How The Construction Mafia Works: 5 Examples

The construction mafia, a term used to describe organized crime groups involved in the construction industry, operates in various ways to exert control, manipulate markets, and reap profits. Here are five ways the construction mafia operates, along with examples:

1. Bid-rigging and collusion: The construction mafia colludes with other companies to fix prices, allocate contracts, and limit competition. For example, in 2019, several construction companies in New York City were charged with bid-rigging and fraud in connection with a $1.5 billion subway construction project.
2. Extortion and protection rackets: The mafia demands payment from construction companies in exchange for “protection” or to avoid sabotage, vandalism, or labor disputes. In Italy, the mafia has been known to demand a “pizzo” (protection money) from construction companies, with those who refuse facing violent consequences.
3. Labor racketeering: The construction mafia controls or manipulates labor unions, exploiting workers, and extorting money from companies. In the 1980s, the Lucchese crime family in New York City was involved in labor racketeering, controlling construction unions, and extorting money from contractors.
4. Material theft and diversion: The mafia steals or diverts building materials, such as steel, concrete, or lumber, and resells them on the black market. In 2018, a construction company in Toronto was accused of stealing millions of dollars’ worth of lumber and selling it to other contractors.
5. Corruption and bribery: The construction mafia bribes government officials, inspectors, or politicians to secure contracts, avoid regulations, or overlook safety violations. In Brazil, the Odebrecht scandal involved widespread bribery and corruption in the construction industry, with the company paying billions of dollars in bribes to secure contracts.

These examples illustrate the construction mafia’s tactics, which can lead to increased costs, reduced competition, and compromised safety standards in the construction industry.