The end of organized crime in Russia

The new generation of Russian gangsters will

Sergei Mostovschikov

Something extraordinary happened on May 6, 1999. The Ministry of Justice of Sverdlovsk Province officially registered an organization with the unassuming, proletarian name of the Uralmash Socio-Political Committee (Uralmash SPC). The founders of this new group of like-minded enthusiasts included 23 legal entities. And why not? Congratulations, gentlemen, and good luck.

Nonetheless, the registration of this seemingly modest organization brought locals and even the government into apparent mental confusion. Who had actually dared to declare themselves to the state? The 23 entities mentioned above had been better known before May 6, 1999 as members of another, very different group of like-minded enthusiasts, the Uralmash Society of Perpetrators of Crime (Uralmash SPC), one of the largest and best known organization of its type in Russia.

Cold-blooded killers are clawing their way to the top, the boldest observers declared. But are they killers if no one has proved it, those with a greater penchant for rational thought wondered. Former gangsters want to create a more civilized relationship with their country, said meek liberals. In any case, something unheard of had happened in Ekaterinburg, that was clear. And Russia in general is brooding on this certain something. Thus, it makes sense to look more carefully the condition on the ground. Which is what we are about to do.

On the ground

Ekaterinburg simply reeks of scientific knowledge. Almost 200 plants, factories, and manufacturers were built by the Soviets, who also brought a large number of workers to this city of almost 1.5 million. At the same time, the Soviets also attracted knowledge, opening several decent educational institutions. This strange mixture of skill and intellect has made Ekaterinburg a city of genuine working class sagacity.

The beauty of this mix, to be blunt, is limited. Even in the hot days of summer, you can't help thinking that you're walking through the tidy, spacious clubroom of a locomotive factory. But the city has its charms. There are 14 television stations and 3000 political parties and movements. In the center of town stands the television tower from which several people fall every year, and the Grand Urals Hotel, where you have to leave a five ruble deposit on your room key (so you won't steal it) and where the elevator informs you that you should not use it during earthquakes (the last earthquake happened in 1913). And last but not least: Boris Yeltsin came from here. What a wise city indeed!

Ekaterinburg is organized according to the principle of industrial zones. The two main thoroughfares are Lenin Avenue, of course, and Malyshev (whoever that may be) Street. The rest of the city is divided into areas of dense worker population, little worlds with romantic names like ZhBI or Sorting Factory. These worlds have always related to each other in a particular way, rather like viruses and antibodies interact in a living organism. Moving from one world to another, especially after dark, used to have its consequences, in that someone sometime came along and smashed your skull.

The largest world, most isolated from rest of Ekaterinburg, is called Uralmash, after the factory which used to churn out unthinkable numbers of back hoes and such. While the back hoes marched off the assembly line, the children of the factory's employees ran through the street trying to find their way in life, a life without much variety or excitement.

Here's how some summarize the atmosphere of those times. Uralmash has just turned 50. A worker in a suit jacket glittering with medals for achievements in production stands in the middle of the street. The worker is drunk as a skunk. A dog stands next to him, barking and barking. "What are you yelling at, bitch?" the proletarian demands from the doggy, "Uralmash just turned 50!"

No one here would have ever dreamed of becoming a television personality or a famous scholar. Scholars and personalities were from another planet, unreachable by back hoe. But there was another way to break out of the world of Uralmash: become an Olympic champion. The whole neighborhood was obsessed with this idea and played sports in the hope of breaking through the daily grind by sheer muscle. But they didn't become champions. But their sweat and tears were transformed into a certain something.

That Certain Something

If someone had come up with the notion of opening a museum dedicated to the history of the gangsters of the Urals, things would be easier for us today. We would be standing in an elegant, air-conditioned hall with a marble floor and malachite columns. In small decorative fountains, plump puttis would pour cool water over little stone mountains. The gold-laden fingers of the tour guides would point out the different displays, directing the delighted curiosity of the crowd to the most elegant historical episodes. But this museum has never been built. We will have to take a tour of different sort.

We begin with some fuzzy, black-and-white photos from a decade ago, from which gaze the youthful faces of Uralmash sportsmen such as Grigori and Konstantin Tsyganov, Aleksandr Khabarov, Sergei Vorobyev. These are the very men who organized a gang to squeeze money from nascent traders. Flower sellers, market grannies, kiosks, and independent co-ops did not flourish under the good will of the government but under the heavy hand of working class gang members. Money, not the will of the party, began to call the shots at that time. Compact, quick, and ever present like bedbugs in a rural hotel, money climbed all over Russian society, causing serious irritation but evading the large yet clumsy hands of the state. Soon, however, a power came along capable of hunting down and controlling these pesky bugs.

That's what happened in Russia, patient readers. The simple kids from Uralmash, sons of back hoes, got hold of a method for hunting down money, albeit a primitive one. They were not content to chase after bedbugs, however, and had their eye on bigger prey. This prey smelled of export markets, metal trade, wholesaling. This meant rivers of money, the dream of every hungry kid. It was a time of easy victories. One good shot lasted a long time and no one seemed to notice the loss. But these boys were not alone on the hunt; other hunters were out there in the depth of the forest, called the Centers and the Blues. The Centers were not working class kids, but from the center of the city. The Blues were former prisoners, tattooed petty thieves following time-honored Soviet criminal traditions. Sooner or later, they were destined to meet. With this, our tour continues.

The War

The Ural Civil War began in 1992 according to local chronicles. The official reason for declaring war was the murder of one of the Tsyganov brothers, Grigori. He was shot in a quiet, green corner of Uralmash, right at home in his own kitchen. Someone shot him from a building across the street.

What followed his murder is still fresh in the minds of the war's participants, as well as local authorities. Governor Eduard Rossel, for instance, recalls with horror how in the city at that time five to ten people were murdered daily. Armed men appeared on the street, and things kept blowing up, burning down, or disappearing mysteriously. For the first time in Russia, people were talking about organized crime organizations battling for territory.

The first group to fall was the Blues. A prison tattoo on the arm of the fading Soviet power, they could only resist their enemies with old fashioned mythology, drawn from years of Soviet rule. A sleek organization, in which every member knew their place and acted with professionalism, an organization formed to democratically represent the interests of each soldier, ripped the pompous tattooed party to shreds. The next battle was more difficult, however. It was fought between the forces of liberalism and dictatorship. No more, no less.

The Uralmash criminal organization, with its deep roots in the working class, was always thought of as more democratic. Decisions were discussed as a group, and even the most unpleasant questions could be asked of the organization's leaders. The Centers were more inclined to intellectual cynicism. This group had a strict hierarchy, and members called up to see the leaders went shaking in their boots, wondering if they would come back alive. These two ideologies fought it out for over two years, with both sides claiming victory at different times. Yet in the end, the Uralmash boys' structure proved stronger, and they remained among the living.

No one was ever arrested or imprisoned for this war. All criminal proceedings initiated against the gangsters crumbled to dust. The murderers were never brought to justice, which locals see as a clear sign of the complicity and ineffectiveness of city authorities. However, there is reason to hope that a certain logic rules this other world, not simple amorality. If we take a step back, it starts to appear.

What becomes apparent is the fact that a war was not only being fought in the Urals, but all across Russia. This war was a civil war of sorts. The very civil war that public figures wore themselves out anticipating, that was whispered about in kitchens. It was a war of regimes, of poverty against wealth, of capitalism against communism. Call it what you will, but that doesn't change the fact that it was indeed a civil war.

We didn't participate in this war and never will. It seems the mafiosi fought it for us. The sons of back hoes made the ultimate sacrifice for us. They watered Russia's dry soil with their blood, making it ready for a new seed to take root. It has, and its name is capital.

Capital

As our tour moves on, we will examine your average mafioso. Please direct your attention to this model. You see the head is closely shaved and filled with a cold, glass-like material and the fingers are splayed in a typical, fan-like gesture. This is no working stiff; he does not make any bricks, hams, coal, fiberglass, or accordions. He is part of a system which redistributes the wealth created by others. At best, our friend here provides a service, which he calls "protection."

Quality "protection" is not cheap, of course. It allows its providers to make a profit and feel themselves God's gift to humanity for a certain time. Then, however, they realize that this protection is redundant and dusty and dull like…well, like the government. In fact, protection is one of the banal services the state provides to tax payers. It's a matter for boring bureaucrats like the president, prime minister, and those chumps that work for them, whoever they may be.

So, readers, moving on to where the real money is made. We straighten out the mafioso's fingers and give him a briefcase, slightly longer hair, and an auditor's suit. And now turn your attention to this diorama, which depicts the victorious Uralmash Society for Perpetrators of Crime's acquisition of property. Somewhere around 1993, all sectors of the regional economy which made money came under the control of Uralmash. Shops, gas stations, wholesale markets, stores, casinos, restaurants, stadiums-all the spoils of victory. The organization's power also extended beyond the Urals to one of Moscow's largest airports at the time, Domodedovo.

However, Uralmash eventually was forced to move from fast profits to longer-term investments. Not because of greed. It was sink or swim. The former sportsmen of Uralmash had gotten involved in a game with the strictest of rules. Keeping such a huge empire out of the government's sight took more and more resources. Moreover, progress moved ever forward, and where previously every kiosk needed its "protector," now no one knew what to do with all the mafiosi. In other words, Uralmash was forced to start investing in industry, real estate, and major construction projects.

The current state of the SPC's possessions is extremely complex, intentionally confusing, and incomprehensible to all but a limited few. However, based on sketchy evidence, it seems clear that the SPC owes controlling, blocking, or in some cases directing blocks of stock in non-ferrous metal production, as well as light industry and food and alcohol production. The Committee also owns several major hotels in Ekaterinburg, including the city's most expensive, the Atrium Palace Hotel, where a basic room costs 180 dollars a night.

Well, so what? The boys with baseball bats have come to resemble their former prey. The volume of Uralmash's total transactions nearly equals that of the entire the Sverdlovsk Province. This, dear readers, is clearly no joke. And it is no joke to try to hide this huge business from the government. This new creature needs to knew exactly where the government has dug its sneaky traps and needs to keep away from the forests teeming with the state's axe men.

Let us look at this creature, gentle readers! Here it stands in this corner, with huge tusks and tiny eyes. What lies inside its bullet-proof skull? What thoughts teem inside its terrifying head? Fortunately, there are specialists who can to tell us precisely that. These are their portraits in gilt frames here, with the names Sergei Golubev and Dmitri Karasiuk engraved underneath. The former is SPC's financial manager, and the latter is their PR specialist. Oh, readers! If only we could sit down and chew the fat with these two! Then we would have a clue!

The principles

So, let's start with Sergei Golubev, a muscular young man in jeans and a t-shirt, with glasses, a cell phone, and an economics degree. He doesn't work "at" Uralmash, but "for" Uralmash. That's how he prefers to put it. He was merely hired to service Uralmash's financial transactions, keep investment policy in order, and negotiate tax problems with the government. So, let's lean in close, look Sergei in the eyes, and find out what he's thinking. Apparently, his work will determine how fast things will change and the Russian shadow economy will come out into the sun.

Where can you catch up with Sergei? What is he up to in his capacity as manager? At the moment, Sergei Golubev is eating a pork chop with mushrooms and drinking a Miller in one of Ekaterinburg's sidewalk cafes.

"Hello, Sergei! How would you describe the current situation? What's the word of the moment?"

"Creation," Sergei replies. "We have to create. The era of mad consumption is past. Things were probably cool in the past, fancy imports, a luxury home, a mistress. But sooner or later, you start to realize that you can't cruise the city in two cars at the same time. Because your kids are already growing up. You need to do something more realistic, more real. You need to invest in your country. You need to play by its rules, no matter how ridiculous they may seem at the moment. We are investing practically all our profits in manufacturing. We are carefully paying all our taxes. Otherwise, there would no reason to stick around and try to do something. You have to think about your future."

"Too true, too true, Sergei. But there's a crucial difference here. You can work, and then you can work. How do you want to work?"

"Well, I think that it's still hard to say for sure in Russian today how to go about it. What are the people I represent interested in, though? They have already decided how they don't want to do things, even though they don't know exactly how they want to do things."

"I'm curious to hear more."

"Of course. It's all very simple. You don't cheat your associates and you don't steal money. You just don't. On principle."

Let's leave Sergei to his pork chop so that we can consider what he meant by "principle." It seems that the principles of dark and light have never been as confused as they are in Russia. Post-war crime organizations don't want to spend any more money on hiding their illegal activities. They want clean and clear profits. Similarly, the government simply cannot tolerate another, hostile economy. The dreams and ambitions of these two groups have become almost identical. At some point, they will have to converge and create an intense explosion and release of energy. That will herald the end of organized crime in Russia. It will also mean the beginning of Russia's economic prosperity.

The explosion

The other young man mentioned above, Dmitri Karasiuk, is responsible for bringing on this explosion and managing Uralmash's relations to the public. In all fairness, the former journalist is fairly intelligent in his conversation. From time to time, the public calls him up on his cell phone and asks him questions like, "Yo, D! Last night at the casino, someone started shooting a grenade launcher. Was that you guys?" Karasiuk usually answers along the lines of "oh, so if it's grenade launchers, it must be us? No way, it wasn't our guys." Karasiuk also loves to say things like, "We are not involved with guns, drugs, or hookers on principle. I mean, we're athletes and believe in a healthy lifestyle."

If you're not calling Karasiuk on his cell phone, but happen to be sitting with him drinking a beer, you can learn a lot more about how Uralmash tries to get its message out to the public. One of the first thing that comes up is Uralmash's unsuccessful attempt in the provincial elections a few years ago. The Committee decided to get its man into office via the Socialist Party for some reason. Why the Socialists, God only knows. According to Karasiuk, they decided that at least the Socialists weren't the Fascists or the Communists. It also turns out that buying a nomination from the Socialists was easier and more affordable. Despite this, the campaign did not yield any significant results. The party didn't even manage to get 3% of the vote. Then, in 1997, Uralmash's current director, Aleksandr Khabarov, ran for the State Duma. This plan, alas, also failed. Finally, in 1999, Khabarov and his cronies decided with unbelievable boldness to stop hiding behind other government-recognized organizations and to take their documents to the Ministry of Justice in order to register Uralmash.

"At first we wanted to use the popular abbreviation, OCG (organized crime group)," Karasiuk reminisces. "But we couldn't find a good word for the `G'. So we decided on SPC. At first, we really wanted to release a list of our honored members which would include some pretty famous people. So that we would be totally honest. But then we changed our minds and thought, screw it."

Of course, it would make sense to ask Dmitri why they wanted to register the organization and what kind of goals they have in mind. Yet any answer to these questions are far less interesting than the fact that they dared to register in the first place. Moreover, it is even more interesting to ask Dmitri about the public polls conducted regularly with the SPC's money. Here are the most recent results, when the public was asked to respond the question, "What, in your opinion, is Aleksandr Khabarov's profession?" Politician-replied 38% of those polled. Entrepreneur, said 30%. Criminal, answered 15%.

"We're working on that last figure," Dmitri said, "but we're in no hurry."

But we, on the other hand, must hurry to meet the hero of these polls, yes, Aleksandr Alekseyevich Khabarov himself, whom friends call simply Alekseyevich. He is waiting for us in his office overlooking the eleven abandoned chimneys of the Uralmash Factory. But before we get our chance to ask Alekseyevich all our questions, we should first talk to two rather important characters: Eduard Rossel, provincial governor, and Yuri Brusnitsyn, presidential representative. Their opinion is also quite relevant to our tale.

Rossel is famous in Ekaterinburg for one of his sentences which is quoted even by taxi drivers. When discussing organized crime with journalists one day, Rossel stated along the lines of: So what? Some guy comes to see me and I'm told he's a thief. So I say, hey, come on in, thief. Sit down, thief. Then I demand he invest money in construction. He does. And you call that a thief?

"I remember saying that," Eduard recalls. "I don't give a damn what they say about it. But I can tell you what I meant. If you say that someone is a criminal, you better be able to prove it. It's easier for me to think of people as thieves who buy property here and then renig on their obligations and skip town. We don't need that kind here. We need really owners, people willing to work and do something good for themselves and their country. I could care less about what people think about them."

Yuri Brusnitsyn puts it more metaphorically. He was initially against the Ministry of Justice registering Uralmash, but now says there were in fact no grounds for rejecting the application.

"You know, sometimes some has the flu," Yuri Brusnitsyn muses, "and you need to keep him away from the healthy. But soon he gets better and you can shake his hand without worrying about getting sick yourself. I think it's the same with Uralmash. Too much blood was spilled and it's too hard to think about that now. But we can't get away from the fact that they are operating legally now and we should treat them like any business people."

This brings to our next, and final, chapter.

The boss

Anyone who wants to learn more about Aleksandr Alekseyevich Khabarov needs only to consult the fat volume Who's Who in the Mid-Urals. On page 395, we see that A.A. Khabarov was born on April 25, 1957 in Sverdlovsk (now Ekaterinburg) to a military family. He studied physical education in college and directed several children's sport organizations. In 1996, he organized the Sverdlovsk Workers' Movement in support of Boris Yeltsin, for which Yeltsin sent him a personal letter of thanks and Rossel awarded him a pocket watch. Khabarov's current professional position is put quite modestly in Who's Who: vice-president of the Uralmash basketball club. Apparently, in earlier days, Khabarov's business card was even more modest: "Aleksandr Alekseyevich Khabarov, Ph.D. in Education." Now, however, his card states that Khabarov is the director of SPC Uralmash.

The boss rents a rather modest office on the twelfth floor of a tall building on one of the city's main streets. Leather couches, white walls, metal entry door with a single guard. Excuse me, who are you here to see? Right this way, please.

Aleksander Khabarov is a man of average height and a far from athletic build. His face would be completely ordinary if it weren't for his strange eyes. Not that they penetrate or see through you. No, they just look, look and know.

"What can I do for you?" asks the Boss.

"You might not believe this, but I was just curious. It's always interesting to find out what exactly is going on around the country…"

"I would also love to find that out."

"Don't you know?"

"No. I don't understand what's going on. Everyone keeps saying we are headed for a bright future. Great, I agree. But what does that mean? Let's take Napoleon, for instance. He said, okay, I'm marching on Moscow. That goal makes sense to me. It's extremely concrete. But what does it mean to head for a bright future? I don't know. Can we define what that means, on the national level? Tell me what that means and lay down the rules of the game, okay? Then tell people about it. People need to know."

"But as far as I know, you are trying to influence the rules?"

"Yes, we want our opinion to count. We aren't a state within a state. We are here and live just like everyone else. We live by the laws of the land. We are audited by the tax authorities more than anyone else. These audits have taught us to work so well, that I actually owe them a big thank-you. We're professionals now, and if someone thinks we're breaking the law, let him prove it."

"You are aware, of course, what people say about you."

"Yes, yes, I know what they say. Here I am, helping kid's sports teams, orphanages, boarding schools. And they say, oh, he's training new assassins. Really, why should I even try to convince them otherwise? I don't even like to talk about it. It's just stupid."

"What would you like to accomplish?"

"Me? I want to live here in peace. Nothing more. I don't to grovel to Europe and I don't want to be surrounded incompetence. I want stability. Our parents had their pensions, and it doesn't matter how big or small they were. They had them. That's stability."

"How can you achieve this?"

"I'm no Nostradamus. But I think that in every part of Russia there are healthy economic forces. This is my personal opinion. They will support economic growth. It just can't go on this way."

"Do you think you'll see this bright future yourself?"

"I think so. If not, then why have I been working so hard? Might as well just give up now!"

"By the way, what ever happened to the watch you got from Rossel?"

"Aw, it's at home. I'll pass it on to my kids. I am really proud of it. I wasn't just given the watch; I was honored with it. I was recognized as a human being."

With this, we must bid farewell to our hero. Perhaps, you, dear reader, have been left with a bad taste in your mouth. Perhaps part of you wants to reject such a romantic portrait of Russian organized crime. We intended nothing of the sort. There are no sly hints or assumptions here. It would be ridiculous to try to combine what, like oil and water, can never be combined, to demand the impossible. North, as they say, can never be south. Even a simple compass can tell you that.