By Giancarlo Elia Valori*
Since 1992, the Russian word Mafyia has been officially used in the Russian Federation’s documents to refer above all to organized crime, structured through stable groups that repeatedly perpetrate severe crimes and offences. In particular, this word refers to the interests of the world “below” – the invisible universe of organized crime – with the world “above”, namely institutions, ruling classes, politicians and companies.
Both the real Mafia, namely the Sicilian one, and the Russian one were born around mid-19th century.
The Sicilian Mafia became the “parallel State” in a region where the Unitary State did not exist or counted for nothing. A case in point is the Baron of Sant’Agata, the feudal lord of Calatafimi, who ordered his mobsters to “side with the winners”, when he realized that Garibaldi’s troops, the so-called “Garibaldini” were winning in the plain.
The Sicilian “organization”, which had long-standing roots -probably Arab and in any case independent of the Kingdom centred on Naples and the Campania region – discovered its political role precisely with Garibaldi-led Expedition of the Thousand that landed in Sicily, after which it became the primary mediator between the small group of “Piedmontese” soldiers and the great mass of peasants. It immediately agreed with the feudal lords, who helped it considering that it was winning.
The Mafia itself was both the improper bank of the wealthy feudal lords and the only form of effective social control, solely in favour of the Sicilian feudal elites – and hence also of the Unitary Kingdom.
As happened also in Naples, when Garibaldi appointed Liborio Romano – who was also the Head of Camorra – as Chief of Police. An inevitably very effective policeman.
Conversely, in Russia organized crime was initially used – in politics – by various revolutionary groups to fight the Tsar.
Later, there was the magic moment of an important “friend of the people”, namely Nicholai Ishutin.
He was the first to establish a group of professional revolutionaries, in 1864, simply called “the Organization”.
However, with a view to better achieving the revolutionary, anarchist and violent aims of his Organizacjia, Ishutin created another new structure. It was called the “Hell” and had to engage in all possible illegal activities, together with the already active criminals: murder, theft and blackmail. All this had to happen while the “Organization” was running its lawful social and organizational activities.
Hence, for the first time politics became the cover for a criminal organization. Goodness knows how many imitators Comrade Ishutin had.
It was the beginning of a very strong bond – also at theoretical level, through many excerpts from Lenin’s texts that exalted Russian revolutionary populism – between organized crime and the Bolshevik Communist Party.
In fact, on June 26, 1907, a bank stagecoach of the State Bank of the Russian Empire was attacked and robbed in Tiflis, Georgia. It was a robbery fully organized by top-level Bolsheviks, including Lenin and Stalin.
There was also the strong support of local criminals led by Ter-Petrosian (“Kamo”), the Head of the Georgian mob and also Stalin’s early associate.
The relationship between organized crime and Bolshevism – particularly with reference to the “agrarian reform” of 1930-1932 – remained central.
The Soviet power absolutely needed its extra legem left hand to harshly bring peasants into line and to militarily organize the conquest of factories, as well as to control or physically eliminate the entrepreneurs or bureaucrats of the old Tsarist regime.
Everything changed with Stalin, who, together with the stabilization of the Bolshevik regime, made possible also the verticalization and creation of a unitary command hierarchy in the vast world of Russian crime – and in the Party.
Hence the Organizatsja was founded, i.e. a strongly verticistic Panrussian structure – as indeed the Bolshevik Party was.
The “Organization” – full of symbols and particular rites, like the many para-Masonic organizations of the revolutionary Napoleonic network in Italy, which imitated the secret society of Carbonari (the so-called Carboneria) or, precisely, Freemasonry, albeit with entirely new mechanisms and symbols – was sung heroically by one of the poets, former “Thief-in-Law” (the generic term used by Stalin to designate all the members of the Organization), but much loved by Stalin, namely Mikhail Djomin, who exalted the achievements of the Vorovskoi Mir, the Thieves’ World, that had only one code of conduct and revenge throughout the USSR.
Hence the Party established the first organizational structure of the “Thieves-in-Law”, who much operated during the Stalinist regime: the Mir “brigades” were led by a “reserve group” that generated and selected an additional covert group that had to be permanently related to the Soviet political, economic and financial power.
In fact, the “Vory v Zakone”, the Thieves-in-Law, had relations on an equal footing with the Party and State leaders. They dealt with the various “brigades” and managed the odshak, the cash pool, through an ad hoc Committee.
Through the odshak, said Committee mainly paid salaries to the Organization soldiers, but above all invested its proceeds in the so-called “white” economy.
Without the criminal organizations and their autonomous finance, there would have been neither the Soviet normalization after Stalin’s purges, nor the money for Leninist industrialization and the funds – extremely needed for the USSR – targeted to foreign trade and the related sales of raw materials from 1930 onwards.
This also applied to the Sicilian Mafia, a true organization between two worlds, the American and the Italian ones, which invested in real estate in Sicily when there was no capital, in the aftermath of the Second World War, or refinanced capitalism in Northern Italy after the political and union storm in the late 1960s and 1970s.
Without Mafia’s capital and without the protection provided by some entrepreneurs to the most important fugitives in Milan, there would have been no economic recovery after the disaster of 1968.
Reverting to the Bolsheviks, Stalin accepted the presence of the “Thieves-in-Law” in their main sectors of activity, in exchange for their careful persecution of his personal and Soviet regime’s political adversaries.
Years later, even de Gaulle did so when proposing to the Corsican underworld – one of the most ferocious in Europe – to fight the OAS and eliminate it, in exchange for some State favours and the transfer of many gangsters of the Brise de Mer – as the Corsican Mafia was called – to Marseille.
Hence there is no modern power that could do without its particular “Thieves-in-Law”. A case in point was China, in the phase of the “Four Modernizations” and the subsequent Tiananmen Square movement, or the United States itself, which dealt primarily with its various Mafias, especially in periods of severe financial crisis.
In the 1950s, shortly before Stalin’s death, inter alia, a very close relationship was established between the “Organization” and the Soviet power leaders.
It was exactly the underground economy – fully in the hands of the “Thieves-in-Law”- which, in Brezhnev’s time, became the meeting point between Mafia and Communists.
The Organizatsjia already had excellent relations with the parallel “capitalist” organizations – relations which were established upon the creation of the Russian structure in the meeting held in Lviv in 1950 – and it became essential to find the goods which were never found on the Russian market, including weapons and illicit capital flows.
Corruption became the real axis of bureaucracy and of the Party itself, while there was a spreading of poverty that closely resembled the poverty of Ukrainian and Crimean peasants during the so-called “agrarian reform” of 1930-1931.
Later, always in agreement with the Bolshevik leadership, Mafyia organized – in every factory or office – “clandestine units”, not falling within the scope of the collectivist system, which created an underground market that, from 1980 to 1991, was even worth 35-38% of the Soviet GDP.
The proceeds from that semi-clandestine trade were shared between the Party, the “Organization” and the law enforcement agencies. No one could escape that mechanism.
Again in the 1980s, precisely due to the social and political pervasiveness of the “Thieves-in-Law”, the Organizatsjia was structured into units for each commodity sector, especially with units specialized in oil, minerals, wood, precious stones and even caviar.
At that stage, however, many Soviet Party and State leaders were officially accepted in the Organizatsjia, thus becoming the necessary link between the “Thieves-in-Law” and the institutions.
Furthermore, with Gorbachev’s reforms, Mafyia was no longer only an important part of the economic system,but became the economic system in its entirety.
The elimination of the old political apparatus and fast privatizations enabled the old leaders of the various “clandestine units” to quickly collect the initial capital to buy everything going from companies onto the now apparently liberalized market.
Sometimes Mafia’s intimidation was also needed, when the old employees did not want to assign – for a few roubles – their shares that the law allowed to be allotted between workers and managers of the old State-owned factories.
In 1992 Yeltsin himself admitted that over two thirds of the Russian production and commercial structure were in the hands of the “Organization”.
However, in memory of the old ties with similar organizations abroad, only Mafyia did start the first joint-venture contracts with Western companies and 72% of that opening onto the world market was only the work of the Organizatsija.
That was exactly what Judge Falcone would have dealt with in Russia with his Russian colleague Stepankov, if he had not been killed with his wife and three agents of his escort in a bomb attack.
The joint venture worked as follows: firstly, foreign capitalists put their money into the companies of the “Organization” and later – without realising it and only with the hard ways – they were in the hands of the old “Thieves-in-Law”.
Nevertheless, it was from 1990 to 1992 that the Russian Mafia structure penetrated the West with vast illegal funds managed together with the local Mafias.
Not surprisingly, a few days after the Capaci bombing, Giovanni Falcone was to fly to Russia to talk with the Russian Prosecutor General, Valentin Stepankov, who was investigating into the CPSU funds that had disappeared in the West.
The intermediary of the operation could only be the “Organization” that knew the Sicilian Mafia very well, at least since the aforementioned meeting held in Lviv in 1950.
A huge amount of money went from the CPSU to the “sister” parties and probably the issue regarded also the failed coup against Gorbachev in August 1991.
Each CPSU faction had its autonomous funds – often huge ones – given to “sister” parties but, above all, to their most similar internal wings. Here a significant role was played by the covert bank accounts held in Zurich, together with the Wednesday air transfers to the local Narodny Bank, as well as the money transfers that took place during the visits of the CPSU executives to the various local “comrades”.
Nevertheless, the cash flows -managed only by the Organization -were regarded by the CPSU’s “old guard” mainly as a source of personal survival and a basis for future political action at national level. Everyone, ranged face to face upon the field of the new CPSU factions, thought to said cash flows.
Coincidentally, it was exactly in those years and months that the Sicilian Mafia expanded – for its drug business – to the Caucasus and Anatolian Turkey, on the border with the new Russian Federation.
At that time – as currently – the Russian Mafyia had preferential relations with the Sicilian Mafia, the Neapolitan Camorra, the Chinese triads and the Turkish Mafia.
Also the relations with Latin American and Arab criminal organizations have been mediated by Sicilians or Calabrians (in South America), Turks (in Central Asia and India) and Chinese (in Maghreb and Africa).
Currently the Organization’s yearly turnover is still 2,000 billion roubles approximately, with weapons – including nuclear ones – which were provided by the Mafyia sections within the Soviet and later Russian Armed Forces.
As even Luciano Violante – the former President of an important anti-Mafia Parliamentary Committee – maintained, both the CPSU and the KGB have long had excellent relations with the Sicilian Mafia. The Russian Mafyia itself is now the world centre where money laundering strategies, as well as the division of territories at international level and the new strategies of relations with the various ruling classes, are managed.
Violante used to say that the CPSU and the KGBhad put in place the most recent Russian Mafia, with which they were gradually confused.
Hence the new post-Soviet oligarchy – selected after Mafia wars that,between 1990 and 1995, exacted a toll of 30,000 victims – has now merged with the ruling class.
As Solzhenitsyn used to say, currently in Russia a maximum of 150 people rules. Putin deals with the “Organization”, but he is certainly not linked to it.
Furthermore, according to the most reliable Russian sources, currently the “Thieves-in-Law” network is composed of about 50,000 people, including managers and mere “soldiers”.
Nevertheless, their network of intimidation and capital makes them essential in carrying out any kind of “white” operation. They are the bank of the new Russia, considering that all the official banks are part of the “Organization”.
In the Russian media jargon, the Russian Mafia bosses who have reinvented themselves in the legal business are called avtoritet(“authorities”).
The Russian Mafyia also operate abroad, throughout Europe, but does not operate directly in the territory of the various countries. If anything, it seeks relations with the State and bureaucracy, through the national criminal networks, without by-passing them.
Currently the Russian money laundering hub is still France, while recently the “Organization” has been spreading quickly within the German economic, banking and commercial fabric.
In Italy, it operates mainly in Emilia-Romagna, Tuscany and, obviously, Rome.
According to the Italian police sources, the capital flows of the Russian “Organization” in Italy are equal to 38.5 billion a year, while the flow of Russian money laundering is still focused on France, albeit with some operations made in Spain and Portugal. A diversification already underway, which could also affect Italy.
The first channel has always been Latvia, used by Russian mobsters to enter the Euro area directly.
With a view to penetrating Latvia, the Russian “Organization” created dummy companies based in London.
Later a Russian company lent money to the company based in London – a company with main headquarters often located in Moldova.
The Russian company did not repay the debt – hence a corrupt judge in Moldova forced the Russian company to transfer capital to a Moldavian account.
Hence the money entered Latvia in a perfectly legal way and later the Euro area and Western economies.
The network has already endangered 753 Western banks – and money laundering is still one of the primary business activities of the Russian “Organization”.
*About the author: Advisory Board Co-chair Honoris Causa Professor Giancarlo Elia Valori is an eminent Italian economist and businessman. He holds prestigious academic distinctions and national orders. Mr. Valori has lectured on international affairs and economics at the world’s leading universities such as Peking University, the Hebrew University of Jerusalem and the Yeshiva University in New York. He currently chairs “International World Group”, he is also the honorary president of Huawei Italy, economic adviser to the Chinese giant HNA Group. In 1992 he was appointed Officier de la Légion d’Honneur de la République Francaise, with this motivation: “A man who can see across borders to understand the world” and in 2002 he received the title “Honorable” of the Académie des Sciences de l’Institut de France.”
Source: This article was published by Modern Diplomacy