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Euroasia Insight: Russia's organized crime

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  • mariuslab2002
    EURASIA INSIGHT January 31, 2002 RUSSIA S ORGANIZED CRIME: A TYPOLOGY Part I: How the Mafias Were Formed Roustam Kaliyev (Chiharro): 1/31/02 Part I of a
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      EURASIA INSIGHT January 31, 2002

      Part I: How the Mafias Were Formed
      Roustam Kaliyev (Chiharro): 1/31/02

      Part I of a two-part series.

      The Russian Mafia poses serious obstacles for Russia's development
      and has been perceived as a threat to its neighbors and even the
      West. Yet few seem to have a clear understanding of how Russian
      criminal syndicates are organized. The structure of criminal
      syndicates has evolved considerably due to the changing political
      circumstances of the late Soviet period and the subsequent upheavals
      in the Russian Federation. Criminal networks have grown to represent
      an attribute of the country's national character. Many in the West
      expected President Vladimir Putin, who had made his career in the
      Security Services, to herald a new approach to law enforcement.
      However, the problem of criminalization of the state at all levels

      The problem is not simply corruption, such as bribe taking, that
      infects the public sphere, but actual criminal activity by
      governmental and law-enforcement agencies. The organized crime groups
      in Russia can be divided into 3 major
      categories: "classic," "governmental," and "national." The classic
      Mafias are the familiar structures known throughout the world. The
      governmental structures are the security services and private
      security agencies that run substantial criminal enterprises. The
      national Mafias sprang from ethnically Chechen groups, which were
      initially set up explicitly to protect Chechen business interests but
      then diversified their activities and membership.

      Among the "classic" groupings we find many ethnic, territorial and
      other criminal groups that formed and functioned along established
      systems, and were familiar to the law enforcement community. Famous
      groups include the Tambovskaya, Solnetzevskaya, Tul'skaya and
      Armenian Mafias. Their activities include: the drug trade, arms
      trade, smuggling, robbery, contract murder and more recently
      kidnapping and trade in people.

      Prior to the 1990s the security services of the USSR used fairly
      primitive methods of law enforcement to deal with these classic
      syndicates. The main mechanism of this system was that the government
      tolerated the existence of a criminal elite - the so-called "thieves
      in the law" - 20 or 30 persons who maintained authority by having
      certain powers, such as influence over criminals in prison, delegated
      to them. This institution of the "thieves," which existed in most
      union republics, was reasonably effective. Besides giving the
      authorities a lever of influence in the criminal world, the "thieves"
      were also useful in limiting the formation of new criminal
      syndicates. To identify and liquidate such networks would otherwise
      have required tremendous effort and resources. This way the thieves
      had an incentive to limit competition and the new groups that
      sprouted up were cut off at the root.

      In the early 1990s as Russia's market became liberalized,
      the "classic" criminal groupings turned out to be unprepared for the
      outbreak of new criminal groupings. These new Mafias began a very
      energetic assault against the old criminal system. According to
      criminologists, the 1990s were a watershed for Russia's underworld:
      the authoritative "thieves" suddenly lost the levers of influence.
      The "thieves" had no authority with the new groups and had to
      cede "market-share" to them.

      "Governmental" syndicates, an important post-Soviet phenomenon, are a
      relatively new category of organized crime. They comprise MVD and FSB
      cadres and members of the multitude of non-governmental security
      services and mainly seek to profit financially from exercising their
      powers. For instance, a recent scandal described in Russia's
      Moskovsksi komsomolets and Novaya gazeta newspapers revealed high-
      ranking FSB officials, including Deputy Director Yurii Zaostrovtsev,
      as well as officials from the procuracy and the customs service
      illegally importing furniture for sale in a chain of warehouse style
      stores in Moscow. Instead of paying tariffs into the budget, the
      owners of such stores were paying protection money to various customs
      and security officials.

      Business has been rife with corruption since the early 90s, when
      small and medium sized foreign businesses arrived in Russia. A
      business would not be able to function on the Russian market without
      paying "tribute." Worse still, the various racketeers are constantly
      warring with each other over spheres of influence. The businessman
      finds himself the object of competing gangs' attention, and suffers
      each time there is a rearrangement of spheres.

      In Russian slang, protection is called krysha (literally roof).
      Typically the switch to a new krysha proceeds as follows: two
      presentable young men appear in the company offices. They ask to see
      the owner or manager and sit down with him in private. The "guests"
      question the manager in detail about the business. Then they offer
      their own protection services. The manager typically responds that he
      does not need their services because he already has protection (in
      which case he offers the visitors the phone number of the krysha), or
      because the company pays its taxes and otherwise obeys the law.

      The racketeers leave the office calmly, but check into the
      information. Depending on what they find they will proceed as
      follows: 1) If the company has no krysha, they will force the owner
      to pay tribute. 2) If the company has a weak krysha, the racketeers
      will take over as a new krysha. 3) The racketeers will leave the
      company alone only if the existing krysha is connected to the
      security services or to the Chechens. These last two arguments have
      almost magical powers to rid the businessman of the racketeers. If
      it's fairly obvious why connections to the security services would
      have this effect, the assertion concerning Chechens requires some

      Chechen business in Russia is fairly substantial in finance, banking,
      oil, metallurgy and bulk sale, and operates on a refusal to pay
      tribute. Chechens were determined to remain independent for the sake
      of honor, even when this meant open confrontation with the
      racketeers. Chechens used every resource available to them: family
      connections, the police and the courts, and if that failed they used
      force. This posture owed a great deal to the fact that, unlike
      Western or other newcomers, Chechens had strong networks to protect
      themselves. When thugs pressured Chechen businesses, other Chechens
      would do the maximum in their power to limit the activities of the

      In short time, Chechens became virtually the only category of
      business that could resist krysha (though some Chechens did affiliate
      themselves with governmental syndicates). Word about the Chechens
      spread among foreign executives, who began to include Chechens in
      investment projects - Chechens with experience in protection became
      the preferred source of it over time, and Chechen groups formed
      initially to protect Chechen business became Mafia groupings. The now
      notorious Chechen Mafioso Khozh A. Noukhaev got his start this way.
      Syndicates in this category are called "national" because they formed
      initially on the basis of nationality and due to particular cultural
      traits. However after the formative stage the groups developed a
      multinational character employing Russians, Armenians, Georgians,
      Ukrainians and others.

      Analysts in Russia and in the West had interpreted the Putin
      presidency as the start of a vigorous campaign against the
      criminalization and corruption of the Yeltsin period. The last two
      years have seen a substantial increase in the growth and power of the
      security services, which is connected to their role in the war in
      Chechnya. These changes have altered the balance of power among the
      Mafia types but has not altered the overall system or brought about a
      greater attention to the rule of law.

      Editor's Note: Roustam Kaliyev (Chiharro) has traveled repeatedly in
      Chechnya during the present war, and has contributed articles to
      Moskovskiye Novosti and Obschaya Gazeta. Miriam Lanskoy translated
      this article from Russian into English.

      This is part one of a two-part series. Part two will consider how the
      start of the new Chechen war affected organized crime.
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