Newspaper article The Christian Science Monitor

Russian Organized Crime Infiltrates Economy, Threatens Foreign Investment

Newspaper article The Christian Science Monitor

Russian Organized Crime Infiltrates Economy, Threatens Foreign Investment

Article excerpt

BUSINESSMAN Boris Berezovsky almost became a statistic last week - yet another victim of the gangland-style killings threatening to become a daily fixture of Russia's increasingly violent criminal underworld.

Mr. Berezovsky, head of the giant LogoVAZ car distributor and a leader of the All-Russia Automobile Alliance (AVVA) was sitting in his limousine in rush-hour traffic last Tuesday when a car bomb exploded. Police say the powerful, professionally made device was triggered by remote control.

The incident appeared to be yet another failed contract murder. But there are indications that the attack could also have implications for United States businesses operating in Russia. Russian sources say the bombing could have been an attempt by organized crime rings, which have a strong interest in sales of used - and often stolen - foreign cars, to block AVVA's plans with the US firm General Motors Corporation (GM) to fund a privately financed joint venture to manufacture cars in Togliatti.

Organized crime, stemming from long-entrenched bribery and corruption, has flourished since the Soviet state dissolved. Some reports say rival gangs vying for position in Russia's fledgling market economy have carved up the capital into as many as 10 spheres of influence, which are completely under their control. The police, many of whom are corrupt themselves, are largely powerless to cope with the problem. Consequently, politicians such as ultranationalist Vladimir Zhirinovsky advocate shooting all suspected criminals on sight.

Russia's "mafia" now runs many key businesses, not only shady operations such as prostitution and drug-dealing, but also legitimate enterprises from the tiniest street kiosk to the most influential bank. Some Western observers have warned that Russian gangsters have even gained access to nuclear technology, which they could use for international blackmail. Police revealed last week that in March they had detained three men with seven pounds of highly enriched uranium stolen from a top-secret Russian plant, but officials said the substance was not enriched to a sufficient degree to make nuclear weapons.

Violence has become so intrusive that many Muscovites carry guns to protect themselves. Kidnapping and hostage-taking occur almost daily. Police say crimes involving firearms or explosives have risen 45 percent in the first five months of this year compared with the same period last year, and organized rings are threatening to become the largest impediment to both Russia's political stability and the future of President Boris Yeltsin's economic reforms.

Last week, Mr. Yeltsin unveiled several new measures to combat organized crime, which he has called his top priority. On Friday, he told a Kremlin news conference that he had ordered his security forces to cleanse the "criminal filth" from the country. …

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