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Horsemeat dinner is served, courtesy of the mafia Horsemeat dinner is served, courtesy of organised crime
(about 17 hours later)
Organised crime and mafia-type networks penetrate the heart of a country's mainstream economy when there is a breakdown of the rule of law, or so the criminology theories go. We like to think that the breakdown of law is something that happens elsewhere – in fragile states where political instability and weak institutions allow criminals to operate with impunity, and ordinary people have little access to justice – not the sort of thing that would happen here, surely.Organised crime and mafia-type networks penetrate the heart of a country's mainstream economy when there is a breakdown of the rule of law, or so the criminology theories go. We like to think that the breakdown of law is something that happens elsewhere – in fragile states where political instability and weak institutions allow criminals to operate with impunity, and ordinary people have little access to justice – not the sort of thing that would happen here, surely.
Yet last week a government-commissioned review of the horsemeat scandal warned that organised crime had penetrated our mainstream food manufacturing and retailing sectors. Food fraud is such a risk, it said, that we need a new, specialised police force to deal with it, because criminals laundering meat know they are likely to go undetected and, even if detected, likely to go unpunished.Yet last week a government-commissioned review of the horsemeat scandal warned that organised crime had penetrated our mainstream food manufacturing and retailing sectors. Food fraud is such a risk, it said, that we need a new, specialised police force to deal with it, because criminals laundering meat know they are likely to go undetected and, even if detected, likely to go unpunished.
The corporations that dealt in the proceeds of horsemeat crime may hide behind the excuse that they didn't know, but why are they not being held criminally liable? Buy a half-price Rolex from a street dealer and you would struggle to persuade the police you didn't think it was fake or stolen. If big manufacturers and retailers buy "beef" that's a third of the market price of real beef, they shouldn't be able to use ignorance as an excuse to avoid prosecution. Yet they have done so and there will be no penalty, because they are too big to take on; they have become untouchable.The corporations that dealt in the proceeds of horsemeat crime may hide behind the excuse that they didn't know, but why are they not being held criminally liable? Buy a half-price Rolex from a street dealer and you would struggle to persuade the police you didn't think it was fake or stolen. If big manufacturers and retailers buy "beef" that's a third of the market price of real beef, they shouldn't be able to use ignorance as an excuse to avoid prosecution. Yet they have done so and there will be no penalty, because they are too big to take on; they have become untouchable.
What we are witnessing is not so much the breakdown of the rule of law as the systematic removal of law. We may not have the political instability of a fragile state, but we have weakened the public institutions that keep the market in check. This is the logical corollary of the great neoliberal project. Any burden on business must be stripped away, and the role of the state must be shrunk. So government inspection and testing in the food industry has been cut in favour of allowing the private sector to police itself. The regulator, in this case the Food Standards Agency, has been eviscerated, cut and stripped of powers, and left inadequate for the task of investigating. Individual local councils and trading standards officers – responsible as the home authorities for imposing the law on any giant company headquartered in their patch – have lost most of what little money they had to rise to the unequal challenge. Crime, not surprisingly, has rushed into the vacuum, and the industry's own policemen turned out to be of the sleeping kind.What we are witnessing is not so much the breakdown of the rule of law as the systematic removal of law. We may not have the political instability of a fragile state, but we have weakened the public institutions that keep the market in check. This is the logical corollary of the great neoliberal project. Any burden on business must be stripped away, and the role of the state must be shrunk. So government inspection and testing in the food industry has been cut in favour of allowing the private sector to police itself. The regulator, in this case the Food Standards Agency, has been eviscerated, cut and stripped of powers, and left inadequate for the task of investigating. Individual local councils and trading standards officers – responsible as the home authorities for imposing the law on any giant company headquartered in their patch – have lost most of what little money they had to rise to the unequal challenge. Crime, not surprisingly, has rushed into the vacuum, and the industry's own policemen turned out to be of the sleeping kind.
It's not just the food sector. We have seen deregulated banks forming illegal cartels to rig interest rates. It has been alleged that the criminal practice goes back to 1991. About 20 major banks are now being investigated over fiddling their figures. But for the banking crisis, would they have been exposed? Where were their policemen?It's not just the food sector. We have seen deregulated banks forming illegal cartels to rig interest rates. It has been alleged that the criminal practice goes back to 1991. About 20 major banks are now being investigated over fiddling their figures. But for the banking crisis, would they have been exposed? Where were their policemen?
In public services, enforcing statutory obligations is being reduced to a matter of private contractual law. Take Serco, the privatised provider of public services, which admitted that its staff had falsified data when reporting to the NHS on the targets for its out-of-hours GP service in Cornwall.In public services, enforcing statutory obligations is being reduced to a matter of private contractual law. Take Serco, the privatised provider of public services, which admitted that its staff had falsified data when reporting to the NHS on the targets for its out-of-hours GP service in Cornwall.
There has been no penalty. It is now walking away from the contract because it can't make the profits it had hoped to make, leaving disarray and a vacuum within a service that had been a successful co-operative of local GPs until Serco's arrival. The company blamed a couple of "rogue" managers in Cornwall, just as bank directors have blamed "rogue" traders. The Serco pair were sacked with gagging clauses, but the allegations from whistleblowers were always that fraud had gone on for years and predated those particular managers.There has been no penalty. It is now walking away from the contract because it can't make the profits it had hoped to make, leaving disarray and a vacuum within a service that had been a successful co-operative of local GPs until Serco's arrival. The company blamed a couple of "rogue" managers in Cornwall, just as bank directors have blamed "rogue" traders. The Serco pair were sacked with gagging clauses, but the allegations from whistleblowers were always that fraud had gone on for years and predated those particular managers.
The Serious Fraud Office has launched a full-scale criminal investigation into both Serco and G4S over allegations that they fraudulently overcharged the Ministry of Justice under their security contracts.The Serious Fraud Office has launched a full-scale criminal investigation into both Serco and G4S over allegations that they fraudulently overcharged the Ministry of Justice under their security contracts.
Yet there has been no full investigation of the NHS contract, or of whether the allegations are true. Indeed, who could conduct it?Yet there has been no full investigation of the NHS contract, or of whether the allegations are true. Indeed, who could conduct it?
The local NHS commissioning trust was officially responsible, but did not have the capacity and has now, in any case, been abolished. The health regulator, the Care Quality Commission, had neither the capacity nor the powers to look back over the whole period. It was only thanks to whistleblowers who came to the Guardian that the case was pursued.The local NHS commissioning trust was officially responsible, but did not have the capacity and has now, in any case, been abolished. The health regulator, the Care Quality Commission, had neither the capacity nor the powers to look back over the whole period. It was only thanks to whistleblowers who came to the Guardian that the case was pursued.
The rule of law does not much trouble the criminal networks that have run illegal labour rings in the UK either. For years they have supplied casual workers to our food and packing factories, the catering trade, building sites and care homes. Their connections with people-trafficking and money-laundering have been established. But, even if detected, few are likely to be prosecuted. It has taken the Gangmaster Licensing Authority more than eight years since its inception to secure its first prison sentence for an illegal gangmaster.The rule of law does not much trouble the criminal networks that have run illegal labour rings in the UK either. For years they have supplied casual workers to our food and packing factories, the catering trade, building sites and care homes. Their connections with people-trafficking and money-laundering have been established. But, even if detected, few are likely to be prosecuted. It has taken the Gangmaster Licensing Authority more than eight years since its inception to secure its first prison sentence for an illegal gangmaster.
Set up with far too few resources to interfere with what business describes as its need for a "flexible workforce", the authority was struggling even before this government decided to slash its budget.Set up with far too few resources to interfere with what business describes as its need for a "flexible workforce", the authority was struggling even before this government decided to slash its budget.
We need to admit how far the obsession with light-touch regulation has opened the door to crime, including white-collar crime. Roll back the state far enough and there is nothing left to fight it. We are on our own against it as individuals.We need to admit how far the obsession with light-touch regulation has opened the door to crime, including white-collar crime. Roll back the state far enough and there is nothing left to fight it. We are on our own against it as individuals.
It was a former Conservative party leader, and moreover a former home secretary, Lord Howard, who brought home to me how far the rot had spread. Speaking on a panel with him at a horse welfare conference this year (at which Princess Anne famously raised the subject of making horsemeat more culturally acceptable), I said it was strange that supermarkets were not suing beef processors for selling them horse in breach of contract. They are said, instead, to have extracted private justice in the form of multimillion-pound settlements paid as huge discounts on new supply contracts. But where is the public justice? "Well, why haven't consumers sued supermarkets for damages?" Howard asked. Perhaps because individuals are supposed to be able to depend on the state to police crime and enforce the law. Or does that no longer apply?It was a former Conservative party leader, and moreover a former home secretary, Lord Howard, who brought home to me how far the rot had spread. Speaking on a panel with him at a horse welfare conference this year (at which Princess Anne famously raised the subject of making horsemeat more culturally acceptable), I said it was strange that supermarkets were not suing beef processors for selling them horse in breach of contract. They are said, instead, to have extracted private justice in the form of multimillion-pound settlements paid as huge discounts on new supply contracts. But where is the public justice? "Well, why haven't consumers sued supermarkets for damages?" Howard asked. Perhaps because individuals are supposed to be able to depend on the state to police crime and enforce the law. Or does that no longer apply?
• This article was amended on 19 December 2013. The headline was changed to better reflect the piece.
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