Russian ex-spies put skills to work

The Alexander Litvinenko poisoning case shines light on a shadowy world in which former agents cash in on old contacts.

By Kim Murphy

Los Angeles Times

January 2, 2007

MOSCOW — With stylish offices featuring a portrait of the Soviet secret police founder and a prestigious location alongside Red Square, Vladimir Lutsenko is one of the top go-to guys for "security" advice in today's Russia.

The former military intelligence officer shrugs and laughs when asked about allegations, made by a former Russian agent before he died of radiation poisoning in November, that his men were hired out to do dirty work for the Russian special services.

"At first we gave a shudder, and we were very upset. And then we read it attentively. Well, it looks like advertising!" he said. "We looked at it and said, well, to shoot bandits is not the worst trade you can have in this life."

Russia is awash in companies like Lutsenko's, stocked with veterans of the Russian intelligence services. Usually they work behind the scenes, providing a discreet service for foreign business interests trying to operate in the often-hazardous world of Russian business — and providing some discreet muscle, if need be.

But the very public death of Alexander Litvinenko in London has lifted the lid on this shadowy world of ex-agents, both in Russia and abroad, who trade on their contacts on the margins of Russia's powerful security apparatus for both political influence and economic gain.

Perhaps not by coincidence, many of the main characters in the drama that left a radioactive corpse in London moved in this network of agents and spies-for-hire, a John Le Carre-made-real illustration of the dominance of the security services in political and economic life here.

President Vladimir V. Putin, a former spy and onetime head of the FSB, as the main successor agency to the KGB is known, brought in a broad cadre of intelligence veterans to assume leading positions within the presidential administration and crucial federal agencies during his first term.

Over the last three years, they have gone on to quietly assume an enormous presence in virtually every major economic engine of the state.

The chairman of the board of Rosneft, the state-owned company that consumed the giant Yukos Oil Co. in 2004, is a veteran of the state security services. So is the deputy chief executive at state-controlled Gazprom, the world's largest gas producer, and the chairman of Aeroflot. A KGB veteran who served with Putin in Germany heads Russia's main weapons export company as well as the leading state-owned automobile manufacturer.

"The secret power which the KGB enjoyed in the Soviet Union has been legalized and cashed into money. What has been happening is so obvious, yet people just haven't seen it because it's right in front of their faces," said Alexei Mukhin, an analyst with the Center for Political Information who has written several books on the security services.

"The new KGB is now an amalgamation of businesses. Their power is based on the fact that their people are sitting in the presidential administration, in the legislature and in the regional administrations," said Yevgenia Albats, a professor at the Higher School of Economics who served on the commission that made recommendations on disbanding the KGB in 1991.

Litvinenko, a former organized-crime agent, had quit the FSB, fled Russia and devoted much of his new life in London to battling Putin's rule and exposing what he saw as unconscionable abuses of power in Russia. His poisoning, he believed, was the president's revenge.

But Litvinenko hadn't completely left his old life behind. In providing security research for investors looking to do business in Russia, he found himself working on the dangerous line between business, power and organized crime — a line that in the last few years has blurred.

Litvinenko's last reported meeting before he fell ill Nov. 1 was with two fellow former agents, Andrei Lugovoy and Dmitry Kovtun, reportedly to discuss a business deal in which the three men would help steer foreign business clients through the rocky thoroughfares of Russian finance. The two men, whose radioactive trail through Russia and Germany in the days before the encounter has made them persons of interest in the case, run security business operations of their own in Russia.

Litvinenko offered a detour past official roadblocks, and contacts with his former FSB cronies to learn where the real hazards of doing business lay.

"You see, there's a market, a very shady field, where these former KGB agents, and also people coming from the FSB like Alexander Litvinenko, trade in information, and what I know about this environment is that they are extremely suspicious, each against the other one," said Paolo Guzzanti, the chairman of an Italian commission that concluded that Soviet military intelligence was involved in the attempted assassination of Pope John Paul II in 1981. "They are continuously selling information, asking for money."

Many of Litvinenko's best contacts were undoubtedly in the Chechen community. The former agent had close ties to the Northern Caucasus, having grown up in the republic of Kabardino-Balkaria, near Chechnya, and had formed a close alliance with the Chechen rebel leadership in London.

A large part of his work was attempting to expose what he saw as the FSB's involvement in a series of apartment bombings across Russia in 1999, officially blamed on Chechen terrorists, which were one of the important triggers of Russia's second war in Chechnya.

But officials in Russia have suggested that Litvinenko, who recently converted to Islam, might have been trying to help the Chechens assemble the components of a dirty bomb.

Akhmed Zakayev, a spokesman for the insurgent leadership in London, said he believed the former agent's work on Chechnya caused him to be marked for death by the FSB.

"For them, Alexander Litvinenko was not only the enemy of the Russian state but, according to their view, he was the traitor who betrayed their own system," Zakayev said. "Litvinenko provided proof by examples, specifics…. He had the internal information. And therefore, he was more dangerous."

Litvinenko believed the FSB was operating contract death squads among the various security companies and veterans organizations that allowed for the elimination of major criminals and extremists without the necessity of arrest and trial.

In one of his books, he accused Lutsenko's private security and analysis company, Stells, of operating "under the roof" of the FSB. He wrote that one of Stells' employees had acknowledged to Litvinenko's source that his job was to study the entrances of certain apartment buildings, along with possible approach and exit routes. One such report he prepared, Litvinenko said, was on the apartment building where popular former ORT-TV director Vladislav Listyev was shot to death in 1995. The killing has never been solved.

Lutsenko dismisses such speculation as the stuff of spy movie plots. The real work of agencies like his, he said, is to guide companies through the minefields that remain the business environment in Russia, long after the "Wild East" days of early capitalism.

"We do what we have the skills for," he said. "In the early days, we were dealing with boys in leather jackets who were hitting businessmen on the head with a phone, saying, 'Pay me protection money.' "

These days, he said, one of the biggest sources of business for KGB-veteran companies such as his is the "unfriendly merger," the Russian equivalent of a hostile takeover, in which a company may buy 5% of the stock of another company, stage a fake meeting of stockholders, bribe court officials in a remote Russian town into issuing a document recognizing new owners, throw the previous owners into the street, then immediately proceed to sell the company.

"We stopped this sort of thing several times, although sometimes our guys were beaten with baseball bats," Lutsenko acknowledged.

There are some business skills that only a former KGB agent can bring to the table, not all of them requiring bats.

"These are the people who initially chose the dangerous and responsible work. They are used to very strict order. They understand. They have a sense of discipline and of being true to their word," said Yuri Drozdov, a former commander of undercover operations for the KGB.

Drozdov now runs his own security company in Moscow, and swears by his fellow KGB employees.

"These people have the expertise to be prepared to work under any conditions you can imagine. [In the KGB], I had a Catholic priest under my command. There were poets, and actors — I myself went to the Max Reinhardt theater school in West Berlin to learn the art of impersonation. There were inventors. I even know one who was dealing with producing details for your Trident missiles," he said, his glinting blue eyes seeming too merry for a spy's.

The one thing he's sure of, Drozdov said, is that none of his former colleagues would have agreed to poison a former comrade, even one seen as a traitor.

"I know from communicating with my former colleagues. I know that not one of them would ever agree to carry out such a task," he said.

But for some former agents, one has only to look at the number of opponents of Russia who have been poisoned. Former Soviet intelligence officer Boris Volodarsky said he had identified 20 KGB poisonings since 1921, all marked with the same signs — meticulous planning and massive public disinformation.

"We see not the slightest doubt," he said, "that it was executed by the Russian special services."