Wednesday, July 27, 2016


The Power Vertical

The Putin Syndicate

The Godfather
The Godfather

When Russia annexed Crimea, the Kremlin installed a reputed gangster known as "the Goblin" to run the peninsula. When Moscow's agents abducted Estonian law enforcement officer Eston Kohver, they used a mafia-run smuggling ring to set him up. 

And of course, organized crime groups have played a prominent role in the Moscow-instigated conflicts in Transdniester, South Ossetia, Abkhazia, and Donbas.

It has become something of a cliche to call Vladimir Putin's Russia a "mafia state." But cliche or not, the term actually fits. Not just because the Kremlin and organized crime groups are closely linked. And not just because Moscow uses gangsters as instruments of policy.

The term is most apt because the Putin regime actually operates like a crime syndicate. It uses threats, intimidation, and extrajudicial violence to achieve its goals. It has teams of enforcers to harass, harm, and -- if necessary -- kill its enemies.

It is even structured like a crime syndicate. It is run by a tight cabal of "made men" who oversee their own crews of capos and underbosses.The made men are led by a godfather-like figure whose main function is to settle disputes among them.

The Putin Syndicate has its code and its rituals. It has a team of respectable consiglieres, who, like good little mafia lawyers and accountants, give it a facade of respectability. In this sense, Tom Hagen has nothing on Sergei Lavrov. 

And its goal is simple. Self-perpetuation and self-enrichment.

But just as La Cosa Nostra adorned itself in age-old Sicilian traditions and the venerable rites of Roman Catholicism (recall the chilling baptism scene from The Godfather), the Putin Syndicate cloaks itself in Russian nationalism and Orthodox Christianity.

But all the pomp and ceremony masks a much more banal reality.

Be Corrupt, Be Very Corrupt

Vladimir Yakunin is doing pretty well for himself. According to an investigation by anticorruption blogger Aleksei Navalny, the longtime Putin crony and boss of Russian Railways controls a business empire of offshore companies around the world worth billions of dollars.

"It is an underworld family of the purest kind, and it exists due to its mafia boss, Vladimir Putin, who gives license to steal everything they can get their hands on," Navalny wrote.

Yakunin's case is typical for the syndicate's made men, all of whom have their own little empires: Igor Sechin at the oil giant Rosneft; Yury Kovalchuk at Bank Rossia; Gennady Timchenko at the gas producer Novatek; and construction magnates Arkady and Boris Rotenberg.

Corruption is the Putin Syndicate's lifeblood. It starts at the top and it flows down by design. It isn't a bug in the system, it's a feature -- an essential feature.

"For the Kremlin, corruption has been a reliable means of keeping control over all meaningful elites -- economic, political, municipal, media, even intellectual," Kadri Liik of the European Council on Foreign Relations wrote recently. 

"It is the basis of much upward mobility in Russia. In the clientelist system, loyalty rather than merit is rewarded, and access to illicit wealth is the reward as well as guarantee of continuing loyalty."

And the more widespread the corruption, the better. The more people and companies who are corrupt, the more who are dependent on -- and beholden to -- the syndicate.

Indeed, the syndicate's code demands that its members steal, seek rents, and take bribes and kickbacks -- although not in excess of their rank. It also demands total loyalty.

And those "that do not engage in corruption are clearly alien elements to the system," Liik wrote. "What happens to them depends on the circumstances. If they are dangerous, they will be marginalized or isolated, even destroyed."

And this same principle applies to Russia's neighbors.

Making The World Safe For Graft

Putin's syndicate is more than a small-time local mafia. It's an international conglomerate that seeks to spread corruption -- and by extension its reach -- beyond its borders.

In a 2012 report for Chatham House, James Greene noted how Putin sought to gain control over Ukraine and Belarus's energy infrastructure by using murky companies "such as EuralTransGas and RosUkrEnergo as carrots for elites, and energy cut-offs as sticks." 

But the approach is about more than just energy policy. It's about control.

Greene wrote that by utilizing "the corrupt transnational schemes that flowed seamlessly from Russia to the rest of the former Soviet space -- and oozed beyond it -- Putin could extend his shadow influence beyond Russia's borders and develop a natural 'captured' constituency for maintaining a common Eurasian business space."

And in this sense, the European Union, with all its transparency and accountability, is a mortal threat. Which goes a long way toward explaining Moscow's approach to EU aspirants like Georgia, Moldova, and Ukraine.

"Ukraine’s former President Viktor Yanukovych was clearly 'Russia’s person' in Moscow’s eyes -- if not by convictions, then certainly by virtue of his corrupt relationships and the ties that these created," the European Council on Foreign Relations' Liik wrote.

"Yanukovych's talks with the EU were therefore viewed by Moscow not even as a rebellion by Yanukovych, but as a hostile takeover attempt by the West."

And when Putin's syndicate was unable to stop this by buying off Yanukovych, it resorted to more extreme measures.

"Russia’s destabilization of Ukraine...should be seen for what it is: a Kremlin containment effort to prevent Ukrainians from achieving a democratically accountable government that would threaten Russia’s corrupt authoritarian system," Christopher Walker, executive director of the National Endowment for Democracy’s International Forum for Democratic Studies, wrote last year in The Washington Post.

In a recent article expanding on this theme, Walker noted that the Kremlin "aims to erode the rules-based institutions that have established global democratic norms and cemented the post-Cold War liberal order." It is also seeking "to check the reform ambitions of aspiring democracies and subvert the vitality of young democratic countries."

The Kremlin frames this in the language of national security and restoring Russia's international role. But at it's core, it is about protecting the interests of a corrupt syndicate.

-- Brian Whitmore

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Comment Sorting
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by: Poison Press
June 09, 2015 15:56
Crime syndicates reward the worst in human nature: Aggressive sociopaths, liers, thives and murderers, people without any conscience or empathy. That's a bit scary to think about.

by: Jack from: US
June 09, 2015 16:08
in this country the populace is presented with "free and democratic" choice: vote for one pre-selected candidate from ruling malaka mafia, or another pre-selected candidate from the same malaka mafia

by: Mr Smith
June 10, 2015 00:02
Putin manages to be a bonefeid Bond villain in a world without a 007

by: Notmyrealname from: Detsky Mir
June 10, 2015 01:44
in other words, a kleptocracy.

by: john from: canada
June 10, 2015 02:25
Good story by Whitmore!

Besides using threats, Putin mafia "вор в законе" uses rewards such as offering amnesty to criminals to return their big loot to Russia: http://finance.yahoo.com/news/putin-urges-oligarchs-criminals-bring-114500471.html

Russia mafia state reflected in its dirty ranking on corruption index: https://www.transparency.org/cpi2014/results
- And on rule of law index: http://data.worldjusticeproject.org/#/

In Response

by: Carlton ..
June 11, 2015 03:08
You are right John

by: Vytautas from: Lithuania
June 10, 2015 07:27
Yes, you paint an accurate likeness. However a question to ask western leadership is "would you associate yourself with a criminal?" "Would you sign agreements with a criminal? Would you go out to dinner and pose in pictures with them?. In real life most people will not any of those things since they know that by associating with a criminal one will either be robbed by them or become criminals themselves. However states behave differently from people and that is a major problem western leaders have to confront and answer.
In Response

by: Inlewof
June 10, 2015 11:44
Excellent point.
In Response

by: Dan from: U.S.
June 10, 2015 13:37
@ Vytautas. You make a very valid point; however, I would venture that it's not just western leaders who need to confront and resolve these dualities.
In Response

by: Carlos. .
June 11, 2015 03:06
Absolutely right Vytautus. . Western leaders are to blame for much of the success of this Kremlin mafia

by: Democracy from: Earth
June 10, 2015 11:08
Putin is a criminal and a head of mafia that managed to hijack a country. That much is clear.

But as Brian aptly notes it is also a cancer with ability to spread further West which it already has.

What does it say about our leaders who continue to act as if it is business as usual while standing against a thuggish deluded criminal Putin and his gang, it's up to anynone's judgement.

Mine is clear. The future if it is to be better must have no place for this inhuman-beings.
In Response

by: Andrew from: Brisbane
June 11, 2015 11:19
Remember, just because leaders appear in public to act like it's business as usual doesn't mean that behind the scenes it's the case. Nothing compels them to give away for the cameras what is advantageous if kept close to their chest, we don't conduct foreign relations by referenda. The EU and NATO are moving to close the space occupied by Putinists at a pace determined by them, not by him. Could they always do more? yep, and the more people like you that point it out the better.
In Response

by: Democracy from: Earth
June 11, 2015 20:00
well said, Andrew but we must keep on pushing!

by: John Christmas from: Latvia
June 10, 2015 12:08
I wouldn't call the EU "transparent." For example, consider the EU bailout of Kremlin-linked offshore bank "Parex" of Latvia. Over a billion euros of EU taxpayer money disappeared into this black hole. And the bailout featured a deceptive "privatization" where Latvia pretended to sell shares to the EBRD only to reverse the sale five years later in accordance with a secret guarantee agreement that Eurostat already knew about. Seems the EU is dropping fast down to Russian levels of "transparency"...
In Response

by: Andrew from: Brisbane
June 11, 2015 11:29
I don't think the Parex bailout and the Citadele sale necessarily meant the EU is stooping to Russian levels of transparency. The relationship with EU banks and Russian money is definitely alarming as we're seeing play out in Moldova right now, but I think as an EU and ERM II member it was a case of taking the bad (dubious Russian money) with the good (Latvia, it's economy + honest Russians investment) and at the time it was difficult to separate the two given the circumstances of a crisis. What do you think?
In Response

by: John Christmas from: Latvia
June 11, 2015 16:40
The bailout of the offshore accounts at Parex didn't help Latvia's economy. The bailout caused a massive crash. Also it doesn't help that Latvia is only prosecuting one person - a whistleblower. This "shoot the messenger" and "protect the Oligarchs" mentality will cause ever increasing disasters in the future. I am confident that the Eurozone needs real reforms (honest financial statements and prosecution of corrupts) rather than cover-ups (deceiving people about debt levels of member states to protect corrupts) if we are to see any improvement.

by: Mikhail Corleone
June 10, 2015 14:01
I know it was you, Fedya. You broke my heart. YOU BROKE MY HEART!

by: Henry from: Virginia
June 10, 2015 15:47
Interesting article, although probably Putin as a form of corrupted patriotism as Stalin did despite murdering millions of people(Stalin).
Putin obviously supports corruption but without it Russia would be almost invincible. Putin has the public support to conquer the world, there is no doubt about it, however due the endemic corruption of his regime Russia has not reached its full potential. Putin's Russia depends on an elite oligarch who care little about the "Motherland" while all about living in mansions in London with all their money in Switzerland. If however Putin and his elite are removed by a nationalist coup then Russia will be far scarier than it is know. If Putin was a die hard Nationalist Russian, than their would be no Ukrainian army but limited guerrilla resistance in Lviv. Hence Putin is probably the best of the bunch but the only thing he understands is power and money. In his opinion the EU and NATO is bent on surrounding and destroying Russia which is understandable due to the many invasions Russia has had from the Mongols to the Tatars to the Khazars to the Avars to the French to the British(Crimean war) the Ottoman Turks and the Germans twice in the form of the Kaisers army and the Nazi's(CRAZY) and in particular the Great Patriotic war(World war 2) massively affected the Russian and Soviet people. Interestingly, the first knyaz or prince of Kievan Rus(forebear of Russia, Ukraine and Belarus) was a very nice prince who tried to love everyone and the priests(Orthodox or Provaslavnaya) had to convince him to actually have some sort of punishment for criminals due to their rampages across the land. However this changed after the devastating Mongol invasion when Kievan Rus lost a huge proportion of it population( like 80% to 90%) to the Mongols and the Black plague and Russia's authorities became paranoid like all get out. After this Russia was never the same and never shall be the same. Russia is always going to be unique due to its terrible history. Hence I don't think the problem is with Putin, it's with Russia. The Russian people are tough and I hope they shall realize the folly of the Nationalist right of Russia, although the so called "opposition" is almost a joke with in one article one of the members of the opposition actually asked for the U.S to arm the Ukrainians and put more sanction on Russia. That in my opinion fits the description of a traitor.
In Response

by: sandy miller from: USA
June 11, 2015 02:16
Henry...You've read too much Russian revisionist history. Kyiv-Rus was never Russia. At the time of Kyivn-Rus it was all tribes living in all the area. Moscovy came 500 years after Rus and Russia didn't become Russia until the 18th Century by Peter the Great. Russia became an expansionist country and warring constantly and expanding its empire. Kyivn-Rus was Ukrainian at that time called either people of Rus (in Swedish meaning Sweden) or Ruthenians and later became Ukrainian's. Most of the wars were fought on Ukrainian land not Russia's. Russians have always been a warring nation. They're doing nothing new now. Ukrainians have always suffered under either Moscovy' rule or the Polish rule. Please read Ukrainian history so you know more true history about the area. Ukraine should never have given up its nuclear weapons...Putin would be no problem to them now. Yes, arm Ukraine with defensive weapons and squeeze Russia so hard with sanctions that they'll choke. It's a cancer in Europe and needs to be stopped now. And please don't cry to me about Russia's suffering, they're the ones who've made their neighbors suffer through their entire history.
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The Power Vertical is a blog written especially for Russia wonks and obsessive Kremlin watchers by Brian Whitmore. It offers Brian's personal take on emerging and developing trends in Russian politics, shining a spotlight on the high-stakes power struggles, machinations, and clashing interests that shape Kremlin policy today. Check out The Power Vertical Facebook page or