Odom started his testimony by evoking the tradition that had begun with Alexander Herzen and Mikhail Bakunin, Lenin and Trotsky. “A very large community of Russian intelligentsia… found it necessary to come to the West, if they were going to carry on the intellectual and political activities they desired,” he said. Odom went on, describing the difference between the three generations of émigrés to the United States and focused on the third wave, “which includes very sophisticated and well-educated people”:
They are not victims of war and upheaval, but people who have tried to change the USSR from within, people who have begun to rethink the basic and age-old questions facing their former country: What is Russia’s purpose? Whither the USSR? Can a totalitarian regime evolve toward a liberal and humane regime? They have come West not merely to survive Stalin and the fate of war, as did the second wave; they have come from relative privilege in many cases, from positions of status, with keen and energetic minds. They have come with basically different aims, hopes and purposes than did their predecessors. They are more akin to their nineteenth century predecessors than to the first and second waves.13
It looked like emigration had come full circle.
Among the people Odom mentioned as the most prominent voices of Russian dissent was Alexander Solzhenitsyn—“I listen to him for what he knows about the Soviet Union, not the US,” he said. Books still worked.
The next year, Gorbachev granted amnesty to Soviet soldiers who had defected in Afghanistan. He also signed a decree that returned Soviet citizenship to twenty-three people who had been stripped of it by previous Soviet authorities.14
Three years later, by December 1991, the Soviet Union would officially be no more: all Soviet republics proclaimed themselves independent of Moscow’s control. And the year after that, Boris Yeltsin’s government would invite Bukovsky to testify at the trial of the Communist Party. This trial was held in the Constitutional Court of Russia—a country born out of the ashes of the Soviet Union. To prepare for his testimony, Bukovsky requested and was granted access to the Soviet archives. He brought a small handheld scanner and a laptop computer with him to Moscow, and he managed to secretly scan many documents—including highly sensitive KGB reports to the Central Committee and transcripts of Politburo sessions. (This is how we know about the heated argument between Brezhnev and Andropov over the fate of Soviet Jews.) As Bukovsky later told us, he managed to scan these documents only because archive officials didn’t know what the scanner was. Bukovsky’s efforts resulted in his 1993 book Judgment in Moscow, which documented extensive behind-the-scenes cooperation between Western politicians and the Soviet Union throughout the Cold War. But this book, unlike Bukovsky’s other books, was never published in English. Bukovsky believed that he was subjected to Western censorship.15
Bukovsky himself, a man of action and the most familiar name among dissidents to the Russian populace, would not return to Moscow. Many believed he could have been a strong competitor to Yeltsin in the presidential election—many, but not Bukovsky. He chose to stay in Cambridge in the United Kingdom. In fact, nobody from the resistance decided to move back after the fall of the Soviet Union. The once-legendary organizations from the first generation of Russian political emigration—the NTS, the ROVS—tried to find a foothold in the rapidly changing country. They opened offices in Russia, but they failed to win popular support.
The dream George Kennan articulated in 1948 in the National Security Council’s memo, “US Objectives with Respect to Russia,” was that when the time came, he hoped to get “all the exiled elements to return to Russia as rapidly as possible and to see to it, in so far as this depends on us, that they are all given roughly equal opportunity to establish their bids for power.” The time had come, and the dream went unfulfilled.
The US government, foreign policy makers, and the intelligence community quietly forgot about the Russian émigré community. William E. Odom was the last US top-level official to address the subject of the Russian Americans. The next time Congress would address the issue would be in the mid-1990s, and then the topic would be the Russian mafia. “The Russians in the US fall in the category of lessened interest,” Rolf Mowatt-Larssen, who served in Moscow’s CIA station in the 1980s and 1990s, told us.
The time came—and passed by.
CHAPTER 14
THE OTHER RUSSIA1
In 1990, although the Iron Curtain had fallen, the Soviet Union was alive and well. Boris Yeltsin, Gorbachev’s main rival, wanted to enlist the help of the émigrés to create a new and better country. The country he envisaged was a democratic place, free of Communist Party control. On the New Year’s Eve that ushered in 1991, Yeltsin, then head of the Supreme Council (Russian parliament), delivered a speech. It was immediately picked up by the country’s newspapers. Yeltsin’s speech was very unusual in one way: he addressed neither the deputies nor his constituents but “Russian compatriots” abroad. He evoked Solzhenitsyn’s name and said that he understood the bitterness of those who had been forced to leave their homeland. There was a hope now, he said, that “today, the government’s war against its citizens, which has been going on for decades in Russia, has been put to an end.… A dead wall, that for so long separated the Russians abroad from their native land, has begun to collapse. And it will be destroyed forever!”2
This was a calculated political move. The author of Yeltsin’s address was Mikhail Tolstoy, a member of Yeltsin’s Supreme Council whose attitude toward the compatriots abroad had been shaped by his personal history. A physicist from St. Petersburg and a distant relation of Leo Tolstoy, he was also the grandson of the prominent Soviet writer Aleksey Tolstoy, nicknamed the Red Count, a nobleman who had served in the propaganda section of the chief commander of the Whites during the civil war. The Red Count had fled Russia along with the White army but returned a few years later and became one of Stalin’s top propagandists. Stalin, in turn, let him live in a grand style, in a big house with an old family servant who still addressed him as “your excellency”—thus his nickname.3 Among other things, the Red Count wrote a novel called The Emigrants that exposed the White émigrés’ plot to kill Soviet officials—given its timing, the book could have been a Soviet response to the scandal around General Kutepov’s abduction in Paris.4 Forty-nine years old, with expressive eyes, a prominent nose, and full lips, Mikhail, who bore a striking resemblance to his grandfather, had inherited his interest in the history of the Russian White emigration.
Tolstoy talked to Yeltsin, and the two developed an ambitious plan for the émigré community. Yeltsin needed a new national idea for Russia—one that could replace the old, compromised communism and help build a new national identity. For that, he needed the support of the “other Russia”—the Russian diaspora, those who had fled the Soviets. Mikhail Tolstoy thought he could help with this.
To enlist the other Russia’s support, Yeltsin and Tolstoy needed to find a way around the paranoid KGB, whose members were still deeply suspicious of Russians abroad.
Tolstoy drew on the vocabulary of Soviet propaganda, according to which “emigrant” was synonymous with “enemy, defector, anti-Soviet element, traitor, renegade.”5 In Soviet lingo, people loyal to the Soviet authorities, in contrast, were always described using another word: “compatriot.” Thanks to this carefully chosen wording, Yeltsin seemed in his speech to be addressing the pro-Soviet sort of émigrés.6
Tolstoy’s big plan kicked off when the Supreme Council decided to gather the first Congress of Compatriots in Moscow and began inviting Russian émigrés from all over the world. On August 17 and 18, 1991, seven hundred delegates were brought to the Rossiya Hotel, the massive brutalist rectangle that was Europe’s largest hotel and that loomed over Red Square, right between the Kremlin and the Moskva River. Yeltsin and Tolstoy wanted the congress to be a very big event; it was supposed to last for twelve days and include several trips around the country.
On August 19, the participants were woken up by the sound of tanks rolling through
Moscow’s streets. In the early morning, armored columns had taken up positions right outside the hotel’s windows, in the center of the Russian capital. The compatriots who had come to see the new Russia were suddenly front-row witnesses to the country’s first coup d’état since the Russian Revolution.
The horrified delegates turned to the chief organizer, Mikhail Tolstoy. Understandably, the émigrés felt trapped. Tolstoy shared their feelings of dismay: to him, it now looked as if the KGB had eased entry restrictions for many invitees in order to trap them. He felt terrible. He assumed the KGB must have decided to lure them back into the country thinking it would be easier to deal with them in Russia than abroad.7
He knew that the coup was organized by the KGB and the military. Unhappy with Gorbachev’s reforms, they wanted to roll back history and reinstall the Soviet rules. They started by locking up Gorbachev in Crimea, introducing censorship, and placing tanks on the streets.
In the gloomy Rossiya lobby, some emigrants were nearly hysterical. They sought out Tolstoy and told him that what they were witnessing was exactly the kind of revolution their ancestors had fled from. Some rushed to the airport.8
The congress’s opening ceremony was scheduled for that evening; there was still time to decide what to do. Tolstoy hurried to the Russian parliament’s White House, but people there had more urgent things to do than worry about the congress. They were busy trying to erect barricades around the building, which Yeltsin had turned into the center of the resistance.
Left to themselves, the emigrants went out into the streets. Many headed to the White House, while others cautiously approached the officers and soldiers in the tanks. From what they saw, it didn’t look like the soldiers had any desire to fight.
Evening came and Tolstoy returned to the hotel. He had decided to proceed with opening the congress. In the large hall of the Tchaikovsky Concert Hall, with the great organ behind him, Tolstoy took his position at the lectern. He began to read Yeltsin’s call to resist the coup. And the audience applauded.
Two days later, the coup collapsed—and Boris Yeltsin won.
On August 27, Yeltsin signed a decree granting the Russian Service of Radio Liberty permission to open a bureau in Moscow. With that, the very same “subversive center of emigration” the KGB had fought for so long was officially welcomed into the heart of the Russian capital.9
The next day, a victorious Yeltsin attended the congress’s closing ceremony. In his speech, he directly addressed the emigrants present, inviting them to help build a new, democratic Russia. “The most important goal of the congress is to start a permanent dialogue with the Russians abroad to overcome the deep internal disunity of the Russian people,” he said from the stage. “The disruption of party-state organizations, including the most ominous, like the KGB, is already under way,” he added cheerfully.10
The Soviet Union collapsed three months later. The Kremlin, now under Yeltsin’s command, was already busy dealing with galloping inflation and ethnic conflicts. The role of Russian émigrés was nowhere near the top of their to-do list.
Still, Tolstoy managed to host two more congresses. One was attended by St. Petersburg’s deputy mayor, a man by the name of Vladimir Putin.
The Russian emigrant community had now dramatically expanded to include millions of ethnic Russians living in the former Soviet Union republics, now independent from Moscow. But Yeltsin simply didn’t have the resources to deal with them, and he probably was not very interested in doing so. His search for a new national idea was achieved when, in 1991, Russia adopted a new flag. White, blue, and red, it was the tricolor of pre-Bolshevik Russia used by the Whites during the civil war.
The Russian émigrés, then, were left to themselves—until a new leader came to the Kremlin.
PART II
MARKET FORCES
CHAPTER 15
MOVING THE MONEY
By the late 1970s, the Soviet Union had been restricting people’s movement for decades, but the Kremlin always needed to be able to move something else in and out of the country: money. Extremely sophisticated schemes were developed to channel hard currency and all kinds of untraceable commodities, from gold to diamonds, to the West. And these schemes were operational right until the collapse of the Soviet Union—and a bit after.
Life gives everyone one big chance. In June 1978, Stan Rifkin, a chubby-cheeked, thirty-two-year-old engineer who ran a computer consulting firm out of his apartment in California’s San Fernando Valley, experienced this firsthand.
Rifkin’s firm had been contracted to install a new computer system for the Security Pacific Bank in Los Angeles. This system would automate the bank’s wire room, which handled transfers between accounts and electronic payments in the event of a failure in the primary transfer system. Essentially, Rifkin’s company was supposed to build a security system backup.1
As part of his assignment, Rifkin learned about the bank’s money transfer procedures. The bank used a daily code—four digits that changed every morning—that a bank clerk wrote down by hand and kept on display in the wire room. The bank gave Rifkin access to this room while he was building their backup system. Before long, Rifkin figured out that now he too could transfer money out of the bank.
Rifkin wasn’t a fool. He could get the money out of the bank, but he also knew he would have to come up with a way to pick up the money after the transfer without being caught. So Rifkin contacted a lawyer, an acquaintance, and explained that he wanted advice on a sensitive issue. He said he was working for a large corporation, and his boss needed to find an untraceable commodity he could use in his dealings with another corporation.
“Diamonds,” was the answer.
“OK,” said Rifkin. “Do you know anyone who knows a thing or two about diamonds?”
The lawyer put him in touch with one Lon Stein, a well-respected diamond broker in Los Angeles. Rifkin invited Stein to lunch at the fancy French restaurant La Serre on Ventura Boulevard in Encino.2 At lunch, Rifkin explained that he represented a large corporation he couldn’t name and that his boss wanted to purchase $10 million worth of diamonds. From the beginning, Rifkin was thinking big. “Impossible,” said Stein.
But Rifkin didn’t give up. For the next four months, Rifkin came back to Stein every week with ideas. (Stein was convinced that Rifkin was legitimate.) He was determined to figure out a way to make his plan possible and squeezed every imaginable option out of the dealer. By October, the two decided they had found a way to accomplish the deal that Rifkin’s boss supposedly wanted done. Rifkin gave Stein a small advance—$700—for a short trip to Geneva, Switzerland. The trip went well, and three weeks later, it was time for Rifkin to take action.
On Wednesday, October 25, Rifkin walked into the fifty-five-story Security Pacific Bank building on South Hope Street in downtown Los Angeles. With its spacious lobby lined in flamed granite walls, the stone-and-glass tower was a true embodiment of the international corporate style.
Once inside, Rifkin took the elevator, descended to level D, and went straight to the wire room. When a clerk asked what he was doing there, Rifkin said he was conducting a study. It was almost 4:30 p.m., a time when the wire room employees were relaxed. The code was there in plain view. He wrote it down and walked out to the street to a pay-phone booth. He phoned the wire room and said he was Mike Hanson, from the international department of Security Pacific, and he wanted to make a transfer.
“Ten million two hundred thousand dollars exactly to the Irving Trust Company in New York, for credit of the Wozchod Handelsbank of Zurich, Switzerland,” he said, calmly—after all, he had long since decided on the sum of $10 million for himself. And $200,000 was the amount he had promised Lon Stein. A numbers guy, Rifkin didn’t want to ruin his nice round sum with the dealer’s commission—so he simply made it $10.2 million. And besides, he thought, that number looked less like a lottery winning and more like bank business.
A young woman on the other end of the phone asked for the code.
&
nbsp; “Four-seven-eight-nine,” Rifkin said.3
And that was it. It was done. The woman thanked him and hung up.
The next day Rifkin flew to Geneva. Once there, he phoned Alexander Malinin, managing director of Russalmaz. Russalmaz was a relatively new company, established only two years earlier. It had a single mission: Russalmaz was in charge of selling Soviet diamonds abroad. Rifkin asked if Malinin had received the $8 million he had transferred (the other $2 million Rifkin put aside in his savings account). There was some delay, but a few hours later, the money duly arrived—wired from Security Pacific in Los Angeles via the Irving Trust in New York to the Wozchod in Zurich, where it was deposited in the Russalmaz account.
It was time for Rifkin to head over to Russalmaz’s Geneva offices and pick up a Swissair baggage claim ticket for a piece of luggage. As Rifkin had explained to Russalmaz, it was his desire to export the stones; therefore, he could not take delivery of the diamonds at their office. Russalmaz had a simple solution: Rifkin could pick them up instead at duty-free in the Geneva airport.
The next morning, Rifkin presented the baggage claim ticket to Swissair. The airline employee assured him the bag would be on his flight. Rifkin flew to Luxembourg. He retrieved his bag there, checked into a hotel, and opened the bag. For the first time, he saw his diamonds—a sparkling 8,639.84 carats.
He repacked them in a piece of luggage designed to carry folded dress shirts and flew back to the United States—where he was caught a few days later. Rifkin made a visit to his lawyer in Los Angeles and showed him, out of the blue, a $1 million cache of diamonds. The astonished lawyer immediately reported him to the FBI.
The Compatriots Page 13