By Renfrey Clarke
MOSCOW — On the night of August 25, unknown assailants fired more than 100 bullets into the country house of Yuri Gekht, a business leader and head of the Industrial Union faction of the Russian parliament. Gekht, who has been a prominent critic of the Russian government's economic strategies, rolled onto the floor and survived with cuts from flying glass.
A few days later, leaders of the Russian Union of Coal Industry Workers announced that coal miners would go ahead with a planned one-day national warning strike. Union leader Vitaly Budko said the strike was being held in protest at the failure by the government to observe the industry wage agreement.
Together, these two events define the setting within which political struggles in Russia are being fought out. On one side, country's large and powerful gangster syndicates — known collectively as the "mafia" — are trying to supplant more orthodox entrepreneurs in such vital economic sectors as the banking industry and, through terror and bribery, to induce the organs of the Russian state to rule in mafia interests.
But the gangsters face a formidable adversary in the working class. After years of demoralisation, the labour movement is showing increased militancy, as workers demand an end to the devastation of living standards and the collapse of social services.
Within this setting, President Boris Yeltsin's conflict with the Russian parliament is by no means unimportant for ordinary Russians.
The contending sides in this struggle — the presidential apparatus on the one hand, and the parliament and its allies on the other — have not been penetrated equally by the mafia organisations. The will and capacity of the two sides to resist the criminal onslaught are also quite different.
The question of who is to exert decisive influence on Russian state bodies during the coming period — mafia hit men, or industrial moguls — affects working people in very direct ways. It will do much to decide whether Russia's national assets are simply stripped and exported, or whether significant investment takes place. It will also help determine whether civil liberties, including the ability of trade unions to exist and organise, remain a reality.
Corruption scandals
Since late July, the question of mafia penetration of the state structures has become a major political issue, as a series of corruption scandals have blown up around government ministers.
By late August, five top government officials had resigned or been sacked. Then on September 2 two close presidential collaborators, first deputy prime minister Vladimir Shumeiko and Federal Information Service chief Mikhail Poltoranin, were summoned to appear in court for questioning on corruption allegations.
Yeltsin's proclaimed agenda for the second half of August — "artillery preparation" for an all-out offensive against the Russian parliament — was largely thwarted. Instead, the president was forced to try to deflect charges that some of his most trusted associates had aided in the large-scale misappropriation of public assets.
Alliances
The relationship between Russia's 150 or so large criminal syndicates and the various ideological camps within the new capitalist class is far from simple. Historically, one of the key processes in the development of the new Russian bourgeoisie was the formation in Soviet times of a bloc between gangster elements and corrupt managers of state enterprises. The main purpose of this alliance was the theft and illegal sale of state property.
With the rise of Yeltsin, and the removal of many controls on exports, the opportunities for making corrupt profits expanded enormously. Raw materials that were saleable on world markets could readily be stolen in Russia, or bought at minimal prices. Modest extra sums could buy the official signatures needed for the goods to be shipped out.
The process of stripping Russia gained an enormous boost. Latvia and Estonia became world-ranking exporters of non-ferrous metals, despite having no deposits of their own. Meanwhile, travel on St Petersburg suburban rail lines became hazardous, as signalling equipment was plundered for the copper it contained.
Understandably, the criminal operators warmed to the doctrinaire neo-liberals who set the ideological course of the Yeltsin regime, and who regarded the lifting of state regulation on economic activity as virtuous in itself. The love affair was sealed in 1992 when the government of Yegor Gaidar launched its scheme of voucher privatisation. Traded on the streets without any requirement for the transactions to be registered, the vouchers formed an ideal mechanism for laundering illicit profits.
If the last few years have brought an increasing convergence of attitudes and interests between the gangsters and neo-liberal politicians, the political evolution of the managers of state-owned industries has often been quite different.
Many of these managers have been attracted by the opportunities for "nomenklatura privatisation" — that is, illegally transferring big shareholdings to their own names or those of trusted agents. But ownership of fixed assets has given the "nomenklatura bourgeoisie" interests and perspectives distinct from the essentially short-term objectives of the mafia, whose sights remain set on plundering the national wealth and depositing the proceeds in Western banks.
There are, of course, plenty of factory managers in Russia who have Swiss bank accounts and who collaborate with the mafia in selling embezzled goods. Nevertheless, the "nomenklatura capitalists" have at least a certain inducement to invest their capital within Russia, and to resist the process of capital flight that reduces the local market for their products. Dependence on government subsidies often leads such people to view state intervention in the economy quite differently from the neo-liberals. Also, nomenklatura capitalists tend to be highly critical of the neo-liberal prescriptions of fiscal "shock therapy" and rapid privatisation, sensing that the resulting crash might well wipe them out.
Through bodies such as Gekht's Industrial Union, the nomenklatura bourgeoisie has found its main political weapon in the Russian parliament. Thus there is a correspondence — diffuse, but clear enough to register in popular perceptions — between mafia and anti-mafia interests within the new wealthy class, and the presidential and parliamentary camps on the political battlefield.
Rutskoi's charges
If mafiosi have an interest in supporting neo-liberal policies, that does not prove that government ministers who implement these policies are corrupt. Nevertheless, prominent neo-liberals in Russia have often shown a strikingly complacent attitude to corruption. One example is former Moscow Mayor Gavriil Popov, famous for his 1992 complaint that he "never knew how much to pay" to "express his appreciation" when officials performed services for him.
The widespread suspicion that Yeltsin's ministers have not held back while co-thinkers are becoming millionaires represents a significant weakness of the government, and one that its opponents have done their best to exploit. In April, shortly before the referendum on "confidence" in Yeltsin and his policies, Vice-President Alexander Rutskoi announced that he had in his possession documents indicating corrupt activities by a number of senior government figures.
Rutskoi, an Air Force general with close links to economically hard-pressed military industries, fell out definitively with Yeltsin early this year. Yeltsin stripped the vice-president of most of his staff and bodyguards, as well as of assignments that included heading the Inter-Departmental Commission on Crime and Corruption. During his work with this body, Rutskoi later stated, he had gathered 11 suitcases full of potentially incriminating documents; these he took with him when he passed into opposition.
It is typical of the way both sides have operated that Rutskoi has not yet released a single incriminating document. Nevertheless, the allegations have gradually become more specific.
Of Rutskoi's main targets, one is deputy prime minister Shumeiko, accused of wrongdoing in a case involving the import of baby food from a Swiss firm. In July, state prosecutor Valentin Stepankov alleged that Shumeiko had authorised the improper transfer of $US19.7 million in state funds and property to Switzerland and Monaco.
Defence minister Pavel Grachev has been accused of complicity in a scandal involving the illegal sale of tens of millions of dollars' worth of state property in the former East Germany.
Some of the most substantial allegations appear to be those against Federal Information Service director Poltoranin. According to the English-language Moscow Times, the president's own state inspector has said Poltoranin acted improperly in allowing the Russian House of Culture in Berlin to be turned into a profit-seeking joint venture.
Rutskoi maintains that his suitcases are "working". In an August press conference, the vice-president said he had discovered 55 facts demanding investigation, and that in a number of cases the prosecutor's office had instituted criminal proceedings. On September 2 it was announced that charges had been brought against a series of senior military officers of the Western Group of Forces, including three generals.
Government divisions
So long as the charges of ministerial corruption were made by the opposition, Yeltsin had a certain ability to turn them aside by describing them as politically motivated fabrications by his enemies. Now, however, corruption allegations are being levelled in battles within the government itself.
Throughout this year the government has represented a fragile coalition between neo-liberal ideologues and pro-Yeltsin industrial managers. Sharp disagreements between ministers have repeatedly threatened the government with collapse. As the president's overall political position weakened during the summer, the need became pressing to end the divisions within the regime and to purge it of doubters.
One member of the government who was clearly targeted for removal was foreign trade minister Sergei Glazyev. Since being appointed last December, Glazyev has tried to stem the Russian state's huge losses from unregulated and often illegal raw materials exports. A system under which exporters of "strategic" goods, including many raw materials, were required to be licensed was massively abused. On August 18 the Foreign Trade Ministry reimposed tight state controls over raw materials exports, forcing exporters to work through a small number of accredited organisations.
The crackdown was followed by a prompt counter-blow. On August 20 Glazyev and a plane load of trade officials set off on a tour that was to include talks with leaders of five African countries. But when the aircraft was over the Mediterranean, it was recalled by a radio message. This calculated humiliation of the minister was reinforced by charges from the president's anti-crime commission that Glazyev's ministry was riddled with chaos and graft.
Glazyev's response was unexpectedly aggressive. He submitted his resignation in protest, rallied business leaders in his support and claimed that his accusers were trying to remove him in order to protect their ties to criminal syndicates. Among his "chastisers", Glazyev named first deputy prime minister Shumeiko and justice minister Yuri Kalmykov.
On August 25 the cabinet rejected Glazyev's resignation, but instructed him to cease his criticisms of ministerial colleagues. Yeltsin was left wondering what to do with the now heavily compromised Shumeiko.
In a further embarrassing development, the Moscow press on September 1 published a letter which had been sent to Yeltsin on August 23 by former security minister Viktor Barannikov. Yeltsin had sacked Barannikov on July 27, accusing him of "serious infringements of ethical standards". Many observers concluded, however, that the security minister lost his job because he was suspected of harbouring misgivings about the president's campaign against the parliament — something unacceptable in the chief of the still-powerful security apparatus.
In his letter, Barannikov described his sacking as the work of a clique of "mafia bureaucrats" around Yeltsin. These people, he maintained, were pushing the president and the nation "to the very brink". "Believe me", Barannikov wrote, "for the sake of their own interests they will betray you too".
Counterattacks
With the resources of the former KGB at its disposal, the presidential camp had not failed to conduct its own search for evidence linking opposition figures to corruption and the mafia.
In a television broadcast on August 18, leading figures in Yeltsin's anti-crime commission accused Rutskoi of misdirecting $20 million in state funds to a Swiss bank account held in his name. The money was said to have been channelled through a public welfare organisation, the Revival Fund, whose board of directors Rutskoi headed for a period in 1991.
In the same television broadcast, an important Rutskoi ally, state prosecutor Valentin Stepankov, was accused of having plotted to murder a leading member of the anti-crime commission, Andrei Makarov. On August 20 the Russian press published transcripts of a taped telephone conversation between Stepankov and a former co-worker, Dmitry Yakubovsky. Now a Canadian resident, Yakubovsky during part of 1992 was a consultant to Stepankov, and also enjoyed regular access to Shumeiko as an unpaid adviser. In the conversation, Stepankov responded to a series of leading remarks by suggesting that Makarov, as a "sick" individual, should "get treatment".
Except by the most devoted Yeltsin supporters, the charges against Stepankov have not been taken seriously. The allegations against Rutskoi have not fared much better.
The vice-president has emphatically denied having a Swiss bank account, and under Swiss law, the existence of such an account cannot be checked. The retired Israeli air force colonel who is supposed to have handled the transfer of funds is, conveniently, now dead. The main incriminating document was supplied in the form of a photocopy authenticated, for some reason, by a Canadian notary in Toronto; the whereabouts of the original are unknown. Because only a photocopy is available, the authenticity of Rutskoi's signature cannot be established.
Vice-president 'removed'
At the end of August Moscow public prosecutor Gennady Ponomarev, assigned to examine the allegations against Rutskoi and Stepankov, reported that in both cases the evidence was insufficient to justify opening a criminal investigation.
Nevertheless, on September 1 Yeltsin issued a decree stating that because the charges of corruption were "undermining the authority of the state power", he had decided to "temporarily remove" Rutskoi and Shumeiko from the fulfilment of their duties.
Although Shumeiko claimed to have asked to be suspended in order to concentrate on fighting the charges against him, it was widely considered that Yeltsin had resolved to dump his deputy prime minister as a political embarrassment.
Yeltsin's move against Rutskoi was more obscure. Under the Russian constitution, the vice-president fulfils assignments as decided by the president. It follows that the president can assign no tasks at all, and in fact Rutskoi has had no official assignments since early this year. If Yeltsin's decree concerned only these functions of the vice-president, then it was legal, but meaningless.
The wording of the decree suggested, however, that Yeltsin regarded Rutskoi as having been removed, at least temporarily, from the vice-presidency as such. This appeared to violate the sections of the constitution that set out mechanisms for the removal of the president and vice-president through impeachment.
Not surprisingly, this attack on Rutskoi was met with outrage by the opposition. On September 3 the parliament voted overwhelmingly to overturn Yeltsin's decree, and to refer the matter to the Constitutional Court for a ruling on whether the constitution had indeed been breached.
On September 6, Rutskoi found that he had been locked out of his Kremlin office on orders from the president's chief of staff; earlier, his telephone had been cut off. These actions reinforce the view that Yeltsin regards the vice-president as having been removed from office. If the president's moves now extend to defiance of the Constitutional Court, they could provide grounds for impeachment.
Yeltsin's attack on Rutskoi, which is clearly intended as an expression of scorn for the existing constitutional order, can be regarded as the opening volley in the autumn political offensive which the president has promised — and as a signal of the ruthlessness with which the fight will be pursued.
There is little sign that most Russians have followed the corruption scandals with particular interest. Popular anger is focused not so much on technical breaches of the law — which has never been perceived as having much authority — as on the collapse of mass living standards, the spread of burglary and street crime and the depredations of petty speculators.
Nevertheless, the penetration of state organs by the mafia — people accustomed to removing obstacles to their enrichment by using sub-machine guns rather than court proceedings — is extraordinarily dangerous. The corruptibility of many officials, and the complacent or politically opportunist response to this situation by government leaders, give the most savage and rapacious exponents of the new Russian capitalism access to power far greater than they would otherwise enjoy.
Corrupt government is inevitably bad government, and many business leaders — of whom Yuri Gekht is an example — have the sense to see this. But if the rule of law is to be defended in Russia, and elective democracy to have any meaning, it is unlikely to be capitalists who will lead this struggle. The most vocal ideologues of Russian capitalism — including people who in the days of perestroika were demanding a "law-governed state" — are today urging on Boris Yeltsin as he fights to overthrow the constitution and disband the parliament.
The only force in Russia capable of defeating the mafia, and of ensuring the rule of law and respect for human rights, is the working class. As the trade union movement launches itself increasingly into struggle, its task is not just to defend the economic and political rights of its members, but also the values of civilisation itself.