CHAPTER 6

THE UNHOLY TRINITIES

Big thieves hang little ones.

Russian proverb

It is a perverse irony that the true midwives of organised crime in today’s Russia are to be found in an unlikely and disparate trinity of Soviet general secretaries: Stalin the tyrant, Brezhnev the manager and Gorbachev the reformer. Stalin created the collaborator-criminal willing to work with self-interested elements of the elite. Brezhnev presided over a Soviet Union characterised by corruption and the black market, turning the new vory increasingly towards the informal economy. And Gorbachev shattered the state, but also unleashed new market forces that the vory would prove best placed to exploit.

The way their policies conspired to shape the vory is perhaps best illustrated by the career of Gennady Karkov, ‘The Mongol’. In the late 1960s and early 1970s, his gang was the terror of Moscow’s black-market magnates, and it would set the tone for the evolving relationship between gangsters, underground entrepreneurs and a corrupt state. It would also be the finishing school for a generation of future kingpins, including Otari Kvantrishvili, who in the early 1990s looked set to become the boss of Moscow’s ganglands, and Vyacheslav ‘Yaponchik’ Ivankov, who brought Moscow’s underworld to New York’s Brighton Beach.

Karkov (sometimes also called Korkov) was born in 1930 in Kulebaki, 300 kilometres east of Moscow, a child of Stalin’s charnel house industrialisation and the Second World War. By all accounts he soon fled the smog and shadow of Kulebaki’s foundries and the workers’ barrack blocks around them, and took to the underworld. He was smart, quick, ruthless and daring, a natural-born leader who was very willing to get his hands dirty, and he quickly adapted to the new, more permissive code of the suki. He was crowned a vor v zakone at the unusually young age of twenty-five, just two years after Stalin’s death in 1953, and given the klichka ‘The Mongol’ on account of his Asiatic appearance. Later that year, he was arrested in Moscow on charges of theft. He served six years of a ten-year sentence before returning to the capital in 1962 and resuming his criminal activities, but now with a more ambitious plan. Before, he had simply been a robber; now, he would be a racketeer. In his absence, the black market in Moscow had grown exponentially, and the tsekhoviki, the ‘shopmen’, who ran it were doing well for themselves. He assembled a gang of some thirty criminals, and began to stalk these hidden capitalists. Initially, the gang would burgle the tsekhoviki’s apartments, confident that their victims could not go to the police lest they had to explain how they had accumulated the cash and luxuries that were taken. Then, they graduated to extortion, demanding payment in return for a peaceful life and kidnapping those who refused or who had hidden away their ill-gotten gains.

Having taken to wearing police uniforms to access people’s homes without question, Karkov’s men also began using the same tactic to seize their victims. The tsekhoviki would then be driven out of town, typically into the woods or to abandoned houses, and tortured with sadistic ferocity until they broke: burned with hot irons; hung from trees and only cut down when nearly asphyxiated; even nailed into a coffin, which the burly, drug-addicted thug bearing the imaginative nickname ‘The Executioner’ would then begin to saw in two, as if in a magic trick. For a while they did handsomely for themselves, and Karkov’s gang doubled in size. Meanwhile, with the rise to power of General Secretary Leonid Brezhnev in 1964, the corruption of the Communist Party and the pervasiveness of the underground economy only deepened.

Karkov and most of his men were arrested in 1972 in one of the largest post-war operations mounted yet by MUR, Moscow’s Criminal Intelligence Division. Most of the charges failed to stick as witnesses became strangely forgetful and documents vanished, but there was no way the authorities were going to let ‘The Mongol’ walk. He was convicted on two charges and sentenced to fourteen years in a strict-regime prison colony. He would end up serving his full term, only being freed in 1986, a year after Gorbachev had become general secretary, and in the earliest and most hesitant stage of his reforms. Karkov’s time had passed, though. He tried to muscle his way back into the criminal big leagues, and built himself something of a fiefdom in Moscow’s northern Tushino region, but this never amounted to much. He eventually died of cancer or cirrhosis – reports vary – in 1994.1

His decade-long reign in Moscow was punctuated by arrests and time in detention, but nonetheless ‘The Mongol’ became a legend. I can attest that in the 1990s, hardened MUR investigators and gangsters alike used him as a benchmark for assessing the underworld contenders of the time. Beyond his own talents, it was because he was the first seriously to appreciate the extent to which the rise of the black market, facilitated by the corruption of the Party, was creating a new class of underground entrepreneurs who were cash rich but protection poor, such that they were ripe for exploitation. Karkov had money, but he also accelerated the process leading to an understanding between vory, tsekhoviki and the state. This would finally be formalised in 1979 when a gathering of kingpins from across the Soviet Union decided the terms of the ‘tax’ they would expect from the black marketeers in return for protection.² Karkov’s true legacy was not just a new generation of vory but also a whole new criminal world in which they would operate. This alliance would be crucial in the 1980s, when Mikhail Gorbachev’s quixotic reform programme would in practice doom the state and empower the gangsters.

Stalin’s legacy

In certain circles, criminal tendencies are even becoming fashionable. Thieves’ slang and even thieves’ tone of voice have become trendy.

Letter to the Party leadership from concerned citizens of Chelyabinsk³

On 5 March 1953, Stalin succumbed to a stroke, cardiac haemorrhage and paranoia (the last because his suspicion of potential assassins meant he forbade unauthorised entry into his rooms and so lay dying for hours before anyone realised). The Soviet Union he bequeathed to his successor was a perverse collection of paradoxes. It was an unquestioned superpower, a nuclear one at that, with an empire in eastern Europe. It had industrialised and electrified, brought literacy to the masses, made the steppe sprout grain and the tundra give forth gold and timber. Yet this had been on the basis of murderous mass terror, and it left the countryside scarred with Gulags, prisons and mass graves, and the Soviet psyche shadowed with habits of collaboration, opportunism and automatic defensiveness.

It was also showing the signs of pressure. The elite were desperate not to deliver themselves to another Stalin, but at the same time were worried about retaining their grip on society. The Cold War was in full swing. The labour camps had become uncontrollable and uneconomic, hence their opening up. ‘Theft of socialist property’ was a serious crime, but also endemic. It was not just that in times of extreme hardship and shortage people had to steal from the state to get by, it was also a by-product of the alienation brought about by the stark juxtaposition of an official narrative of worker empowerment, shared plenty and comradely democracy, and the reality of corruption, scarcity and authoritarianism. If everyone owned everything, then surely no one owned anything, and how could it be theft if no one owned it? Everyone stole what they could, and even if they could not steal goods, they stole time, disappearing from work to queue up for food, or moonlighting off the books. Everyone knew it, and this was even the subject of much humour:

‘I think,’ says Ivan to Volodya, ‘that we must have the richest country in the world.’

‘Why?’ asks Ivan.

‘Because for nearly sixty years, everyone has been stealing from the state and still there is something left to steal.’4

Stalinism had been marked by a strange cognitive dissonance, a nation-wide Stockholm syndrome in which a bloody and wasteful tyranny could somehow coexist with continued belief in the Marxist-Leninist dream, or at least that there was some greater purpose to the suffering. Ironically, Nikita Khrushchev’s denunciation of Stalin in his soon-leaked ‘Secret Speech’ in 1956 and the consequent programme of ‘de-Stalinisation’ knocked away many of the surviving ideological underpinnings of the Soviet state. If enduring Stalin had been for nothing, what else meant anything? From this anomie would emerge all kinds of different counter-cultural expressions. Amnestied zeki brought with them the music of the Gulag, such that, as dissident poet Yuli Daniel wrote, ‘songs from the camps were becoming popular. They were gradually seeping through from Siberia and the Far North, and you kept hearing snatches of them in refreshment rooms at railway junctions . . . At last they marched into town on the backs of the “rehabilitated” offenders.’5 Foreign-influenced youth fads emerged, such as the stilyagi beatniks and rockers of the 1950s and 1960s, the football-mad fanaty and the heavy-metal metallisty of the 1980s. They not only challenged the orthodoxy of the Party, but often expressed that through a quest for Western clothes and music.⁶ Even theft from the state and corruption acquired a perverse, implicit legitimacy as blows struck against a hypocritical and exploitative elite. Change was coming, but no one could be sure quite what kind.

The vory found themselves within this strange new world. The irony was that, while the suki had won the cultural – and very physical – war in the camps, and were amongst the first to be released in the amnesties following Stalin’s death, they were emerging into a USSR whose underworld was still dominated by the blatnye. The result was a renewed struggle, in which again their key assets – a capacity to organise and a willingness to work through and with the authorities – ensured that the suki won. It was a patchwork victory, a neighbourhood here, a township there. One retired police officer I spoke to recalled his early childhood in Yekaterinburg (then called Sverdlovsk), a city in the Urals that ever since the mid-1950s had been afflicted by so-called ‘blue gangs’ – called that because of their dense tattoos – of ex-convicts. At first this had meant vicious street battles between blatnye and suki groups on an almost daily basis.⁷ It was not an easy victory for the ‘bitches’, then, let alone a bloodless one. Much of the dramatic increase in lawlessness across the Soviet Union – 552,281 recorded crimes in 1953, 745,812 by 1957⁸ – was accounted for by the inevitable chaos when 5 million convicts were suddenly dumped into the country, with minimal assistance; it also concealed a nation-spanning underworld revolution. However, it was near-enough inevitable, given the circumstances.

Gangsters under pressure . . .

The real tragedy of the 1980s is that until then, the [criminal] authorities were kept under the state’s thumb. We were winning. And then we threw it away.

Russian police officer, 1990⁹

After they had completed their reconquest of the Soviet underworld, though, the gangsters soon had to come to terms with their place in the new order. In 1957, Deputy Interior Minister Mikhail Kholodkov complained that ‘often in the camp points it is not the administration but the recidivists who are in command’.10 Outside the labour camp system, though, the biggest gang in town was undoubtedly the Communist Party and the opportunists who had risen under Stalin. With understandable hyperbole, David Remnick calls it ‘the most gigantic mafia the world has ever known’,¹¹ but this was a view shared in the underworld. As the professional pickpocket ‘Zhora the Engineer’ put it, ‘there certainly is a Soviet mafia. And it’s organised a hell of a lot better than the American mafia. But it has another name. It’s called the Communist Party. We wouldn’t dream of trying to compete with it.’¹²

The state was authoritarian and possessed – in the form of the militsiya (police) and the political police (from 1954 known as the Committee of State Security, KGB) – the undoubted capacity to crack down on the gangsters if ever they became a challenge or an embarrassment. Indeed, one of the key purposes of the 1956 Law on Measures for Improving the Performance of the USSR MVD (Ministry of Internal Affairs) was precisely to suppress the gangs that were erupting out of the Gulags, and a multi-vectored campaign was soon launched by the police, the KGB and the agencies of social and political control. Even suki, in what could be considered tough but ironic justice, might find themselves considered ‘counter-revolutionaries’ rather than mere hooligans if they tangled with the police or their volunteer auxiliaries, the druzhinniki. This was generally done to regain control over the situation and to reassure the public, but it was also implicitly part of the creation of a new set of ponyatiya, understandings between the state and the underworld.

Throughout the 1960s and 1970s, the vory were very much kept in their place, and the general consensus is that the gangs which had first emerged in the 1950s were largely dismantled. Organised crime was atomised back to relatively small-scale ventures and, despite continued sporadic cases of armed robbery and the like, often defaulted to activities such as fraud and illegal gambling. In the late 1960s, for example, an old man who had been a fabled card-sharp in the 1940s, and who went by the klichka ‘Tbilisi’, was persuaded to set up an informal academy in Moscow and pass on his skills to a new generation. As a result, in the early 1970s the capital saw a flowering of professional gambling, which spawned its own specialisms, each with its own place in their hierarchy, from the ‘riders’ who played in taxis roaming Moscow’s streets, to the top tier, who had their own secret gambling dens in restaurant backrooms and apartments.13

Without a critical mass of members, spread as they were now across the country, without the Gulags as forcing houses for a new generation, and without the ability to operate openly, the vorovskoi mir as a distinctive subculture began to die. Of course, there was still much crime, a great deal of it organised. But the vory’s strong sense of being separate from the rest of the population, of their status as the only true lyudi (‘people’), began to fade, along with the transmission of the code and folklore of the vorovskoi mir. The father of the police officer quoted above had himself been in the militsiya in the 1960s and, in his view, ‘then the vory were already losing their way. Some believed in the old code, and remembered it well. They tried to teach it to the youngsters. But outside the camps, it was different. Just because they knew all the lyrics of Vysotsky, the youngsters thought they knew the code. They didn’t.’¹⁴

Vladimir Vysotsky, an iconic singer-songwriter of the post-Stalin era, did indeed draw heavily on thieves’ music for language and inspiration. But, as the retired policeman noted, the essence of the vorovskoi mir was not just a shared songbook. For perhaps twenty years, the thieves’ world would fade, gaining a mythological status at the expense of authenticity and power. It had adapted to Stalinism, though, so it would be revived, reinvented and reinterpreted again in the later Brezhnev and Gorbachev years, from the 1970s. It would re-emerge in an underworld dominated by the opportunities to be found in the informal economy and corruption, but also one with far fewer opportunities to use violence openly without incurring the wrath of the state. Just as the suki used the same language as the blatnye, simply rewriting the code, so too the new generation of vory would seek to use that language and culture in new ways. Karkov’s story, of the vor v zakone who found his chance preying on the underground economy, was indeed the harbinger of the next iteration of the vorovskoi mir, one shaped by the black market.

. . . street gangs on the rise

Say what you like, but there are now two battles being waged in Kazan. One of them, with knifing and bloodshed, is in full view of the public. But the other is even more awful. It is a hatred-arousing battle that has divided Kazan into ‘rotten boys’ and ‘good ones’.

Ogonyok magazine, 198815

One perverse irony of this situation was that it also contributed to the rise of marginalised and violent street gangs. Back in the day, many of the more aggressive and charismatic young street toughs would have drifted into the vorovskoi mir and the discipline that entailed. As it was, though, their anti-social proclivities, magnified by the absence of alternative outlets and activities beyond the stultifying banalities of the Young Communist movement, had to find other outlets. The so-called ‘Kazan phenomenon’¹⁶ – because it was first properly recognised in that city – followed a classic pattern, as adolescents clustered around territorial divisions, particular affiliations (such as following the same football team) or even large factories, to hang out and brawl. Indeed, this had been a staple of village life until the 1960s, and was simply transposed into the cities. Fights, often conducted with a kind of rough-and-ready ritual and rules, let young men blow off steam, demonstrate their masculine virtues and establish hierarchies. Fyodor Razzakov remembers being part of a gang in 1970s Moscow which claimed three streets in the north-east of the city – Kazakov, Gorokhovsky and Tokmakov – and whose allies were the kids from Bauman and Pochtovaya streets, while their blood foes were the lads from the alleys around Bauman Gardens less than half an hour’s walk away. Even so, all these gangs would gladly unite for a grand brawl with their rivals from the central Chistye Prudy neighbourhood, which could sometimes involve up to a hundred young bruisers.¹⁷

Sometimes, street gangs evolved into organised crime groups, monetising muscle by turning it into territorial control, or at least the capacity to extort rents from the local informal economy. In Kazan, several street gangs ended up merging into Tiap-Liap, an organisation run by Sergei Antipov, an older ex-convict who masterminded a process of consolidation that saw more and more small gangs forced to join or be destroyed. By the end of the 1970s, Tiap-Liap had perhaps 200 members, with their own structure, a common obshchak fund and even a uniform: dark padded jackets and a badge (a crown with the letters TK, for Teplokontrol, the neighbourhood where it all began). They were involved in organised burglary, provided protection for the tsekhoviki black-market entrepreneurs, and escorted the movement of illegal goods. Their example encouraged or forced other Kazan gangs to go through a similar transformation, but the authorities were evidently reluctant to admit to such an open criminalisation of their city.18

Ultimately, though, Tiap-Liap would become a victim of its own success and its overconfidence. In August 1978, in a deliberate show of force against the rival Novotatarskaya Sloboda gang, they deployed perhaps fifty toughs with guns and iron bars and began shooting and beating at random in their territory. A seventy-four-year-old war veteran was killed, and ten others – including two police officers – were wounded. This the authorities could not ignore and so, as usual, they swung from wilful blindness to draconian repression. Thirty gang members were tried and convicted; two senior members were executed. While gang violence in Kazan persisted into the 1990s, Tiap-Liap itself was broken.

So even in its most primordial forms, organised crime endured, and it had a chance for a revival in the 1970s – to a large extent, ironically, thanks to the government that had tamed it. For all that it had the laws, the men and the guns, the state was also riddled with corruption and increasingly dependent on the black market to satisfy the needs of ordinary Soviets and elites alike. A second shadowy trinity emerged, of corrupt officials, gangsters and black marketeers. The Party was facing a prolonged period of stagnation and decay. Under General Secretary Brezhnev (1964–82), the scale of corruption within both the Party and society expanded dramatically. As the planned economy began to grind to a painful halt, the underground economy grew to compensate.

To an extent, this was a natural by-product of the failures of the system: people turned to bribery, the black market and blat – the economy of favours¹⁹ – to fill in the gaps. However, it was implicitly also policy: under the social contract that Western Sovietologists came to call the ‘little deal’, the state granted the masses greater freedom to loaf, complain, steal and barter, so long as they did not challenge the status quo.²⁰ Likewise, the elite were pacified by perks, access to scarce goods and a quiet, safe life. This shabby compromise worked for a while, so long as the economy was growing at a sufficient rate to provide the resources to keep everyone content, but it would not last. Meanwhile, not only did organised crime benefit from the indolence and venality of the state, it acquired a new role as the indispens-able middleman between corrupt Party figures and the tsekhoviki.

The fish that rotted from the head

Who is the most dangerous counter-revolutionary right now? The bribe taker.

Soviet propaganda poster, 192321

In the 1970s, in particular, ordinary Soviets were being bought off by the fruits of early consumerism: a fridge, a television, maybe even a car. But the vlasti, the people of power, had from the first eagerly used their new latitude to feather their own nests on a much grander scale, building themselves summer palaces, dressing in imported clothes, and generally living often lavish, easy lives. As the Russian proverb has it, the fish rots from the head, and the institutionalised corruption of the Soviet elite not only increasingly made the state dysfunctional and ungovernable – and, as Gorbachev was to discover, unreformable – but it also contributed to the corruption of society as a whole.

The original Bolsheviks had considered corruption not just a moral failing, but also a symptom of pre- and anti-revolutionary attitudes and a practical threat. However, they were no more able to control it than Stalin. Indeed, under his reign the malign convergence of hunger and desperation on the one hand, and impunity and official omnipotence on the other, made it all the more integral to the system. James Heinzen has suggested that the Second World War was ‘a largely unrecognized turning point in fuelling the kind of corruption that proved to be a hallmark of later periods of Soviet history’.²² With their careers and bonuses dependent on the often unrealistic demands of the Five-Year Plan, managers and officials used illegal methods to meet their quotas (or at least to appear to). Most enterprises had their tolkach, their ‘fixer’, whose job it was to use his connections to get the labour, raw materials, spare parts, transport or whatever else was needed to reach the targets.²³

Of course, within the workplace – from labour camp to government office – those with power also demanded tribute from those beneath them, for promotions, perks or just a quiet life. Meanwhile, ordinary Soviet citizens paid bribes to get what they were entitled to but which was in short supply, and also to get other goods, services and opportunities to which they were not. Samuel Huntington memorably once suggested that ‘in terms of economic growth, the only thing worse than a society with a rigid, over-centralized, dishonest bureaucracy is one with a rigid, over-centralized and honest bureaucracy’.24 Soviet citizens would probably have agreed. Bribery, connections and blat were ways in which citizens could exert some personal control over their lives and a world which were otherwise shaped by the Plan, the command economy and scarcity. But, while on a micro-scale they empowered the individual, overall they simply passed wealth upwards, to the gatekeepers who could control access to defitsitny goods (ones in short supply), grant a job or a promotion, or approve a medical treatment. The so-called ‘socialist’ system actually became a pyramid of predation, as those at the bottom paid those at the top, often for what was no more than their legal due.

Beyond the bespoke corruption at the individual level, there were also industrial-scale schemes which emerged thanks to the weaknesses and structures of the post-Stalinist state. The dependence on clientelism, the lack of independent checks and balances, and the pervasive culture of illegality allowed rings of officials, especially in the regions, to organise schemes which would plunder the greatest piggy bank of all: the state itself. Perhaps the crowning glory was the Uzbek cotton scandal, wherein local Party boss Sharaf Rashidov and a slate of Party and government officials in the central Asian republic of Uzbekistan, including the local KGB, were involved in a decade-long scam that embezzled some three billion rubles in payments for cotton that was never harvested, from fields and farms which did not exist. Claiming uncharacteristic efficiency and discipline, reports flowed back to Moscow of new irrigation networks dug, new fields planted and productivity records shattered. No wonder cotton was known as ‘white gold’, as thanks to the connivance of co-conspirators in Moscow – including Brezhnev’s son-in-law and deputy interior minister, the grossly overpromoted Yury Churbanov – they were able to conceal the minor detail that none of this alleged harvest actually existed. So tight were the circles of mutual obligation and self-interest that, when Yury Andropov, the ascetic former KGB chief who became general secretary in 1982, began to try and get to the bottom of this plot, he had to turn to extreme measures. Spy satellites were redirected to photograph the Uzbek cotton lands, and soon revealed scrub and steppe where rolling fields were meant to be. This was the beginning of the end. Rashidov died in office in 1983 – some claim suicide – and hundreds of officials were swept up in the successive investigations. Sackings, prison terms and further suicides followed.

Yet while the cotton scandal may be an egregious example, the fact is that it reflected the general pathologies of the late Soviet era. Rashidov had been feted and honoured – including being awarded no fewer than ten Orders of Lenin – because of his real success in maintaining control over Uzbekistan through the reigns of three general secretaries and his apparent success in achieving and exceeding targets. Needless to say, his control had been largely for his own benefit and his successes often rooted more in fiction than fact. As one of the defendants in the cotton case rightly claimed, ‘crimes like bribery and inflated production reports, and theft, have become the norm. There is no serious attempt to combat these things . . . Thus not a single question gets resolved without paying a bribe.’25

In an era when even the most powerful and highly praised figures within the system were deeply and enthusiastically involved in corruption to maintain their privileged existences, is it any surprise that ordinary citizens, experiencing a relative decline in their standards of living, likewise turned to illegal means? To an extent, this meant corruption. But it also meant an ever-deeper relationship with the underground economy.

The shadow men . . .

No one lives on wages alone. I remember in my youth we earned money by unloading railroad freight cars. So, what did we do? For every three crates or bags unloaded we’d take one for ourselves. That’s how everybody in the country lives.

General Secretary Leonid Brezhnev²⁶

Much of the underground economy was in the hands of petty fartsovshchiki, black-market wheeler-dealers, but it was big business, and could not have developed as far as it did without close ties with corrupt Party officials. The more powerful and ambitious tsekhoviki (or tenevniki, ‘shadow men’) needed these connections not just for their own survival, but often to gain access to raw materials, facilities and labour. Many fartsovshchiki dealt in illegally imported defitsitny goods, from clothes to decadent Western music, or ran illegal money exchange scams. The legendary Yan Rokotov, ‘Cross Eyes’, who was said to have amassed a fortune of 20 million rubles by the time of his arrest at the end of 1960, started earning serious money trading vodka for Western clothes off the backs of thirsty Finnish tourists, before he later went into more ambitious schemes dealing in foreign currency (with a side-line in outright fraud).²⁷ However, the greater part of the underground economy was accounted for by domestic goods, whether diverted from official production or made in underground factories.

Many of the black marketeers went out of business or were arrested: this was, after all, ‘speculation’, defined as unauthorised buying and selling for personal gain. It could get you up to seven years in prison under Article 154 of the 1960 Russian Criminal Code (which was the basis for the codes adopted in the other constituent states of the USSR) if considered a proper business, not just an isolated transaction. Indeed, Rokotov was shot in 1961, after Khrushchev had amended the law on currency speculation to allow capital punishment.

Many of those who built up business empires, which often prospered for years, did so working inside state structures and, frankly, making up for the failures of the planned economy. In 1981, a major scandal broke relating to underground businesses in the Chechen-Ingush Republic. An ambitious entrepreneur called Veniko Shengelaya, conscious of the demand for basic consumer goods and the miserably low productivity of the local economy, targeted an especially moribund enterprise. It had a fabric shop that made linen for industrial flour sieves, and thus every excuse to order materials. Shengelaya and a consortium of existing black marketeers brought the plant manager into their scheme and set up separate production facilities turning out shopping bags. Materials came from the state sector, workers moonlighting on this job were paid extra, and the bags met a market need. In its first two years, protected by judicious bribes to a variety of senior officials, all the way up to figures at the Ministry of Light Industry, the business made almost half a million rubles. At that point, like any good start-up entrepreneur, Shengelaya sold the business on to another for a hefty fee. It prospered and grew further, diversifying into knitwear, artificial leather and other markets. It was five years before it came to the attention of the authorities, and then only because one of the conspirators was sending money overseas, to his brother in Italy, whom he hoped to join.28

The conspirators ended up receiving sentences of up to fifteen years in prison, but what is striking is, in many ways, the very banality, even wholesomeness of the operation. Not only did it follow the same essential trajectory of any capitalist business, it did so wholly inside the system and did not compete with the official economy so much as supplement it. The workers were paid better; the consumers received good-quality merchandise they simply could not find in the shops. So what was the problem? Such businesses evaded taxes, of course. They also often could operate precisely because they acquired raw materials cheaply through state requisitions and squatted inside government facilities. But most dangerously for the regime, they demonstrated the failings of the planned economy compared with the dynamism of the market, and encouraged widening networks of corruption and compromise. Such networks could, and did, reach to the very pinnacles of the system, as the Uzbek cotton scandal had demonstrated.

The king of the tsekhoviki, though, was the notorious Otari Lazishvili. A Georgian, his business success depended to a considerable extent on his close, symbiotic relationship with Vasily Mzhavanadze, Georgian Party first secretary from 1953 until 1972. From the late 1960s, Lazishvili built up a business empire with resources diverted from the legal economy. He established a network of factories and workshops, many, like Shengelaya’s business, on the premises of official plants, in which goods from shopping bags to raincoats were made for sale across the USSR with raw materials which managers overclaimed or wrote off as damaged or destroyed. While Lazishvili bribed lesser officials left and right, Mzhavandze was his true krysha (‘roof’), his protection, and in return he received the steady stream of gifts and tribute he needed to live the kind of high-rolling life to which he and his wife Viktoria soon became accustomed. A high-ranking Party official could live like a prince, but they aspired to live like kings.

Lazishvili meanwhile enjoyed his wealth and his impunity. It was said that he had bath taps made of gold at a time when ordinary Soviet citizens could wait for years for new fittings, and he would fly to Moscow to watch the Dinamo Tbilisi football team, wagering thousands of rubles on a game, at a time when a nurse might earn 1,000 rubles in a full year.29 Again, ultimately this cosy scheme foundered thanks to the general anti-corruption campaign Andropov launched while still head of the KGB. The apocryphal story is that Georgia’s ambitious interior minister, Eduard Shevardnadze, spotted Viktoria Mzhavanadze wearing an enormous and distinctive diamond ring that Lazishvili had given her and which Interpol had reported as stolen. This is probably just a myth, though, not least as Lazishvili’s businesses and the Mzhavandazes’ venality were hardly secrets. In any case, with Andropov’s enthusiastic support, Shevardnadze launched a campaign against Lazishvili’s business empire and its protectors. Ultimately, Mzhavanadze was sacked in disgrace in 1972, and Lazishvili arrested soon after.³⁰

Yet this relationship arguably foundered only because its protagonists were unusually flagrant and because of the political ambitions of Andropov (whose anti-corruption campaign was a useful weapon against his enemies within an elite where everyone had skeletons in their closets) and Shevardnadze (who replaced Mzhavanadze). From the 1960s, the underground economy had become an unacknowledged but crucial element of Soviet life, but to acquire this position, the tsekhoviki had had to reach understandings not just with officials, but organised crime.

. . . and their gangster friends

The gangsters left the black-market barons alone, even protected them. For a price, of course, because no one does anything for free. And over time, they got to see how the secret capitalists worked, and how they lived, and they came to see that they could do that, too, when they had the chance.

Russian police officer, 199031

Few of the tsekhoviki were anything like as rich and powerful as Lazishvili, just as few Party bosses were quite as blatant and entrenched as Mzhavanadze. The latter had the power to punish or protect, and virtually absolute authority over their own fiefdoms. On the other hand, they often lacked the means to convert that into the money and consumer goods they craved. With their protection, the magnates of the underground economy could smuggle in foreign luxuries, deal in high-demand goods and set up workshops and factories to produce everything from counterfeit jeans to cigarettes. In the process, they became rich – but could not risk spending their ill-gotten gains unless they retained that protection. Furthermore, in most cases neither party could easily or safely talk to or work with the other.

First tempted to be predators on the tsekhoviki, following the example set by ‘The Mongol’, the gangsters then became their middlemen. Through the 1960s and 1970s, they were in many ways the weakest of the three: they needed the black-market businessmen’s money and the Party bosses’ protection. But they also became indispensable, and knew how to parlay that into greater leverage and freedom. By the late 1970s, the tsekhoviki had decided that it was better to make a deal. Representatives from both worlds met in the southern Russian spa town of Kislovodsk in 1979, in a gathering that undoubtedly was known to the authorities and may even have been brokered by them. Although I have never seen anything to corroborate it, one retired KGB officer who served in the Fifth Chief Directorate (responsible for domestic political policing) later claimed to me that the head of his unit had actually attended this so-called ‘congress’ as an observer. The outcome was an agreement that, in return for a tithe of one-tenth of their earnings, the tsekhoviki would be free from interference.32

Everything became increasingly institutionalised: black marketeers would pay local gangsters a tax, while the vory, possibly in conscious mockery of the Party but more likely assimilating its language and methods, began holding more such congresses of gang leaders on issues including whether to deal drugs, how to respond to changes in policing and even, at a meeting in Tbilisi in 1982, whether to get involved with politics.³³ (The result was inconclusive: Georgian vory wanted to get closer to corrupt officials, Russian traditionalists under the vor ‘Vaska Brilliant’ were reluctant, and the meeting ended without a firm decision.) The more they dealt with entrepreneurs, the more they had to come to understand the market and respond to new opportunities; the more they dealt with the state, the more they had to understand politics and demonstrate the capacity to resolve disputes and maintain discipline. Furthermore, in a foreshadowing of a process that would become much more important in the 1990s, what started as a simple exchange of a tax for a quiet life led in many cases to closer and more productive cooperation between the black marketeers and the gangsters. From being the outcasts of the Gulags, the vory were moving closer to the heart of the Soviet system. And Gorbachev, alas, would unwittingly let them all the way in.