FBIS4-46846 "jpusr061___94017"
FBIS-USR-94-061 JPRS
FBIS Report: Central Eurasia 26 May 1994 RUSSIA ECONOMIC & SOCIAL AFFAIRS

Economic Counterintelligence Tasks Viewed

Economic Counterintelligence Tasks Viewed PM3105150594 Moscow ROSSIYSKAYA GAZETA in Russian 26 May 94 First Edition pp 1, 2 PM3105150594 Moscow ROSSIYSKAYA GAZETA Russian BFN [Interview with Vladimir Tsekhanov, chief of the Federal Counterintelligence Service's Economic Counterintelligence Directorate, by Vladimir Klimov "only in ROSSIYSKAYA GAZETA"; date and place not given: "The Country Is Being Sold Off. Wholesale and Retail. Directorate Chief Vladimir Tsekhanov Reflects on the Struggle on the Economic Front"] [Text] [Klimov] What is the main sphere of questions that the Economic Counterintelligence Directorate is working on? [Tsekhanov] The might, stability, and prosperity of a state are determined by the condition of its economy. But at the same time this is a state's tenderest, most sensitive spot. It is no accident that the developed countries' special services are shifting the center of gravity in their activity to the economic sphere. The Economic Counterintelligence Directorate, which was the result of the amalgamation of two Russian Security Ministry directorates (the directorate for combating contraband and corruption and, partly, the economic security directorate), endeavors to organize the protection of vitally important spheres most at risk from external and internal threats. These are above all priority state programs, including privatization, investment projects with federal status and foreign investors, the credit and finance sphere, foreign economic activity, and the sphere of the circulation of precious stones and metals. Such forms of economic crime as the smuggling of strategic raw materials and centrally allocated resources, the illegal arms trade, banking crimes -- including the laundering of huge sums obtained through criminal means -- represent a serious threat. International narcotics syndicates are making a beeline for Russia. The theft and resale of cultural assets and unlawful enterprise in the sphere of culture are becoming profitable business. The expansion of organized crime and its capital in the Russian economy has taken on threatening proportions. Such trends are directly connected with the growth of corruption in the organs of power and administration and the law-enforcement system. [Klimov] What sphere of our economy attracts the most interest from foreign intelligence agents, Vladimir Stepanovich? Tell me as far as possible about cases of economic blackmail. [Tsekhanov] It will seem strange to some people, but it is a fact that, with the end of the Cold War, the intelligence activity of foreign services in relation to the Russian economy has been stepped up. Countries of the former socialist camp and the Baltic have gotten in on the act. There is a clear tendency for priorities to shift from military to economic confrontation, with the aim of making Russia a raw materials adjunct of the economically developed countries, to do everything to prevent its access to the world high technologies markets, and to exclude Russia from the list of potential economic rivals. And it is not a question here of some kind of pathological noxiousness on the part of our foreign partners. Let us look at it soberly. In planning their strategy, the developed countries endeavor at least to preserve the level of prosperity that they have already achieved or, if they succeed, to raise it. This is impossible relying only on internal resources. It is therefore important to ensure a stable supply of external stimuli and, as far as possible, to increase it. But in the modern, extraordinarily complex world, with its dwindling raw material and energy resources, it is extremely difficult to carry out such a policy. The weak links in the chain must be searched out and probed energetically. Today Russia has, unfortunately, become just such a weak link. The expansion of cooperation with other countries and the attraction of foreign capital and advanced technologies into the Russian economy is beneficial to our country. But at the same time it is important to observe our own interests as much as possible and not to be a "sheep in the wolves' den," if you will pardon the expression. Foreign partners, incidentally, are not such bad guys; it is quite possible to get on with them, but only if you don't act dumb. For instance, the Soros Foundation and the American Mathematical Society applied through the Russian Academy of Sciences to our mathematicians, requesting them to send their scientific articles to the United States for U.S. academics to assess. Thousands of our best authors would be paid $50 each for an article. Just consider -- $50 for information that could bring in millions! [Klimov] One area of the directorate's activity is corruption in the higher echelons of power. It is already known that instances of the criminal abuse of power have been uncovered. Is it possible for you to speak about this? [Tsekhanov] Corruption in the state service system is reaching epidemic proportions, discrediting the economic reforms and exerting a destructive influence on our way of life, our sense of justice, legality, and the social protection of our citizens. In St. Petersburg criminal proceedings have been instituted against L. Savenkov, the city's deputy mayor, for organized smuggling. In Moscow V. Danilenko, the first deputy prefect of Moscow's Western Administrative District, has been charged with corruption. In Pskov Oblast A. Kabanov, deputy chairman of the Oblast Committee for the Management of State Property, has been detained for organizing the illicit export of metals and import of arms. Unfortunately there are many such examples. It is extremely difficult for the law-enforcement organs to investigate and stamp out corruption among leading officials. All the advantages of office and influence and connections in the top-ranking executive echelons are brought into play in order to oppose our work. Often the mass media are exploited to distort the nature of events or exert pressure on the law-enforcement organs investigating cases of corruption. Sometimes curbing corruption among judges, public prosecutors, and deputies is seriously hampered by the excessively inflated guarantees of immunity of these officials. [Klimov] How did the directorate collaborate with the commissions -- first Rutskoy's, then the Makarov-Ilyushenko commission? [Tsekhanov] Different interdepartmental organs dealing in one way or another with questions of combating corruption have been set up from time to time. After the Russian Federation president's well-known 4 April 1992 edict "On Combating Corruption in the State Service System," sessions of the standing Interdepartmental Conference for Protecting Private and Public Interests Against Organized Crime and Corruption" (the "G. Burbulis Commission") began to be held fairly regularly. The Russian Federation Security Council Interdepartmental Commission for Combating Crime and Corruption, which you have called the "Rutskoy" or "Makarov-Ilyushenko Commission," is still operating, although from time to time reports of its cessation of activities do appear. It coordinates activity in the sphere of combating crime and elaborates appropriate proposals, recommendations, and documents of a conceptual and program character. Thus it was under the auspices of the Interdepartmental Committee that the All-Russia Conference on Questions of Combating Crime and Corruption was organized and held last year. For this conference we prepared analytical and statistical materials and proposals for draft statutory acts on questions of combating organized crime, smuggling, illegal international trafficking in narcotics, and corruption, which were included in the conference's final documents. The Commission organized work to prepare the Federal Program for Combating Crime for 1994-1995. We keep the Russian Federation president informed about instances of corruption in the organs of state power. [Klimov] How extensively has economic crime affected the law-enforcement organs? [Tsekhanov] For the militia it is most difficult of all. Organized crime today possesses huge financial and material resources, is excellently technically equipped, and has great experience of opposition to the state. Not everyone can withstand such pressure. There are cases of betrayal of official interests, official abuses, mergers with criminal structures, illegal participation in entrepreneurial activity, and assistance in getting criminal proceedings dropped in return for bribes. For example, one month ago the illegal activity of an extensive criminal community with the participation of officers of the central apparatus of the MVD [Ministry of Internal Affairs], the Moscow Oblast and City Internal Affairs Main Directorates, and other militia subdepartments was uncovered. Orders from professional criminal groupings of the Moscow region to drop charges against their members under investigation for muggings, robbery, smuggling, and illegal possession of arms, and also to change preventive restrictions and reduce sentences imposed by the courts, were carried out in return for huge bribes. Criminal proceedings have been instituted, and the case has been referred to the Russian General Prosecutor's Office. In 1993 alone, according to the records of the former Russian Federation Security Ministry, criminal proceedings were instituted against 39 officers of MVD organs, one Prosecutor's Office employee, and one court official, and more than 1,000 employees of the internal affairs organs were disciplined for various abuses of public office. In the first quarter of 1994, according to federal counterintelligence records, criminal charges have been brought in nine cases against 14 MVD officers. There are four cases against officials of the Public Prosecutor's Office. There is information on extortion of bribes by individual officials of the tax police for reducing punitive sanctions. Some of these officials have links with criminal structures and carry out their orders, passing to them official information and helping individual entrepreneurs to tax exemptions, receiving huge sums in return. There are cases of threats and psychological pressure against taxpayers and cases of forcing them to give bribes. [Klimov] The narcotics trade is growing drastically in Russia. What is being done to oppose it? [Tsekhanov] According to official estimates the turnover of narcotics reached the level of $150 million in our country last year. More than half of the narcotics in illegal circulation in Russia originate from outside its borders. They come mainly from Ukraine, Kazakhstan, Azerbaijan, Lithuania, and the Central Asian states. In recent times contraband deliveries of narcotics from Afghanistan, Pakistan, and Iran have grown markedly. Cocaine from South America and the United States and other narcotics, new to this country, are increasingly appearing in Russia. On the other hand the smuggling of narcotics from Russia to Finland, Sweden, France, Germany, Austria, and Greece is on the increase. The international narcotics business has manifestly intensified its interest in Russia. This is to be explained by the peculiarities of Russia's geographic position on the crossroads of transport routes and the huge, though as yet exploited, market in the demand for narcotics. There is reason to believe that, in addition to the traditional Balkan and Caucasus routes, a new international drugs route is being established from Southwest, South, and Southeast Asia to the CIS countries and West Europe. One means of increasing effectiveness in the battle against the illegal circulation of narcotics is cooperation with the special services of a number of countries of the world. Of course, collaboration within the CIS receives priority attention. [Klimov] What crimes, apart from false promissory notes, have appeared in the banking sphere? [Tsekhanov] The scale of crime is becoming menacing, and the character of the crimes increasingly refined. The law-enforcement organs have managed to uncover and prevent losses totaling hundreds of billions of rubles from the use of false payment documents. Representatives of the criminal world have made efficient use of the absence of a properly thought-out program to transform the existing credit and finance system and Russia's monetary circulation in conditions of the transition to the market; they have undertaken a series of large-scale illegal actions in 1992-1994. Today we can confidently talk about the emergence of organized crime in this sphere. Such forms of crime as false bankruptcies and professedly mistaken payment of money into the accounts of outside organizations and so forth have emerged. In recent times we have encountered "computer" crime, whereby large-scale embezzlement of funds is carried out by "cracking" banking data protection systems with the aid of an IBM, illegally obtaining credit through the use of false credit cards ("electronic" money), and pumping convertible currency abroad. The new electronic payments banking system is also in the criminals' sights. One cause of the growth in the number of these frauds are the gaping holes in Russian legislation. [Klimov] What danger awaits us from the commercialization of the entire country? [Tsekhanov] A "flight" of the ruble, whereby foreign currency actively penetrates the sphere of circulation and the ruble is squeezed out of internal circulation. The second calamity is a leak of capital from Russia. This question can be resolved only by combining administrative measures with the creation of an attractive investment climate. Plus legislative support. And there is one further highly complex problem -- the concentration of huge sums of money in the hands of individuals and organizations having direct links with the criminal world. There is an ongoing process of laundering "dirty" money, both from Russia and abroad, and the active assimilation of private funds into the Russian economy through the establishment of control over commercial banking structures. Many confidence tricksters and fraudsters, both Russian and foreign, have now appeared in the Russian market. The successfully thwarted losses which could have been inflicted by these dishonest people are frequently measured in tens of billions of rubles. Major financial fraud cannot fail to affect the condition of the state credit and monetary system. [Klimov] Vladimir Stepanovich, what prevents even more effective work by your directorate? [Tsekhanov] Dissatisfaction with the level of social protection and the uncertainty of the status of a state Federal Counterintelligence Service employee, the unending process of reorganization -- all this substantially reduces our level of efficiency and drives away professional cadres. Many trained officers have gone into the tax police, where the level of monetary support is far higher than in our directorate, and into other state structures. Commercial firms happily take on our boys, sometimes offering pay several times in excess of what they were previously earning. Former state security employees are valued for their high efficiency, professionalism, and ability to perform the most diverse tasks, and, of course, for their honesty and reliability.