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...."