“In one shoot-out, the KGB found themselves up against men from the interior ministry, as the security services were effectively privatised, each arm guarding a different client.”

Toby Clements reviews McMafia: Crime without Frontiers by Misha Glenny –

By the Mafia, Misha Glenny means any group of organised criminals, not just those with their roots in Sicily. Balkan cigarette smugglers, Nigerian internet phishers, Russian oligarchs, Chinese snakehead people-traffickers, South African drug lords, Bombay extortion-racketeers, Israeli money-launderers and Brazilian cyber-thieves are among the many who play their part in a complex network of links that the author estimates makes up nearly 20 per cent of global trade.

… Where did all this money come from? In a word, Russia.

… Stark differences in wealth is one thing that typically excites criminal activity, but as … traders grew luridly wealthy, the state institutions collapsed around them, and services such as the KGB found themselves without prestige, money or purpose.

A supply of bored young men with guns is the other stimulus to crime, and soon the oligarchs needed bodyguards. In one shoot-out, the KGB found themselves up against men from the interior ministry, as the security services were effectively privatised, each arm guarding a different client.

Toby Clements @ The Telegraph : Link.

Via The Day They Tried to Kill Me: Link.

McMafia: Crime Without Frontiers, by Misha Glenny: Amazon: Link.

“What Iran plans to do in the long run is quite daring: to confront head-on Anglo-American energy/corporate banking domination of the international oil trade. “

The Iranian oil bourse — the first oil, gas and petrochemical exchange in the Islamic Republic, and the first within the Organization of Petroleum Exporting Countries (OPEC) — was launched on Sunday by Iran’s Oil Minister Gholam-Hossein Nozari, flanked by Minister of Economy and Financial Affairs Davoud Danesh Ja’fari, the man who will head the exchange.

… Transactions at this early stage will be in Iran’s currency, the rial, according to Nozari, ending worldwide speculation that the bourse would start trading in euros. The Iranian ambassador to Russia, Gholam-Reza Ansari, has said that “in the future, we’ll be able to use the ruble, Russia’s national currency, in our operations”. He added that “Russia and Iran, two major producers of the world’s energy, should encourage oil and gas transactions in various non-dollar currencies, releasing the world from being a slave of the dollar.”

Russia’s First Deputy Prime Minister Dmitry Medvedev said last week that “the ruble will de facto become one of the regional reserve currencies”.

The opening of the exchange is just what the Iranians are calling the first phase. Ultimately, it is intended that it will compete directly against London’s International Petroleum Exchange (IPE) and the New York Mercantile Exchange (NYMEX), both owned by US corporations (since 2001, NYMEX has been owned by a consortium that includes BP, Goldman Sachs and Morgan Stanley). What Iran plans to do in the long run is quite daring: to confront head-on Anglo-American energy/corporate banking domination of the international oil trade.

- Pepe Escobar, Asia Times Online: Link.

[Image: “About 20 brokers are already active in Iran’s newly-established oil stock market.” Via Alalam News: Link.]

Iranian Oil Bourse @ Wikipedia

“Virtually all key positions in Russian political life — in government and the economy — are controlled by the so-called “siloviki,” a blanket term to describe the network of former and current state-security officers with personal ties to the Soviet-era KGB and its successor agencies. “

The unexpected replacement of former Prime Minister Mikhail Fradkov by former Federal Financial Monitoring Service Director Viktor Zubkov is the latest consolidation of this group’s grip on power in Russia. Although Zubkov is not an intelligence officer by background, he has become one de facto during his years at the Financial Monitoring Service, and he has intimate knowledge of where the country’s legal and illegal assets are to be found.

Never in Russian or Soviet history has the political and economic influence of the security organs been as widespread as it is now.

The core of the siloviki group, led by former KGB officer and Federal Security Service (FSB) Director Vladimir Putin himself, comprises about 6,000 security-service alumni who entered the corridors of power during Putin’s first term. Now, as Putin’s second term winds down, their clout is virtually unassailable.

- Victor Yasmann, September 17, 2007 (Radio Free Europe/Radio Liberty). Link.

“Russia’s Espiocrats”

“The plutocrats have been tamed, and replaced by a vast horde of spies. Much as this ominous prospect gives me pause, I have to think that maybe the siloviki are an *improvement* over the former semibankyrshina. Those moguls were a deeply unpleasant lot, and think what you may of Putin’s spy petrocracy with its giant bombs, oil blackmail and hideously poisoned dissidents, he is hugely popular with the general Russian population. ”

- Bruce Sterling @ Wired: Link.

“Ex-spook cult now running most of Russian politics”

“Russian political life has been usurped by “siloviki” — ex-spies — who have apparently seized power from the small network of hyper-rich plutocratic “bankers” who rose to power after the Wall came down. The siloviki are a tight mafiyeh whose methods include high-profile international assassination of defectors (the assassins walk free and then run for high office).

- Cory Doctorow @ Boing Boing: Link.

“What motivates these so-called siloviki? “

In part, the wish for revenge on those who challenged them in the early 1990s, especially after the abortive KGB coup of August 1991. Greed may be the most powerful motive: some Kremlin insiders have hugely enriched themselves in the past decade, and corruption may be worse even than in the later Yeltsin years. But the new elite also has an ideology of sorts. They see the break-up of the Soviet Union as, in Mr Putin’s words, the “greatest geopolitical catastrophe” of the 20th century. Capitalising on a widespread sense that Russia has been humiliated, they want to create as mighty a state as the Soviet Union once was. They see the West as a foe bent on stopping them.

- The Economist: Aug 23rd 2007 Link.

“Vladimir Vladimirovich Putin and His Style of Democracy”

In his first decade as a KGB agent, Putin’s job was to help prevent change. In 1985, only months before Mikhail Gorbachev arrived in power and started to advocate glasnost and perestroika, Putin was assigned to the Soviet Union’s hardline ally East Germany. True, it was not “exile”; but psychologically, Putin’s isolation in Dresden may have been experienced as emigration. Like a true emigrant, he kept his home alive, sweet and unchanged, in his heart: the Soviet rodina, the place of his youth, his parents - and his tongue.

While his generation personally experienced the erosion of Soviet power, Putin spent the Gorbachev years in an East German time-bubble, isolated both from a Russian society in transition and (as a KGB bureaucrat) from his crumbling host country as well. He missed the moments of awakening, the years full of hope as the Soviet empire crumbled, when millions took to the streets and democracy was a dream. It was only after the fall of Soviet power that he returned from Germany to his native St Petersburg.

To this day, Putin seems to be nostalgic for the pre-Gorbachev USSR - like the people of a decade older than him, who have been unable to make the transition. He has even reinstated some of its insignia, such as the Soviet anthem and the red banner for the military. And his team consists mostly of so-called siloviki, former Soviet military and security-apparatus officers who also speak the language of the past.

- Vichar Bhatt: Link.

“Siloviki Versus Oligarchy”

Russia today is ruled by Vladimir Putin’s siloviki, former K.G.B. men and military officers who have the nation by the throat. That power-hungry mafia (the Russian word is rooted in “power”) brooks no opposition from either the small band of democratic reformers or the political leftovers from the Yeltsin regime.

Only one power center posed a threat to the siloviki’s domination of Russian life. This was the group of oligarchs, who became the super-rich by ripping off the old Soviet Union’s natural resources when Communism collapsed.

The K.G.B.’s Putin came to power by making a deal: we of the siloviki run the country, and you oligarchs can keep your ill-gotten gains — provided you cut us in on some of the money and stay out of politics.

- William Safire @ New York Times, November 5, 2003: Link.

“Silovik (силови́к, plural: siloviks or siloviki, силовики́, from a Russian word for power)”

“[A] Russian politician from the old security or military services, often the KGB and military officers or other security services who came into power in the terms of Boris Yeltsin or Vladimir Putin.

Opinions concerning siloviki in Russia are polarized. Some argue that the siloviki have Russia by the throat and threaten the fragile democracy; their power is immense, and they tend to favor a statist ideology at the expense of individual rights and freedoms.

Another point of view in Russia is that the siloviki are an appropriate counterweight to the Russian oligarchs, who might otherwise loot Russia and subvert its government.

- Wikipedia: Link.

“This marriage of Classic Russian Literature and the Caped Crusader of Gotham … serves as further proof, if any were needed, that everything is better with Batman.”

Time for another forgotten classic from the vast Again With the Comics archives. Here we present Dostoyevsky Comics, originally printed in Drawn and Quarterly #3 (2000), and currently out-of-print, as far as I know. Crime and Punishment, originally written by Fyodor Dostoyevsky, was brilliantly adapted here by R. Sikoryak, as seen through a Dick Sprang Batman filter. This marriage of Classic Russian Literature and the Caped Crusader of Gotham also serves as further proof, if any were needed, that everything is better with Batman.

Brian Hughes @ Again With the Comics.
Link .

Via Boing Boing.

September 14, 2006:
Russian Central Bank reformer Andrei Kozlov gunned down —

Andrei Kozlov, who had spearheaded the campaign against fraudulent banks and money laundering as the No. 2 official at the Central Bank, died of gunshot wounds early Thursday.

Kozlov, 41, the bank’s first deputy head, and his driver, Alexander Semyonov, 54, were shot by two gunmen with automatic pistols Wednesday evening as Kozlov was exiting the Spartak sports complex.

… A longtime Central Bank official, Kozlov oversaw the closure of 44 banks accused of improper activities this year alone. He had also pushed for mandatory deposit insurance for banks, which was particularly important to millions of Russians who lost their savings in financial crises in the 1990s.

Most recently, he had lobbied for a permanent ban on those convicted of tax evasion from working in the banking sector.

Kozlov’s killing has raised concerns among many in the banking sector that these reforms and others could be stalled.

While the investigation has just begun, several senior government officials and banking sector experts said Kozlov died because of his work.

“He was a very brave and honest man, and through his activity he repeatedly encroached on the interests of unprincipled financiers,” Finance Minister Alexei Kudrin said in a statement Thursday.

Born in Moscow on Jan. 6, 1965, Kozlov, started his career at the State Bank of the Soviet Union in 1989. He joined the Central Bank after the 1991 Soviet collapse, reaching the bank’s highest echelons by the mid-1990s and becoming first deputy head in 1997.

From 1999 to 2001, Kozlov took a break from government. During that time, he served as board chairman of the Russky Standard bank and also worked for a subsidiary of Aeroflot.

Kozlov is survived by his wife, Yekaterina, and three children.

[Moscow Times: Link]

Andrew Osborn reports from Moscow –

Russian President Vladimir Putin has warned that his country’s battle with organised crime has entered a dangerous new phase after the assassination of a top anti-money-laundering official.

Putin called [Kozlov’s] murder “a manifestation of the intensifying situation in the struggle against crime” and ordered a special task force be established to staunch the rivers of dirty money that flow through Russia every day.

… It is no exaggeration to say that Kozlov’s slaying was the most high- profile murder of a senior official since Putin came to power six years ago; his rank was close to that of a government minister. Senior politicians called the attack an assault on the government itself and said it shattered an unspoken truce between the Kremlin and the Russian mafia, a catch-all phrase for scores of highly organised criminal groupings that have sprung up since the collapse of the Soviet Union.

In the chaotic 1990s, the Mafia routinely “eliminated” awkward politicians and officials, but since the tough- talking Putin took the reins of power it had backed away from such terror tactics and was thought to have opted instead for a veneer of respectability.

That “truce” now appears to have been torn up overnight.

Kozlov … had shut down dozens of “dirty” banks after revealing that they were fronts for money launderers.

Perhaps more significantly, he planned to shut down dozens of others in the months and years ahead and kept a blacklist of financial institutions he suspected were “compromised” which he was working his way through.

… Kozlov had become adept at “following the money” and closing down such banks by withdrawing their licences and publicising their wrongdoing.

His most high-profile case came in 2004 when he took on the aptly named Sodbiznesbank, ironically a large contributor to Putin’s re-election campaign.

Kozlov accused the bank of accepting ransom money to the value of $1m (£532,000) from a well-known criminal group. The money was purportedly extorted from a Russian truck-maker called Kamaz, whose general director Viktor Faber was kidnapped along with the company’s chief economist Natalia Starodubtseva.

The kidnapping went badly wrong: both were abducted in May 2003 and found dead in September but the hostage-takers got their money nonetheless.

Kozlov suggested that the bank was implicated in the crime, said over 80% of its capital was fictitious, and ordered it to hand back its banking licence.

Sodbiznesbank’s defence mechanism was crude. It blocked access to its central Moscow office for two weeks during which time it allegedly spirited away millions of dollars of assets. In the end, Kozlov ordered in the riot police who stormed the offices ending the standoff.

Powerful vested interests were clearly upset though and the affair caught up with Alexander Slesarev, the 37-year-old owner of Sodbiznesbank bank, last October.

He was executed with his wife and daughter in a contract drive-by shooting just outside Moscow.

[Sunday Herald: Link]

Flashback 1997:
Business Week praises Andrei Kozlov for creating “Russia’s most liquid, clean, and efficient securities market” –

In 1992, Russia’s economy was in chaos. Inflation was 2,000%. Industrial output was falling. Trust in Boris N. Yeltsin’s radical reformers was nil.

But in the bowels of the Central Bank of Russia, Andrei A. Kozlov, 32, saw a way out. A staffer in the securities department, he heard a group of American bankers, including then New York Federal Reserve Bank President Gerald E. Corrigan, describe how the U.S. government finances its operations by borrowing money on capital markets. Kozlov vowed to develop Russia’s own government securities program. Says Kozlov: ‘’The attitude of the majority of higher-level government officials was, ‘Let these young guys play with their toys.”’

Five years later, Kozlov, is First Deputy Chairman of the Central Bank, and his ‘’toys'’ are bringing billions of dollars to the Russian budget. Using Corrigan’s advice, he created Russia’s most liquid, clean, and efficient securities market. Now, Russian and foreign investors feel confident enough to put over $50 billion in Russian Treasury bonds. Russia qualified for an international rating in September, 1996. Since then, Russians have sold more than $6.5 billion in Eurobonds. Says David Boren, Salomon Brothers’ emerging- markets research president: ‘’Kozlov was there early, he’s going to stay around a long time, and he’s clean.'’

[Link]

From the BBC:

Former Soviet leader Mikhail Gorbachev and [Alexander Lebedev] have bought a 49% stake in a leading Russian independent newspaper.

Mr Gorbachev told an international media forum in Moscow that Novaya Gazeta - often critical of the Kremlin - should maintain a plurality of views.

Mr Gorbachev pioneered the “glasnost” (openness) policy that demolished decades of Soviet censorship.

Critics say President Vladimir Putin now has too much media influence.

Russia’s main television channels are state-controlled and several major newspapers are owned by businesses friendly to the Kremlin.
[Link]

Mikhail Gorbachev is an interesting historical figure; in my eyes, a hero:

• Mikhail Gorbachev

Alexander Lebedev appears in “World’s Richest People” list at Forbes.com:

Net Worth: $1.6 bil

The wealthiest former Soviet intelligence officer turned businessman, Lebedev is also a parliamentary deputy. As a KGB agent in the 1980s he was involved in the effort to prevent capital flight from the Soviet Union. He also worked for five years at the Soviet embassy in London. As a businessman Lebedev has been especially successful in portfolio investing. His sizable holdings in Unified Energy Systems and Gazprom are now worth six times more than his core business, National Reserve Bank.
[Link]

Interview with Chalmers Johnson by Tom Engelhardt: “Johnson, who served as a lieutenant (jg) in the Navy in the early 1950s and from 1967 to 1973 was a consultant for the CIA, ran the Center for Chinese Studies at the University of California, Berkeley for years. He defended the Vietnam War (’In that I was distinctly a man of my times…’), but … ”

In 1989, [Soviet leader] Mikhail Gorbachev makes a decision. They could have stopped the Germans from tearing down the Berlin Wall, but for the future of Russia he decided he’d rather have friendly relations with Germany and France than with those miserable satellites Stalin had created in East Europe. So he just watches them tear it down and, at once, the whole Soviet empire starts to unravel. It’s the same sort of thing that might happen to us if we ever stood by and watched the Okinawans kick us out of Okinawa. I think our empire might unravel in a way you could never stop once it started.

The Soviet Union imploded. I thought: What an incredible vindication for the United States. Now it’s over, and the time has come for a real victory dividend, a genuine peace dividend. The question was: Would the U.S. behave as it had in the past when big wars came to an end? We disarmed so rapidly after World War II. Granted, in 1947 we started to rearm very rapidly, but by then our military was farcical. In 1989, what startled me almost more than the Wall coming down was this: As the entire justification for the Military-Industrial Complex, for the Pentagon apparatus, for the fleets around the world, for all our bases came to an end, the United States instantly – pure knee-jerk reaction – began to seek an alternative enemy. Our leaders simply could not contemplate dismantling the apparatus of the Cold War.

That was, I thought, shocking. I was no less shocked that the American public seemed indifferent. And what things they did do were disastrous. George Bush, the father, was President. He instantaneously declared that he was no longer interested in Afghanistan. It’s over. What a huge cost we’ve paid for that, for creating the largest clandestine operation we ever had and then just walking away, so that any Afghan we recruited in the 1980s in the fight against the Soviet Union instantaneously came to see us as the enemy – and started paying us back. The biggest blowback of the lot was, of course, 9/11, but there were plenty of them before then.

I was flabbergasted and felt the need to understand what had happened. The chief question that came to mind almost at once, as soon as it was clear that our part of the Cold War was going to be perpetuated – the same structure, the same military Keynesianism, an economy based largely on the building of weapons – was: Did this suggest that the Cold War was, in fact, a cover for something else; that something else being an American empire intentionally created during World War II as the successor to the British Empire?

Now that led me to say: Yes, the Cold War was not the clean-cut conflict between totalitarian and democratic values that we had claimed it to be. You can make something of a claim for that in Western Europe at certain points in the 1950s, but once you bring it into the global context, once you include China and our two East Asian wars, Korea and Vietnam, the whole thing breaks down badly and this caused me to realize that I had some rethinking to do. The wise-ass sophomore has said to me – this has happened a number of times – “Aren’t you being inconsistent?” I usually answer with the famous remark of John Maynard Keynes, the British economist, who, when once accused of being inconsistent, said to his questioner, “Well, when I get new information, I rethink my position. What, sir, do you do with new information?”