Councils pay out ‘millions’ to firms
Councils are paying “millions” of pounds every year to front companies run by Glasgow crime groups, police warned today.
Detectives have long warned that major gangland figures have been cashing in on local government contracts for everything from taxi travel to security work.
Now they have finally revealed the seven-figure scale of the problem – just as they come up with a new scheme they believe will squeeze gangsters out of cashing in on the lucrative council contracts.
Detective Inspector Joe McKerns of Strathclyde Police said: “Local authorities are unwittingly providing contracts to companies, unaware that they have are involved in organised crime. These contracts can be worth millions.”
This money, once laundered through the front company, appears in the gangsters’ bank accounts as legitimate cash or is used to fund other criminal activities.
Strathclyde Police has quietly signed a special deal with Glasgow City Council and three other local authorities in its area to hand over what was once secret intelligence about the gangland links of firms bidding for contracts.
Mr McKerns believes this simple move will make it harder than ever for criminals to profit from taxpayers’ money. Under the new protocols, senior council officers will be able to check that the business they are dealing with is not a front for organised crime. Glasgow yesterday made it clear it would do no deals with any firm that the police flagged up as having gangster links.
A Glasgow City Council spokesman said: “The protocol on information sharing allows us to play our part in fighting organised crime.
“Anyone bidding for council contracts should know that if they have criminal links then the police will tell us. Contracts will only go to legitimate companies and criminal gangs will not benefit.”
The police have also signed similar protocols with East and North Ayrshire and East Renfrewshire.
However, police and council insiders have no doubts that council contracts have previously gone to businesses “involved in organised crime”. Some council insiders last night admitted they feared pressure to cut costs could mean they have previously given contracts to the lowest bidder – even when they know the firm is only cheaper because of its underworld connections.
The new protocols, council and law enforcement sources stressed yesterday, will “empower” officials to flag up such deals before they are signed off.
Some money from public contracts can also make its way to criminals indirectly. Contractors, for example, building schools for councils may feel forced to employ site security firms owned by gangsters.
But much of the cash is being handed over directly to crime groups’ front companies.
Councils are among the biggest users, for example, of taxis and private hire firms. Officials regularly need to arrange cabs for people
dealing with social work departments – or for disabled kids who have to travel long distances to special schools.
Police have already made it clear that private hire businesses has been historically linked with major crime groups.
Chief Constable Steve House has expressed concerns over the awarding of a £2 million NHS taxi contract to Glasgow firm Network Private Hire.
The firm was stripped of its radio operators’ licence in April after Glasgow City Council was given a dossier detailing the spent convictions of a man associated with the firm.
The company itself, however, argued that it was the victim of a police vendetta and stressed the individual named in the report, a former manager, was no longer employed. Network, meanwhile, is continuing to trade pending an appeal of the council decision.
The Evening Times yesterday revealed that Strathclyde Police had uncovered gangster links at nearly 300 firms in and around the city, after the most exhaustive exercise ever carried out to determine the true scope of criminal infiltration in to the city’s business world.
Many of the “crime-linked” businesses were in areas traditionally targeted by criminals, such as pubs, clubs, tanning and nail salons, site security, second-hand car dealerships and private hire cabs.
Big firms to be warned on crime links
Secret police intelligence on Glasgow’s gangsters is to be shared with private companies.
Strathclyde Police yesterday confirmed it aims to be the first force in Scotland – and almost certainly the UK – to hand over confidential information about firms linked with organised crimes to specially vetted executives at big corporations.
The force wants to sign the same kind of “information-sharing protocols” with private businesses that it is beginning to develop with public-sector bodies.
Under the scheme, police will inform big firms of the criminal histories of prospective business partners or contractors.
However, Detective Inspector Joe McKerns stressed businesses who sign up to the scheme would still be free to trade with whoever they liked. He said: “What we will do is provide the information. We can’t make the decision for them.”
Business groups, including the CBI, yesterday welcomed the move. But human rights lawyers warned the police could be hurting the livelihood of entrepreneurs who have never been convicted of a crime. Cameron Fyfe of Ross Harper, one of Scotland’s most successful litigators, yesterday said: “I would expect people to challenge this, because it appears to contradict Article 6 of the European Convention on Human Rights, which gives the right to a fair hearing.”
Experts yesterday said the new scheme would be more accountable than the old system of police sharing intelligence on a “nod and wink” basis.
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