FBIS4-38364 "drsov104_a_94008"
FBIS-SOV-94-104 Daily Report 28 May 1994
RUSSIA INTERNATIONAL AFFAIRS

U.S. Senate Hearings on Organized Crime Described

U.S. Senate Hearings on Organized Crime Described PM2705191594 Moscow IZVESTIYA in Russian 28 May 94 pp 1, 5 PM2705191594 Moscow IZVESTIYA Russian BFN [Report by Vladimir Nadein: "Russian Mafia Alarms America"] [Text] Washington -- The U.S. Senate Governmental Affairs Committee Permanent Subcommittee on Investigations has held hearings on the question of organized crime in Russia. The members of the subcommittee, headed by the very influential legislator Sam Nunn, were addressed by Louis Freeh, director of the FBI; Hans-Ludwig Zachert, president of the German federal criminal police, and Mikhail Yegorov, Russian first deputy minister of internal affairs. "Today organized crime in the former Soviet Union is an international problem," the FBI director noted. "A global problem can only be solved by global methods," Senator Nunn said in his opening speech. No one has accused the Americans of interfering in our internal affairs. Russia does not feel sorry for its mafia. But the chairman, wishing to avoid any possible misunderstanding, immediately explained what the U.S. interest is. First, crime -- and organized crime above all -- has become a threat to the democratic transformations in Russia and is pushing the country toward national socialism. Second, it is undermining U.S.-Russian business links. Third, it has penetrated U.S. territory. Fourth, it poses a potential nuclear threat: Criminal groups dream of capturing mass destruction weapons in order to be able to hold the world to ransom. Fifth, Russian organized crime has breathed new life into trafficking and contraband in narcotics. Another important reason for the Senate hearing was the fact that the United States has the world's richest police experience in combating organized crime. Several senators compared the dangerous streets in Moscow today with Chicago in the twenties and thirties, in order to demonstrate how familiar the difficulties and hardships of the young democratic Russia are to Americans, who have still not beaten this monster.
When Was the Gun Loaded?
The distinctive and in many respects unparalleled organized crime of the postcommunist world is not a brand-new phenomenon, although, as FBI Director L. Freeh said, "only four years ago the former Soviet Union did not officially recognize organized crime among its serious problems." There was no objection from his colleagues to this viewpoint. The German expert put the flare-up of organized crime down to the "opening up of Eastern Europe and its desire for political changes" and to the criminals' extraordinarily swift adaptation to completely new circumstances. The general from the Internal Affairs Ministry [MVD], Mikhail Yegorov, gave a more detailed account: "The growth of criminal associations in the former USSR was due to the state command system of government and its result -- the shadow economy. The numerous efforts in the sixties and seventies to change economic laws by force encouraged the expansion of the underground market and the creation of a substantial criminal potential. Illegal industrial and commercial structures appeared. Major thefts became widespread in the state and public sectors of the economy and official corruption became common. A new social stratum emerged, comprising people with large amounts of illegal capital. At the same time, in the criminal milieu tens of thousands of bosses of various ranks were trained within prison walls." According to Yegorov, the changes that then took place in public and political life led to a conflict of interests between dealers in the shadow economy and the traditional criminal world, particularly for spheres of influence. But they soon found a common language based on mutual interest. Dirty money, legalized in the economic sphere through bank fraud, theft, racketeering, robbery, and the sale of weapons and drugs, sewrved to develop organized crime.
Twenty "Dirty" Billion
FBI Director Freeh from America, President H.-L. Zachert from Germany, and Gen. M.K. Yegorov from Russia are the senior people in their countries responsible for the fight against organized crime. They have all climbed the professional ladder, from the bottom to the top. All three are regarded not only as experienced leaders but also as experts in the field. As they sat there at the same table they often referred to one another's speeches. Not once did they resort to refuting a colleague's words; they agreed on practically everything, only rarely providing extra clarification. So it could be said that the data on organized crime cited by Yegorov are shared by the chiefs of the leading Western police services and their numerous experts. According to Yegorov, 785 organized criminal groups were active in Russia in 1990. In early 1994 there were already 5,691 known groups, led by nearly 3,000 criminal bosses, and they included 279 "godfathers." (Director Freeh had earlier given the openmouthed senators a popular account of our linguistic termninology, enunciating in Russian words which have become common parlance here, such as "vor v zakone" ["godfather"], "vorovskoy zakon" ["criminals' law"], "blatnoy" [criminal], "smotryashchiy" [?someone who keeps a lookout], "obshchak" [fund of money for criminal purposes], and so on. Some 926 groups make up 155 criminal associations with memberships of between 70 and 300. The total number of active members of these associaitons is more than 100,000. But there is no single organized crime center in Russia and the groups and their leaders have many differences. Bank frauds were recognized as the largest-scale crime in Russia. "It appears that the most frequent form of criminal activity bringing in high profits in Russia is bank frauds and other forms of swindle in which corrupt businessmen and government functionaries participate," the FBI director said. "At the present time the FBI has launched several special investigations into Russian-American enterprises which have engaged in laundering `dirty' money through American banking institutions. These complex schemes are linked with multilateral international transactions, and in many cases are at the final stage sent back to Russia in the form of cash." Freeh attributed the deaths of 35 Russian bankers in the past year to the handiwork of organized crime, perfectly obviously in pursuit of the goal of gaining control over the Russian financial system. He also added that amendments adopted by Congress in October 1992 to the law on the procedure for investigating the laundering of "dirty" money are making U.S. soil less congenial to Russian crooks, and that cooperation with the MVD will enable a significant proportion of the billions of dollars which disappear to the West every year to be returned. Gen. Yegorov again confirmed that the sum of this money is roughly equal to $20 billion. He acknowledged that his subordinates do not yet have sufficient experience and knowledge to put active members of criminal groups behind bars. However, the majority of them are under MVD surveillance. President Zachert did not express optimism. In his opinion, Germany has been in the past few years not just an arena of high criminal activity on the part of Russian criminals, but also a place for them to relax and plan new operations, a place for their families to live and bring up their children. "Several instances of extortion, often connected with the kidnap of family members, have been recorded in Germany," President Zachert said. "In the majority of cases this is directed against former Russians well known for their criminal past." He also cited cases where German businessmen have also been victims of savage beatings for refusing to pay up to extortioners from private Russian "protection bureaus." The FBI director thoroughly analyzed every case of criminal actions against Americans in Russia, and Gen. Yegorov reported a high clear-up rate for such crimes. However, senators intimated unambiguously to the MVD's authorized representative that they consider the actions of the Russian militia in investigating crimes against American citizens to be extremely slow. Verging on Fantasy The most mystical part of international police operations (and criminal actions too, however) is connected with nuclear fissionable materials. Let us leave to one side the science-crime-fiction element, although it was referred to by Senator Cohen in posing questions about the probability of components for the manufacture of nuclear charges falling into criminal hands. And let us not censure the Americans for being more worried about the threat of a nuclear bomb explosion somewhere among New York's skyscrapers than about Chechen crimes in Moscow. The problem is fueled by the fact that many entirely respectable publications and television companies have published reports about kilograms of plutonium which have already been stolen from Russian enterprises and military bases. And about the tonnes of plutonium which will mysteriously disappear tomorrow. Such an article, which has just been published in the magazine ATLANTIC MONTHLY, was cited during the hearings by Senator Nunn. On these questions, the FBI director stated that "as of the present time not one case is known in which the existence for sale of highly enriched materials suitable for the manufacture of nuclear weapons has been confirmed by the law-enforcement organs." However, he added that there have been many cases of the illegal transportation of uranium and plutonium in Europe, and that all this material had been stolen in the former USSR. For his part, Yegorov analyzed in detail, without exception, every case of the theft of nuclear material. He graphically demonstrated that it invariably involved material which, if it were to be regarded as a real threat, would require intensive reprocessing at a number of specialized enterprises. The demand for radioactive materials in Europe, particularly Germany, was described by president Zachert as a myth, one to which the "crassest section" of the criminal world responds with surprising persistence. It has been proved, he stated, that there is no market for such products in Europe. However, the danger of real weapons of mass destruction being stolen cannot be ruled out. Zachert said that this kind of control requires considerable expenditure on specialized equipment. Moreover, the lack of demand here today does not mean that it won't appear tomorrow in another place.
The "Golden Crescent" and Dope-Induced "Highs" from Chernobyl
It was noted at the conference that the enormous contribution of the post-Soviet area to the world trade in narcotics was not a myth but a proven reality. The enormous potential of the "Golden Crescent" -- Pakistan, Afghanistan, and Iran -- in producing opium has become a factor posing a serious threat since the previously carefully guarded borders of the USSR collapsed and disappeared Through Uzbekistan, Tajikistan, and Turkmenistan, which add their own narcotics production to the goods in transit, the route runs via Kazakhstan, Russia, the Baltic states, and Poland to West Europe. Modern semi-industrial facilities for manufacuring synthetic drugs operate in Russia, Poland, and Czechoslovakia [as published], while poppy straw, which also goes for export, grows around Chernobyl, although it is not of such good quality as that from Kirghizia [Kyrgyzstan] and the Chu Valley. Because of the absence of borders and the utter corruption of officials, this route has become so easy and accessible that the Colombian cocaine barons now use it too. According to a representative of the German police, where narcotics infiltration routes are studied specially carefully, Moscow's Sheremetyevo Airport has become an important transit point for smuggling drugs to the West.
Time Is Short
The leaders of the world's three largest police agencies agreed that they are dealing with clever, treacherous, and ruthless enemies. They unanimously expressed themselves in favor of the closest cooperation: The American, the German, and the Russian confirmed that time is short. Freeh reported that he will very shortly be visiting Moscow as part of a high-powered American delegation (State Department, Treasury, and Drug Enforcement Administration), where an agency maintaining constant liaison between the MVD and the FBI will be opened. "Our cooperation requires a legislative foundation," Yegorov stated. According to him, the present high level of cooperation is due to the personal trust and liking that exists between him and the FBI director. "But cooperation should not depend on likes," the MVD general stated. Asked by Senator Nunn what he would do with $15-20 million ("I'm not giving it to you, it's just a hypothetical question," the American hastened to add, making plain the cold reality), Yegorov said: I would buy computers, develop a data base, and assemble people for two kinds of attack on crime -- brainstorming and the armed approach. However, he described the creation of international police groups to investigate specific cases as the chief prerequisite for success in the fight against international crime. The Russian general unambiguously rejected any likelihood of the occurrence of what is the topic of animated discussion in the American press, namely the possibility of power being seized in Russia by a criminal group. However, he did not rule out a turn of events whereby a mafia stooge is elected a deputy or appointed to high office. The session of the Senate Permanent Subcommittee on Investigations has not received extensive comment in the press yet but has been briefly commented on in television bulletins. Asked by me whether he could compare the hearings in the American Senate and the Russian Duma, Yegorov said: "I won't answer because I don't want to offend anyone...."