To the Secretary

by Mary Thompson-Jones

  On the economic side, the consulate predicted that as citizens lose their tolerance for the fact that the price of a bottle of olive oil, a jar of tomato sauce, a bottle of wine—the staples of Italian life—has been inflated by organized crime, or the products have been adulterated by the same sources, their disgust with “the system” may take more tangible form. Culture matters too, and change will mean “breaking the culture of illegality that is so rampant in Southern Italy, that is, the blatant disregard for the law by average citizens and the lack of a sense of civic responsibility. The Naples chief prosecutor suggested—while lighting a cigar in a no-smoking office to underscore his point—that Neapolitans have ‘something in their DNA’ that causes them to react to any law by breaking it.” 51 Prosecutor Gratteri, despite his bravery, ended on a pessimistic note, saying, “As long as the human race exists, the ’Ndrangheta will exist.” 52

  From New Jersey to Naples, from Spain to Sarajevo, organized crime is every bit as dangerous as terrorism. The pattern is similar, no matter the place. Criminal activities initially focus on businesses, but they soon leach into civic life. Mobsters buy corrupt politicians; they buy corrupt voters; and they finally buy elections. Losing patience with the time and effort needed to buy influence, they soon find it is simpler and more cost-effective to enter politics themselves, tapping unlimited campaign finance chests funded by their extortion and racketeering practices, completing a truly vicious cycle.

  When this happens in Russia, it sets the stage for a country in which no amount of “resets” will make a difference. When this happens in transitioning countries such as Bosnia-Herzegovina, it impedes progress and wastes precious assistance funds. But when it happens in one of America’s closest allies, such as Italy, it is disastrous. Lest policymakers think such problems can be confined to Italy’s borders, reports from law enforcement suggest otherwise. Globalization has increased connections between markets. The ’Ndrangheta and its ilk are not coming to a town near you soon. Likely, they are already there.

  GOOD (AND BAD) GOVERNANCE

  While not every embassy or consulate took the enormous all-out reporting initiative of the Naples consulate, many invested time and effort translating corruption’s effects on the small, day-to-day actions of normal citizens, trying to convey to Washington the helplessness of an individual in a corrupt system.

  When the Tajikistan government inaugurated sales of shares for its megaproject hydroelectric dam known as Roghun, there was nothing voluntary about citizens’ purchases. The embassy in Dushanbe reported that employers ordered staff to buy shares at rates that far exceeded their monthly salaries or risk dismissal.

  National television larded the airwaves with footage of Tajik citizens clambering over each other to give their money to the bank. Happy stock owners recited poems about Roghun to the cameras as they proudly grasped their stock certificates. State media followed up with music video paeans to the dam, heroic images of Roghun builders, and aerial footage of a column of trucks on route to the construction site as if off to war. Images were straight out of Soviet central casting, including footage of President Rahmon in deep conversation with Roghun craftsmen, apparently discussing details about the masonry. Once could almost hear him exhorting, “Comrades, this grout must be thicker!” 53

  The top-down approach included targeted amounts for everyone in Tajik society. At the bottom were students, forced to “volunteer” to buy 100 somoni worth of shares (roughly $20). Professors warned students that failure to present a share certificate bearing their full name would bar them from their exams. “As an added incentive, students could present their stock certificate for better grades. A certificate for 300 somoni in shares reportedly buys a ‘3’ (a passing grade roughly equivalent to a ‘C’ in the American system), while 400 somoni yields a ‘4,’ or ‘B.’ A student told us her professor told her not even to bother showing up at the exam; her 500 somoni contribution had already won her a ‘5.’” 54

  Higher education figures frequently in corruption tales. A law school in Plze, in the Czech Republic, began awarding degrees on a fast-track basis, challenging even the most liberal diploma mills in the United States. A joke made the rounds: “What are you doing this weekend? Answer: Getting a law degree.” The post reported that the story had all the ingredients of a classic corruption case: “potentially undue influence on state tenders, lack of transparency in school procedures, politicians and other well-placed individuals receiving special treatment, and allegations of involvement by organized crime.”

  The story began when a student noticed that a vice dean had plagiarized a number of pages in his dissertation. The press quickly discovered that many politicians, police, and other officials and members of Mafia families had obtained law degrees without completing the five-year program. In some cases, degrees were awarded in just two months. Dozens of dissertations were “missing” from the law library (or were, in fact, never written). Embarrassed Czech alumni, several of whom held office, could not produce their dissertations and could not remember the names of their faculty advisors or professors. The president of the Czech university accreditation commission told the embassy she believed organized crime set up the entire system with the goal of controlling or blackmailing officials who had bogus degrees. To substantiate this allegation, she pointed to an analysis written by the law school’s vice dean and signed by the dean for an institute that provides expert legal advice to the government, which recommended that a $6.5 billion environmental cleanup project be treated as a concession and not as a more transparent public tender. This decision would have allowed the government to award the contract without opening it to public bidding. 55

  Elsewhere, embassy officers tried to describe the frustration for the average citizens living in societies where corruption is the rule and bribery is not confined to public tenders and megaprojects. “Turkmen routinely pay bribes when obtaining a driver’s license, during stops by the traffic police, registering children for school or university, and registering a business.56 Turkmen doctors and nurses, forced by law to make house calls without the means to do so, pay bribes to the deputy heads of the clinics where they work to avoid paying stiff penalties. The heads, in turn, use the money to bribe health inspectors to make sure their reports are favorable. Laboratory workers also pay bribes, as do many hospital workers.57 This entrenched system stifles competition and public confidence, not to mention degrading the quality of health care. But nothing beats the surreal tale of one Turkmen village.

  When Turkmenistan president Gurbanguly Berdimuhamedov opened a model village in fall 2009, there was plenty of hoopla at the brand-new school, hospital, mayor’s office, market, and apartment building. “Medical staff waved balloons and flags outside the hospital. Inside, they scurried around the halls and populated various offices. Berdimuhamedov toured the apartment housing and visited a family living in their brand new, well-appointed home.”

  The embassy described the Potemkin aspect as follows:

  One of the diplomats, who had accompanied the president on this visit, stopped by the village the following day when all the officials had left. She found a ghost town. The schools, mayor’s office, and most of the other buildings, including the apartment building where the family that hosted the president supposedly lived, were empty. The family was nowhere to be seen and their furniture was gone. The hospital director told the diplomat that his hospital was not really open, because he had no staff. The people, whom the diplomat had seen the day before, had come from other areas to play the part of hospital workers.58

  It might be easy to dismiss corruption in out-of-the-way places, but Moscow, Europe’s largest city with almost twelve million inhabitants, makes other examples seem like child’s play. The embassy characterized former Moscow mayor Yuri Luzhkov as the personification of an out-of-control spoils system. Luzhkov’s uniquely Russian brand of conservatism grabbed international media attention when he banned gay pride parades, calling them “satanic,” and plastered the cit
y with posters of Stalin, refusing to be “an apologist” for a leader he admired.

  Luzhkov, the embassy wrote, had “a national reputation as the man who governs the ungovernable, who cleans the streets, keeps the Metro running and maintains order. As a loyal founding member of the political party United Russia, he can also deliver the votes.” But, the embassy noted, Muscovites increasingly questioned their mayor’s links to organized crime. Some called the city “dysfunctional, operating more as a kleptocracy than a government.” The embassy described the intricate krysha (roof or protection) system that links organized crime, business owners, and several crucial public agencies: the police, the federal security services (FSB), Ministry of Internal Affairs (MVD), and the prosecutor’s office.

  Getting much of their information from Russian journalists, the embassy officers contended that Moscow’s elaborate three-tiered structure placed Mayor Luzhkov at the top, the FSB, MVD, and militia at the middle, and ordinary criminals and corrupt inspectors at the bottom. Apart from its illegality, they characterized it as a highly inefficient system in which criminal groups filled voids in areas where the city did not provide services.

  “Luzhkov oversees a system in which it is apparent that almost everyone at every level is involved in some form of corruption or criminal behavior,” the officers wrote. An investigative reporter said that having received enormous sums in protection money, Luzhkov, in turn, paid off key insiders in the Kremlin, ensuring his eighteen-year tenure, which began in 1992. “People often witness officials going into the Kremlin with large suitcases and bodyguards.” 59

  While Luzhkov as a corrupt leader is hardly unique, the embassy described a complex structure of interlocking bribes that is uniquely Russian. The system runs through all sectors of society, including government, where most members of the Russian parliament buy their seats but quickly recoup their investment. “The lawless criminal climate makes it difficult for businesses to survive without being defended by some type of protection. According to that Transparency International’s 2009 survey, bribery costs Russia $300 billion a year, or about 18 percent of its gross domestic product.” 60

  A Russian reporter told the officer how the system worked:

  A cafe owner pays the local police chief via cash through a courier. He needs to pay a certain negotiated amount over a certain profit. The high prices of goods in Moscow cover these hidden costs. Sometimes people receive “bad protection” in the sense that the krysha extorts an excessive amount of money. As a result, they cannot make enough of a profit to maintain their businesses. Yet, if people forgo protection, they will instantly be shut down. For example, officials from the fire or sanitation service will appear at the business and invent a violation.

  Everyone has bought into the idea of protection in Moscow, so it has become the norm . . . Business owners understand that it is best to get protection from the MVD and FSB (rather than organized crime groups) since they not only have more guns, resources and power than criminal groups, but they are also protected by the law.

  The division of spoils has police and MVD collecting from small businesses while the FSB collects from the larger ones. “Despite paying for protection, nobody is immune; even rich people who think they are protected get arrested. The krysha system has led to an erosion of police internal discipline. Young police officers spend their money buying luxury vehicles that a normal worker could never afford.” 61

  What seems extraordinary about corrupt systems is the symbiotic relationship between organized crime and officialdom. In the Russian case, the government officials maintain their own separate (but equally corrupt) identity. In contrast to the Italian protection rackets, official Moscow seems to have clear supremacy over the criminal element, which is relegated to lower-level functions.

  Embassy officials wondered at what point Luzhkov and the system he personified would become a bigger liability than an asset. The cable noted mounting evidence that corruption had metastasized to a point that even those who benefited most could no longer defend it, and fate ultimately dealt with Luzhkov. The embassy began noticing numerous signs that his days were numbered, reporting that ultra-nationalist Vladimir Zhirinovskiy had called for Luzhkov’s resignation, saying his city government was “the most criminal in Russian history.” Such a remarkable denunciation, carried on state TV flagship Channel 1, was widely seen as an indirect Kremlin rebuke. Journalists and others willing to talk to the embassy agreed that Luzhkov was on his way out, one way or another. That day finally arrived on his seventy-fourth birthday. He was summarily fired by President Dmitry Medvedev, via long-distance decree, while Medvedev was visiting China.

  Systemic problems require systemic changes, however. No single person, however corrupt, can be responsible for all the evils in a complicit system. Thus Medvedev also decided to take on the MVD, proposing a 20 percent cut in positions, higher salaries for those remaining, rotation of senior leadership, and a review of hiring and promotion practices. Like Luzhkov, the MVD had possibly exceeded the number of allowable scandals, with its leadership confessing to a shooting spree resulting in the murders of local residents, the torture death of a prominent lawyer while in pretrial detention, and YouTube postings by a former police officer chronicling widespread corruption in the ranks. The U.S. post noted that Medvedev was savvy in using these crises to manipulate public opinion against the Ministry of Internal Affairs. “The reputation of the police forces in Russia has been low for years, with Russian polling results depicting that more than two thirds of Russians distrust the police. It would probably take major reforms sustained over years before public opinion toward Russia’s police officers significantly improved.62

  Of course, American businesses working in corrupt climates are not exempt from shakedowns. Any business that is slow or falls into arrears with any kind of payments can encounter trouble. This became a growing problem in southern China during the global financial crisis, when orders slowed and businesses of all kinds had difficulty making ends meet. The Guangzhou consulate reported an increasing number of cases in which American citizens were forcibly detained for owing money. The caseload peaked during trade fairs, when the numbers of foreign businesspeople in the country swelled.

  “Extra-legal, strong-arm tactics are long established methods of resolving business disputes in southern China . . . Frequently the victim is threatened with violence by hired thugs and detained at a factory, hotel, or private residence until payment is received.” The consulate illustrated the lengths to which perpetrators will go. “Two Amcits [American citizens] and their Taiwanese business partner were forced from the road in Dongguan, a major manufacturing center in Guangdong’s Pearl River Delta. The victims were driven to a rural location and threatened with torture and death unless $4 million was transferred to a bank account in China. The suppliers transferred the money and the hostages were released the next day. We learned of the incident after the Amcit victims returned safely to the U.S. Their lawyer notified us that he had asked DOJ [Department of Justice]/FBI to help him work with Chinese authorities to investigate and prosecute the case.” 63

  Two other cases offer clear examples of extortion. In one, an American citizen was detained by a group of men and threatened with violence at his factory in Xiamen. The victim was convinced his interlocutors were affiliated with organized crime and insisted that he had no connection with them. In a separate case, an American was held in his home until money was paid for his release. In both cases, local authorities assisted the American citizens in escaping only after telephone calls were made from the consulate. No arrests were made.

  The consulate saw a clear link to globalization, noting that old customs die hard but will be increasingly exposed as China continues to court international investment. As foreign entrepreneurs pour into the country, there will be cultural clashes over their expectations of acceptable business conduct. The consulate also linked extortion to the global economic crisis. “As economic conditions deteriorate, business owners and f
actory employees grow more fearful that expected income will fall through. Weak enforcement of contract law was already a problem in China’s legal system; the economic downturn has worsened the situation. Under these conditions, it appears that the use of vigilante tactics to collect on debts is growing.” 64

  While examples of corruption in Italy, Russia, and China are easy to envision, there are cases in smaller places that stretch credulity—both for their security implications and that they could have happened in the first place. One of the era’s sillier cases of corruption—but one with alarming possibilities—involved Slovakia’s Border and Alien Police and its senior officer at the Ukrainian border. An airport officer working a bomb detection exercise with sniffer dogs hid live explosives in the luggage of a Slovak who worked in Ireland. Incredibly, the officer failed to retrieve the package after the exercise. Through a series of errors the luggage made it to Dublin, where three days later the Irish police were able to track it down. The uproar spurred a secondary scandal in which the regional chief in charge of eight hundred and eighty police at the country’s most sensitive border—and a key embassy contact—was accused of accepting a bribe and abusing his public office. The post commented, “It would be surprising if an officer of [his] length of service just decided to begin a life of corruption now, given the well-known and lucrative smuggling of cigarettes and other contraband over the border from Ukraine. One newspaper reported that on the Ukrainian side, officers pay EUR 10,000 to secure a job on the border, which they swiftly make back.” 65