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8Organized Crime Darkness at Dawn Darkness The Rise of the Russian Criminal State at Dawn david satter Yale University Press / New Haven & London Published with assistance from the Louis Stern Memorial Fund. Copyright ∫ 2003 by David Satter. All rights reserved. This book may not be reproduced, in whole or in part, including illustra- tions, in any form (beyond that copying permitted by Sections 107 and 108 of the U.S. Copyright Law and except by reviewers for the public press), without written permission from the publishers. Printed in the United States of America by R. R. Donnelley & Sons. Library of Congress Cataloging-in-Publication Data Satter, David, 1947– Darkness at dawn : the rise of the Russian criminal state / David Satter. p. cm. Includes bibliographical references and index. ISBN 0-300-09892-8 (alk. paper) 1. Organized crime—Russia (Federation) 2. Russia (Federa- tion)—Social conditions—1991– I. Title. HV6453.R8 S27 2003 364.1%06%0947—dc21 2002015754 A catalogue record for this book is available from the British Library. The paper in this book meets the guidelines for permanence and durability of the Committee on Production Guidelines for Book Longevity of the Council on Library Resources. 10987654321 To the honest people of Russia For nothing is hidden except to be known and nothing is secret except to be revealed. —Mark 4:22 Contents Preface ix List of Abbreviations and Administrative Delineations x Introduction 1 1 The Kursk 5 2 Ryazan 24 3 The Young Reformers 34 4 The History of Reform 45 5 The Gold Seekers 72 6 The Workers 93 7 Law Enforcement 112 8 Organized Crime 127 9 Ulyanovsk 156 10 Vladivostok 165 11 Krasnoyarsk 182 12 The Value of Human Life 198 13 The Criminalization of Consciousness 222 Conclusion: Does Russia Have a Future? 248 Notes 257 Bibliography 289 Acknowledgments 303 Index 305 Illustrations follow page 126 Preface In Darkness at Dawn, I have tried to describe the rise of a business criminal elite and its takeover of the machinery of the Russian state, leading to the impoverishment and demoralization of the great majority of the population. The book consists of narrative histories and personal stories. The histo- ries show how criminal oligarchic power achieved its present dominance in Russia, while the stories of ordinary Russians provide a social context for the activities of this ‘‘elite.’’ I have chosen to describe Russia with the help of stories because Russians experienced a spiritual crisis in the reform period as a result of being confronted with a new way of life for which their previous experience had not prepared them. To understand this spiritual crisis, facts alone are not su≈cient. It is necessary to grasp the psychology of Russia, and this can be conveyed only through the stories of individual lives. It is also not irrelevant that telling the stories of ordinary Russians is a way to help them. As the Danish novelist Isak Dinesen put it, ‘‘All sorrows can be borne if you put them into a story or tell a story about them.’’ Abbreviations and Administrative Delineations CIS Commonwealth of Independent States FAPSI Federal Agency for Government Communications and Informa- tion (formerly part of the KGB) FSB Federal Security Service FSK Federal Counterintelligence Service (predecessor of FSB) GKI State Property Committee GRU Main Intelligence Administration (military intelligence) IMF International Monetary Fund KGB Committee for State Security MVD Ministry of Internal A√airs UVD Directorate of Internal A√airs (subdivision of the ministry) GUVD Chief Directorate of Internal A√airs (principal subdivision of the ministry) OMON special police detachments of the Interior Ministry RUBOP (formerly RUOP) Regional Directorate for the Struggle with Or- ganized Crime SBP Presidential Security Service Krai Best translated as ‘‘province’’ or ‘‘territory,’’ a krai is a territorial sub- division that generally encompasses a large area, such as Primoriye in the Far East or the Krasnoyarsk region in Siberia. Oblast Often similar in size to an American state, an oblast has the same weight in the Russian administrative system as a krai. Raion A raion is a subdivision of a krai, oblast, or city and is responsible for most local administration, including the police and the courts. Okrug An okrug is an administrative subdivision of Moscow, created in the mid-1990s through the consolidation of groups of raions. It can also signify a Russian military district, for example, the North Caucasus military okrug. Any call to personal discipline irritates Russians. Spiritual work on the formation of his personality does not present itself to the Russian as either necessary or interesting. —Nikolai Berdyaev, Sudba Rossii (Russia’s Fate) Introduction In 1991 Russia experienced a new dawn of freedom. The Communist party was dissolved, and Russia appeared ready to build a democratic future. The literary critic Yuri Karyakin spoke for many when he said, ‘‘For the first time in this century, God has smiled on Russia.’’1 Few at that time could have foreseen the outlines of what exists today. In the years that followed, many former Communist countries experienced a rebirth of freedom, but Russia came to be dominated by poverty, intimida- tion, and crime. The reason is that during the reform period, which wit- nessed a massive e√ort to remake Russian society and the Russian economy, Russia once again fell victim to a false idea. The victory over communism was a moral victory. Millions took to the streets not because of shortages but in protest over communism’s attempt to falsify history and change human nature. As a new state began to be built, however, all attention shifted to the creation of capitalism and, in particular, to the formation of a group of wealthy private owners whose control over the means of production, it was assumed, would lead automatically to a free- market economy and a law-based democracy. This approach, dubious under the best of conditions, proved disastrous in the case of Russia because, in a country with a need for moral values after more than seven decades of spiritual degradation under communism, the introduction of capitalism came to be seen as an end in itself. The young reformers were in a hurry to build capitalism, and they pressed ahead in a manner that paid little attention to anything except the transformation of economic structures. ‘‘The calculation was sober,’’ said 1 Aliza Dolgova, an expert on organized crime in the O≈ce of the General Prosecutor; ‘‘create through any means a stratum in Russia that could serve as the support of reform . All capital was laundered and put into circula- tion. No measures of any kind were enacted to prevent the legalization of criminal income. No one asked at [privatization] auctions: Where did you get the money? Enormous sums were invested in property, and there was no register of owners. A policy similar to this did not exist in a single civilized country.’’2 The decision to transform the economy of a huge country without the benefit of the rule of law led not to a free-market democracy but to a klep- tocracy that had several dangerous economic and psychological features. In the first place, the new system was characterized by bribery. All re- sources were initially in the hands of the state, so businessmen competed to ‘‘buy’’ critical government o≈cials. The winners were in a position to buy the cooperation of more o≈cials, with the result that the practice of giving bribes grew up with the system.3 Besides bribery, the new system was marked by institutionalized violence. Gangsters were treated as normal economic actors, a practice that tacitly legitimated their criminal activities. At the same time, they became the partners of businessmen who used them as guards, enforcers, and debt collectors. The new system was also characterized by pillage. Money obtained as a result of criminal activities was illegally exported to avoid the possibility of its being confiscated at some point in the future. This outflow deprived Russia of billions of dollars that were needed for its development. Perhaps more important than these economic features, however, was the new system’s social psychology, which was characterized by mass moral indi√erence. If under communism universal morality was denied in favor of the supposed ‘‘interests of the working class,’’ under the new government people lost the ability to distinguish between legal and criminal activity. O≈cial corruption came to be regarded as ‘‘normal,’’ and it was consid- ered a sign of virtue if the o≈cial, in addition to stealing, made an e√ort to fulfill his o≈cial responsibilities. Extortion also came to be regarded as normal, and vendors, through force of habit, began to regard paying protec- tion money as part of the cost of doing business. O≈cials and businessmen took no responsibility for the consequences of their actions, even if those consequences included hunger and death. Government o≈cials helped to organize pyramid schemes that victimized people who were already destitute, police o≈cials took bribes from lead- 2 Introduction ers of organized crime to ignore extortion, and factory directors stole funds marked for the salaries of workers who had already gone months without pay. The young reformers were lionized in the West, but as the years passed and the promised rebirth of Russia did not materialize, debates broke out in Russia over whether progress was being prevented by the resistance of the Duma, by inadequate assistance from the West, or by the inadequacies of the Russian people themselves. These arguments, however, had a surrealistic quality because they im- plicitly assumed that, with the right economic combination, it was possible to build a free-market democracy without the rule of law.
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