Corruption and organized crime often go together. The existence of large-scale illegal businesses is likely to have a corrupting influence on government, especially law enforcement and border control. Corrupt rulers and illegal businessmen feed on each other. Bribes reduce the cost of illegal business ventures and help them raise capital, fueling their growth relative to legal businesses and generating more corrupt arrangements.

Both corrupt officials and organized crime groups (OCGs) often need to send funds across law enforcement boundaries. Hence, three criminal phenomena – organized crime, corruption, and money laundering – are often closely related. Each may occur individually. For example, a criminal organization may operate with complete impunity, with no need to launder its funds or engage in corruption (either because the state is absent or because the criminal organization uses violence and intimidation instead of corruption). The cash stolen from a bank by common thieves needs to be laundered, but no public official has to be bribed. The proceeds of bribery and kickbacks may be spent outright, without laundering, especially when the bribes are small or there is no legal requirement to justify extraordinary income or spending. In many cases, however, one leads inevitably to another, with vicious circles or spirals between organized crime and money laundering, organized crime and corruption, corruption and money laundering, and among all three. It is essential, therefore, to take their interactions into account.

The chapter is organized as follows. Section I shows how organized crime networks harm society through their illegal business dealings, such as the drug trade and human trafficking. Section II then goes on to argue that organized crime can corrupt the state and undermine its legitimacy, leading to a vicious cycle. If a strong symbiotic relationship exists, Section III claims that anticorruption policy needs to target the impact of organized crime explicitly. Otherwise it will ignore one key root of the problem of corruption. Finally, Section IV argues that, although state-level reforms are necessary, a comprehensive approach ought to include efforts to make it more difficult for both organized crime bosses and corrupted politicians and officials to launder their illicit earnings. Law enforcement bodies that target public corruption, organized crime, or illicit financial flows will be more effective if there is cooperation and coordination among them.