INVITROGEN S.A; MEDISISTEM SRL; POGGI RAUL JORGE LEON

As described in Chapter 1 of this study, Dutch policy on fighting organised crime was strongly influenced by events in the United States. In particular the Dutch-American Conference on Organised Crime that took place in 1990 had a major impact on developments in the Netherlands.166

American influences could first be found at the local level. In 1990 the Amsterdam city government was planning the construction of a new metro line, a project estimated to cost €0.73 billion. Given the experiences of the New York Organised Crime Task Force presented at this conference, the city government decided to try to bar criminal organisations from the tendering procedure. In 1993 a project group consisting of local officials and police representatives

165 _{The RICO legislation was also connected to money laundering, as violations of the money laundering} statutes were included within the definition of racketeering (Mitsilegal, 2003: 39).

166 _{This conference was organised by C. Fijnaut, a notable in the criminological circle in the Netherlands} who praised the task force’s innovative strategies and recommended the introduction of similar strategies in the Netherlands. The papers of this conference are published in Organised Crime and its Containment: A Trans-Atlantic Initiative (Fijnaut and Jacobs, 1991).

developed pre-qualification procedures with which Dutch and foreign companies participating in the public tendering procedure could be screened to uncover possible connections to criminal organisations. The experiences of the United States had taught Amsterdam’s city government that it was particularly important that the screening and auditing agency could consult all relevant information. The fact that the information needed was not available in administrative databases made it necessary to seek information from police departments, judicial authorities and tax offices. However, the city government came across some judicial barriers in the form of privacy regulations, which hindered the sharing of such information.

Recording and communicating personal data is regulated by the Data Protection Act (Wet Persoonsregistratie),167 which exactly describes obligations for safeguarding privacy in communicating personal data. The Police Files Act (Wet op de Politieregisters) deals with personal data recorded by police services.168 Communication of personal data collected by police entities is strictly limited, meaning that this data may be shared for police purposes only. Because the screening and auditing activities were executed by administrative authorities, the police could not provide their information and vice versa, not even when these two bodies were cooperating on one project. In the framework of Amsterdam’s administrative approach, discussed in more detail in the next chapter, the Minister of Justice granted special permission for the exchange of information, at least to a certain extent. Yet these obstructions delayed Amsterdam’s establishment of its special screening and auditing bureau until 1996. In 1998 the local bureau commenced its operations.169 These developments can be seen as the experimental garden for the national developments, which, for that matter, also took a long time to get off the ground.

The national developments started in 1992 with the Minister of Justice and the Minister of the Interior introducing the American screening approach into national crime-fighting policy. In the policy document Organised Crime in the Netherlands: Threats and Plan of Action the Minister of Justice described the administrative approach as necessary for complementing the repressive approach of police and judiciary.170 In this plan organised crime was no longer seen as criminal activities that occurred in an underworld separated from the legitimate environment. On the contrary the Ministry of Justice argued that due to large profits deriving from organised crime ‘criminal organisations and the

167 _{In 2000 the Data Protection Act was replaced by the Personal Data Protection Act (Wet bescherming} persoonsgegevens) Stb. 2000, no. 302.

168

Law of 21 June 1990, dealing with regulations on the protection of the personal living situation in relation to police files, last revised in 1999, Stb. 1999, no. 244.

169 _{The ministers of justice and finance even gave permission to exchange relevant information from} police and tax authority databases. Such permission fit with Amsterdam’s administrative approach. This approach, including rules on exchanging information, is described in Chapter 4. However, this special competence was taken away from the local bureau once the national screening and auditing procedures entered force.

legal economy are interwoven to a much larger degree than in the past’.171 Although the minister did not use the term racketeering, the idea that criminal organisations were gradually becoming embedded in the legitimate environment alluded to a problem similar to that observed in the United States. The minister argued that the public administration needed new capabilities to operate more combatively. These new capabilities are incorporated in the administrative approach,172 which as presented in this government policy document, involves two main strategies. The first strategy was to investigate the possibilities for screening and auditing people in order to exclude criminal organisations from legitimate economic dealings. In particular the minister referred to certain civil services such as the granting of permits and subsidies and tendering of public contracts. The second strategy was to set up a campaign to strengthen integrity at all levels of the public administration. This implied increasing the defences of the public administration against the threat of infiltration by criminal organisations. In practice, this second strategy is one to counter government corruption and fraud in general. Integrity in the public administration was considered a main precondition for effective screening and auditing; without an honest administration screening has no purpose.

Notwithstanding the introduction of the administrative approach in 1992, it was unclear whether sufficient tools were in place to allow government agencies to implement a screening and auditing procedure. To answer this question Struiksma and Michiels (1994) investigated the legislative possibilities at that time.173 They discussed a range of possibilities for refusing and withdrawing permits by means of an audit done by external agencies and consultation of criminal records. Yet the researchers concluded that the existing legislation likely offered insufficient possibilities to hinder criminal organisations in their economic dealings (Struiksma and Michiels, 1994: 70). In particular the fact that civil servants could not consult police data was seen as a huge obstacle to uncovering possible connections with organised crime and to dealing with suspicions of criminal activities. Moreover, there were few grounds for refusing permits based on the possibility of criminal activities. Therefore, Struiksma and Michiels recommended strengthening the law to enable administrative agencies to take action against organised crime. In their opinion, new legislation was needed to give administrative authorities the legal power to screen and audit applicants for permits and subsidies and participants in tendering procedures (Struiksma and Michiels, 1994: 67-69). Moreover, they said that the new legislation had to enable all types of information to be used in these screenings; and a judicial framework needed to be developed containing relevant grounds

171

De georganiseerde criminaliteit in Nederland; dreigingsbeeld en plan van aanpak. Kamerstukken II 1992-1993, 22 838, no. 2: 2.

172 _{Besides the administrative approach, in the policy plan several measures that fit the repressive} approach are mentioned, e.g. intensification of cooperation between public prosecutors and police officials, formation of regional criminal investigation units, improvement of information exchange between police and regulatory agencies (e.g. tax authorities), growth of expertise on organised crime and expansion of international cooperation.

for refusing and withdrawing permits and subsidies and for excluding certain agents from tendering procedures. The ministers of justice and of the interior acted on these recommendations and started a project to develop such legislation.

The development of the screening and auditing approach was postponed by a crisis in the criminal justice system in the mid-1990s.174 The parliamentary inquiry that investigated this crisis made some recommendations on criminal methods, while also emphasising the need to further develop the administrative approach. This was remarkable as the research team led by Fijnaut, which the parliamentary inquiry had charged to investigate organised crime in the Netherlands, had just concluded that in general there was no evidence of racketeering in the Netherlands. Criminal organisations had gained no control of legitimate sectors of the economy, and neither were there indications that organised crime had infiltrated government (Fijnaut et al., 1998: 203). On the contrary, the team concluded that, generally, organised crime in the Netherlands was mainly confined to the traditional illegal supply of certain goods and services (Fijnaut et al., 1998: 203). Thus, based on the recommendation of the parliamentary inquiry, the administrative approach no longer needed to be exclusively aimed towards combating racketeering in the Netherlands.

Nonetheless, the research team did make an exception regarding the hotel and catering industry including the related real estate, where there was a certain extent of penetration by criminal groups (Fijnaut et al., 1998: 204). In particular the team referred to the situation in the red-light district of Amsterdam. Criminal organisations were investing in hotel and catering premises so as to acquire positions of power there. These positions of power gave criminal organisations control over an important part of the economic life in this neighbourhood, which they used to influence the boundaries of interventions by the city and law enforcement (Fijnaut and Bovenkerk, 1996: 126). Thus, in Amsterdam’s red- light district racketeering was observed, at least to a small extent. As the situation in Amsterdam could not be compared with that in the rest of the Netherlands, the Dutch nominal capital remained an exception where additional measures were deemed necessary. Chapter 4 further discusses the situation in Amsterdam and the city’s response.

Thus, the problem of organised crime in the Netherlands was found to be generally limited to trade in illegal goods and services. Whereas racketeering refers to activities in the legal market, ‘common’ organised crime takes place in the unlawful market as it implies trade in illegal goods and services. The big difference between racketeering and ‘common’ organised crime is the level of penetration into the legitimate environment. With regard to this aspect Fijnaut’s research team concluded that the Dutch situation was far less serious than the Italian one (Fijnaut et al., 1998: 204, 207).

174

The causes and the results of this parliamentary inquiry are described in the first chapter of this study. The criminological research was carried out by the Fijnaut research team (Fijnaut et al., 1996 and 1998).

So why did the parliamentary inquiry recommend the administrative approach? The inquiry argued that the level of observed intertwining of organised crime and the legitimate environment, even though it did not amount to racketeering, was already enough reason for developing an administrative approach (Enquêtecommissie Opsporingsmethoden, 1996: 386). The interaction between criminal organisations and the legitimate environment was considered a problem as it could influence police and administrative authorities. Notwithstanding the fact that corruption cases were rare in the Netherlands, the number of incidents was considered worrisome and there were no guarantees for the future (Enquêtecommissie Opsporingsmethoden, 1996: 387). Furthermore, regarding public administration the parliamentary inquiry argued that granting public permits, subsidies or contracts to criminal organisations would damage the integrity of the administration (Enquêtecommissie Opsporingsmethoden, 1996: 386).

There was also a practical reason to develop the approach. The parliamentary inquiry argued that the lack of screening and auditing legislation had led to an informal exchange of information (Enquêtecommissie Opsporingsmethoden, 1996: 286) among various governmental bodies. In response to their need for information, these bodies were already creating administrative measures by which they could generate information from different sources. Although administrators officially had no access to police files, in practice the authorities were looking into alternatives for attaining that same information. Therefore, the parliamentary inquiry suggested that a legal instrument be established to regulate the necessary information exchange.

Based on the recommendations of Struiksma and Michiels (1994) and those of the parliamentary inquiry, the ministers of justice and the interior announced in October 1996 the development of an administrative and legal instrument to screen and audit subjects in order to refuse or withdraw permits and subsidies and to exclude them from tendering procedures if there was a serious threat of criminal abuse. In the meanwhile, some incidents of unintentional governmental involvement in fraudulent practices through the granting of permits or contracts by administrative authorities from the early 1990s had come to light. For example, the government had granted subsidies to a waste disposal firm that had pretended to offer environmentally friendly ways to process waste.175 This case resulted in a scandal when it came to light that the company actually drained away its waste in illegal ways (Eshuis and Van den Berg, 1996). Furthermore, in awarding a contract for construction of a police station, the government proved unaware that illegal subcontractors would be involved. As these examples illustrate, the Dutch government was not exclusively focused on organised crime, but rather on all kinds of unintentional facilitation of criminal activities.

175 _{Detailed in the explanatory memorandum to the BIBOB Act. Kamerstukken II 1999-2000, 26 883, no.} 3: 3.

The resulting instrument to prevent such facilitation was established with the ‘BIBOB Act’ named from the Dutch acronym.176 Due to the rather extensive legal adjustments and the wide discussions on the scope of the new act, it took until mid-2003 before the draft bill was passed by parliament.177 Following the recommendations of the parliamentary inquiry the BIBOB instrument was designed not as focused on racketeering but to prevent the abuse of public permits, subsidies and contracts for criminal activities and to prevent public facilitation of criminal activities, in particular by the government. The BIBOB instrument is unmistakably concentrated on preventing organised crime. However, as early as the letter announcing the screening and auditing approach, the ministers of justice and the interior asserted that it was unnecessary to restrict the scope of the instrument to organised crime.178 They said then that the unintentional facilitation of criminal activities should be the focus of the instrument irrespective of the kind of crime.

The explanatory memorandum to the BIBOB Act confirms that the act indeed applies to other criminal offences as well as organised crime. In fact, it indicates the scope of the instrument includes non-organised crime, at least as it seriously affects society and the integrity of the public administration.179 This line of reasoning illustrates the policy precedence given to maintaining the integrity of the public administration. This aspect is described in more detail below.

With the act coming into force, the Netherlands is, after Italy, only the second country in Europe to have a judicial framework to screen applicants for permits and subsidies and subjects vying for public contracts with the view to preventing organised crime. Meanwhile, the European Union has been developing such a framework as well.