The KGB — the Secret Engine of Perestroika

September 15, 2010 · Adam Bondaruk, Baptists, Victor Belykh, AUCECB, Persecution, Interview, KGB, Books, Unregistered Pentecostals, Nikolay Kotyakov, On Emigration, United Church of Evangelical Christians, Vestibule, Petr Saenko, Pentecostals, Religious Mafia, Slavik Radchuk, Contemporary Persecution, Security Services

The first to sense the imminent collapse of the communist system were KGB agents. Starting in the mid-80s, they signaled that the system was heading for ruin. Reports that KGB bodies were easing pressure on criminal groups set off alarm bells. In effect, individual KGB elements began forming joint ventures and started operating by the unwritten laws of the underworld.

This also affected the KGB’s Foreign Intelligence Service (the First Chief Directorate). At first, intelligence officers believed that the broad international commercial activity of Russian firms, especially through the Chamber of Commerce and Industry, would strengthen the unofficial “covers” for the KGB’s overseas presence. Soon, however, the KGB’s foreign intelligence work began to be used for personal enrichment.

When a layer of new property owners emerged in the country with their vast, unaccounted-for resources, KGB officers felt a desire to secure living conditions approaching those of the new rich. All that remained was to mobilize their power resources, professional skills, and internal corporate connections. Gaining control of significant property posed no difficulty for the “KGB businessmen.”

Our report deals with how a new kind of “shadow economy” was formed, and with certain processes and mechanisms of corruption’s penetration into the Soviet special services.

The Scheme for Diverting Party Money

The most powerful organizations in the history of the USSR were the International Department (ID) of the CPSU Central Committee and the Administrative Department (AD) of the CPSU Central Committee. They handled everything: from multibillion-dollar deals to mundane murders. They counterfeited banknotes, passports, stamps, checkbooks, and certificates. They had their own illegal intelligence apparatus, orchestrated terrorist and criminal organizations abroad, and fomented wars and ethnic conflicts. In carrying out bold operations, the ID and AD of the CPSU Central Committee relied not only on the KGB and the GRU. There were times when even those agencies were not supposed to know anything. To that end, the Administrative Department had at its disposal a special operational group (the “Z” special subunit). It was the child of the Special Strategic Intelligence Service, which survived in fragmentary form as an instrument of personal power since the time of J. Stalin.

The group had many times more rights and authority than the KGB. Lenin himself created it at one point to fight the Cheka and the apparatus. Under Stalin, this special group had the right to burst into any apparatchik’s office and, clamping his nose with pliers, demand a candid account of his crimes. In those years, even security ministers were not certain that they would not be hauled out in handcuffs into the yard and shot at any moment.

When it became clear that the fate of the party and the country was sealed, the Administrative Department of the CPSU Central Committee did not sit idle. The party’s money had to be stashed in reliable places. After all, it was not a photocopier box—you couldn’t just shove it into the trunk of a Volga—nor a little cast-iron pot of coins to bury in the kitchen garden. The removal of the gold reserves from the country was entrusted to the “Z” special subunit. It was thought that the blabbermouths in the KGB could not be trusted. They could easily stab you in the back.

They acted in accordance with a scenario of party privatization that had earlier been worked out by experienced people close to the Soviet leadership.

They recalled that, upon coming to power, the first thing the Bolsheviks did was to use Alexander Parvus to transfer the tsar’s treasury to Western banks: Trotsky—80 million dollars, Zinoviev—75 million francs, Lenin—70 million francs, Dzerzhinsky—75 million francs.

Later, Armand Hammer proposed setting up front joint-stock companies (JSC) in a number of capitalist countries with lenient tax laws, engaged in intermediary activities. Trusted individuals were to act as shareholders. Accounts were opened in their names in banks of the JSC’s host countries, into which the corresponding sums were placed. KGB operatives with experience working in residencies were used as the trusted shareholders. The KGB operatives entered the new conditions of corrupt relations already knowing the mechanisms needed. They had honed them during operations to provide financial support to foreign communist parties. They were more skilled than others in the art of evading surveillance, using intermediaries, front companies, rapid meetings, dead drops, and containers.

And already under Robert Maxwell, joint ventures were set up on the territory of the USSR, providing access to the said deposits (see AN No. 26(60) of June 28, 2007).

Illegal Financial Operations of the KGB

In the late 1980s, KGB structures tried to bring the economic entities being created under their secret control. Each large commercial organization was offered KGB officers. Entrepreneurs recounted that interaction with the KGB developed in almost the same way for everyone. The scheme was simple and practically identical. First came racketeering and intense pressure, then the KGB offered help and created the enterprise’s security service, in which the leading role belonged to former KGB handlers. Then KGB officers infiltrated the firm’s management as new co-owners. At that point, the enterprise’s independence ended. As a rule, such organizations initially encountered certain financial problems. However, soon after a commercial enterprise agreed to “recruitment,” it would suddenly begin to receive absolutely fantastic benefits, licenses: for aluminum, zinc, copper, tomato paste. And then the “engaged” firm, in which this change of ownership had taken place, would rapidly expand on the market.

The Party facilitated the process of economic restructuring. In January 1987, at the insistence of the CPSU Central Committee, restrictions on foreign trade were lifted. Enterprises and other legal entities were permitted to sell scarce goods abroad: food, raw materials, electricity, gold, chemical products, and so on. By resolutions of the CPSU Central Committee and the USSR Council of Ministers in September and October 1987, directive instructions were already given for the “mandatory” sale of scarce goods abroad. In 1988, the KGB was tasked with creating capitalist structures, commercial structures, and joint ventures. By mid-1990, the Chamber of Commerce and Industry alone had participated in the creation of approximately 500 joint ventures.

Thus, the KGB had experience in financial operations. As a result, in August 1991, it became clear that one of the largest criminal acts of the 20th century had taken place. The CPSU’s money vanished without a trace. It had been timely disposed of, naturally, not without KGB involvement. Radical democrats demanded the names of party functionaries mired in corruption, but it was too late. A series of mysterious “suicides” of a number of officials followed: on August 26, 1991, the Head of the CPSU Central Committee Administration, Nikolai Kruchina, jumped out of a window; on October 6, his successor Georgy Pavlov; 11 days later, Dmitry Lisovolik, head of the USA section of the International Department of the CPSU Central Committee. In total, from August to October 1991, there were 1,746 mysterious suicides of former party functionaries in the territory of the former USSR, and almost the same number of joint ventures were established.

During the investigation, secret receipts were discovered in the CPSU Central Committee archives: “…I, a member of the CPSU, pledge to preserve the party funds entrusted to me until…” About 600 bank accounts within the country and almost 500 abroad were identified. In 1992, Yegor Gaidar concluded a sensational contract with the private detective agency “KROLL” from the USA to gather information about the monetary assets and funds of Russians abroad. Three months later, the Americans presented Gaidar with a report, which then vanished without a trace. The list of accounts included about 30 well-known political figures.

Fertile ground for espionage

Observing the events unfolding in the USSR, CIA analysts sent encrypted assignments to their regional residencies, demanding intensified actions to dismantle the Union, fan separatism, unleash civil war, and establish external control over the Soviet Army. In the early 1990s, an uncomplicated directive in the form of an Instruction arrived from Langley to the Moscow residency. It stated that the primary targets for recruitment approaches are the heads of subjects of the Federation, who possess legislative power locally. Second on the list were representatives of the so-called counterbalance to this power—meaning the bureaucratic apparatus of modern Russia, capable under certain conditions of nullifying any reformist initiative. Third were the “oligarchs”, fourth—local representatives from “St. Petersburg”, fifth—the “siloviki” (security officials), sixth—the Russian Orthodox Church, and seventh—the media. Representatives of the technical intelligentsia, science, culture, and the “people” were absent from this list. Apparently, they fell short, or perhaps they “weren’t considered”. Instead, it was recommended to use unlimited opportunities to provide assistance to various political parties and public organizations in order to successfully promote their agents of influence into Russian power structures, administration, and security agencies.

Source: Informacia.ru

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