The Mafia Threat to Freedom in Russia

The author examines the economic situation in Russia, with special reference to the Mafia-type terrorist organizations that have flourished and which are corrupting government officials as efforts are made to transfer economic assets from the Government to private ownership. Key Words: Russian economy, extortion, mafia, economic crime Russia has no semblance of democracy and is far from achieving real market reform. Russia's present rulers are hardly better than the Communists. A stable and tight oligarchy of 150-200 people is deciding the fate of the nation. For the past 10 years, leaders have robbed their own people of national wealth, pocketing billions of dollars, impoverishing millions and possibly leading to the death of thousands. Russia's economic chaos is the result of nearly criminal reforms that have created a new class of mafia capitalists. Alexander Solzhenitsyn' Since the dissolution of the Soviet Union on December 31, 1991, the struggle for power between various groups within the disintegrated state has yet to produce a visible and dominant leader. Boris Yeltsin claims to be the liberator of the Russian Federation and mediator of the other fifteen republics, guiding them towards democratic and market reforms. However, those who were once members of the political elite, the former Communists, still hold a majority of the political and economic authority in the former USSR. During the 1993 parliamentary elections, the Communists and nationalists gained a large share of the State Duma's seats, and Communist Party leader Gennadii Zyuganov and the Liberal Democratic Party leader Zhirnovsky both grew more popular and influential. Zhirnovsky's faction received 23 percent of the votes.2 In order to avoid a Communist victory in the 1996 presidential elections, seven prominent bankers provided approximately three million dollars as well as most of the media's attention to Yeltsin's campaign. These bankers feared that a return to power of the Communists would eliminate privatization.' Following his electoral victory, and in gratitude for their assistance, President Yeltsin appointed these seven bankers to senior cabinet positions. Unfortunately the close relationship between organized crime and bureaucratic corruption is undermining the trend toward political and economic privatization in Russia today. As the bonds between organized crime and governmental corruption continue to strengthen, a return to totalitarian rule becomes a possible outcome. This paper seeks to expose organized crime's relationship to the totalitarian model. In addition, it discusses the current state of the Russian economy, and how crime-induced instability is impeding democracy. Finally, it identifies the three different paths Russia could possibly pursue, dependent on the relative strength of the relationship between government corruption and organized crime, and the ability of non-corrupt reformers to combat these two forces. When Communist Party officials realized that the Soviet Union was crumbling in the early 1990s, those who managed or had access to the state's financial resources privately transferred substantial state assets into their own private accounts. Those same criminal bureaucrats, often retaining close ties to members of the state bureaucracy, are consequently once again controlling and monopolizing the Russian economy by virtue of their new status as major actors amongst "Russia's most influential bank managers company directors, and heads of commercial enterprises."4 Dr. Louise Shelley testifies that the new type of thief within the Russian Federation has "one foot in the old black market world, the old criminal world, and another foot in the official world, the world of politics and the old structure of the party."5 Today, many purportedly pro-democracy officials are adding to the level of corruption. Government officials frequently charge rival officials in government or in rival businesses with being guilty of corruption or of cooperating with organized criminals in order to oust them from their positions or diminish their powers. …