How crime stopped paying
After 15 years of market growth, drug gangs are struggling with collapsed consumer demand and a liquidity crisis. The first of two articles examines how the recession cracked drug crime
WHEN THE END came for Eamon Dunne it was brutal and swift. As he raised a pint to his mouth at a 40th-birthday party, one of a group of masked men who had just walked into the north Dublin pub where it was being held began firing at him. The 34-year-old collapsed dead on the floor.
Dunne, the leader of a Finglas-based drug gang, had many enemies, and the initial list of suspects was long. Fifteen months on, detectives believe the decision to kill him was financial, linked to the impact of the recession on organised crime. He is believed to have been shot dead on behalf of a Spanish-based Irish gang whose lucrative drug-trafficking business was under pressure on two fronts.
First, the Irish criminals the Spanish gang were supplying were finding it harder to sell drugs, as pay cuts, tax rises and job losses left recreational users with less money. The Irish gangs were unable to shift larger hauls and, in any case, lacked the resources to buy in bulk, so they were ordering smaller quantities. This liquidity crisis was an unfamiliar problem for criminals used to having a river of money at their disposal.
Second, Dublin was the Spanish-based gang’s main market, and Dunne had harmed business by ordering the murders of 11 people and focusing Garda attention on the city’s drug gangs. It was bad enough trying to sell drugs in the small, recession-hit Irish market without an overzealous gangster destabilising what trade was left.
The Spanish gang decided to get rid of Dunne. The recession was another challenge entirely, however, for them and for all organised crime.
Irish drug gangs have been contending with collapsed demand for almost three years. Drug seizures, which mirror trends in the overall drug market, are down from the peaks of 2007 and 2008, and drug-related arrests and shootings have both fallen dramatically.
After 15 years of huge growth the trade has crashed, alongside the wider economy. Stockbroking firms don’t report on the condition of the cocaine business, but crime data from a number of sources reveal that the drug trade has contracted significantly in the recession and is now just as distressed as the housing market.
The value of drugs seized in 2010 was the lowest for 15 years, at €30.9 million, indicating a return to the levels of activity common before the boom. Long term, the drug-seizure trend has mirrored the wider economy: after rising steadily from the mid-1990s, it peaked in 2007 and 2008, with Garda seizures of more than €100 million worth of drugs in each of those years, before declining rapidly.
Garda sources point out that most people who use drugs do so for recreational reasons and are not addicted. “It means that when they have less money in their pockets to buy drugs, they are able to stop. And that’s what we’re seeing now all over the country,” says a senior garda.
Another believes that gangs selling cocaine have been hit hardest. “Most of the young people who were doing drugs were doing cocaine,” says the source. “But now we see that thousands upon thousands of these people have lost their jobs, and so they don’t have the money for coke any more. What’s going on in the drug trade is exactly the same as in the legitimate economy: people aren’t spending.”
Garda seizures of cocaine fell to €7.6 million last year, or considerably less than half the level seen every year for most of the past decade. Seizures of cannabis resin reached just €5.2 million last year, the lowest level in 10 years, and well down on the €48.7-million peak of 2006. The value of amphetamines seized halved last year, to €390,000, and that of ecstasy was just €70,000, compared with a peak of €12.9 million in 2003.
The heroin seized in 2010 was worth €6 million, the lowest level since 2004, and well below the €41.8 million seized in 2008. Some Garda sources say they expected the heroin market to weather the recession better, as users generally fund their habits with the proceeds of recession-proof petty crime.
Tony Geoghegan, the chief executive of Ireland’s biggest drug-treatment centre, Merchants Quay Ireland, is also surprised by the record low, saying that the daily goal of heroin addicts is always to buy drugs, irrespective of the economic climate or of how they get the money for their next fix.
“We did see a drought in heroin from around last November that lasted to around February. That was a long one, the first we’d seen in a good while,” he says. “It’s hard to say why that happened. Maybe it’s because there’s less heroin around because gangs haven’t got the money to bring it in in bulk, and then maybe one or two interceptions cause a drought.”
When that drought hit, Merchants Quay saw activity at its needle-exchange programme in central Dublin plummet from about 100 exchanges a day to just 10. Geoghegan believes a prolonged heroin shortage may usher in a return to 1980s-style drug smuggling.
“Rather than waiting for gangs to bring in big quantities, and being disappointed, people went on the boat to places like Liverpool to do small runs for a couple of ounces,” he says.
ALTHOUGH GARDAdrug-seizure figures show a market that has crashed spectacularly, the figures for drug arrests in recent years paint a slightly more complex picture. Arrests for possessing drugs for sale or supply – that is, dealing – have fallen from their peak in 2008, but only marginally, by 2 per cent. Arrests for possessing drugs for personal use have fallen by 20 per cent. Gardaí say that although the 2 per cent fall in dealing arrests is small, it is significant because it follows a decade of big increases.For example, there were 2,196 arrests for drug dealing in 2004, and this had almost doubled just four years later, to 4,302 in 2008.
Other sources say the arrest statistics do not fully capture what’s going on on the streets. “There might be only a tiny fall in drug-dealing arrests, but the quantities of drugs people are getting caught with is way down,” says a garda, who adds that these smaller hauls explain why the total value of drug seizures has fallen considerably in recent years while drug-dealing arrests have only fallen slightly. He says it also explains why arrests for possession are down. “It means there are less drugs on the market, so not as many people are carrying drugs to take themselves.”
Another garda points to the significance of the diminishing value of individual hauls. “It is all to do with the money that the recession has taken out of the drugs economy, if you want to call it that,” he says. “The gangs buying in the big shipments to get a bulk discount can’t get the money together any more for those big shipments, because the user demand just isn’t there any more. So the really big money is not there for selling drugs. A few years back you’d regularly see us getting hauls of coke, heroin and cannabis worth several million at a time, even up to €10 million. Now a seizure of even €1 million or €2 million is unusual.”
Other sources point to falling gun crime, which has always been linked to the drug trade, as further proof that drugs gangs are in decline. In 2007, for example, incidents involving the discharge of a firearm peaked, at 326 cases nationwide. This fell to 177 cases last year, a decrease of 46 per cent. Cases involving possession of a firearm peaked in 2008, at 457 cases; last year such cases had dropped to 378 cases.
Although there have been five fatal shootings in the past five weeks, the total of gun killings this year, currently standing at eight, seems likely to be down on the 23 gun murders last year. In only four of the recent killings does there seem to have been a drug-related motive. Some of this year’s killings have been linked to personal feuds and two appear to have involved accidental shootings. If the lower levels of drug-related fatal shootings continue throughout this year, 2011 will see the first significant fall in such killings in a decade.
“To a certain extent people are being shot dead less often because drug feuds have calmed down now that the drug market is not massive. People have gone into other areas, such as cigarette smuggling and robbery,” says a garda. “But a lot of criminals have also been caught and sent to prison in the past few years. You only have to look at places like Limerick and west Dublin to see that loads of guys have been caught, loads of murders have been solved and fellas jailed. The drugs game doesn’t look like it’s going to recover any time soon. But you can never keep these b******s down for long, mark my words.”
On MondayWhat next for the crime world? How criminals are diversifying into new crime areas