'Virtual Mafia States': Russian Mafia an International Concern for US Diplomats

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'Virtual Mafia States': Russian Mafia an International Concern for US Diplomats

'Virtual Mafia States': Russian Mafia an International Concern for US Diplomats

By Uwe Klussmann

Leaked embassy cables show US diplomats are concerned about the growing power of Russian organized crime and believe it has contacts with the highest levels of government in Moscow.

US diplomats believe that organized crime connections are deep in Moscow.

The secret embassy reports read like descriptions of a small banana republic. The mayor of the capital city allegedly has "connections to the criminal world," a few of his friends, including members of parliament, are said to be little more than "bandits," with city officials supposedly "requiring bribes from businesses attempting to operate in the city." The mayor, US diplomats allege, "oversees a system in which it appears that almost everyone at every level is involved in some form of corruption or criminal behavior."

The US cable, dated Feb. 12, 2010, originated from one of the world's largest capitals, Moscow. Russian President Dmitry Medvedev fired Moscow Mayor Yuriy Luzhkov at the end of September because he is no longer trusted by the government. Nevertheless, the memos documented by the American diplomats show how the mafia appears to be deeply anchored in Russian society and to have ties with the government. US diplomats believe that some criminal masterminds have the blessing of people in the Kremlin and security services.

Even a tough approach on the part of Western investigators has done little harm to Moscow's mafiosi, a fact supported, for example, by memos from the US embassy in Madrid. During the summer and autumn of 2008, Spanish investigators conducted home raids and arrested a number of suspected members of the Russian mafia.

In October 2008, they raided the Mallorca vacation mansion of a Russian named Vladislav Reznik and issued an arrest warrant. Among other crimes, the Spanish suspected he was involved in money-laundering, an accusation Reznik denies. And the arrest warrant meant little, anyway, because the man lives in Moscow and has no reason to fear that Russian authorities would extradite him. He is the chair of the financial markets committee in the Duma, Russia's parliament. Prime Minister Vladimir Putin refers to him using the term of endearment "Slava," Russian for glory. The Russian prime minister has made it possible for the multimillionaire to rise to the executive board of his United Russia party and to become the deputy chairman of the party's group in the Duma.

Little More than 'Optimistic Statements'

The "public declarations by senior Spanish officials" in mid-2008 that they had successfully investigated and "decapitated" the Russian mafia in Spain were little more than "optimistic statements made in a moment of euphoria that did not reflect the current reality," an embassy report dated October 2009 read.

A Spanish national court prosecutor responsible for dealing with corruption and organized crime shared his views with the US ambassador in January 2010 after spending several years investigating the Russian mafia, and his conclusion sounds devastating. The investigator complained that it is bad enough that the "Eurasian mafia" retains the "best attorneys and law firms" in Spain. Even worse, though, he complained, is how deeply entangled the governments of Russia, Belarus and Chechnya are in organized crime. They are "virtual 'mafia states'," the cable states. And Ukraine is on its way to becoming one, it says.

"For each of those countries," the top prosecutor alleged, "one cannot differentiate between the activities of the government and organized crime groups." He said he believed that the Russian domestic intelligence agency once run by Putin, the FSB, is "absorbing" major mafia criminals.

The "Russian mafia," the Spaniard complained, already has "tremendous control" over "certain strategic sectors of the global economy," such as aluminium production. The fact that mafia clans are also powerful in Russia's provinces, is also made clear in reports from the US Consulate in Vladivostok. The port city on the Pacific Ocean is, according to the cables, an El Dorado for crooks.

'Corruption and Complicity'

"Fishing is often said to bet he most criminalized industry in the Russian Far East," one report from the US Consulate assesses. In the area, which shares borders with both China and North Korea, the diplomats also see the most illegal logging, with the "largest illegal cutting operations in Russia," according to a cable dated January 2009, often thanks to "corruption and complicity by the authorities."

Even 6,600 kilometers further to the west, Russia still appears to be far from becoming a country that observes the rule of law, according to a dossier from the Moscow Embassy about the Russian constituent Republic of Chechnya. The leadership style of President Ramzan Kadyrov is based on the "organization of corruption," the Americans claim.

The US diplomats suspect that Kadyrov has a "drive to eliminate potential rivals," and that he uses mafia methods to do so. This has enabled him to become the "strongest figure in the Caucasus." Kadyrov also has the support of the Kremlin. Presidential Administration Deputy Vladimir Surkov, whose father is Chechen, the memo claims, has "close ties to Kadyrov."

Many of the men who are observed with distrust by America's diplomats maintain the best possible contacts to Israel. One former leader of the Russian Jewish community, the US diplomats report, said that the Russian government hoped to use Jews who had emigrated to Israel as a "bridge between their homeland and adopted countries." Perhaps they could provide opportunities for investment and "give Russia access to Israeli technology."

'Murky, High-Stakes Gas Deals'

But there's also a dark side to trade and relations between Russia and Israel, the US Ambassador in Tel Aviv sums up in a May 2009 dispatch. "Many Russian oligarchs of Jewish origin and Jewish members of organized crime groups have received Israeli citizenship, or at least maintain residences in the country," the ambassador writes. Estimates provided by sources cultivated by the Americans within Israel indicate that within a short number of years, Russian organized crime groups in the country have "laundered as much as USD 10 billion through Israeli holdings."

Originals: The Key Russian Underworld Cables

Click on the headlines below to read the full texts...

Feb. 12, 2010 -- Moscow

May 15, 2009 -- Tel Aviv

Oct. 15, 2009 -- Madrid

Further cables track international deals by Russian businessmen. For example, diplomats report about the supposedly "murky, high-stakes gas deals" between Russia and the Ukraine through an intermediary, RosUkrEnergo. The company, owned by Moscow energy giant Gazprom and two Ukrainian businessmen, made money from January 2006 until January 2009 from Russian and Turkmen gas exports to Ukraine.

The Americans were alarmed by unconfirmed reports that the deals involved a man who is wanted by the FBI for a large number of alleged fraud cases: Seymon M., a citizen of Israel, Russia, Ukraine and Hungary. The Americans regard the man as a leading figure in the Russian underworld. He's an easy man to find, too: he lives in Moscow.

US diplomats found out a little more about him from a co-owner of RosUkrEnergo, who surprisingly rang up the American ambassador in Kiev and asked for a meeting. The information the guest provided in a two-and-a-half-hour conversation confirmed US fears. According to one cable, the RosUkrEnergo official saw Russian business interests "as the biggest threat to the country's security." One of the RosUkrEnergo owners had "ties to Russian organized crime figure Seymon M.," the cable said in a summary of the meeting.

The RosUkrEnergo co-owner -- regarded by the embassy as "arguably one Ukraine's most powerful people" -- had even required M.'s "approval to get into business in the first place."

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