2011-02-25 Russia and Spain: Organized crime, half-truths, and public secrets

Spanish Special Prosecutor for Corruption and Organized Crime Jose “Pepe” Grinda Gonzalez, in charge of the prosecution of Zahkar Kalashov, a "vor v zakone" (highest echelon in Russian Mafia or Eurasian mafia leadership), recently gave a detailed assessment of Spain’s operations against Russian Organized Crime (OC) in a closed door meeting with experts on the subject, where he explained he considers Belarus, Chechnya and Russia to be virtual “mafia states” and Ukraine a soon-to-be-one (10MADRID154).

Grinda also quoted a “thesis” by Alexander Litvinenko that he believes is accurate. Litvinenko, a former Russian intelligence official who worked on OC issues, died mysteriously in London from poisoning by radioactive polonium-210 in late 2006. He believed that “the Russian Security Service (FSB), the Foreign Intelligence Service (SVR), and its military intelligence (GRU) – control OC in Russia”.

The cable also mentions Grinda saying that “he believes the FSB is “absorbing” the Russian mafia but they can also “eliminate” them in two ways: by killing OC leaders who do not do what the security services want them to do or by putting them behind bars to eliminate them as a competitor for influence. The crimelords can also be put in jail for their own protection.”

He argues that “the Liberal Democratic Party (LDP) was created by the KGB -Russia’s old Committee for State Security, a force to which Vladimir Putin belonged- and is home to many serious criminals”. Grinda further alleged that there are proven ties between the Russian political parties, organized crime and arms trafficking. He also mentioned, without elaborating, the strange case of the “Arctic Sea” ship in mid-2009 as “a clear example” of arms trafficking. The “Arctic Sea” disappeared for about a month in the summer of 2009 and was later recovered from the coast of West Africa on August 17. A great deal of mystery surrounds the whole case but it is known that the ship was being monitored by the Mossad (Israel’s intelligence service), which would later claimed that the boat didn’t contain timber, as Moscow had declared, but S-300 missiles, Russia’s most advanced anti-aircraft weapon. The final destination was Iran.

Further reading:

http://www.telegraph.co.uk/news/worldnews/europe/russia/6145336/Arctic-S...

Russian State and Organized Crime

Grinda states that “10-12 years’ worth of investigations on OC has led him to believe that whereas terrorists aim to substitute the essence of the state itself, OC seeks to be a complement to state structures”.

He also notes that “OC begins to accumulate both economic and political power when it begins to bid for contract tenders on civil works and infrastructure projects.”

He then talked a bit about heads of the organization, the vor v zakone, saying that they “do not engage in racketeering and murder, preferring to distance themselves from this activity and focus on crimes that are further up in the hierarchy, such as corruption of high-level ministers”.

Grinda commented that Gennadios Petrov, the chief target of Spain’s Operation Troika (further reading on Operation Troika below), was engaged in a “dangerously close” level of contact with senior Russian officials. In a surprise move, Spanish judges granted bail to Petrov, who is out on house arrest as of January 31, 2010.

Grinda has noted that Germany, Switzerland, Austria, Belgium and the U.S. have been valuable partners in supplementing information to further flesh out his office’s understanding of the Russian mafia’s activities. He added that Spain is beginning to collaborate with France on these issues, but singled out the United Kingdom for its lack of cooperation. It is worth noting that the ex-spy Litvinenko died in a London hospital, further investigation into the affair was blocked by the UK.

When referring to his government’s collaboration with Russia, Grinda recalled Spain’s efforts to arrest alleged criminal Tariel Oniani as part of Operation Avispa (more information on Operation Avispa below). “In June 2005, Georgian-born Oniani fled to Russia hours before he was to be arrested in Spain and Russia gave him citizenship in April 2006, despite the fact that he had fled Spanish justice. He cites this fact as “an example of Russia putting crimelords to work on behalf of its interests”. Grinda alleged that the Russian Ministry of Interior and the FSB are closely protecting Oniani in Russia (even in prison). Following Oniani’s arrest in Moscow in June 2009, Spain requested his extradition for charges stemming from Operation Avispa, to which Russia replied that Oniani’s Russian citizenship prevented him from being extradited.

Operation Troika

This police operation was conducted in Mallorca, Malaga, Madrid and Alicante and its main target was Gennadios Petrov and some of his closest collaborators, all from Russia’s Tambov-Malyshev crime family.

Cable 09MADRID869 explains:
“Phase I of Op Troika, which was executed in June 2008 resulted in the arrest of 20 top leaders of Russia’s Tambov-Malyshev crime family for criminal conspiracy, money laundering, document falsification and crimes against public finances. Most of those arrested were “vor v zakone” or “Thieves in Law,” the highest echelon of Russian OC leadership. In particular, Gennadios Petrov, the alleged leader, Alexander Malyshev, Petrov’s deputy, and Vitaly Izguilov, a key lieutenant who was out on bail from his arrest in Operation Avispa, allegedly formed the leadership of one of the four largest OC networks in the world and the largest Russian OC network. Spain served as the group’s safehaven from authorities and rival OC networks in Russia from which they directed their illicit business. Baltasar Garzon, the National Court judge who directed the investigation, accused the group of laundering money in Spain that came from a range of illicit activities conducted elsewhere, including contract killings, arms and drug trafficking, extortion, coercion, threats and kidnapping.”

The Spanish journal ABC reported in July 2008 that the Government of Spain’s (GoS) security services tapped ‘thousands’ of conversations in its two-year investigation. Unnamed sources told the newspaper that 230 of those intercepts “will make your hair stand on end” because of their revelations on the Troika defendants’ – especially Petrov’s – immense power and political connections, as well as the range of criminal activity in Russia that the Troika defendants directed from Spain. According to the article, the mafia leaders invoked the names of senior Government of Russia (GoR) officials to assure partners that their illicit deals would proceed as planned. The press suggests this “sensitive” evidence could impact bilateral relations and adds that the “extremely delicate” details of Operation Troika are so reserved that barely ten high-level government officials are aware of them all.

ABC also claims that Vladislav Retznik, a very close collaborator to Petrov, has very strong ties to Russia: not only does he work as Petrov’s right hand; he is also chair of Duma‘s (Russian lower House of Parliament) Financial Markets Committee and vicespokesman of its parliamentary group. Retznik happens to be “very close to Russian’s PM Vladimir Putin and is also a close friend of Russian president Dmitri Medvedev and German Fref, president of Sberbank and a key member of the Ministry of Economy and Development”.

The whole article can be found here: http://www.abc.es/20081020/nacional-nacional/operacion-troika-contra-maf...

On the other hand, Russian daily Novaya Gazeta states that “an anonymous businessman from St Petersburg, who dealt both with “Malyshevskie” and “Tambovskie” in the 90’s, told one of their correspondents that the Spanish operation might have undesirable consequences for some members of the Russian political and business elite. This source considers that those “Russian Spanish” might have been in contact till recently with some high ranking officials in Moscow. In particular, some media gave the name of Igor Sechin in relation to Ilia Traber and Gennady Petrov. Igor Sechin is the former deputy head of the President’s Administration and now he is one of the deputies prime minister.”

You can read the whole article at: http://en.novayagazeta.ru/data/2008/43/06.html

Also in 09MADRID869 it is noted that: “Multiple press reports allege that Moscow was left out of the loop on the Troika investigation – whose Phase II raid resulted in the detention of three lawyers in southern Spain in April 2009 – due to Madrid’s fear of leaks to GoS OC targets. Moscow reportedly is interested in learning what exactly the Spanish have as evidence and has sent investigators to Spain for meetings with GoS officials on more than a half a dozen occasions since the Troika Phase I arrests. Spanish President José Luis Rodríguez Zapatero and Russian President Dmitri Medvedev have met three times since then, including in Madrid in March 2009, when the two leaders upgraded the bilateral relationship to a strategic partnership and signed an MoU -Memorandum of Understanding- on cooperation on OC matters.”

[For MoU see http://en.wikipedia.org/wiki/Memorandum_of_understanding]

Operation Avispa

This operation was conducted by Judge Garzón‘s colleague, Judge Fernando Andreu, it “targeted the Russian, Georgian and Ukrainian OC presence in Spain, which allegedly laundered money from illegal casinos in Russia by investing in the Spanish real estate market”

Phase III of the operation, conducted in 2007, resulted in three more arrests, including the Spanish national government’s number-two official in the Catalan region, Eduard Planells, for allegedly helping members of the “Russian” mafia secure work visas to allow them to enter the country legally.

- Further reading: http://www.elmundo.es/elmundo/2007/07/16/espana/1184576122.html -

“Although GoS officials in 2005 publicly proclaimed Avispa a success, subsequent press reports suggest authorities struggled with leaks and bureaucratic snafus. Zahkar Kalashov and Tariel Oniani – Georgian-born Russian citizens who were the primary Avispa targets – apparently were both tipped off hours before the 2005 raid occurred and fled the country […] the Russian security services or a corrupt source within the GoS have been cited as possible culprits”. Kalashov would later be arrested in Dubai and quickly extradited to Spain, which had placed an arrest order via Interpol.

As mentioned before, the Government of Russia chose to protect its citizens: “Spanish press reports suggest that Madrid has expressed interest in the extradition of Tariel Oniani, whom Russian authorities arrested in Moscow in June 2009. Spain has sought Oniani through Interpol since 2005. However,XXXXXXXXXXXX suggested to POLOFF on August 17 that Moscow is unlikely to extradite Oniani to Spain.”

The leaks also states that El Mundo, a center-right daily from Spain, published an extensive report on July 6, 2009, highlighting Britain’s absolute lack of cooperation to detain russian criminal Michael Tcherney, accused of money laundering in Alicante. Tcherney had fled Russia in the 90s after his alleged implication in a 200 million dollar bank scam:

http://www.youkioske.com/prensa-espanola/diario-el-mundo-6-julio-09-/ (page 15).

Cable 09MADRID1003 states that, “Fernando Bermejo, the city’s prosecutor for anti-mafia, anti-corruption and money laundering issues, claimed that there is large scale money laundering going on in Catalonia and “many, many” members of the Eurasian mafia are active in the region. He and Gerardo Cavero, Barcelona’s chief prosecutor on counter-narcotics and organized crime suggested that public declarations by senior Spanish officials in mid-2008 (see Ref A) that the raid that nabbed Petrov and others had “decapitated” the Russian mafia in Spain were optimistic statements made in a moment of euphoria that did not reflect the current reality”.

Other organizations Involved

To understand the level of involvement the Eurasian mafia has in Spanish businesses, Grinda mentions one of Spanish leading law firms, Cuatrecasas, saying it “constantly defends Russian mafia members”. Emilio Cuatrecasas, the founder, has denied any factual connection to the Russian mafia, stating that the four clients they counseled and defended, from Russia or other ex-soviet republics were not connected. He also said, however, that he had defended two other clients from money laundering charges: one was Israeli and the other, Russian.

On their website they have reported a merger with a Portuguese firm – Gonçalves Pereira- and they are both counseling Qatar Holding (Qatar Intermediate Industries Holding Company Limited) in the signing of a treaty with Banco Santander for Latin America. The firm has stated that they are “back on the growth path”, after collecting a revenue of 241.7 millions Euros last year.