Organised crime exploits wind industry

by Robin Pagnamenta   Business with the Wall Street Journal

EUROPE’S booming wind energy industry is being exploited by criminals, according to Kroll, the corporate security group.

Criminals see an opportunity to tap into billions of euros’ worth of European Union subsidies.

Organised groups linked to the Italian Mafia are among those to have infiltrated the industry, Jason Wright, senior director of Kroll’s consulting group, told The Times.

While emphasising that the overwhelming majority of European wind projects were “entirely legitimate”, he said that criminals were increasingly investing in the industry, both to qualify for subsidies and to launder profits from drug-running and other illegal activities.

Kroll, he added, was doing brisk business conducting due diligence on renewable energy projects on behalf of big banks and other potential investors.

The American-owned Kroll has detected a sharp increase since 2007 in the number of cases involving fraud and corruption in the wind energy sector – chiefly in Italy and Spain but also in Bulgaria, Romania and other parts of Central and Eastern Europe.

“Renewable energy is completely dependent on subsidies, so it is clearly an area for corruption,” Mr Wright said.

“Wind farms are a profitable way to make money because of the subsidies, and they are also a great way of laundering it.”

He added that the wind energy industry was vulnerable because projects frequently hinged on the political patronage of local officials who grant licences and access to public land.

With more than €6 billion ($8.7bn) of EU subsidies having been earmarked for renewable energy projects over a 13-year period ending in 2013, Mr Wright said that the industry’s growth in Italy had been much faster in Sicily and the south of the country than in the north – a reflection of the ease with which developers can secure licences.

Eight people in the Trapani area of western Sicily, as well as in Salerno in the southwest of the mainland, were arrested last year after an investigation by anti-Mafia magistrates into a string of wind projects.

Police in Trapani said that officials had been given bribes and luxury cars to encourage the town to invest in wind farms worth hundreds of millions of euros.

In another case, in Spain’s Canary Islands, five local officials, a mayor and two developers were accused of bribery and misappropriation of land.

Another case in Corsica involved the skimming of more than €1.5 million worth of EU subsidies for wind energy projects.

Mr Wright said that he was not aware of any similar cases in the UK, where wind farms face rigorous planning scrutiny and often are rejected. He said they were very unusual elsewhere in Northern Europe.

“The vast majority of these projects are entirely legitimate but there is clearly a minority that are fraudulent … We have seen a huge increase in the number of clients who have come to us with concerns.”

It was extremely hard, he added, to determine the degree to which criminal activity had penetrated Europe’s wind industry.

The president of the Italian National Wind Energy Association, Oreste Vigorito, was arrested last year and charged with fraud. He has not been convicted of an offence.

In Italy, there have been at least three police operations targeting the country’s wind industry, one of which was given the codename “Gone with the Wind”.

Christian Kjaer, chief executive of the European Wind Energy Association in Brussels, rejected the concerns. He said that reports of corruption in Italy were symptomatic of deep-rooted problems in the country’s construction sector and not restricted to renewable energy projects.

Mr Wright said that about 50 per cent of the renewable energy cases that the corporate investigations group undertook on behalf of clients in Madrid and Milan uncovered evidence of fraud or corruption. This compared with an average of 10-20 per cent for most Kroll projects.

5 thoughts on “Organised crime exploits wind industry

  1. Exploiters of Wind here in Ontario are certainly “organized”, I’ll give them that much!

    But I think that here they use the framework of the Political Parties. Oh wait…!


  2. We don’t need organized crime — we are already organized…

    “Glenn Beck breaks the biggest corruption story of the century yesterday and it doesn’t appear on a Front Page anywhere. Beck points the way to the 15 Trillion dollar scam that has some amazing players.
    (See full transcript here)

    First Glenn makes and astute point: If Goldman is really the bad guy, why are these people still on the job? The Goldman suit is a put up job!
    • William C. Dudley, president of the Federal Reserve Bank of New York; was a partner and managing director at Goldman
    • Gary Gensler, chairman of the Commodity Futures Trading Commission; spent 18 years at Goldman
    • Mark Patterson, chief of staff to Tim Geithner; former Goldman lobbyist
    • Philip Murphy; nominated for ambassador to Germany; former Goldman executive
    • Diana Farrell; deputy director of the National Economic Council; formerly with Goldman
    • Emil Michael; White House fellow; former investment banker with Goldman

    Glenn tells us that a watchdog has steered him to the collusion between Barrack Obama, George Soros, Al Gore, Goldman Sachs, Franklin Raines (super crooked Fannie Mae head), CCX, and Generation Investment Management (GIM-London based co-founded by AL Gore).”

  3. Organized corruption makes sense of the persistence cocky approach of industrial wind developers. It would also provide some sense as to why a background in producing power is not necessary to build industrial wind turbines.

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