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What is the so-called Russian mafia? Answering this question is not easy. The difficulty arises out of a number of circumstances that will shape this discussion. First, the phenomenon called Russian mafia is not and cannot be strictly Russian. A second complication is the fact that the term mafia had come to be indiscriminately used in the former Soviet Union, where it referred widely to any sort of activity or enterprise that was perceived to be outside of the law. Thirdly and most importantly, there is the most unusual story of Russia and Russians with respect to crime, organized crime, and corruption – a history that spans at least back to the seventeenth century, takes in the 70 plus years of Soviet rule, and finally focuses on the “New Russian” generation since the collapse of the Soviet Union in 1991. Each of these factors, but most particularly the last, helps explain the current situation with respect to organized crime in Russia itself, as well as the transnational organized crime that emanates from Russia with widespread global impact. Finally, following the explanation and understanding of this particular organized crime problem, there is the ultimate challenge of what to do about it.
Describing and attempting to explain the popularly known “Russian mafia” is a task with a number of complications. Contrary to what might appear to be the obvious, it requires first dealing with the characterization of its being “Russian.” This is because Russia and Russians have long been all-encompassing labels. As was particularly the case during the time of the Soviet Union (1918–1991), the world regarded persons from all the countries that made up the former USSR as essentially being Russians. Russian came to include persons not only from the other 14 Soviet republics but also from the hundreds of different ethnic groups. Although Russia is the largest and perhaps best known of the former Soviet states and although there are many ethnic Russians who have immigrated elsewhere, indeed including some who are criminals and engaged in organized crime, and not all of those currently popularly characterized as being part of the so-called Russian mafia are actually Russian. Instead, they are, for example, Armenian, Georgian, Ukrainian, Azeri, or Chechen or they are actually from Eastern Europe, such as the Albanians. The point is this phenomenon known as the Russian mafia is not and cannot be strictly Russian. This is also why law enforcement agencies in the United States more typically refer to the criminal groups in this category as Eurasian Organized Crime.
Even thornier is the concept of “mafia.” Strictly speaking, mafia is a very particular kind of organized crime. It is especially associated with Sicily and southern Italy. Made members of the true mafia – inducted in formal ceremonies – are considered to be men of honor. They are bound by traditions that have been passed down for generations, such as respecting omerta or the vow of silence.
The mafia’s traditional business has been providing protection and acting in quasigovernmental roles. The latter is a particularly important defining element. It means that mafias are most likely to be found in countries or regions that lack strong governmental structures and healthy civil societies. Such locations are usually characterized by rampant corruption, weak or absent rule of law and protections for civil liberties, and/or civil disorder. In these circumstances, a mafia or mafias take on “protective” functions and judicial functions, meting out judgments and sanctions. Although the term mafia has come to be used indiscriminately to refer to all kinds of criminal organizations, in many places, mafia is not synonymous with organized crime. Rather, it is one form of organized crime.
The term mafia was particularly indiscriminately used in the former Soviet Union. It referred widely to any sort of activity or enterprise that was being controlled or that at least appeared to be controlled. Thus, mafia could refer for example to organized criminal groups, clans that controlled politics and the economy in particular regions, corrupt government employees, or even the Communist Party itself. The noted Russian journalist, Yuri Shchekochikhin, who covered the ubiquitous mafia in the USSR extensively, said the label mafia was being applied to practically anything and everything – unions, hospitals, prostitutes, chess players, etc.
In any instance when terms are used somewhat arbitrarily, they tend to become practically meaningless. As a result of this longstanding definitional ambiguity, the subject to be dealt with here is consequently a rather amorphous one. Yet a further complication derives from the unique history and character of Russia and Russians with respect to crime, organized crime, and corruption – a history that spans at least back to the seventeenth century, the 70 plus years of Soviet rule, and then the generation since the collapse of the Soviet Union in 1991.
History And Origins
Organized crime in various forms has a 400-year history in Russia. This is a history characterized by authoritarian governments, beginning with the czars, who were then followed by the hegemony of the Communist Party and its dictatorial rulers. Indeed, authoritarianism, albeit it in a somewhat different form, extends into today under the rule of Russian President Vladimir Putin. Putin, the former head of the KGB (the Soviet secret police), calls his form of authoritarianism democracy with order.
Throughout Russian history, its rulers showed little or no regard for individual rights and liberties. Government and its laws and rules were not seen as representing and protecting the people. A consequence of this history was and is blurred distinctions between what is legal and illegal and what is public versus private. Stealing the czar’s timber, for example, was not considered criminal by the Russian people, whereas one peasant stealing anything from another was. Commitment to the rule of law, a backbone of democracy and civil society, has thus always been very feeble in Russia.
Serguei Cheloukhine (2008), who has studied and written extensively about Russian organized crime, describes its beginnings as follows:
Historically, the professionalization of criminal groups in Russia was a product of strong patriarchal traditions, hostility towards the state and an underdeveloped, largely agrarian economy. During the 17th century, corruption combined with the tyranny of state officials and landowners was widespread in Russia. This was in part a reflection of the lack of respect for the dignity of the individual – most people were regarded primarily as property and such property was not protected by a rule of law, but was due to the “benevolence” of the autocracy towards the country’s nobility.
It was during these centuries prior to the Soviet era, when the czars ruled Russia, that one of the most prevalent crimes was theft, especially as indicated from the czar’s properties. The thieves’ rationalization was that property that belonged to the czar – to the state – did not belong to anyone, or belonged to everyone, and thus was fair game to be stolen. Although not unique to Russia, this sort of rationalization is important because it reflects the origins of the division between permissible and impermissible crimes that rose to new heights in the Soviet Union. And it continues to be very much in evidence today.
Another piece of this explanatory puzzle can be found in the reading of Russian literature. From Nikolai Gogol (The Government Inspector) to Ilya Ilf and Yevgeni Petrov’s The Twelve Chairs and The Golden Calf, to Alexander Zinoviev (The Yawning Heights and Homo Sovieticus), and to more recent authors such as Victor Pelevin (Homo Zapiens) and Gary Shteyngart (Absurdistan), writers have described the insidious corruption and the particular long-standing relationship between corruption and crime in Russia. A sign that this norm continues was reflected in a 2012 New York Times article that opened a discussion of the issue as follows: “CORRUPTION [sic] in Russia is so pervasive that the whole society accepts the unacceptable as normal, as the only way of survival, as the way things ‘just are.’”
Crime In The USSR
Following the Russian Revolution of 1917 that resulted in the overthrow and ultimate execution of Czar Nicholas II and his family, the Bolsheviks embarked upon their ambitious agenda of creating a new society, intended to be crime-free and also to produce a new “Soviet Man” who would be hardworking, communal, patriotic, and loyal to the state. Oddly however, it was during the 1917 revolution that the Bolsheviks collaborated closely with professional criminals to overthrow first the czar and then the first short-lived revolutionary government. Thus, from the outset, there was a kind of hypocrisy about the supposed Soviet utopia. The Russian revolutionaries working hand in glove with criminals to attain the spoils of power reflects a picture of Russia today – the marriage between political power and crime. A very similar kind of criminalpolitical nexus – among entrepreneurs, criminal organizations, and government officials – very aptly describes the current nature of serious crime in Russia.
In most instances, organized crime arises to meet market demands for goods and services that are either illegal, regulated, or simply in short supply. In addition to goods that were illegal such as a variety of Western products, almost from the beginning, most goods and services were in chronically short supply in the USSR. This led to, or fed, the emergence of what was known as a shadow economy and to a black market. The shadow economy produced legal goods “off the books” that were sold or bartered illegally. The black market usually dealt in illegal goods, such as prohibited items from the West or drugs, for example. As indicated, it was common during the Soviet era to refer to practitioners in a variety of these activities as being mafias.
Soviet citizens used blat – connections and informal networks – to access the black market and shadow economy. Blat (Russian: блат) is a term which appeared in the Soviet Union to refer to the use of informal agreements, exchange of services, connections, Party contacts, or black market deals to achieve results or get ahead. While obviously not unheard of elsewhere, agreements/connections became the primary way of doing business in the USSR. Blatnoy came to refer to someone who got a job or got into a university using connections or sometimes bribes – again not unique to Russia, but just much more prevalent. This system was in many ways similar to the Chinese practice of Quanxi.
As a result of eight decades of these practices, there are at least two effects that are relevant to the current nature of Russian organized crime: It created or refined a distinct mentality about conniving to survive, and it stimulated the development of a shadowy entrepreneurial class operating outside the law. The previously mentioned writer Zinoviev’s Homo Sovieticus was a string puller, an operator, a time server, a freeloader, and, above all, a survivor. He was also the ancestor of today’s new Russians.
The offshoots of this peculiar history include, for example, the monetarization of organized crime in Russia, in which dealing in goods and services shifted to dealing in currency. This inheritance also includes the crony capitalism and widespread corruption that are so characteristic of Russia’s economy and politics today.
During the 1960s, organized crime in Soviet Russia evolved into a three-tiered pyramid-like structure. The top tier was made up of high-level government and Communist Party bureaucrats – those referred to as the apparatchiks and the nomenklatura. Party officials enjoyed special privileges that were denied to the vast majority of the Russian people. They lived in special more luxurious housing; had their own vacation hideaways; consumed special foods, wines, and liquors that were otherwise unavailable; traveled widely and bought expensive clothes; and sent their sons and daughters to the best schools. Party members lived in high style off of the country’s vast resources while all the while claiming to be representing the people’s interests in a socialistic state of mythical equality. The hypocrisy of this lie was apparent to the population, and once again reinforced the lesson about what one really needed to do to get ahead in life.
Below the Communist Party, the middle tier of the crime pyramid was comprised of the shadow economy (underground) operators and the black marketers. They, for example, oversaw the production of the shoddy goods to fulfill the 5-year plan quotas. As long as the plan was fulfilled or better yet exceeded, the quality of the products was irrelevant – again a foundation for cynicism. These operators also procured the illegal goods and products that were then passed on up the pyramid. They did all this while siphoning off what they saw as their share.
Finally, the bottom tier consisted of the professional criminals. This group included a whole range of criminal types from petty thieves up to an including the vory v zakone or thieves in law. The vory were products of the Soviet gulag or prison system, what Cheloukhine describes as “a university of the underworld.” These leaders of the underworld were (and still are in some instances) the most sophisticated of the professional criminals. They lived within a set of rules known as the thieves’ law, dedicated themselves to a life of crime, and rejected involvement with the legitimate world. In many respects, although not all, they bore some resemblance to the traditional definition of mafia or at least more so than did any other form of Russian organized crime.
The Post-Soviet Era
There were great hopes for Russia after 1991. Unfortunately, many of those hopes have not materialized. Instead of enjoying the fruits of freedom and democracy and a thriving market economy, Russia has been racked by a host of social, economic, and political ills. The Russian people have been confronted with worsening living standards, poor health care, rampant inflation, corruption, alcoholism, drug addiction, and surging crime rates. Russia faces a shrinking population because of declining birth rates and decreasing life expectancy, especially among Russian men. The latter is attributable to the increased alcoholism.
The predatory nature of the Russian economy – an economy whose driving philosophy seems to be to steal as much as you can as fast as you can – is closely intertwined with official corruption and organized crime. One result is that, for the vast majority of Russians, life is much worse today than it was at the beginning of the decade of the 1990s – an outcome that would have been almost inconceivable in 1991. Another result is that the legal and criminal justice processes, and any fledgling effort toward the rule of law, have been overwhelmed by the enormity of the challenge of crime.
In the years following the collapse of the former Soviet Union, there was a rapid growth in organized economic crime. During Boris Yeltsin’s presidency, both political and economic chaos reigned as Russia stumbled from a state command economy to something resembling a market economy. Predators who had cut their teeth in the shadow economy, the black market, and the criminal corruption of the Soviet era were best positioned to take advantage of the chaos – lining their pockets and those of their friends. The so-named oligarchs – the millionaires and billionaires who profited the most – were beneficiaries of the policy of privatization, that is, the selling off of the state’s assets. Enormously lucrative properties were obtained for investments far below their worth largely through collusion and insider trading.
As the country moved to privatize its vast holdings, that is, sell to private owners what was previously owned by the state, organized crime in partnership with corrupt officials engaged in a wholesale rape of the privatization process, buying up valuable properties at fire sale prices via insider trading information. The economy that resulted from the various perversions of economic reform has thus not been an economy governed by market principles but is instead, as indicated, a predatory economy.
Following Yeltsin, first the Putin and then the Alexander Medvedev governments grappled with the problems of developing laws and regulations to govern private business and economic activities. But organized criminal groups were clearly able to exploit the opportunities that became available. This wave of criminal activity was a destabilizing influence as Russia struggled to achieve economic and political reform. It thwarted foreign investment, widened the gap between rich and poor, and ultimately undermined confidence in the government.
Given this context, the particular character of Russian organized crime that has arisen over the last 20 years reflects not only a high level of criminal sophistication and well-developed networks of corruption but also a broad scale of activities and influence exerted over a considerable portion of the economy. Russian organized crime is not a single monolith but rather a conglomeration of criminal groups. Some of these groups are large and some small; some are ethnically based and some are not; some specialize in particular crimes and others are more diverse. In sum, when one speaks of Russian organized crime, one is not speaking of a single entity.
The criminal activities and enterprises of these various groups can be categorized into two broad groupings. In one group are such crimes as extortion, robbery, car theft, drug trafficking, and prostitution. These kinds of crimes are the staples of organized crime in many parts of the world. But it is really the second category of crimes that most distinguishes Russia from many other countries. Between 1991 and 2008, for example, Russian organized crime gained control of a significant share of the nation’s economy (estimates run to 40 % or more in certain sectors). The lack of laws, lax regulation, corruption, and violence enabled criminal groups to make substantial inroads into several lucrative economic sectors, including energy, metallurgy, construction, banking, fishery, retail trade, liquor production, and transportation. The Russian Ministry of Internal Affairs (MIA) estimated that almost 2,000 different economic enterprises were actually under the control of organized crime groups. This latter category of high-level economic crimes was much more likely to involve a class of sophisticated criminals known broadly as the avtoritety or authorities. This is a collection of businessmen/criminals who are drawn from the ranks of former black marketeers and shadow economy operators, government bureaucrats, and the security services, among other roots. Whereas the drug crimes, protection rackets, loan sharking, and so on were the bread and butter for the old style gangsters and the vory v zakone, the avtoritety favored corruption, embezzlement, financial crimes, and other forms of white-collar crime. It should be emphasized, however, that these two categories are not mutually exclusive.
Shelley has pointed out that hundreds of banks in Russia are owned or controlled by organized crime groups and that these groups use the banks to launder money, for pyramid schemes, and so on. The capital flight out of Russia, says Shelley, is one of the most damaging aspects of Russian organized crime activity.
Organized crime has been able to penetrate Russian business and state enterprises to a degree that is unheard of in most other countries of the world, even including those where organized crime is present. As already indicated, this penetration occurs in a variety of forms. For example, protection rackets are operated by what are called kryshas or roofs. Nearly every business in the major cities must make extortion payments for “protection” by a krysha. This protection sometimes comes in the form of acquiring unwanted partners.
Russian organized crime in Russia itself has most recently evolved into new forms that are diminishing the role of the old vory v zakone. Professionalization, globalization, legalization, and patrimonialism characterize these new forms. Their skill at white-collar crimes, for example, electronic crimes and crimes victimizing banking and financial institutions, gives witness to the professionalism of the new Russian criminals. At the same time, a Russian diaspora has developed – particularly in Canada, Israel, and the United States, for example. This diaspora provides a potential critical mass for the development of organized crime in those areas. The globalization is also evident in such activities as worldwide money laundering and in the trafficking of a variety of goods and persons. Through effective use of the mass media and charitable donations and through heavy giving to political campaigns and even electing their own candidates to political office, Russian organized crime has moved to legalize, in effect to legitimize itself. Finally, patrimonialism – via the kind of insider training, the issuance of preferential licenses, and the illegal banking of state funds, referred to earlier – is the other major force driving organized crime into the center of “normal” political activity. Whereas in most societies crime is an outside threat external to the society, in Russia, organized crime is not only pervasive but is very much mainstream.
One expert on Russian organized crime, Mark Galeotti, has pointed out that “Russia’s internal situation is the most significant asset of Russian organized crime.” The fact that law enforcement officials are corrupt and that politicians are intertwined with criminals makes Russia a safe haven for laundering ill-gotten gains through its banks but also for hiding a variety of other criminal activities and the criminals themselves. Galeotti thinks this might be changing because the political costs of being associated with criminal networks have increased because of pressures from society to reform. Also, he cites the internal “silovik wars,” which bring to light rivals’ illegal businesses and crimes. As a result, “the ‘price tag’ for political protection is increasing and those who are not willing to pay are made an example of.”
Galeotti says there are now three generations of criminal groupings in Russia: The oldest group is made up of those who came out of the gulag, including the vory v zakone. Then there are the avtoritety, referred to earlier. Many of these criminal entrepreneurs have moved into the upper levels of the economic and political systems. The newest and third generation is comprised of criminal operatives who likewise have embedded themselves in the ruling political and economic apparatus. Galeotti says “these [latter] criminals come from within the elite and although they are cosmopolitan, educated in the West, and know how to operate internationally, they have opted to continue the criminal activities of their parents as an easy and quick way of making big money.”
The kind of sucker mentality that is a legacy of the Russian experience obviously continues to be very much alive and well – not only in Russia but also in Russian e´migre´ communities overseas as well. This is a mentality that extolls getting ahead by getting over. It is based upon an inherent belief that one generally moves up and makes it in the world, not by hard and honest work which is for suckers but rather by scheming and scamming and by using blat.
Combating Russian Organized Crime
The current environment in Russia is very conducive to the emergence and sustenance of organized crime and to the export of that crime abroad. Among the structural tools any society needs to resist and combat organized crime are an aware and active civil society, a culture of lawfulness, and a strong public disgust for crime and corruption. At least partly as a legacy of its connive to survive history, such society and culture do not now exist in Russia. Also needed, but likewise in still quite an anemic state for some of the same reasons, is an independent and incorruptible legal and judicial system.
Russia does not have effective legal tools for fighting organized crime nor does it have an effective law enforcement system. As Serio (2008) has noted:
…in order to create an effective organized crime control program, five elements are needed. First, criminal statutes which allow for the prosecution of a criminal enterprise as a whole.. ..Second, there need to be laws which allow for the use of confidential informants and undercover operations. Third, the use of cooperating witness testimony in court proceedings is critical for the successful prosecution of organized crime cases. Fourth, the legal base must permit electronic surveillance and the use of wiretap evidence in court proceedings. And fifth, an effective witness protection program must be in place. Virtually none of these tools are in place in Russia in a meaningful way…
There are a number of explanations for why these legal tools are unavailable or limited in Russia, ranging from holdover concerns about having too much power put into the hands of prosecutors or other law enforcement entities (where it has been abused in the past) to the fact there are a number of occupants of the Russian parliament who are or have been either directly or indirectly involved in organized crime and thus have reason to protect those interests by blocking the passage of certain laws.
“Russian Mafia” Abroad
It has been estimated by the Russian Ministry of Internal Affairs (MIA) that there are some so-named Russian criminal groups operating in upwards of 50 countries. Their greatest presence is in Europe and North America, but they have also shown up in Australia and Israel, for example. As in other historical instances of organized crime, for example, La Cosa Nostra, the most opportune locations for this Russian crime are where there is a budding Russian community that creates a critical mass for victimization. A common language, common culture, common fear of law enforcement, ignorance and distrust of local institutions, and family members back in the former USSR present an inviting target and criminal opportunity.
Russian criminals are known to have been active in the United States since the mid-1970s. Their activity at that time was, however, quite limited and localized in the main Russian-speaking community in Brighton Beach, in Brooklyn, New York. During the 1980s, the numbers of persons from the former Soviet Union allegedly involved in crime grew, and the crimes themselves became more sophisticated and organized. For example, a series of bootleg gasoline tax evasion schemes netted their perpetrators millions of dollars.
Although the types of crimes typically perpetrated require organization to carry them off, the criminal groups engaged in them do not generally possess the characteristics most associated with traditional organized crime. Instead, they have loosely connected and fluid criminal networks. These do not have continuity over time and crimes. They do not have hierarchical structures. They do not attempt to gain monopolization of the criminal market, nor do they systematically use violence and corruption to further their ends. This is not to say they are not violent, for example, but rather that their use of violence tends to be more situation specific and sporadic than systematic. Violence tends to be most associated with their extortion and protection rackets. Most importantly for this discussion, these kinds of free-floating networks do not have any of the characteristics associated with traditional notions of what a mafia is and looks like.
Growing beyond the initial Brighton Beach location, Russian (or better Eurasian) criminals have more recently been said to be active in major metropolitan areas in a number of US states, with California being a particular case. There, Eurasian Organized Crime (EOC) is principally made up of Armenians, Russians, and Ukrainians. Their criminal activities include firearms trafficking, auto theft, cargo theft, extortion, murder, prostitution, money laundering, drugs, and human smuggling and trafficking. Their real specialties, however, are health care and financial frauds. They are said to familiarize themselves with both state and federal government health care policies so as to bilk insurance companies and programs such as Medicare and Medicaid. They engage as well in a wide variety of other frauds. It is this specialization, along with such crimes as identity theft, the black market purchases of various kinds of professional licensing, and staged auto accidents, that most clearly demonstrate the continuing effects of the kind of criminal socialization that gave birth to today’s criminals from the former Soviet Union. It is this that is the legacy of the hundreds of years of Russian history.
Two of the better known US prosecutions of criminals from the former Soviet Union are the cases involving Vyacheslav Ivankov, who was Russian, and Semyon Mogilevich, who is Ukrainian. Ivankov, who was nicknamed Yaponchik or Little Japanese, was convicted in 1996 of extortion and marriage fraud. He served 7 years in prison in the United States and was then deported back to Russia where he was subsequently assassinated. He is believed to have been a vor and the highest ranking Russian organized crime figure ever in the United States. The Mogilevich case, involving an ongoing prosecution, charges Mogilevich and others with a scheme to defraud investors in the Canadian company YBM Magnex International, Inc. The specific charges are wire fraud, mail fraud, and money laundering.
Given their history, as we see, the predominant crimes of persons from the former USSR in the United States are frauds and scams. The criminal networks they have established are diverse in the criminal opportunities they exploit, and they reflect a blend of legal and illegal activities. Their crimes reflect their descent from the old system of blat, the black market, and the shadow economy. What these criminal networks and their activities do not resemble, however, is what is commonly accepted as constituting that we know as a mafia or at least something that is mafia-like.
So is there a Russian mafia after all? In Russia itself, there are certainly criminal organizations that look and act like a mafia. They have indeed penetrated and embedded themselves in the governing apparatus and are running a number of security operations that entail functions normally in the domain of government. Some experts believe that there is such a nexus between the state and organized crime in Russia and that organized crime has actually become an instrument of state power. Particularly significant, they believe, is the presence of organized crime in such strategic markets as energy and metals, as well as with respect to nuclear power. Another area of both domestic and international threat is in cybercrime, where Russia has many sophisticated perpetrators that are instruments of Russian organized crime.
There are a number of other criminal groups in Russia, however, that although similarly labeled as being mafias, do not actually have mafia trappings. And interestingly, even in Russia, a large number (perhaps even a majority) of criminal groups are not actually or solely Russian. Instead, they are Chechen, Azeri, Dagestani, and Georgian, among others. Of the estimated 800–1,000 or so vory v zakone still believed to be active in organized crime groups, the majority of them are said by the MIA to be Georgian.
Without a doubt, organized crime emanating from the former Soviet Union is a major threat, both domestically and internationally. In this sense, it does not matter that “it” is neither Russian nor a mafia. The extent to which a variety of criminal groups under this label have infiltrated business and government in Russia threatens the possibilities for progressive reform and could threaten the stability and national security of the country. Abroad, the ease of international travel, the liberalization of emigration policies, the expansion of foreign trade, the high-tech nature of communications, and the possibilities for money laundering are all changes and vulnerabilities being exploited by criminals from the former Soviet Union. Whatever the label, more and better tools, and more and better collaboration and cooperation within the world community to combat this problem are in everyone’s interests.
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