I’ve been watching Sopranos lately, and a few times they’ve talked about construction jobs, the unions, and getting ‘no show’ jobs (whatever they are) and I realised a lot of Organised Crime I’ve heard about always seems to be tied them, yet I have no idea how it makes so much money for them.
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So the unions are a great tool for the mafia to exploit for a few reasons:
1. Bid Rigging – A lot of industries (construction, road work, garbage collection, stevedoring, etc) are heavily unionized. When the government wants to build a new airport or get companies to collect garbage for the city, they issue a bid. Multiple companies will bid on this. If this is fair, the companies will each indicate how much they will charge, and the govt will choose the best option. However, when the mafia controls the union, they can go to the company owner and say, “You were going to bid for $5 million? Don’t you think it would actually take another 10 workers? I’ve got 10 boys who are looking for work. You should bid for $7 million. No? Would be a shame if all your union workers walked off the job, wouldn’t it? Oh, $7 million sounds good, now? Make it $8 million.” With enough control, you could make sure everyone bids the right amount so the government has no choice but to pay the mafia inflated price.
2. Money Laundering – This is where the no-show job comes in. Christopher makes $250k selling cocaine, but Christopher doesn’t have a real job. If he tells the IRS he only makes $40k a year, the government (who knows he’s connected), may start wondering why Adriana is walking around in a fur coat, Gucci, and a Birken bag. So Tony gets Christopher a job at a unionized work force as a “consultant”. He doesn’t even show up to the job, but the company puts him on the payroll and “pays” him (either the company pays or it’s just a paper trail) $250k a year.
3. Exploitation – related to (1), the mafia looks to exploit the various businesses around town. There’s the protection racket (pay us to “protect” your business or it burns down), but there’s also the workers going on strike, crippling your business.
4. Defrauding the union – Since unions can be large, and a lot of unions have pension funds, which are funded by union members paying dues regularly, and these pension funds don’t have the best oversight, it’s easy to defraud the union by skimming off the pension fund making various “loans” to the mafia.
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