Saturday, October 29, 2005

Post-KGB Russia truly dysfunctional

Ex-agent: Post-KGB Russia truly dysfunctional
By Jack Markowitz
Sunday, October 30, 2005

Want to do business in Russia? Hire an ex-KGB man. Nothing like good old-fashioned experience in the secret police to keep Russia's criminal gangs out of your shop.

Such is the implied advice of 73-year-old Moscow businessman Victor Cherkashin -- by no surprise an ex-KGB man. Even "prominent liberals," he claims, agree that the KGB produced "among the least corrupt members of the new society."

Cherkashin doesn't hide that he regrets the breakup of the KGB and, indeed, the evil empire itself.

He blames the reckless flirting with freedom of ex-President Mikhail Gorbachev, "overcome by praise" from then-President Ronald Reagan and then-British Prime Minister Margaret Thatcher. Even Gorbachev's drive against the national weakness of alcoholism -- a public relations winner, you'd think -- proved "immeasurably harmful." Less vodka came from the factories, Cherkashin says, but more people died swilling "samogon," moonshine. And the Soviets' top domestic source of income dwindled.

Cherkashin has issued a book, "Spy Handler," with American journalist Gregory Feifer, highlighting his glory years in counterintelligence in Washington. It was he who "handled" two of America's worst traitors ever -- the CIA's Aldrich Ames and Robert Hanssen of the FBI. (Both left enough clues that the CIA and FBI should have caught them, but they're too "risk-averse," says the Russian. Public criticism, firings and scandals scare them.)

Retiring in 1991, Cherkashin badly needed a second career. He opened a leather company spun off by the government, but soon left it -- too many Communist functionaries kept butting in. He tried buying and selling surplus military uniforms, gas masks and imported cigarettes, then became security chief of First Russian Bank, set up with "an American partner," unnamed.

Mafia-type gangs were specially targeting banks that grew fat on the profits from give-away sales of state property. Bankers regularly were gunned down. Police were no help -- they were shaking victims down themselves. Only men with intelligence backgrounds had the skills needed to neutralize the Mafias. Cherkashin's security force grew to 150.

"We often feared for our lives," he writes. A man hired to negotiate with gangs was shot dead in the office. The bank had to turn to a government "special services" group in the SVR, successor to the KGB. Ironically, First Russian Bank failed anyway, due to "siphoning" of depositor accounts, including $70 million from an oil company. By then Cherkashin had formed his own private security firm, which today employs 100 workers -- many of them ex-KGB -- at shopping malls, offices and film studios.

As for current business conditions, the Russian cautiously observes: "Stability doesn't necessarily mean rule of law."

Second-term President Vladimir Putin "has done much to shut down individual purveyors of influence under his predecessor (Boris Yeltsin)," he says, but "corrupt insider politics (has) grown."

Jack Markowitz can be reached at

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