Here is a summary of Vsevold Sokolov’s World Policy Journal article, “From Guns to Briefcases” (Spring 2004), describing the evolution of the Russian State and Organized Crime in Russia....
Thesis: Just as the Russian State has evolved since the fall of communism, so has organized crime.
• Two key findings have emerged from the author’s research: (1) organized crime did not spring up from the ashes of the Soviet State, rather the current organized crime is an evolutionary offshoot of the Soviet era criminal-business partnership that existed prior to 1989; and, (2) the positive economic outlook of Russian organized crime has frequently been overlooked. In fact in the mid 1990s, it was the criminal groups that provided businesses protection and enforced contracts that the state was too weak or corrupt to do so.
• There is a myth that the “Red Mafiya” is a monolith with global reach – run by all-powerful godfathers. Rather, the current organization is characterized by loosely structured alliances based on generational shifts, ethnic divisions, shifting loyalties and leadership.• The myth is based on assumptions derived from Italian-American criminal networks and the legacy of the infamous 1930s Russian criminal fraternity – “thieves in law”
• This secret society declined as criminal groups began to form relationships with state officials in order to profit from the burgeoning black market that began to rise following the death of Stalin. “Self Made Men” came to power focused not on a criminal code of conduct but motivated purely by profit. Corrupt state administrators protected these organizations in return they received bribes and also black marketed goods that were hard to come by in a state run economy.
• As a result of Gorbachev’s reforms in the 1980s, the state became weaker and criminal organizations multiplied and expanded to fill the power vacuum – especially in terms of protection and financial services. With the fall of communism, organized crime stepped in during a period of “anarcho-capitalism.” Conflict now existed not between the state and crime organizations but between crime organizations seeking to dominate certain areas or services.
• As privatization began in earnest, criminal groups began entering into long-term economic partnerships with businesses and consequently became more tied to fundamental laws of economics – competing for clients and setting prices.
• In 2000, Putin declared he would institute a “dictatorship of the law.” Cracking down on specific criminal activity and seizing financial assets. He also took on the arduous task of eliminating the demand for extralegal protection and asserting state control. In order to battle corruption, he raised the salaries of police and public prosecutors while executing a crackdown on corrupt police.
• This internal effort was coupled with other nations (Europe and Canada) to seize assets and curb the spread of Russian organized groups.
• Both gangsters and law officials have cited Law reform as a major factor in stopping the spread of organized crime. Russia has also sought to reduce its own bureaucracy and make it easier for entrepreneurs to operate within the law versus outside.
• Consequently, many criminal groups have also expanded out into legal ventures.
While Putin has emplaced numerous measures to battle organized crime, criminals (like businesses) in Russia have learned to adapt to their surroundings and still seek to make a profit in a corrupt system.