Publication: Eurasia Daily Monitor Volume: 4 Issue: 209

In early 1994, the Analytical Center of the administration of then-President Boris Yeltsin produced a shocking report stating that 70-90% of Russia’s private enterprises and commercial banks in major cities were being forced to pay “tribute” to organized crime groups, totaling 10-20% of their turnover. Judging by an article published recently in the biweekly Novaya gazeta, little has changed in the last 13 years, except for the fact that today, those collecting payments for the provision of krysha (Russian for “roof,” which is slang for protection) services are more likely to be wearing a uniform.

Sergei Kanyev, criminal reporter for Novaya gazeta, wrote in the October 22 issue that today, outdoor market booths and other forms of street trade — right down to the level of babushky (grandmothers) selling pickles — are controlled by local police patrols. “It is their turf, and they are on the alert to ensure that alien policemen don’t swindle their traders,” Kanyev wrote, adding that policemen generally get a daily payment of 500 rubles (around $20) from each booth, but, for the sake of fairness, ask only 100-150 rubles ($4-$6) from each babushka. “Besides that, it is always possible to take anywhere from 100 rubles ($4) to 1000 rubles ($40) from the shopkeepers or to ask for a couple of watermelons (a jar of cucumbers, a kilo of apples, etc.). Try not giving. Problems will begin immediately.” In addition, local police patrols get a “substantial income” from illegal migrants and people caught publicly intoxicated, as well from “guarding” spots where prostitutes gather (1,500 rubles, or around $60, per night) and extorting money from the prostitutes’ clients (500 rubles, or around $20, from each customer). According to Kanyev, a district police chief can earn $5,000-$10,000 a month through “guarding” areas where prostitutes work.

According to Kanyev, a majority of shops, medium-sized firms, cafes and small restaurants are controlled by members of the local police department’s criminal investigative unit. It is simple to find out who is paying them off, he wrote: “Look inside a restaurant on the birthday of the head of the criminal investigation unit and see the guests who are attending. You will probably see the owner of the local auto repair shop, car wash, and several directors of small firms and shops.” Members of the police’s anti-economic crimes department get payoffs from those who sell pirated CDs and DVDs, bootlegged vodka and counterfeit Chinese-made goods. Large shopping centers and warehouses are controlled by the district police precinct’s leadership, Kanyev reported. “Various construction and food markets like the Savelovsky and Cherkizovsky [markets in Moscow] are the patrimony of the UVD [internal affairs directorate].”

Payoffs are not made monthly with “suitcases of money,” but are transferred to the bank accounts of firms belonging to friends or relatives of the officials who are providing the krysha, Kanyev wrote, adding businessmen sometimes giving their “protectors” gifts such as foreign luxury cars, apartments, and land. “The beloved wives and children of police bigwigs can often be encountered among the heads of all these very markets. In many of them, entire rows of stalls belong to the relatives of high-ranking policemen. If anyone wants to know the kind of incomes that Moscow police from the UVD have, visit the ozero (lake) Dolgoye region, not far from Lobnya [in Moscow Oblast, north of the capital]. There is an entire MVD cottage village there.”

According to Kanyev, by the mid-1990s, the Interior Ministry had largely broken up the protections rackets controlled by organized crime, leaving the various regional branches of RUBOP, the ministry’s anti-organized crime unit, in control of all large and medium-sized businesses in Moscow, St. Petersburg, and other big cities. Since then, the Interior Ministry has been forced out of the highest levels of the krysha business in Russia by the Chekists — members of the FSB, Kanyev wrote. Indeed, in 2001, following Vladimir Putin’s accession as president, Vladimir Rushailo, the creator of RUBOP, was removed as Interior Ministry and replaced by Boris Gryzlov, who then disbanded RUBOP. (Gryzlov today is State Duma speaker and head of the pro-Kremlin United Russia party.)

“Everything has long since been divided up,” wrote Kanyev. “Oil, the gas industry, and other big businesses are under the Chekists. The police don’t poke around here. The scheme is simple. The wife (son, daughter, brother, uncle) of a high-ranking Chekist is put on the board of directors of a bank or a large-scale concern. This is advantageous to the businessmen and bankers. First of all, no one attacks; secondly, it is always possible to get needed information about competitors through the husband (father, brother, nephew). Well, tell me, who will risk striking Vneshekonombank, where the wife of the director of the FSB, Yelena Nikolaevna Patrusheva, works? Nobody.”

However, if the pecking order among those providing “protection” has changed over the last decade-and-a-half, the average businessman remains at the mercy of a large number of competing krysha providers. “I have a friend, an entrepreneur from [the Moscow region], who is guarded by a bandit private security firm,” Kanyev wrote. “He gave the local police chief an expensive foreign car for ‘special friendship’ and pays his ‘curator’ from the FSB with daily dinners in a restaurant. Moreover, he has ‘good relations’ with the mayor of the city, with the tax inspectorate, the migration services and the [public health authorities]. One a month, the fire and trade inspectorates visit his stores. Even the district police officer comes by for a present on his birthday. Lately, another pair of spongers has appeared – the head of the local branch of United Russia and a representative from A Just Russia [the other main pro-Kremlin political party]. They also ask for money, for their party activities.”