The Coalition is an outlaws best friend. The government can't touch it, enemies can't harm it and no one can stop it.
The Underworld Coalition, or simply the Coalition, was a criminal organization based in the Outer Rim during the time between their formation in 265 BBY and their destruction in 3 ABY at the hand of its old rival, the Black Sun. Although it never reached the level of the Sun or the Hutt Cartel, it managed to remain intact for over a hundred years due to its secretive nature.
The Coalition would use puppet organizations like the Bounty Hunters' Guild and the Du Vranga Gata to hide their presence. Few even knew of its existence and the Brethren's Court used this to keep themselves from falling into the clutches of the disapproving Republic. The Underworld Coalition was created in 265 BBY by crime lords on Nal Hutta in order to unite former rivals and strengthen their criminal empires. These founding fathers sent representatives to the Brethrens' Court.
During the Clone Wars the Underworld tried to manipulate both sides and use them for their own profit. However, due to the financial nature of the Confederacy the Coalition ended up aiding the Separatists by the end of the war. This put them at odds with the Empire after the Clone Wars ended.
To make matters worse, the Black Sun began harassing the alliance. Prince Xizor destroyed their decoy Bounty Hunters Guild and assassinated several of their members. Finally Xizor would trick Mandy Bathsheeba, the Coalition's leader, out of hiding and had Guri kill her and the Court, thus eliminating the Underworld Coalition.
The Underworld Coalition was begun when a rising crime empire on Nal Hutta began swallowing and eliminating the other local corporations on the planet. Many of these smaller businesses were too weak to fight the rapidly expanding criminal organization.
In order to fight this growing problem the smaller criminal chains banded together. Each sent their highest ranking members to the Brethrens' Court. There they plotted to overthrow their larger foe. With their combined might they were able to succeed. When their enemy was destroyed the Court elected their first Overlord, a Hutt by the name of Fodor.
Expanding the Coalition
With their rival destroyed, the Underworld Coalition was being sent representatives from nearly every criminal organization on Nal Hutta. Fodor even began expanding his reach offworld. Soon hundreds of small empires were under the payroll of the Coalition.
To appeal to a larger popular the Hutt had the Court write down a collection of set laws pertaining to members of the alliance. The creed gave organizations to right to handle their own business, as long as they paid tribute to Overlord. Moreover one member of the Coalition could not assassinate another without the majority of the Court agreeing. The protection offered by the Underworld attracted many smaller corporations, seeking to avoid destruction.
Other time the Bounty Hunters' Guild also allied themselves with the Coalition. Fodor used the Guild to assassinate rivals. Another valuable member was the Du Vranga Gata, a Force-sensitive organization created by Pretentieux.
A new era
Fodor had ruled the Coalition since the organization's beginning and many of his underlings grew envious of his reign. Pretentieux began plotting with his fellow Brethren to overthrow their Overlord. Together they wrote a document declaring Fodor's power void.
Because the Court controlled the dealings of the individual companies their orders were taken into effect and Fodor was forced to comply with their wishes. When the Coalition's founder was finally removed the Court held an election for his replacement. Pretentieux was chosen.
Prior to Ieux's rise the Coalition had been little more than a loose cartel that kept local criminal organizations from destroying each other. However, Pretentieux dreamed of something more. He believed that the Underworld become a dominating force in the Galaxy.
Through shrewd negotiation the new Overlord forced the member-corporations to pay regular tribute to the Coalition. He also created a standard military that answered only to him. Soon entire worlds pledged fidelity to the Underworld.
Invasion of Naboo
When reached Pretentieux on Nal Hutta that the Trade Federation had successfully captured Naboo and that it appeared that the Senate would not respond to these crimes, he saw an opportunity to gain from the crisis. Coalition ambassadors were sent to Nute Gunray. They hoped to make an alliance with the viceroy, possibility even convince the Federation to join the Underworld. However, Gunray assured Ieux's ambassadors that he was in no need of the Coalition's aid.
Therefore the Court authorized a mission to force the trade franchise into service. Specialized agents, enlisted by the Overlord some years prior, sneaked onto the Droid Control Ship. Their objective was the reprogram the battle droids and covert the metal warriors to the side of the Underworld. Naboo would than be under their control and the Federation would take all the losses.
Pretentieux's agent likely would have to successful, however, when the Court got word of the fighting on Naboo they ordered the agents to wait. They knew that a command-shift in the middle of a battle could very well result in a Naboo victory.
Even after the battle the Coalition would not be able to complete their mission, for the Control Ship was destroyed by Anakin Skywalker.
When the Separatists began to form under Dooku's rule, the Coalition saw the growing turmoil of the conflict as a great opportunity. Paranoid businessmen were all too each to buy weapons and mercenaries from the Underworld's black market.