The Committee to Protect Journalists reports that Iren Karman was nearly killed:

Karman, 40, published a book last year on corrupt oil dealings in the 1990s. The book, titled Facing the Mafia, reported on the practice of “oil bleaching� or the removing of red dye from government-subsidized heating oil in order to sell it as diesel at a higher price, according to local and international press reports. The dye was used to identify the oil.

Karman’s investigations, collected both in her book and a soon-to-be-released documentary film titled “Oiled Relations,� implicate Hungarian politicians and police officials in collecting unlawful profits from the scheme, the MTI said. Hungarian media have reported that the illegal profits amount to more than US$500 million, The Associated Press said.

The police tasked with investigating the dye treatment and illegal oil sales all seemed to end up with links back to organized crime, so the prosecution apparently never went anywhere. The unusual thing is that, with her book published and a movie on its way, an attempt to murder her will bring a spotlight to the issue.

The report mentions she has been under threat — her papers and other media targeted in an attack — since last year, but that police “did not make the link” to the subject of her research.

A former chief inspector, Tibor Karancsi, who contributed to her work suggests that she is likely to have put faith in publicity as a form of protection. It is hard to argue with that perspective, when the police and justice system are potentially in the pocket of the accused.

Just a few weeks ago I was sitting in a cafe with her and Istvan Sandor. I told her than that she should take care because people wished her ill. I said, jokingly: “Don’t use the rear-view mirrors just for doing your make-up.” But Iren knew very well that my concerns were well-founded.

Did you expect something like what happened on Friday evening?

It was a possibility, but I didn’t think they’d go that far. I thought publicity would serve as a kind of protection. Back then, five of my colleagues were killed in mysterious circumstances over two years, but nobody died after I brought the affair to public attention. I was threatened, too, I was even beaten, like Iren, in 1997.

At the end of the day you have to wonder why some systems are setup with a clear financial reward to those who cheat, and at the same time offer no protection for those who report on the cheating or who are given the unfortunate task of trying to prevent it from happening.

Also, some economic and political analysis is missing from these reports. Did the demand for heating oil, artificially driven by the diversion of oil to engines, ever have an impact on the availability?

A similar but different scenario is emerging today in India, where coins are illegally diverted to the razor blade industry.

Police say that initially the smugglers took coins into Bangladesh and then melted them down, but as the scale of the operation has increased, more and more criminals in India are melting them down first, and then selling them as razor blades.

Sharp investors? Sorry, couldn’t resist.

The impact of the diversion is creating a whole new set of problems and, unlike the report on Hungary, there are solutions discussed:

To deal with the coin shortage, some tea gardens in the north-eastern state of Assam have resorted to issuing cardboard coin-slips to their workers.

The denomination is marked on these slips and they are used for buying and selling within the gardens.

The cardboard coins are the same size as the real ones and their value is marked on them.

I guess most people would agree it is easier to work around currency shortages, through bartering or apparently even issuing proxy currency, than face an oil shortage. Cardboard coins, eh? Now there’s a system built on trust.

Organized crime clearly will target the things most likely to be monopolistic by design — defense, trash collection, utilities, fuel — and use its muscle to set itself up as a shadow or even backer of the public authority. These stories thus remind me that bio-diesel and other oil recycling systems could radically change that paradigm and produce a whole new area of risk for those proposing alternatives to a petroleum-based economy.