through in the morning. Then she moved to the more incendiary stuff and started it during the afternoon.
A remorseless image of Ukraine came through: one of the most corrupt places on earth. Late in the day, one particular topic heading seized her, and the subsequent document seemed to sum up everything else she had read.
Partners in Extortion:
Criminals and Public Officials
The most pernicious element of organized crime in Ukraine is the alliance among former Communist Party elite, members of the law enforcement, security apparatuses, and gangs of professional criminals. Much crime in Ukraine combines government officials’ access to information or goods with the use or threat of force by organized criminals.
Crime and corruption had soared in Ukraine over the past decade. Since gaining independence during the Gorbachev era, the corruption of the Soviet years had been replaced by energetic gangs of organized criminals.
In the summer of 2004, several American corporations had considered investing a total of two billion dollars in Ukraine, mostly in the appliance field. After investigating carefully, each of the corporations decided that the business environment there was fraught with both financial and physical danger.
Drug traffickers, particularly those involved with heroin, laundered money through casinos, exchange bureaus, and state banks.
The banks provided criminal groups with information about businesses’ profitability and assets, which the gangsters used to extort money from them.
Criminals and public officials often colluded. The extortion was imaginative. Criminals, for example, extorted money from businesses by threatening to sell the information they illegally obtained from banks to the tax police. In turn, tax officials sold their information about businesses with crime groups in return for a share of the money the crime groups extorted from the same businesses.
Alex continued reading.
Infiltration by criminals into Ukrainian legislatures remains rampant. More than thirty members of the Parliament might be tried on criminal charges if they were to be stripped of their governmental immunity. Fifty- four legislators, at minimum, elected to local political bodies, also have criminal backgrounds. The problem of corruption extends to the highest levels of government in Ukraine. Ukraine’s prime minister in 1996-97, reportedly made tens of millions of dollars annually through his company’s license to import natural gas and oil.
[Case officer’s note: The former prime minister is also suspected of having stolen $2 million in state funds and stashed some $4 million in a Swiss bank during his premiership. In February 1999 Ukraine’s Supreme Council stripped the former premier of his parliamentary immunity, and a warrant was issued for his arrest. He is currently incarcerated in the United States. See also, UK-2-356-2006.]
Alex moved along. There was a section on the growing narcotics problem in the newly independent state.
Ukraine has become a significant conduit for Afghani and Southwest Asian heroin bound for European and American markets…
A dismal feeling started to creep over her. Ukraine made Lagos look like Disneyworld. Why was she spending her life with such things?
She flipped to the final pages, absorbing quickly.
The main trafficking routes are (1) the seaports of Odessa and Sevastopol; (2) Transdniestria is often mentioned as a high-risk region for drug trafficking. The drug is stockpiled in this region for further trafficking to Ukraine and Romania. The drug continues by air from the military airport next to Tiraspol or by trucks toward the north of Moldova and then continues to Poland, Lithuania, or Latvia. The route continues in Transdniestria, reenters Ukraine at Chernivtsy to move westward to Hungary and Romania. (3) There is an important transit from the eastern border of Ukraine with Russia. The trucks from Northern Caucasus cross the border at Taganrog, Luhansk, and Kharkiv en route to Hungary and Slovakia. (4) Another transit route goes through the eastern border of Belarus with Russia since there is no control of this border with Russia…
Ukraine lacked adequate law enforcement and an independent judiciary which might be able to block the influence of organized crime. Alex’s eye settled on a concluding sentence, a masterpiece of understatement.
Institutionalized Ukrainian corruption is perceived as the worst in the world. This is no small accomplishment.
Nigeria, but worse. Oh, Lord…
She finished the document. She closed the briefing book and settled back to think. A few moments later, the door opened and Michael Cerny reappeared.
He poured himself a fresh container of coffee and sat down. “Now I need to mention something else,” he said. “
“No. Should I have?”
“Maybe, maybe not,” he answered. “But that’s why you’re here. They’re based in Kiev. They’re a private equity firm. Almost all of their investments are related to government contracts in Ukraine and in the United States. They cozy up to the proper people in both governments, take a financial position in an industry, then move into the industry.”
He took a long drink of coffee.
“Let me illustrate to you how it’s structured,” he continued. “Picture a triangle with the three corners anchored by the politicians on one, the military on the second corner, and the oil and gas industries on the third. Then picture a second triangle, interconnected with the first. Concentric perhaps. Now assume that one triangle is an American one and the second is Ukrainian. Then figure that the two triangles, for financial purposes, are interlocked and service each other. Any corner can connect with any other corner. Follow?”
“Of course I do,” she said. “But what’s the big deal? The world runs on the oil and gas business. I’m sure the triangle is filled with venal overpaid self-serving people making their fortunes off the backs of ordinary folks. Deplorable, but nothing new.”
He broke open a new file, which he pushed before her.
“I’m going to give you this to take away,” he said. “An FBI dossier on Caspian Industries. Examine what Caspian Industries is doing. A lot of money and a lot of product disappear into thin air, escaping taxation completely. See the problem?”
“Yes,” she said.
“When you go to Ukraine,” he said, “you’re going to meet this man.” He reached into his pocket and pulled out a picture. He handed her the photograph. “Say hello to Yuri Federov.”
Alex looked at an eight-by-ten surveillance shot of three men, all of whom had the Russian wise-guy look to them. They were seated at a table in a night club. There were women at the table who looked as if they were being paid to be there, one way or another. Everyone was smoking. The men had short haircuts, almost shaved heads, and wore silk suits with open collars. A Eurotrash night out. There was a stage show going on in the background. More women, but not much clothing.
Cerny leaned forward and pointed an index finger at the man in the center.
The man was a thick-browed thug with wide shoulders, a lantern jaw, and a hard dark pair of eyes. He wore some sort of a medallion at his open neck. Alex could see that it was no companion piece for the gold cross she wore around hers. She fingered her own neckwear for a moment.
“Yuri Federov is probably one of the most dangerous men in the world,” Cerny said. “And certainly no friend of the United States.”
“Where was the picture taken?” she asked.
“Paris. A night club somewhere near the Place Pigalle where he had interests.”
“When?”
“Late last year. December.”
“Who are the others in the picture?” Alex asked. “Are they important too?”
“Since you inquired,” Cerny said, “the one on the left is Marko Marchenko. The one on the right, a man named
