Nov. 12 (Bloomberg) -- Forty businesses in Palermo, Sicily have joined together to fight against mafia extortion, the first such group to exist in the island's capital.

About 80 percent of Palermo's 100,000 businesses pay the mafia tax, known as the pizzo, according to Pietro Grasso, Italy's top mob prosecutor. The formation of the group, called Libero Futuro or ``A Free Future,'' comes a week after the arrest of Salvatore Lo Piccolo, the suspected Cosa Nostra boss who controlled Palermo's extortion racket.

``Palermo has changed over the course of the last year,'' said Addiopizzo, a consumer association that helped create the business group, in a statement on its Web site. ``The rising number of threats has increased the necessity for a structure that can aid businessmen who want to name their extortionists.''

Fires, bombings and threats against Sicilian business owners who refused to pay the kickbacks escalated this year. That prompted Italy's biggest employers' group, Confindustria, to threaten to expel any members paying the extortion money. Libero Futuro will be in direct contact with prosecutors and police in case of threats, and will provide legal support to businesses who press charges against mafia henchmen.

``There's no more alibi'' for those who pay extortion, said Francesco Forgione, president of Italy's anti-mafia commission, in an e-mail.

With the Nov. 5 arrest of Lo Piccolo in a country villa near Palermo, the police found detailed records of 500 businesses that pay the mob tax in the city. The monthly rate ranged from 500 euros to 20,000 euros ($732-$29,297), investigators said.

In July, the mafia set fire to the Ferramenta Guajana hardware and paint store in Palermo, destroying the family- owned business founded in 1876, because the owner wouldn't pay the mob tax, police have said.

Italian crime syndicates, including the Cosa Nostra, together take in about 41 billion euros per year excluding drugs and arms sales, SOS Impresa, a Rome-based group that fights mafia extortion, said on Oct. 22.

Lo Piccolo, 65, who had evaded capture for 23 years, made more than 2 million euros per month with his extortion racket, police said.

To contact the reporter on this story: Steve Scherer in Rome at scherer@bloomberg.net

Last Updated: November 12, 2007 07:29 EST