YETT Young Experts’ Think Tank

Lindsay Haselton

The Emergence of the Russian Mafia

While many scholars emphasize the strong emergence of the Russian mafia after the collapse of the Soviet state to a free market democracy, others argue that the emergence, more accurately, can be traced to the country’s criminal tradition and its ensuing development. A closer look at Russia’s criminal tradition makes it apparent that the emergence of the Russian mafia was not a spontaneous development – a product of the temporary dislocations and uncertainties of the country’s transition from a Soviet state to a free market democracy – rather, its emergence was made possible by an existing criminal culture. An examination of the emergence of organized crime groups during Tsarist and Soviet Russia is necessary in order to set a context for the increase in mafia activity that has dominated the Russian economy and society in the post-Soviet era.

Russia is a society whose centuries-old attitudes towards various kinds of crime still prevail. The prevalent attitudes reflect the stages of social development that Russia has undergone, as well as the influence of specifically Russian factors such as geography, climate and religion.[1] According to Mark Galeotti, Russia’s criminal tradition originated from the abuse of power exercised by the monarchy under absolutist rule. Russia, according to Galeotti, never developed under the rule of law because the absolute state, under Tsarist rule, reserved itself to absolute power over the lives of its subjects and willingly sacrificed them in its own interests regardless of the spirit of the law.[2] The tension and levels of inequality between rulers and ruled remained so strong so that even at the beginning of the twentieth century, social relations could almost be described as feudal. At the same time, Russian society was historically under-policed and corrupt. In response, citizens replied with banditry, uprisings and widespread criminality.[3] One part of this culture of underground resistance was the rise of a coherent “criminal class” who were symbols of struggle against landowners and the oppressive Tsarist state.[4] Later, by the late nineteenth century, this criminal class developed into a vorovskoi mir, or “Thieves’ World.”[5] The vorovskoi mir observed a complex set of rules and prohibitions that regulated their relations with one another, with authorities and with outsiders.[6] Furthermore, the vorovskoi mir had its own language: a visual code of tattoos and a complex hierarchy.[7]

The traditional gang structure that developed during tsarist times, fortified by a code of honour and rituals that discouraged outsiders, became a model for organizations formed during the Revolutionary period. It seems that two branches of mafia-style organizations developed during this time: one with the goal of establishing the Bolshevik state, and the other with the goal of destroying it. The first type of criminal group was developed by the founders of the Soviet state who admired the gangs during tsarist times for their antiestablishment ethos.[8] Early revolutionaries borrowed ideas and practices from bandits such as the revolutionary practice of expropriation which was recognized at the time to be a positive version of banditry that took from the rich to give to the poor.[9] Criminal groups were regarded as liberators of the people and resorted to pillage and terror only as a means of raising funds for their cause. The pro-Soviet gangs were secured employment during the revolution – called for bank heists and kidnappings in order to raise funds.[10] Bolshevik leaders energetically supported gang activity as they viewed mob violence and theft as a means of destroying the old regime.[11] According to Stephen Handelman, the young Josef Stalin counted gang leaders among his closest associates and eventually recruited some of them into his secret police. Moreover, after the establishment of Soviet power, members of the criminal group were used as enforcers and informers against political dissidents in the gulag prison system.[12]

Upon the victory of the Bolshevik Revolution in 1917, however, a second type of criminal group formed as an expression of a political rejection of Bolshevik rule.[13] Criminal activity took the form of counter-revolutionary banditry carried out by associations of former capitalists and aristocrats, White sympathizers, and disillusioned revolutionaries who operated outside the new formal hierarchies.[14] Much of the criminal counter-revolutionary movement was formed in labour camps and prisons in early Soviet times and was based on an ideological principal that called for the total rejection of the formal Soviet socioeconomic system.[15] However, up until World War II, these counter-revolutionary gangs neither threatened the status quo nor were of any potential benefits to the new regime; therefore, the Bolsheviks had no incentive to commit resources for their elimination or to engage with them in any compromise.[16] With the advent of World War II and the subsequent Nazi invasion of the Soviet Union, many counter-revolutionary gang members accepted an offer from Stalin to be sent to the front in exchange for their freedom once the war ended. The tug of patriotism outweighed the traditional vory ban on association with government as thousands of Russian gangsters joined their fellow citizens in the army or in munitions plants.[17] However, vengeful for their defiance of the socialist system, Stalin sent the cooperative criminals back to the prisons at the end of the war, hoping that they would eliminate each other. During the 1950s, thousands of convicts were beaten or killed in a “War of the Bitches” between those who violated the gangs’ rules and those who were faithful – reducing their numbers at a time when a new class of postwar criminals was starting to emerge.[18] Unlike the ideologically motivated criminal organizations during the tsarist and early Bolshevik eras, the postwar mafia organizations were the product of a devastated economy. The postwar mafia existed in order to survive: turning to crime for economic opportunity and pure material gain. In this sense, the two branches of mafia-style organizations that emerged during the Revolutionary era merged into one entity. The postwar mafia’s abandonment of its predecessors’ anti-state ideology opened up the possibility for gain via cooperation with the ruling power.[19]

The new type of Russian mafia during Stalinist times had less regard for the rules and traditions of the vorovskoi mir, therefore, it moved into more risky spheres of criminal behaviour such as bank fraud and drug trafficking.[20] At this stage of the development of the mafia the relationship between the mafia and the state was restricted to bribes offered to low-ranking levels of the Soviet government. The government’s power was independent of the mafia and could have eliminated it had it threatened the status quo.[21] During this time, however, incentives for the state to cooperate with the postwar breed of mafia lay at the core of the distribution system. The mafia provided Soviet bureaucrats with administrative rationings of non-tradable commodities at a time of relative scarcity; this resulted in the development of an underground economy whereby commodities were reserved by members of the government and diverted to informal or foreign markets where they could be sold at higher prices. With such an incentive to gain economically, Soviet bureaucrats were no longer willing to provide services to ordinary citizens, thus exacerbating existing shortages.[22] The state’s reliance on the mafia, therefore, stemmed from the economic profits that could be made from its dealings with the mafia. In turn, the increased strength and rise of the mafia in Russia, although it developed in opposition to the state, can mostly be attributed to its ability to act in symbiosis with the state.

The 1960s and 1970s saw a further blossoming of Russian organized crime with the emergence of the black market. During the Brezhnev era, the mafia assumed a greater importance as the most profitable form of cooperation between the state and mafia emerged.[23] Soviet gangsters acted as unofficial middlemen in the “gray” and “black” economies, circulating privately produced goods or state materials with the tacit cooperation of factory managers and apparatchiks.[24] Underground factories and the mafia supplied what the formal economy failed to supply with the cooperation of the highest levels of the Soviet administration. The absolute political power that corrupted the Soviet government induced it to solicit services rendered by the mafia through informal channels.[25] As Shevardnadze noted in 1991:

As long as there was a shortage of goods, food, and services, no matter how harsh the laws and how brutal the law-enforcement officers, (the) evil would not be eradicated. The sources for these ills (were) in the system itself… the conservatism in the economy, the centralized system, the monopoly on property.[26]

In the 1970s and 1980s, Russians first began to use the word “mafiya” to describe the vast networks of corruption lurking inside regional and central ministries.[27] Special arrangements were common in every industry connected with food, for example. In collaboration with the mafia, the Ministry of Fisheries sent top-quality caviare and seafood to special shops around the nation whose managers immediately sold the foodstuffs privately for amounts five or six times higher than the state price.[28]

The advent of perestroika did little to break the power of these networks. In fact, it brought various criminal strands of Soviet life together.[29] The secret wealth accumulated by mafia tycoons and party barons found a legitimate outlet when the government expanded the permissible area of private commerce. Gorbachev’s 1987 Law of State Enterprises gave independence to state enterprises and allowed joint ventures between business entrepreneurs and organized crime groups – sanctioning legal connections between the Soviet government and the mafia.[30] Soon after, the 1988 Law of Cooperatives lifted restrictions on types of activities of companies, profit, size, and pricing. The 1998 Law of Cooperatives allowed cooperatives to establish joint ventures with foreign firms, which in turn opened legal passages to Western banks, through which laundered money could find its way into the formal sphere. The combination of new laws, access to foreign capital, and infiltration of the mafia into the formal economy gave rise to a formation of elite mob entrepreneurs.[31] Russian entrepreneurs who tried to operate by the rules found it impossible to survive in the face of both official and criminal competitions. By the late 1980s, the majority of small cooperative businesses established during perestroika were either controlled by or heavily in debt to criminal elements.[32] The state, business entrepreneurs, and the mafia were presiding over the bulk of Soviet industrial wealth. On the eve of the failed August 1991 coup, the three structures were dependent on each other within a network of connections that made up the USSR’s economic infrastructure.[33] The stage was thus set for the shifting alliances and violent struggles that have come to characterize modern Russian organized crime.

It is important to note that unlike the American La Cosa Nostra (LCN), the Italian Mafia, Chinese Triads, and other ethnically-oriented organized-crime groups, modern Russian organized-crime does not fit into orderly models. According to a study conducted by the U.S. Federal Bureau of Investigation, in traditional organized-crime cases, identifying the leadership and chain of command of a target group contributes substantially to successful investigations and prosecutions. While traditional groups have permanent hierarchical structures and usually operate within specific geographical areas, the Russian mafia comprises amorphous gangs that act autonomously or have loose ties to regional, national, or international networks. Therefore, contrary to the media-promoted depiction of the "Russian Mafia" as a monolithic institution, Russian organized crime groups cannot be classified as distinct, centralized entities.[34] However, there is evidence that the modern Russian mafia gangs have developed a vocabulary of slang terms (see Appendix I).[35] Moreover, it is evident that most Russian gangs have a hierarchy, enforced by strict disciplinary sanctions; a restricted membership, and tight secrecy and compartmentalization.[36] A typical mafia boss controls four specialized criminal cells through a brigadier and two under bosses. Membership is often restricted based on ethnicity, kinship, race, criminal record, and other considerations. Outsiders find it very difficult to penetrate the ruling cadre, governed by a rigid 18-point “Thieves Code” of conduct (Vorovskoy Zakon), that if violated, is punishable by death.[37]

The problem of organized crime in post-Soviet Russia has become large and broad; however, the actual size and scope of the Russian mafia remains uncertain.[38] Reports of the number, size, and activities of the mafia vary greatly. Much of the information is often speculative, conflicting, or a combination thereof. For example, while official Russia reports have estimated that 3,000-5,000 criminal groups exist in Russia, the FBI estimates that approximately 80 major organized criminal groups operate in Russia.[39] The largest of these groups are the Dolgopruadnanskaya and the drug-running Solntsevskaya, with 5,000 members concentrated in the Moscow suburb of Solntsevo. Vyatcheslav “Little Japanese” Ivankov, one of Russia’s deadliest and most feared career criminals founded Solntsevskaya in 1980. The current leader of this cartel is Sergei Mikhailov who is presently being detained by the authorities in Switzerland.[40]

Notwithstanding the lack of clear information, the Russian mafia is unquestionably causing extensive harm in Russia. This damage results partly from traditional crimes, such as extortion, drug trafficking, gambling, prostitution, and fraud schemes. The demoralized and underpaid city police are ill equipped to curb the rising tide of violence or halt the nightly shootings. In 1993, Moscow police records show that there were more than 5,000 murders and 20,000 incidents of violent crime. Since then, conditions have only worsened. On average, 10,000 people die each year from gun violence—600 are contract killings.[41] More threatening, however, is the mafia’s collaboration with corrupt government officials and businessmen, which has been plundering Russia’s assets and moving billions of dollars out of the country.[42] According to a report by Citizenship and Immigration Canada, the Russian mafia controls 40,000 companies and accounts for up to 40% of Russia’s GNP.[43]

According to Martin McCauley, there are several main reasons why modern Russia has fallen pray to organized crime. [44] First, the manner in which the Soviet state dissolved in 1991. When Yeltsin took over in Russia in December 1991, a strong state was out of the question; moreover, Yeltsin had no similar institution to take the place of the Communist Party that held the Soviet Union together. Second, the type of economic reform that was chosen was unsuccessful. No attention was paid to state institutions when shock therapy economics were introduced in January 1992. For example, prices were liberalized or freed while only the prices of a few necessities were still controlled by the state.[45] When the state is weak one can make up the “rules of the game” when the market economy is launched. In Germany, in May 1945, for example, the first from under the rubble were the wheelers and dealers, pimps and conmen. The same thing happened in Russia: the most successful became “roving bandits.”[46] However, the “roving bandits” were already in place in Russia in January 1992 due to the historic connection between the state, business entrepreneurs and the mafia.

The mafia benefited from the collapse of the USSR because the 15 new nations (see below map) that emerged represented easy pickings for criminals who perceived the entire Eurasian continent as their natural domain.

Source: Microsoft Encarta, 2003

For instance, the smuggling trade flourished as enormous quantities of copper, zinc and other strategic metals were shipped from Russia to Baltic ports and then to Scandinavia or Western Europe.[47] Smuggling profits have formed the foundation of post-communist mafia wealth and the basis for the working cooperation between criminals and the nomenklatura. In 1995, for example, the Mafia murdered four executives in order to wrest control of the aluminum industry.[48] Russian authorities readily acknowledge that the mixture of unmonitored capitalism, organized crime and official chicanery has produced a crisis of governance; however, the mafia has perhaps become a dominant force in governing modern Russia as a natural response to the failure of the state to carry out various basic social functions.[49]

The Russian mafia is arguably the only Soviet institution that benefited from the collapse of the USSR. Upon its collapse, the control and ownership of state enterprises, specifically, the banking industry, became largely transferred to the hands of former business entrepreneurs and the mafia.[50] The state also handed over municipal properties to the mafia at fractions of their expected values.[51] Such massive redistribution of state funds, however, left the rest of the population subject to a predatory taxing system justified by the need to insure the survival or what remained of state institutions.[52] A Russian woman remarked to the media about the reforms instituted after the collapse of the USSR while lining up for food:

Reforms mean you can have a big car if you're in the mafia. Reforms mean hard-currency shops for a handful of people who have it. I'm a factory worker. I'll never have a big car or dollars, so reform for me will be when the milk isn't sour, that's all.[53]

A new group of wealthy Russians, known as the “New Rich,” has emerged – accumulating wealth through a combination of cronyism, hard work, and blatant theft. This accumulation has spawned envy, fascination, and some bitterness among many Russians. In 1997 the wealthiest 10 percent of Russians—almost all of them in the biggest cities, such as Moscow, Saint Petersburg, or Nizhniy Novgorod—earned about 15 times as much as the poorest 10 percent.[54] Michael Specter, a journalist for the New York Times, vividly describes the post-Soviet mafia situation in Russia:

Some say rapacious greed is a necessary start on the road to a free market. They point to Chicago in the 1920s and 1930s, when Al Capone and other gangsters dominated the underworld, and to the American robber barons of a century past. They are instructive but not totally apt comparisons: the price of wealth in Russia can be judged at the morgue. More than 100 people in Moscow alone—bankers, businessmen, mobsters—were killed in gangland slayings in 1997. Kidnappings have increased, and the rich have begun to retreat behind the giant, constantly protected walls of gated communities. Normal Russians grumble and laugh, often saying a fine bottle of Dom Pérignon cannot be worth losing your life—even a rich man’s life.[55]

While the Russian mafia appears to play a significant role in Russian politics and economics since the collapse of the Soviet state to a free market democracy, it is important to recognize the extent to which the mafia has been a governing body for hundreds of years in Russia. The emergence of the mafia began in Tsarist times in opposition to the absolutist power of the monarchy and later developed in opposition to the Bolshevik victory in 1917. The mafia later developed, however, in coordination with the Soviet state. The merging interests between the state and the mafia in Russia throughout the Soviet regime laid the foundations for the strength of the Russian mafia today. The emergence of the Russian mafia was not a spontaneous development; rather, its emergence was made possible by an existing criminal infrastructure within the Soviet system. Realizing this fact makes it more apparent as to why the Russian mafia has emerged as the dominant political and economic force in the post-Soviet era.

Appendix I

A Glossary of Street Slang[56]

Akademiya - Russian word meaning academy; used to mean jail or prison, where the underworld receives its real education.

Babki - The name of a children’s game similar to Pick-Up-Stix, but played with old soup bones. On the street it means money.

Blat - Originally used to describe someone in a prison camp who received protection because of personal ties to leading criminal figures. Now it means “clout.”

Boyevik - Mafia Soldier.

Buks - Borrowed from the English language, it is used for convertible currency such as the U.S. dollar.

Fartsofshchik - From the Russian root word for “swap”; the term used for a black marketer.

Frayeri - Common folk; used to refer to someone as a sucker.

Kidali - Meaning “throwers”; Mob jargon for a confidence man whose job is the scam.

Krestnii Otets - Godfather

Lomshchiki - Translated as “breakers”. These criminal specialize in the sleight-of-hand during money changing deals; known in the U.S. as “short-changing” someone.

Mafiya - Widely used in the 70’s to describe the corrupt networks of party officials and black market bosses. To an average Russian citizen the word can be applied to petty hoodlums terrorizing shopkeepers, as well as, to the greedy shopkeepers themselves; to members of crime syndicates, as well as, to the corrupt government officials cracking down on them; to people who kill for a living, as well as, to those who make a killing on the market.

Organizatsiya - Means an organization. Used for the Russian Mafiya.

Razborka - The common word for clarification, distinction of choice; also slang for the means by which rival criminal groups settle their conflicts.

Shestyorka - Literally translated as “the sixth”; insider’s lingo for a bag man, errand boy or other mob gofer, sort of an “associate”.

Suka - The Russian word for a female dog; a derogatory term for a militia officer. In prison it refers to anyone who cooperates with the authorities.

Utyuzhit firmu - Literally translated as “to iron the firm”. In street slang it refers to all foreigners, who are considered members of a “firm” in need of being “ironed”, or straightened out. In American slang “to rip off”.

Volk - Literally meaning “wolf”, a respectful slang term for a police officer or investigator.

Vorovskoi obshak - The communal fund made up of tributes to the Godfather, paid by members of the mob family and assorted racketeers under his protection. The money is used to bribe politicians and police, support families of criminals sent to prison, and pay off prison guards so mobsters behind bars do not have to break their backs with hard labor.

Bibliography

Chalidze, Valery. Criminal Russia: Essays on Crime in the Soviet Union. New York: Random House Inc., 1977.

Galeotti, Mark. “The Mafiya and the New Russia.” Australian Journal of Politics and History 44, 3 (1998): 415-29.

Handelman, Stephen. “The Russian ‘Mafiya.’” Foreign Affairs 73, 2 (March 1994): 83-96.

Handelman, Stephen. Comrade Criminal: The Theft of the Second Russian Revolution. London: Penguin Group, 1994.

Humphrey, Caroline. The Unmaking of Soviet Life: Everyday Economies after Socialism. Ithaca, NY: Cornell University Press, 2002.

Lindberg, Richard and Markovic, Vesna. “Organized Crime Outlook in New Russia.” <http://www.search-international.com/Articles/crime/russiacrime.htm>

McCauley, Martin. Bandits, Gangsters and the Mafia: Russia, the Baltic States and the CIS since 1992. London: Pearson Education Ltd., 2001.

O’Neal, Scott. “Russian Organized Crime.” FBI Law Enforcement Bulletin 69, 5 (May, 2000): 1-5.

Organized Crime Division, Citizenship and Immigration Canada. “The Four Characteristics Shared by Most Major Russian Gangs.”

Organized Crime Division, Citizenship and Immigration Canada. “The Russian Mafia.”

Tomass, Mark. “Mafianomics: How Did Mob Entrepreneurs Infiltrate and Dominate the Russian Economy?” Journal of Economic Issues 32, 2 (June, 1998): 565-574.

Volkov, Vadim. “Violent Entrepreneurship in Post-Communist Russia.” Europe-Asia Studies 51, 5 (1999): 741-754.

BACK

[1] Valery Chalidze, Criminal Russia: Essays on Crime in the Soviet Union (New York: Random House Inc., 1977), 3.

[2] Mark Galeotti, “The Mafiya and the New Russia,” Australian Journal of Politics and History 44, 3 (1998) 417.

[3] Galeotti, “The Mafiya and the New Russia,” 417.

[4] Stephen Handelman, “The Russian Mafiya,” Foreign Affairs 73, 2 (March 1994) 85-86.

[5] Galeotti, “The Mafiya and the New Russia,” 417.

[6] Vadim Volkov, “Violent Entrepreneurship in Post-Communist Russia,” Europe-Asia Studies 51, 5 (1999) 744.

[7] Galeotti, “The Mafiya and the New Russia,” 417.

[9] Caroline Humphrey, The Unmaking of Soviet Life: Everyday Economies after Socialism (Ithaca, NY: Cornell University Press, 2002), 103.

[13] Mark Tomass, “Mafianomics: How Did Mob Entrepreneurs Infiltrate and Dominate the Russian Economy?” Journal of Economic Issues 32, 2 (June, 1998) 566.

[17] Stephen Handelman, Comrade Criminal: The Theft of the Second Russian Revolution (London: Penguin Group, 1994), 30.

[26] Quoted by Handelman in Comrade Criminal, 55.

[32] Handelman, “The Russian Mafiya,” 87.

[34] Scott O’Neal, “Russian Organized Crime,” FBI Law Enforcement Bulletin, 69, 5 (May 2000) 1.

[36] “The Four Characteristics Shared by Most Major Russian Gangs,” Organized Crime Division, Citizenship and Immigration Canada.

[37] Richard Lindberg and Vesna Markovic, “Organized Crime Outlook in New Russia,” <http://www.search-international.com/Articles/crime/russiacrime.htm>

[40] Lindberg and Markovic, “Organized Crime Outlook in New Russia.”

[41] Lindberg and Markovic, “Organized Crime Outlook in New Russia.”

[43] “The Russian Mafia,” Organized Crime Division, Citizenship and Immigration Canada.

[44] Martin McCauley, Bandits, Gangsters and The Mafia: Russia, The Baltic States and the CIS since 1992 (London: Pearson Education Ltd., 2001), 2.

[45] McCauley, Bandits, Gangsters and The Mafia, 2-4.

[46] McCauley, Bandits, Gangsters and The Mafia, 6.

[47] Handelman, “The Russian Mafiya,” 87-88.

[48] Lindberg and Markovic, “Organized Crime Outlook in New Russia.”

[49] Galeotti, “The Mafiya and the New Russia,” 421.

[54] Michael Specter, “Russia’s New Rich,” in Microsoft Encarta, 2003.

[55] Michael Specter, “Russia’s New Rich,” in Microsoft Encarta, 2003.

[56] Lindberg and Markovic, “Organized Crime Outlook in New Russia.”