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Russia Is A Mafia State


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While the US diplomatic cables leaked to WikiLeaks have mostly failed to disclose anything about Russia that was not known before, the sheer volume of the documents depicting the vast system of corruption that the Kremlin’s puppet masters have dubbed the “power vertical” may indeed be a revelation to Western audiences.

Going through the trove of diplomatic cables leaked to WikiLeaks, The Guardian’s veteran correspondent, Luke Harding, describes Russia as a “corrupt, autocratic kleptocracy centred on the leadership of Vladimir Putin, in which officials, oligarchs, and organised crime are bound together to create a virtual mafia state.”

Arms trafficking, money laundering, personal enrichment, protection for gangsters, extortion and kickbacks, suitcases full of money, and secret offshore bank accounts in Cyprus: the cables paint a bleak picture of a political system in which it is often hard to distinguish between the activities of the government and organised crime.

At the summit of what is known in Russia as the power vertical lies the Kremlin, a prime beneficiary of the entrenched system of kickbacks, bribes, protection money and suspect contracts. Beneath the Kremlin is a broad layer of top officials – mayors and governors – collecting money based on bribes almost like their own personal taxation system.

The Kremlin’s spy agencies have such a close relationship with organised crime that Russia has become a “virtual mafia state.” Gangsters enjoy secret support and protection and in effect work “as a complement to state structures,” according to Spanish prosecutor José Grinda Gonzalez, who for ten years has battled the Russian mafia.

Gonzalez says Russia’s Federal Security Service (FSB), Foreign Intelligence Service (SVR), and Military Intelligence (GRU) control the country’s organised crime network. Spanish investigators have compiled a secret list of Russian prosecutors, senior military officers, and politicians linked to organised crime.

Gonzalez said it was an “unanswered question” to what extent Russia’s prime minister, Vladimir Putin, was personally “implicated in the Russian mafia and controls the mafia’s actions.” However, former US Secretary of State Condoleezza Rice alleged that Putin had secret assets hidden abroad.

Citing opposition sources, Rice said Putin refused to install a strong successor when he stepped down as president in 2008 because he was afraid he could become the target of “law enforcement investigations.” Putin’s objective at the time was to secure his “alleged illicit proceeds,” the cables from the Secretary of State’s office said.

Other classified cables referred repeatedly to the “secretive Swiss-based oil trading firm Gunvor” as an alleged source of Putin’s undisclosed wealth. The US ambassador in Moscow, John Beyrle, described the company as being closely connected to the Kremlin, and said its “secretive ownership is rumoured to include prime minister Putin.”

Three years ago, political analyst Stanislav Belkovsky estimated Putin’s worth at a minimum of USD 40bn (EUR 30bn). Putin ignored the story for several months, but eventually described reports that he had amassed a fortune through undisclosed links with business people as “just rubbish, picked out of someone’s nose.”

US ambassador Beyrle claimed that Moscow’s now former long-time mayor, Yuri Luzhkov, sat on top of a “pyramid of corruption” involving the Kremlin, Russia’s police force, its security service, political parties, and criminal syndicates. President Dmitry Medvedev sacked Luzhkov after allegations of corruption.

Beyrle asserted bluntly: “The Moscow city government’s direct links to criminality have led some to call it dysfunctional, and to assert that the government operates more as a kleptocracy than a government. Criminal elements enjoy protection that runs through the police, the FSB, Ministry of Interior, and the prosecutor’s office.

“Analysts identify a three-tiered structure in Moscow’s criminal world. Luzhkov is at the top. The FSB, MVD, and police are at the second level. Finally ordinary criminals and corrupt inspectors are at the lowest level.” Under this system, all businesses were forced to pay bribes to law enforcement structures, in a virtual parallel tax system.

This sleaze went all the way to the top of Russian power, Beyrle said. Bribes were distributed upwards under the “power vertical,” Putin’s bureaucratic hierarchy. The US ambassador quoted one source who said: “Everything depends on the Kremlin … Luzhkov, as well as many mayors and governors, pay off key insiders in the Kremlin.”

Transparency International’s 2009 survey showed Russia was the world’s most corrupt major economy. The report estimated bribery costs Russia USD 300bn (EUR 230bn) a year, nearly 18% of its GDP. The average bribe almost doubled from RUB 5,048 (EUR 131) in 2006 to RUB 8,887 (EUR 231) in 2010, Levada Center reported.

According to Beyrle, the same system of bribery worked in Russia’s provinces: “The governors collect money based on bribes, almost resembling a tax system, throughout their regions.” As in Moscow, businesses paid off the FSB, the interior ministry and the militia who “all have their distinctive money collection systems.”

Deputies in Russia’s parliament had to buy their seats in government, Beyrle suggested. “They need money to get to the top, but once they are there, their positions become quite lucrative money-making opportunities.” The allegations are most embarrassing for the Kremlin, after a high-profile campaign by Medvedev against corruption.

http://www.guardian.co.uk/world/series/us-embassy-cables-the-documents+russia


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