The Mafia, the Law and Radicalism

13 april 2004

Vladimir Ovchinsky

Resume: “You are all future jailbirds” was a slogan addressed to the business magnates whom the Russians refer to as the oligarchs; it became a leitmotif of the December 2003 Russian parliamentary elections. The root cause of this new type of social radicalism lies, first and foremost, in the feeling of being deceived.

“You are all future jailbirds” was a slogan addressed to the business magnates whom the Russians refer to as the oligarchs; it became a leitmotif of the December 2003 Russian parliamentary elections. The slogan adequately reflects the mood that is presently dominating Russian society, as the population generally feels more hostility toward the big business and the wealthy than it had for the former Communist Party nomenklatura back in the rebellious August of 1991.

The root cause of this new type of social radicalism lies, first and foremost, in the feeling of being deceived. This sentiment is currently shared by millions of people, whose aspirations have not come true. Nobel Prize winning economist, Joseph E. Stiglitz, compares the current level of inequality in Russia with the inequality in Latin American societies. There is a difference, though: in the Latin American countries, the inequality has evolved from its half-feudal legacy, whereas in Russia the inequality has been developing over the last fifteen years.


People at the grassroots level have acquired the conviction that the mafia – in the broadest sense of the word, it is an agglomeration of gangsters, racketeers, thieves, swindlers, corrupt officials, in association with businessmen who resort to their services – as opposed to narrowly viewed family-based or clan-based criminal communities, is the major source of deceit. In the era of Mikhail Gorbachev’s perestroika, the people traditionally associated the mafia with members of the Communist Party apparatus, the so-called nomenklatura – a tightly interconnected circle of people largely held together by internal corporate relationships. The perceptions of the mafia have changed since then, and it is primarily associated with oligarchs and democratic reformers. Right-wing political parties did talk extensively about fighting organized crime and corruption during the election campaign, but their proclamations were not radical enough for the radically-minded society, and most of the people found the talk about “future jailbirds” and “executions by firing squad” more acceptable than yet more promises to “pass new laws that will be more liberal than the old ones.”

Society’s extreme repulsion of the democratic reformers, so vividly manifested by their defeat in the election, is in many ways a reaction to the radical economic reforms. This is only natural, given the specificity of the society that has taken shape as a result of the transformation. Consider, for example, a report on Russian organized crime that was put together by the U.S. Center for Strategic and International Studies. It characterizes Russian society as a criminal-syndicate type, meaning that the state machinery is controlled by tightly interconnected corrupt officials, unscrupulous businessmen and criminals. International financier George Soros describes it as predatory capitalism, whereas Joseph Stiglitz describes it as a capitalism of clans and mafias, which he blames on the Russian reformers, the West in general, and the major international institutions – the IMF and the World Bank. Russian experts use another broad term – “the criminal community.”


The popularity of anti-mafia radicalism in the public’s mindset has reached the point where even scholars have been enchanted by the lust for blood and the idea of punitive measures, complete with severed heads rolling down from the scaffold. One such example is found in a textbook entitled Criminal Penology, whose author, Professor Oleg Starkov, suggests the following:

“A war on crime is a priority of the day, and it stipulates that the parties engage in a deadly armed fight. First, there is a need for a military operation by a National Guard or, before it is established, by special units that have the experience of combat actions, for example, in Chechnya. Those units shall be committed to the Constitution and the State Duma, and shall carry out total physical destruction of tracked, registered and well-evidenced leaders of criminal groups. These operations shall be carried out within a twenty-four hour period, and will remain under the control of the prosecution officials. This is the only feasible way of implementing the idea of society’s ‘necessary offensive,’ as well as rehabilitating the sphere of punishment. The legal foundations for such a program must be based on the articles of the Criminal Code specifying ‘forced attack’ and the ‘necessary defense of society’…

“In the second phase, an advanced program of attack on crime must include the arrest of all regular members of criminal organizations from the level of ‘soldiers’ and above, if such people were not eliminated in phase one. It will involve all the actions presupposed by the law on fighting organized crime, which will preclude interference by corrupt justice and government officials. On the basis of gathered evidence and the presentation of proof, the latter officials must be subjected to a variety of punishments. These will include the death sentence (a predominant type), sentences for life in prison, and the lengthiest possible prison terms.” (Oleg V. Starkov. Criminal Penology. Moscow: Ekzamen Publishing House, 2004, p. 96).

No doubt, these stipulations would rally massive support, should they be put on a national referendum, but the supporters of such radical concepts generally have a very vague idea of how the practical implementation of the war on organized crime would look.

The total physical destruction of exposed leaders and rank-and-file members of criminal organizations presupposes that the ones who propose such a plan have a clear understanding of the form and structure of the criminal organizations. What do we mean by “organized crime?” Almost twenty years of studying the organized crime phenomenon in the former Soviet Union (the Soviet Interior Ministry and the KGB began using terms such as “organized group,” “thief get-togethers,” and “criminal pools” in their confidential documents in 1984 and 1985), and then again in the reformist period, have failed to produce a clear and practically operable set of standards in this area. Russia’s Criminal Code, revised in 1996, provides a somewhat abridged notion of an “organized group” and introduces the term of a “criminal organization (community)” without any clear definition. The Code’s authors ignored the Exemplary Legislative Act on Fighting with Organized Crime that the Inter-Parliamentary Assembly of the Commonwealth of Independent States had endorsed in 1996. Incidentally, that document did contain definitions of a “criminal organization” and “criminal community,” which the Russian Criminal Code is badly wanting. Nor does the Russian legislation specify which actions fall into the category of “corruption,” although Russia has signed (but not yet ratified) international agreements that fully explain the essence of this notion. These are the UN Convention Against Transnational Organized Crime (2000), the UN Convention Against Corruption (2003), and the Council of Europe’s Criminal Law Convention on Corruption (1999).

This legal uncertainty admits of rather broad interpretations of such concepts in various circumstances. For instance, it allows for incriminating participation in organized crime not on the basis of law but on the basis of a “revolutionary consciousness.” If a criminal investigation is targeted on the governor of a Russian constituent territory or a city mayor, for example, the operatives or investigators may claim that a “criminal community” includes the entire administration of the region or city, as well as businessmen or officials from other regions who have contacts with that administration.

The same thing is happening with regard to private businesses. The irony is that virtually any corporation in Russia can be treated as a potential, or real, criminal organization, and there is a scientifically grounded basis for this. Since the 1970s, organized crime in the U.S. has been considered a model of enterprise (see Criminology, ed. by G.F. Shelley). Russian researchers went even further than this. A monograph entitled The Financial and Legal Aspects of Criminality at Holding Companies discusses almost all the holding corporations as the largest criminal organizations which dominate many sectors of the national economy (V.F. Gaponenko, A.B. Melnikov, N.D. Eriashvili. The Financial and Legal Aspects of Criminality at Holding Companies. Moscow: UNITY-DANA, 2003). By instituting criminal cases against executives from the MOST, SIBUR and YUKOS corporations, the Russian Prosecutor General’s Office took the researchers’ concept of counteracting an “enterprise as a form of organized crime” quite literally, and moreover, applied it in practice.

If Prof. Starkov’s concept of fighting the mafia is put into practice in the conditions of imperfect laws, it may lead to the demise of all those who work in regional and municipal administration or in management of holding companies that have fallen under suspicion. In case this practice is applied to heads of individual departments of law enforcement agencies, the entire departments will be destroyed. This brings to mind the repression of the so-called “werewolves in police uniforms.” Analogies with some aspects of 20th century Russian history creep into mind, the only difference being that in Stalin’ time the marked individuals were called “the foes of the people;” today they are called “members of criminal communities.”


The Russian radicals believe that one thing can oppose organized crime and corruption: it is only the “healthy forces of society,” argue the advocates of the hard line. Prof. Starkov believes such people can be found in the special forces who have gone through the trials and tribulations of the Chechen war. Others tend to place their trust in the veterans of the Afghan war of the 1980s. But the truth is that a rather significant number of people from those two categories, who ostensibly resist moral degradation, have themselves fallen under the yoke of criminal groupings. Many Russians can still recall the terrifying showdowns between the top executives of foundations for the veterans of the Afghan war, and the killing spree in St. Petersburg by former servicemen of special forces of the Defense Ministry’s Main Intelligence Department (GRU).

The academics who study Russian criminology have come up with an explanation as to why the mafia organizations have accumulated such impressive power. Dr Sergei Inshakov, a lawyer, writes in this connection: “Criminal organizations that wage mortal fights against their adversaries have proved to be most viable in the process of a criminal evolution. In strict compliance with this law, mafia organizations are always commanded by strong individuals who violently resist anything that may pose a threat… Survival of the mafia organization hinges on the strict performance of the crime bosses to the positions they occupy… The accidental accession of individuals to those positions is practically ruled out… The same goes for any kind of protectionism in the process of appointment to those positions… Government service has a far more complex mechanism of evolution. The most viable ones in that system are not those who wage deadly fights or who are loyal to their system, but those who renounce fighting… A bribe-taking official has more chances to survive than an advocate of honor and decency.” (S.M. Inshakov, Foreign Criminology, 2nd edition. Moscow: UNITY-DANA, Law and Legislation, 2003, p. 307).

This is a somewhat ideal picture, however, since the majority of mafia leaders do not show any signs of being extraordinary. Many of these individuals, including bandits and black economy operators, often betray their ‘brethren in arms’ to the law enforcement agencies – either from considerations of the material rewards or out of petty selfish calculus (to survive and not to end up behind bars). Protectionism in the criminal world is also rife. Even the so called ‘thieves-in-law’ (guardians of the thieves’ code, in the criminal hierarchy) now buy or even ‘inherit’ this status, as distinct from the former times when they were ‘enthroned’ because of the merits they bestowed to the criminal community.

The problem in confronting these groups and individuals derives from the sporadic and frequent reforms of the law enforcement agencies and secret services, as well as rotations of their members. This factor has brought accidental people into professional detachments that are entrusted to fight against crime and has led to a situation where the people appointed to fight against the mafia often start working for it.


Nevertheless, it is possible to emerge victorious from the fight against the mafia without the use of radical instruments. But in order for this to happen, Russian legislation must contain provisions that conform to international legislative documents rather than simple populist slogans. This means, first of all, an early ratification of the aforementioned UN Conventions and the Convention of the Council of Europe. Their ratification presumes a harmonization of Russian laws with them, even those standing outside the legislative scope of the Criminal Code, the Code of Practice, the Administrative Code, and the Code of Search and Operative Measures. For example, the UN Convention Against Corruption stipulates, among other things, that the signatory countries take due measures to ensure a high degree of transparency in managing and accounting of public finances. Transparency-building measures must embrace the endorsement of national budgets, a timely submission of reports on revenues and spending, a system of accounting and auditing standards, and the mechanisms of their supervision. The Convention also requires measures to form an adequate system of procurements and greater transparency in the financing of political parties and selection of candidates for elected posts. Besides, it requires the building up of schemes for training specialists who will occupy the public positions most vulnerable to corruption.

The UN Convention Against Corruption is targeted, above all, at exposing and halting the international transfers of illicit assets by freezing the transfer operations, confiscating the revenues from criminal transactions, and returning those revenues to the countries where the money originated.

Presently, however, Russian legislation stands apart from international legal standards, marking a certain legal isolationism. It is difficult to produce a different assessment of the novelties introduced into the Russian Criminal Code in late 2003, right at the time when the UN endorsed its Convention Against Corruption. Alongside the new provisions that really liberalized the criminal law, the authorities scrapped property confiscation as a penal measure, replacing it with fines varying from 500,000 rubles to a million rubles. In practical terms, this means that a criminal who has stolen U.S. $100 million from the state and laundered the money through offshore companies can get away with a fine amounting to slightly more than U.S. $30,000, and the state will consider the damage forgiven. The initiators of those amendments explain that the lifting of the property confiscation clause from the Criminal Code is made up for by provisions in the Code of Practice. Indeed, Article 81 (Material Evidence) states that the money and valuables obtained illicitly shall be subject to being placed under state control upon a verdict by the court. The difference is, however, that the latter stipulation applies only to money and valuables, which the courts classify as material evidence, i.e., which are found to have been obtained illicitly, while the property confiscation clause permits the confiscation of all property obtained by an individual whose guilt had been proved.

The abolition of the property confiscation clause runs counter to Russia’s obligations under several international acts. The Council of Europe’s Convention on the Laundering, Search, Seizure and Confiscation of the Proceeds from Crime interprets “proceeds” as “any economic advantage from criminal offences,” and in the UN Conventions Against Transnational Organized Crime and Corruption “proceeds of crime” mean “any property derived from or obtained, directly or indirectly, through the commission of an offence.” This is a far cry from the actual definition of ‘material evidence.’

To sum up, the narrow meaning of ‘illicit revenues,’ which the Code of Practice interprets as ‘material evidence,’ was made up for by the property confiscation clause in the Criminal Code before the December 2003 amendment. But the balance between the two codes has been upset, and Russia has been pushed to the sidelines in its efforts to fight organized crime and corruption together with the international community. With the amendment endorsed, many procedures of cooperation in the field of confiscations, especially in the handling of confiscated property and revenues, amounted to nothing. Let us consider the above-mentioned $100 million that was (hypothetically) stolen. In that case, the individual who placed the money on an overseas bank account will be able to claim it once he pays a fine and serves a prison term.

The reintroduction of confiscation clauses into the Criminal Code, and the assimilation of international mechanisms of confiscation in the Code of Practice, is an immediate goal for Russian lawyers in the struggle against corruption and organized crime. This is a far from simple task, for it will require the revision of ideological principles linked to economic reform. One of those principles involves certain misgivings that the authors of liberal reforms had about tough laws against organized crime and corruption – similar to the RICO (Racketeer Influenced and Corrupt Organization) laws adopted in the U.S. in the 1970s. RICO specifies a set of legal instruments aimed at curbing extortion and corruption and weeding out organized criminal communities. It also provides for the confiscation of property from the members of criminal groups, the liquidation of the enterprises they control, and many other things.

Foreign experts who advised on the reforms in Russia bluntly told the reformers that the introduction of RICO in this country would not facilitate its progress toward a free market economy, as the sanctions against collusion might entail a restoration of the worst traits of the Soviet legal system – the iron fist of executive power and arbitrary confiscations (Martens, F.T., Roosa, S.B. Exporting RICO to Eastern Europe: Prudent or Irresponsible? In: Journal of Contemporary Criminal Justice, No. 4/10,1994, pp.267-289).

The advice was heeded and the property confiscation clause vanished from the Criminal Code. The initiators of the change clearly ignored the fact that the RICO provisions for confiscating any profits or property obtained by a criminal community or its separate members were also featured in the UN Conventions Against Transnational Organized Crime and Against Corruption.

According to the international legal practice, illicit profits can be confiscated only on the basis of anti-laundering law. Some may think that Russia has done much toward that end in recent years. Indeed, it has passed a federal law and set up a specialized agency, the Financial Monitoring Committee under the auspices of the Finance Ministry. The committee has been nicknamed ‘financial intelligence,’ but the problem is that it does not fall into the category of intelligence bodies, the way similar organizations in foreign countries do. The committee does not have operative and investigation functions – it cannot embed its agents, perform electronic monitoring of negotiations, organize street surveillance, etc. What it can do is use official data of the organizations that report to it. So it is little wonder that the committee has displayed less efficiency than its predecessor – the Inter-Departmental Anti-Laundering Center that reported to the Main Department for Economic Crimes at the Russian Interior Ministry. The latter did have operative and investigation functions, and it seems that providing these functions to the Financial Monitoring Committee would be highly beneficial for the struggle against organized crime and corruption.

The introduction of international legislative standards in the struggle against organized crime and corruption would be a good remedy for anti-mafia radicalism, but one must recall that adjustments in the law will be successful only if legal changes proceed in parallel with the revitalization of the judiciary.

In a country where the slogans like “Down with the rich” or “Divide the wealth equally” are popular, the confiscation mechanism may become one more weapon in the radicals’ arsenals. In the absence of independent and uncorrupted courts, not to mention weak public control over the activity of law enforcers, the struggle against organized crime may easily degrade into settling accounts, violations of the law and encroachments on human rights. No doubt, successful counteraction to the mafia or any other criminal entities will eventually receive better legislative support, but any anti-crime laws, however correct and efficacious, will have real effects only when their application is unbiased and competent.

Last updated 13 april 2004, 18:05

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