Moscow, December 25, 1991

There are also the first stirrings of a popular revolt against price rises. Demonstrations have already begun. On Sunday between 5,000 and 10,000 people carrying portraits of Lenin and Stalin gathered near the Kremlin and banged teaspoons against empty pots and pans as they formed a “hungry line” to represent a queue at a soup kitchen. Coming across the demonstration, Ted Koppel saw how they were already nostalgic for the iron-fisted control of rigid communism and that they had contempt for both Gorbachev and Yeltsin. Koppel tells his ABC viewers, “The teaspoon striking on an empty pot may yet prove to be the most powerful symbol in this new and uneasy commonwealth.”

The leader of the demonstrators is Vladimir Zhirinovsky, head of the neofascist Liberal Democratic Party, who tells his followers that the only reason Americans want to come to Russia to give aid is to scan the territory so they know where to drop their bombs. He threatens that when he gains power, he will fill outer space with weapons pointed at the United States, make Afghanistan a Russian province, sell off western Ukraine, and blow radioactive waste across the Lithuanian border to kill the population with radiation sickness.

There are other sinister characters discussing, on the day the Soviet Union comes to an end, how to capitalize on the country’s chaotic state. Just outside MOSCOW, in a dacha in the hilly Vedentsovo region, several individuals concerned with the country’s future financial structures are wrapping up a secret three-day meeting. From December 22 to 25, some thirty men of different nationalities, mostly Russian, Ukrainian, Georgian, Armenian, and Chechen, have been conferring on how they should divide the former Soviet Union into zones of influence. They are members of Vorovskoy Mir, or Thieves World. Each person in attendance is a vor v zakonye, a thief-in-law anointed by fellow inmates in the country’s prisons as a supercriminal and bound together by a code of loyalty. They have traveled from all across the disintegrating Soviet Union to discuss the new opportunities opening up for control of a vast black market in commodities, ranging from caviar and gold to automobiles and spare parts. In the vacuum created by the collapse of the command economy, they are already able to operate a crude capitalist form of supply and demand. Their reach is so extensive that they control an estimated 15 percent of the movement of all goods in Russia. Now they are poised to make vast profits from the sell-off of state assets that will come in the New Year.⁷

Organized crime has become a serious problem in the dying Soviet Union. With the unleashing of state assets into private hands, it is about to become a major phenomenon in postrevolutionary Russia.

Already in the last months of the Gorbachev era there are illicit and semilegal fortunes to be made. Unregulated privatization is developing rapidly. Former communist directors are leasing to each other prime industrial properties in preparation for taking them over and enriching themselves when the law permits. Much of the Communist Party asset base that Yeltsin nationalized has already been transferred into the hands of private owners.

Rampant corruption in the oil industry has resulted in the wholesale issuing of export licenses, allowing entrepreneurs to buy oil for rubles and sell it abroad for hard currency. These stamped pieces of paper, Gaidar said later, were “a sort of philosopher’s stone that could almost instantaneously transform increasingly worthless rubles into dollars.” The oilmen and the corrupt members of the nomenklatura whom they bribe are shifting money abroad as fast as they can.

As the Russian president assumes command in the Kremlin, commentator Ilya Milshtein issues a warning to him in an article in Novoye Vremya (New Times). The country Yeltsin is taking over, he writes, is “depraved to the core, a state rotten from top to bottom, a great power of fast thieves and bribe takers.” ⁸

Yeltsin doesn’t have to be told by the media. At the end of December, two former KGB officers write to him alleging that top party officials are siphoning off immense quantities of money and gold and depositing them in foreign bank accounts. Gaidar manages to get $900,000 from state funds to hire the international security and detective agency Kroll Associates to investigate the allegation. It comes up against a wall of noncooperation from inside the new Russian ministry of security. After a month the contract is not renewed.

Chapter 21 THE CENTER CANNOT HOLD

Yeltsin’s drunken promise that Gorbachev would “stay” in some capacity in the future arrangements for the Soviet Union was soon broken.¹