1 SOCIAL SCIENCE RESEARCH COUNCIL • MEDIA PIRACY IN EMERGING ECONOMIES Does Crime Pay? MPEE’s Findings on Piracy, Organized Crime, and Terrorism Joe Karaganis, Pedro Mizukami, Lawrence Liang, John Cross and Olga Sezneva Claims of connections between media piracy and narcotraffcking, arms smuggling, and other “hard” forms of organized crime have been part of enforcement discourse since the late 1990s, when the IFPI began to raise concerns about the transborder smuggling of pirated CDs (IFPI 2001). Claimed connections between piracy and terrorism are a more recent addition. In 2003, the secretary general of Interpol, Ronald Noble, “sound[ed] the alarm that Intellectual Property Crime is becoming the preferred method of funding for a number of terrorist groups” (Noble 2003). In 2008, the US attorney general, Michael Mukasey, declared that “criminal syndicates, and in some cases even terrorist groups, view IP crime as a lucrative business, and see it as a low-risk way to fund other activities” (Mukasey 2008). In 2009, the RAND Corporation published what is to date the most exhaustive statement on this subject: a 150-page, MPAA-funded report on flm piracy’s links to organized crime and terrorism (Treverton et al. 2009). Commercial-scale piracy is illegal, and its clandestine production and supply chains invariably require organization. It meets, in this respect, a minimal defnition of organized crime. Pirated CD and DVD vending, moreover, is often concentrated in poor neighborhoods and informal markets where other types of illegal activity are common. Such contexts create points of intersection between the pirate economy and wider illegal and quasi- legal arrangements of the informal economy. It would be remarkable if they did not. But we found no evidence of systematic links between media piracy and more serious forms of organized crime, much less terrorism, in any of our country studies. What explains this result? Invariably, the rationale offered for criminal-syndicate and terrorist involvement is that piracy is a highly proftable business. The RAND report, for example, states (without explanation) that “DVD piracy . . . has a higher proft margin than narcotics” (Treverton et al. SOCIAL SCIENCE RESEARCH COUNCIL • MEDIA PIRACY IN EMERGING ECONOMIES