors and the Boys is that the Majors won’t really kill you.”  Well…that’s a pretty big difference even so.

This is an excellent book to read if you want to know what the Mob is really like.


Naples, Trash, Calvino…

January 16, 2008

naples_trash.jpg

What a horror! Mountains of garbage, frightful stench, and rats of a size I don’t even want to imagine. The terrible spectacle of a great, ancient center of culture being buried in crime, corruption both social and physical, and raw garbage. Will they ever dig themselves out of the hole they are in? Modern civilization depends on the efficient disposal of our wastes, both solid and liquid (via sewers) and the system is broken in Naples, Italy. For years, it was “out of sight, out of mind,” but no longer!

This brings to mind a story by the late, great Italo Calvino, who surely would have appreciated the terrible historical and moral lessons provided by this horrific situation. The story of which I am thinking comes from his book, Invisible Cities, a series of vignettes, alluding to Marco Polo’s Travels, about imaginary cities described by a visitor to the court of the Great Khan. Each one has fantastic qualities that only Calvino could come up with, described with irony, wit, humor, and deep humanity.

In “Leonia”, he tells of a city in which all consumer items are used only once, and then discarded! Everything – sheets, dishes, toothbrushes, furniture – people are surrounded only by the new. The old is carted away daily by the quiet uncomplaining heroes of the city, the municipal garbage men. But all is not well in Leonia, surrounded by mountain ranges of rubbish:

The greater its height grows, the more the danger of a landslide looms…

Here is the entire text of the story:

The city of Leonia refashions itself every day: every morning the people wake between fresh sheets, wash with just-unwrapped cakes of soap, wear brand-new clothing, take from the latest model refrigerator still unopened tins, listening to the last-minute jingles from the most up-to-date radio.On the sidewalks, encased in spotless plastic bags, the remains of yesterday’s Leonia await the garbage truck. Not only squeezed tubes of toothpaste, blown-out light bulbs, newspapers, containers, wrappings, but also boilers, encyclopedias, pianos, porcelain dinner services. It is not so much by the things that each day are manufactured, sold, bought that you can measure Leonia’s opulence, but rather by the things that each day are thrown out to make room for the new. So you begin to wonder if Leonia’s true passion is really, as they say, the enjoyment of new and different things, and not, instead, the joy of expelling, discarding, cleansing itself of a recurrent impurity. The fact is that the street cleaners are welcomed like angels, and their task of removing the residue of yesterday’s existence is surrounded by a respectful silence, like a ritual that inspires devotion, perhaps only because once things have been cast off nobody wants to have to think about them further.

Nobody wonders where, each day, they carry their load of refuse. Outside the city, surely; but each year the city expands, and the street cleaners have to fall farther back. The bulk of the outflow increases and the piles rise higher, become stratified, extend over a wider perimeter. Besides, the more Leonia’s talent for making new materials excels, the more the rubbish improves in quality, resists time, the elements, fermentations, combustions. A fortress of indestructible leftovers surrounds Leonia, dominating it on every side, like a chain of mountains.

This is the result: the more Leonia expels goods, the more it accumulates them; the scales of its past are soldered into a cuirass that cannot be removed. As the city is renewed each day, it preserves all of itself in its only definitive form: yesterday’s sweepings piled up on the sweeping of the day before yesterday and of all its days and years and decades.

Leonia’s rubbish little by little would invade the world, if, from beyond the final crest of its boundless rubbish heap, the street cleaners of other cities were not pressing, also pushing mountains of refuse in front of themselves. Perhaps the whole world, beyond Leonia’s boundaries, is covered by craters of rubbish, each surrounding a metropolis in constant eruption. The boundaries between the alien, hostile cities are infected ramparts where the detritus of both support each other, overlap, mingle.

The greater its height grows, the more the danger of a landslide looms: a tin can, an old tire, an unraveled wine flask, if it rolls toward Leonia, is enough to bring with it an avalanche of unmated shoes, calendars of bygone years, withered flowers, submerging the city in its own past, which it had tried in vain to reject, mingling with the past of the neighboring cities, finally clean. A cataclysm will flatten the sordid mountain range, canceling every trace of the metropolis always dressed in new clothes. In nearby cities they are all ready, waiting with bulldozers to flatten the terrain, to push into the new territory, expand, and drive the new street cleaners still farther out.