Barannikov’s Security Ministry was a more modest creation than the MBVD Yeltsin had dreamed of but retained considerable means.  Its core was the formidable counterintelligence and military counterintelligence apparatus of the former KGB.  It also retained the powerful Investigative Directorate, a key operational component; the Economic Security Directorate; the anti-terrorism Directorate, heavily staffed with former officials of the 5. Main Directorate, which would only grow in power over the coming years; and a number of directorates dedicated to combating smuggling, corruption and organized crime.  Furthermore, the Border Guards were reintegrated under the control of the MB, putting a substantial armed force at its disposal (Vympel and Alfa remained under GUO).  Last but not least, when FAPSI was formed, the MB was given the signals intelligence component of the KPS.  

But the MB, compared with its predecessors, also suffered serious handicaps.  Between September 1991 and June 1992, over 20,000 KGB officers resigned or were discharged, entering private business or joining one of the private security agencies sprouting up throughout post-Soviet Russia.  With the collapse of the ruble in 1992, salaries fell to contemptible levels, encouraging the flight of senior cadres.1  

Within the context of a new Russia in which dozens of ministries and agencies competed bitterly for scarce resources, the MB held nothing like the dominant position of the KGB.  The KGB’s main tool of control over the Armed Forces, the osoby otdely (“special departments”) placed at every unit level and reporting directly to the KGB’s 3. Main Directorate for military counterintelligence, was gravely weakened, though it did remain separate from the military and highly secretive.  In the first years of the 1990s, several plans were floated to transfer the osoby otdely to the GRU or even to form a Special Military Police, but these never materialized; the struggle for the control of military counterintelligence finally ended in 1993, though it was only made a fully samostoyatelnyi department of the FSB in 1998.2  The MB’s (and then FSK/FSB’s) Military Counterintelligence Directorate had many tasks: to fight corruption within the military, to search for spies, to prevent the sale of weapons or information (a particularly acute problem after the start of the Chechnya campaign), and to protect the secrecy of special objects such as submarines and military factories.  After 1993 its powers slowly grew, though only under Putin were they restored to something approaching their former levels.

The quasi-monopoly on armed force the KGB had once shared with the military was irrevocably gone.  The MVD of course had its VV, whose means and power increased as the Armed Forces’ slumped, as well as its OMON and SOBR special units.  But many other bodies, old or new, also acquired a military force: before 2003, there were fifteen state armed formations in Russia.  The GUO with its SBP grew to over twice the size of the KGB directorates it had succeeded.  The Railway Forces broke off from the Ministry of Defense along with significant finances and resources, ending up under the control of the Ministry of Transport.  A new Ministry for Emergency Situations (MChS) was formed with its own armed units charged with civil defense tasks.  Obscure agencies also gained autonomy, such as the Government Forestkeeper Service (GFS, first formed in 1796 under Pavel I), placed under the Ministry of Communications in November 1991.  FAPSI, of course, had its own armed units, as well as the GUSP, which controlled some 20,000 men.3

More crucially still, the federal authorities as a whole had lost the monopoly over the use of force – a key attribute of the modern sovereign State.  Russia of course was confronted with the secessionist troops of General Dzhokhar Dudaev, the new President of the Chechen Republic, who had unilaterally declared independence from the Russian Federation and had acquired, in a secret deal with the Army, over half of the Soviet weaponry based in Chechnya, including some armor and a small Air Force (during this first period, there were as of yet no open hostilities, and the Chechens were in fact secretly collaborating with the GRU, sending several hundred fighters to Abkhazia to destabilize the Georgian regime of Eduard Shevardnadze).  Throughout the Russian Federation, furthermore, purely criminal elements now controlled several hundred thousand armed and trained men, veterans of Afghanistan, MVD personnel,4 and other military or special service types washed afloat in the breakup of the USSR.  For these gangs, in the chaos of the first period, access to weaponry and sophisticated communications equipment posed no problems: in a famous episode, on August 12, 1993, the Gerhat-Ural gang of Afghanistan veterans in Nizhnii Tagil hijacked a T-90 tank to threaten a rival Azerbaidjani gang; and Vadim Volkov also reports an episode in 1991 in which a gang hired a SU-17 jet fighter from an airbase to put a scare on a rival gang from Pskov.5  

Midway between government agencies and criminal groupings, “a long-term solution for the commercial use of the personnel and of the informational and technical resources of the KGB and MVD was found by legalizing the informal security and rule enforcement business.”6  On March 11, 1992, the law “On Private Detective and Protection Activity” created and defined three types of private security agencies: ChDA (a private detective agency), ChSB (a private security service, or rather company), and ChOP (a private protection company).  The ChOPs, independent firms, rapidly multiplied and entered into competition with the organized crime groups for the provision of protection to private business; they were most often formed “according to a corporate principal of recruitment” on the basis of a given former security service, department, or group of veterans, and thus tended “to preserve their corporate identity and resemble privatized segments of the state defense and security ministries.”7  The ChSBs, far less numerous, were in fact security subdivisions of major firms, and in a few cases literally formed “private armies” of several thousand well-armed and trained men.  The ChSB of Gazprom, headed by a former KGB colonel, employed 13,000 men; the Moscow Chechen businessman Umar Dzhabrailov hired Gorbachev’s bodyguard unit virtually entire; the ChSB of Vladimir Gusinsky’s Most financial group was headed by Filipp Bobkov, the former KGB Deputy Chairman and creator of the 5. Main Directorate, and with its extensive surveillance and analytical means in fact comprised a private secret service.  In such a fragmented field, where it had to compete for power and resources not only with its rival agencies but also with its privatized components, the MB, at the start, was hardly in a position of strength.

1993 was dominated by the conflict between Boris Yeltsin and his Parliamentarian opposition, led by Vice-President Aleksandr Rutskoi and the speaker of the Supreme Soviet, Ruslan Khasbulatov.  The struggle began in earnest in March; it soon became clear, as Barannikov made several ambiguous statements, that the MB was not supporting Yeltsin.  On July 27, Yeltsin fired Barannikov for “violations of ethical standards.”  Deputy Security Minister Sergei Stepashin, Yeltsin’s closest supporter within the MB, proposed Col.-Gen. Nikolai Golushko, a veteran official of the 5. Main Directorate and the Chairman of the Ukrainian KGB from 1987 to 1991, to replace Barannikov.  As Stepashin was still chairing the Supreme Soviet Defense and Security Committee, he was able to block all discussion of the nomination by the restive parliament, and Golushko was named Acting Minister in August; Stepashin, for his pains, was promoted to First Deputy Security Minister.  A month later, the crisis reached a head.  On September 21, Yeltsin dissolved the Supreme Soviet; Rutskoi and Khasbulatov barricaded themselves inside the White House and, in an action widely perceived as a second coup attempt, declared the formation of a new government, within which Rutskoi nominated Barannikov as his Security Minister.  Yeltsin had already promoted Golushko to full Minister on September 18, and Golushko loyally, albeit ineffectively stood by him through the events.  As the crisis degenerated into an armed clash in the center of Moscow on October 3-4, the MB, which apparently had not anticipated the putschists would resort to violence, mostly stood aside, allowing them to return to the White House after their incursions into several strategic buildings; as Savostyanov later admitted, the MB “‘did not play its role in averting the events’ because of unspecified legal constraints and the lack of in-house power structures.”8  Barannikov on his side was of little help to Rutskoi: though he worked the phones frantically and claimed to have rallied 7,000 officials to the putsch, only eighteen former KGB officials in fact joined him.  Other agencies also remained passive: when ordered to storm the White House, the elite Alfa and Vympel units, subordinated to GUO’s Barsukov, openly refused.  In the end Yeltsin was saved by Barannikov’s old partner, the MVD’s Yerin, who ordered VV units to attack the White House, and who was rewarded in return with a Hero of Russia medal and a place on the Security Council.

Yeltsin, as soon as the putsch was over, initiated a series of measures to punish and weaken the agencies that had failed him, and which he blamed for the disaster.  On December 21, he signed a decree that abolished the MB and created a far weaker structure, the FSK (Federal Counterintelligence Service); this decree “was followed by radical reforms amounting to purges.”9  Korzhakov’s SBP (Presidential Security Service) had already on November 11 been taken out of GUO and made samostoyatelnyi, reporting directly to the President.  Alfa and Vympel were transferred to the MVD.  Vympel was renamed Special Designation Group “Vega,” and 345 out of its 350 highly trained officers resigned: 215 were reemployed by the FSK and other agencies, while the rest moved into private security, many to the ChOP “Argus” created by former Vympel senior commander Yuri Levitsky, others to a new ChOP named “Vympel-Chest’” (former Alfa commanders I. Orekhov and M. Golovatov also set up a chain of ChOPs, baptized “Alfa-A,” “Alfa-B,” “Alfa-7,” and “Alfa-Tverd”).10  

The MB was in effect gutted (see, again, Fig. 1).  It was downsized from 137,900 to 75,000 staff, with only 1,520 in the central apparatus; all officials were declared “provisionally employed” until certified by a special commission; of the top leadership, only 13 out 227 passed and received an attestation.  Many of the officers relieved of their duties were transferred to other agencies (SVR, FAPSI, GUO); several thousand went to the newly formed FSNP (Federal Tax Police Service), but 11,000 left state security permanently, to swell the ranks of the ChOPs, or of organized crime groups.

The change of status of the agency, from Ministry to Federal Service, removed it from all parliamentary control; the new FSK answered only to the President.  It was to be a pure information-collection agency, able only to observe and report, and as such it lost most of its operational branches. The Border Guards were separated out to form a samostoyatelnyi agency, the FPS (Federal Border Guards Service) under the leadership of General of the Army Andrei Nikolaev; though the FSK retained a directorate for the provision of counterintelligence to FPS, the FPS was granted its own Intelligence Directorate and the right to conduct intelligence work, giving it a broad capacity as a special service.  The Investigative Directorate, which drew its power from its right to send cases to court directly, without first handing them over to the General Procurator’s office, was now transferred to the control of the General Procuratura; a few months later, in the wake of Golushko’s departure, the FSK also lost the SIZO “Lefortovo,” which was given to MVD.  The MVD also got the MB’s antiterrorist and anti-organized crime directorates; the SigInt directorate was transferred to FAPSI, whose legal powers had already been boosted in February 1993, and which now employed, according to conflicting reports, either 53,000 or 120,000 staff.  When the new Duma, dominated by the Communists and Zhirinovsky’s LDPR supporters, amnestied the arrested putschists in February 1994, Yeltsin asked Golushko to keep them in prison illegally; Golushko refused and resigned.  He was replaced on March 3, 1994 by his First Deputy, Sergei Stepashin.11

While Stepashin would go a long way to restoring the FSK-FSB to a prominent position, the dominant spetssluzhba (“special service”) in 1994, and at least until 1996, was the SBP headed by Yeltsin’s old bodyguard and drinking crony, Aleksandr Korzhakov. Already by 1993, the SBP, which paid two to three times the salaries of the other services, had taken the cream of the KGB’s specialists; by the time the agency became samostoyatelnyi, it employed 750 elite staff.12  Korzhakov rapidly exceeded his limited mandate, using his proximity to Yeltsin to turn the SBP into a key player on the Russian political scene, with its own interests not always strictly subordinated to Yeltsin’s.  The SBP’s new statutes, under the guise of protecting the President, gave it the right to conduct intelligence and counterintelligence activities, and Korzhakov took full advantage of this, infiltrating his people into nearly every federal ministry and accumulating, through surveillance and wiretaps, vast amounts of kompromat (compromising information) on most major politicians, businessmen and security officials; the widespread corruption in the government gave him easy access to this “political currency.”13  His business activities were innumerable: at one point, for instance, he placed an SBP official at the head of the National Sports Fund, a purely commercial structure that had been granted tax exemptions on imports by Yeltsin and could thus rapidly generate massive profits.  Under the guise of counterintelligence provision, he also succeeded in gaining control for the SBP, in part or in whole, over three vital and highly lucrative spheres: the export of oil, arms, and precious metals and stones.  This was effected by taking control over the distribution of export quotas to private companies and even by establishing an SBP shell company for the export of oil, Rostoplivo.  Additionally, in February 1995, the SBP established its supervision over the state precious-metal export company, Roskomdragmet, “officially, to prevent illegal exports of precious state resources, in practice, simply to establish the SBP’s monopoly over this business.”14  Many allege that thanks to this system Korzhakov diverted vast sums, either for the SBP or for himself; it also gave rise to some highly publicized incidents, such as when under the pretext of fighting smuggling (normally the province of Customs, the Border Guards or other agencies) the SBP confiscated $3 million worth of jewels which had arrived in Moscow’s Sheremetevo-2 airport from London.  

Korzhakov’s and the SBP’s status only continued to rise.  On July 27, 1995, at the same time as GUO, the SBP was incorporated into the Presidential Administration, of which Korzhakov was thus made a Deputy Head.  A few days earlier he had convinced Yeltsin to appoint his close friend Mikhail Barsukov, the head of GUO (whose son married Korzhakov’s daughter), as director of FSB in place of Sergei Stepashin (see below). The two men, together with First Deputy Prime Minister Oleg Soskovets, came to form a “troika” of hawks that virtually ran the country for the following year.  “Not a single appointment, even the tiniest personnel change, could be made without Korzhakov,” says Emil Pain, an advisor to Yeltsin.  “Anyone who wanted to get something in the Kremlin first had to go and bow before him.”15  Korzhakov was granted even more extensive surveillance means, gaining the use though not the direct control of the former KGB 7. and 12. Directorates (surveillance and eavesdropping).  On March 23, 1996, he was named to Yeltsin’s re-election staff, for which the SBP allegedly set up a secret, off-the-books fund.  The height of his power came in April-May 1996, when he was made First Assistant to the President with a rank of Federal Minister, and actively increased the placement of his own men in key positions throughout the government.  His fall however followed swiftly and dramatically.  Yeltsin, after the first round of the elections, found himself forced, in order to defeat the Communist candidate Gennady Zyuganov in the second round, to come to terms with his rival General Aleksandr Lebed and to put a lid on the conflict in Chechnya (which the “troika” had actively fostered and encouraged).  When Korzhakov triggered a public scandal by arresting and exposing two men working for the head of Yeltsin’s campaign, Anatoly Chubais, caught transporting a half-million dollars in cash, Yeltsin seized the opportunity to abruptly sack his old friend along with Barsukov and Soskovets, on June 20, 1996.  (See Fig. 2 for an organigram of the FSO/SBP after the fall of Korzhakov).

Korzhakov’s activities during his brief period at the summit of power vividly illustrate the blurring of the public and the private sphere in post-Soviet Russia: it is impossible, in most of his actions, to distinguish between the interests of the Russian State, of Boris Yeltsin, of the SBP as a bureaucratic entity, or of Korzhakov himself.  One should not however reduce Korzhakov’s activities to mere corruption: the issue is better addressed in terms of patrimonialism, a system under which an individual such as Korzhakov gains and maintains power through his ability to capture and redistribute resources, be they jobs, money, information, favors, or privileges.16  The ability to display and use force is of course another key component of the system.  The infamous “faces in the snow” incident that occurred on December 2, 1994 provides a very clear illustration of these dynamics.  The story, as recounted by V. Volkov, can briefly be summarized as such: Yeltsin, upset at Vladimir Gusinsky’s alliance with his political rival Luzhkov, secretly ordered Korzhakov to put pressure on Gusinsky, “to create an atmosphere around him as if the earth were burning under his feet.”17  At that time, the ChSB Most, 1,500 men strong, regularly displayed its force publicly when escorting Gusinsky through Moscow in a fleet of armored vehicles packed with armed men; under Bobkov’s leadership, it was actively collecting kompromat on the enemies and rivals of Gusinsky, whose HQ was located inside Luzhkov’s City Hall.  The SBP, when it went after Gusinsky, decided symbolically to target the office of ChSB Most.  After following Gusinsky from his dacha to the office, SBP officers “performed a typical naezd” (in the language of organized crime groups, a “run-over,” an often brutal demonstration of force employed to intimidate businessmen).18  Gusinsky’s security men were beaten and forced to lie face down in the snow for over two hours while the SBP aggressively searched the premises.  Terrified, Gusinsky first called the Moscow RUBOP; when a team arrived, the SBP men showed their identification and the RUBOP officers promptly left.  Gusinsky then called the head of the Moscow UFSK, Yevgeny Savostyanov, who immediately sent another team that started shooting in the air as soon as they arrived.  A massacre was narrowly averted; SBP reinforcements then poured in and disarmed and arrested the FSB men.  Savostyanov, whose position had already been weakened by failures in Chechnya, was sacked, and Gusinsky was forced to flee abroad until 1996, when he returned to help with Yeltsin’s re-election.  As Volkov writes:

This discussion leads us to a broader digression, on what Volkov has called “the use of force in the making of Russian capitalism.”20  In the past few years a body of work has emerged both in Russia and the West that has made broad conceptual strides in redefining the nature of Russian “organized crime.”21  This approach, which drew its concepts from research on the Sicilian mafia, has rejected the traditional normative approach (in which “criminal” is defined as whatever is against the law) in favor of a more functionalist approach seeking to define the specific roles of different groupings within the overall economic and political system.  Thus Volkov prefers to speak of “the violence-managing agency,” be it a crime group, a ChOP, a ChSB, or a government agency.  He defines krysha, “the roof,” as “agencies that provide institutional services to economic agents irrespective of the legal status of providers and clients. … legal status is secondary to type of action and function in the economic realm.”22

The specificity of Russian “organized crime” is linked to the origins of Soviet, and then Russian capitalism.  Before Gorbachev’s law on cooperatives, in 1987, any form of private business was considered, from a legal and normative point of view, “organized crime,” and fell under the purview of the GUBKhSS: it is thus not entirely surprising that organized crime, in turn, came to play a central role in the building of Russian capitalism.  When small businesses were finally allowed to emerge, they were obliged to function within a legal system that lacked the most elementary framework for capitalist activity.  It was at this point that groups of young thugs, usually either veterans of Afghanistan or sportsmen based around a given club, stepped in to offer “protection.”  While the initial approach was essentially predatory – the groups milked the businesses for everything they were worth and moved on – it was rapidly made to evolve.  Some groups, as the Soviet Union declined and then collapsed, understood that far more money could be made if the businesses they “protected” were allowed to thrive, grow, and continue paying a regular cut; as the system grew more sophisticated, these groups placed their own people on the boards or in various departments of businesses, or simply set up their own firms, thus fully “legalizing” their activities.  In fact, the “violence-managing agencies” in the space of a very few years came to fill a crucial niche in the developing capitalist economy, a niche that does not exist in the West but was created here by the legal vacuum.  They provided services absolutely vital for business’s ability to operate.  The most important of these were contract enforcement and debt recovery: in the absence of a functioning court system able to render and enforce judgment, businesses had to rely on a “violence-managing agency” to back up their business deals and ensure their partners would respect them.  Krysha thus fast came to mean much more than simply “protection.”  The groups that insisted on maintaining a predatory approach soon withered away or were eliminated; as the services provided by the kryshy proved both crucial and highly lucrative, competition surged, and only those “organized crime groups” that could move on to the next level survived beyond the very short term.  

Already in the very early years who protected a business became a crucial component in the ability to do business; businessmen would not conclude deals with each other before knowing – and verifying – who their respective kryshy were; often the kryshy would meet before the deal was concluded to trade guaranties.  Yet in spite of their dynamic approach organized crime groups proved unable to maintain a monopoly on the provision of protection for more than a very short period.  After the March 1992 law legalized security agencies, these immediately became major players on the protection market.  The law of supply and demand soon improved the position of business, now able to shop around for a krysha rather than be forced to accept the offer of the first group that walked through the door.  The ChOPs created by former siloviki had definite advantages over organized crime groups, or even over the ChOPs set up by organized crime groups to provide a legal framework for their activities: ex-KGB or MVD officials, by maintaining contacts and good relations with former colleagues still in official positions, were able to offer a broader range of services to their clients than the unofficial groups.  Businesses now expected their krysha to do a great many different things for them: solve problems with the tax authorities or the fire inspection, provide information on competitors, secure loans, and so forth.

Several different types of “violence-managing” agencies thus came to compete on the protection market.  Broadly speaking, by the second half of the 1990s, they fell into five categories:

• Organized crime groups, often operating through one or several ChOPs.

• ChOPs created by former siloviki from the KGB, GRU, MVD, or another agency.

• The ChSBs of major corporations, often built up by a former high-level silovik with good contacts within the security bureaucracies.

• Branches of the security bureaucracy legally mandated to provide protection services.  The most important is the MVD’s OVO, the Department for Extradepartmental Protection, set up in August 1992 on the basis of a pre-existing Soviet structure, which employs 367,000 guards, of which 147,000 are policemen.  OVO’s capability not just to guard offices, factories or sites but to provide a broad range of administrative “services” make it a major player on the krysha market.

• Branches of the security bureaucracy that provide krysha on an extra-legal, privatized basis.  Korzhakov’s SBP is the most famous example.  The main player after his fall, whose influence peaked in 1998-2000, was the Moscow RUBOP.  The FSB’s DEB (4. Department for Economic Security) has also been an important actor, as well as FAPSI.

A pattern thus emerged which has been analyzed by the Russian sociologist Vadim Radaev: by the end of the 1990s, he argues, one could establish a typology of businesses according to the type of krysha they employ.23  The more powerful or developed a business, the higher in the chain his krysha.  Thus, according to Radaev’s data, organized crime groups have been entirely forced out of the high-end market by their more powerful official competitors, and mostly only provide krysha for vulnerable small businesses.  Medium-sized businesses such as regional privatized state enterprises will frequently have good links to the local authorities and will work with an institution such as OVO for their protection needs.  Private conglomerates or the biggest state enterprises will have their own ChSB, and often in addition will be able to call upon a branch of a major security agency, on a private basis, in case of need (Gusinsky’s recourse to RUBOP and the Moscow UFSB in December 1994 is a good example).

All the security organs of the Russian Federation are now, to some extent, involved in the krysha market, whether officially or not.  The FSB, we will see further, has set up a body to coordinate its relationship to the major ChOPs born out of the organs.  Though the “Wild West” climate of the early 1990s is over, the notion of krysha, and of the correlative economic interests of the security structures, must still consistently be taken into account when attempting to analyze their actions.

The disastrous conflict launched in Chechnya at the end of 1994 by a physically diminished Boris Yeltsin and his siloviki cronies has played a major role in defining the evolution of the Russian security organs.  It has proved the major security challenge of the Russian Federation in its brief existence; it has, in spite of all their failures, brought vast additional means to the security services; and in the end it has affected the very nature of the Russian state, placing it squarely in the hands of representatives of these services, whose vision of the world and the state remains profoundly shaped by their professional background.

In 1994, as tensions rose between Moscow and Groznyi and as the clan of the “hawks,” Korzhakov, Soskovets, and Grachev, increasingly pressed Yeltsin for a forceful solution, the FSK remained a highly weakened player.  Nine months after his nomination and just two weeks before the first Russian tanks rolled into Chechnya, Stepashin – whose own attempt to solve “the Chechen problem” by backing a Chechen Opposition assault on Groznyi had just failed – admitted in an interview that “the decisions taken … to make the FSK a purely information gathering service were premature.”24  Stepashin, from the moment he took office, had started working to reverse these decisions.  He had a few minor successes in his first year: in June 1994, he secured the creation of a crime-fighting division; by the fall, he had obtained the return of the Investigative Directorate from the General Procuratura, and by the end of the year that of the anti-terrorism and the organized-crime directorates from MVD.  Stepashin also tried to boost the confidence, shaken by the purges, of the FSK’s staff, by signing a collective agreement with the FSK’s trade union organizations “protecting the economic and social interests of the civilian personnel,” which guaranteed that “all matters related to changing the FSK structure, its reorganization, and downsizing, will also be considered by the service’s management with direct participation of the trade union and subdivision management, and with mandatory participation of trade union committee representatives.”25  

But in regards to Chechnya the FSK retained practically no capacity.  From the moment they had taken power and declared independence, Dzhokhar Dudaev and his supporters had abolished the Chechnya-Ingushetia UKGB and launched an all-out war on its stay-behind assets.  Dudaev’s DGB (Department of State Security), headed by Sultan Geliskhanov, a former traffic policeman, effectively succeeded in wiping out the Russian security services’ capacity in Chechnya; Stepashin publicly conceded that “the old KGB administration in Chechnya had been ‘completely annihilated.’”26 By 1994, the FSK as well as the GRU were only able to work in Chechnya through the armed Opposition to Dudaev, entrenched in their bastions north of the Terek and in Urus-Martan.  The Federals’ SigInt capacity was also extremely weak due to the collapse in funding of the agencies concerned.  Nonetheless Stepashin and the FSK thought the Dudaev problem could be easily solved.  As Gall & de Waal write,

Stepashin thus cooked up a plan in the fall of 1994 to have Dudaev overthrown by his own opposition, with armored backing provided by the FSK.  He delegated the operation to his Deputy Director Yevgeny Savostyanov, who hired 47 tank crews on a contract basis from two divisions based near Moscow, without even their commanding officers being informed (the C-in-C of the Kantemirov Division later resigned because of this).  The attack would take the form of a pincer movement, with 17 tanks moving out of Urus-Martan under the command of Bislan Gantemirov, and the other 30 coming down from the North via Tolstoi-Yurt to support the forces of Ruslan Labazanov and Umar Avturkhanov.  The operation was a disastrous failure, and a number of Russian tank crews were captured alive by Dudaev’s forces and exhibited on television, publicly embarrassing the Russians who had denied providing any support to the Opposition.  The fiasco severely undermined Savostyanov, who was sacked a week later in the wake of the “faces-in-the-snow” episode.  Stepashin survived, but was unable to influence the subsequent course of events.  The Army, led by Defense Minister Pavel Grachev, who famously declared that “if the Army had fought, we would have needed one parachute regiment to decide the whole affair in two hours,” now took the lead.  When Yeltsin, with the support of his Security Council,28 ordered the use of force “to reestablish constitutional order in Chechnya,” the Armed Forces prepared to invade.  Though they deployed overwhelming strength, 40,000 men backed by columns of armor, and rapidly wiped out Dudaev’s small Air Force, the attack on Groznyi, the first major combat operation of the post-Soviet Russian Army, turned into a catastrophic debacle.  On New Year’s Eve, 6,000 Russian troops supported by 350 armored units moved into the city.  Dudaev’s forces, making brilliant use of shoulder-held RPGs in infantry tactics pioneered a week earlier by the defender of Bamut, Khizir Kachukaev, destroyed over 200 tanks and APCs, killing an estimated 1,500 Russians while themselves suffering only light casualties.  Though sustained bombardments and relentless assaults would force the Chechens out of Groznyi a month later, the military’s failure humiliated Russia and exposed its force structures’ glaring insufficiencies for the world to see.  Coordination between the different services was disastrous; though the three power ministers – Grachev, Yerin and Stepashin – were all in Mozdok to supervise operations, no combined joint HQ had been set up.  The intelligence failure, already evident in November, was glaring, and each agency tried to blame the other.  Legally, the responsibility lay with the FSK, as the Army’s GRU was not allowed to conduct military intelligence inside Russia, and the MVD had no intelligence-gathering capacity.29  In December, the FSK had set up a Special Operations Directorate in territory controlled by the Opposition, headed by General Dmitry Gerasimov, a former GRU officer who had also headed Vympel for a time.  This directorate, which originally started with only 17 men, had to frantically recruit new staff, and beg hardware off the GRU and sleeping bags and ammunition from the Army’s 8^th Corps.  It formed the nucleus of the FSK’s Chechen Directorate, set up at the start of 1995, which grew into one of its largest territorial bodies.30

In spite of the FSK’s frantic attempts to boost its capacity and of its own legal limitations, the lead role in intelligence collection in Chechnya was taken, de facto, by the Armed Forces’ GRU.  The GRU is the 2. Main Directorate of the General Staff (GenShtab) of the Russian Armed Forces; its head (Col.-Gen. Fedor Ladygin during the first Chechen conflict, replaced by Col.-Gen. Valentin Korabelnikov in 1997) reports directly to the Chief of the General Staff.  (It should be noted that prior to reforms recently and painfully imposed by Defense Minister Sergei Ivanov, the GenShtab planned and directed combat operations independently from the Defense Ministry, though Grachev often directly meddled with planning during the first Chechen conflict.)  The GRU remains one of the most secretive security organs of the Russian Federation, and little is known about its exact composition or the full range of its abilities.  The only available organigram is based on information provided by a Soviet-era GRU officer, Vladimir Rezun,31 who defected in 1989, and is thus seriously outdated and does not reflect either post-Soviet reorganizations or the capacity developed in respect with Chechnya (it is nonetheless, as a curiosity, presented here as Fig. 3).  

The FAS website presents additional incomplete information as to more recent organizational elements:

• 4. Directorate, responsible for the United States, Latin America, Canada, and England

• 5. Operational Directorate: “…functions include first of all the collection and processing of information relating to encroachments on the state order of the RF.” (Moskovskiy Komsomolets 26.04.95, p.1)

• 16. Spetsnaz Brigade: Reported to be “training mercenaries on a commercial basis.” (Russian Television Network, 19.10.94); Chuchkogo Spetsnaz Brigade

• 22. Spetsnaz Brigade: Participated in Pervomayskaya operation (January 1996)

• 10. Separate Special Purpose Brigade; Analysis and Decryption Service (Ground, Air, Naval); Cadres Directorate; Center for Space Reconnaissance ; Computer Center; Information Directorate; Information and Automation Directorate, headed by Maj.-Gen. Viktor Bazhenov; Inspectorate, headed by Lt.-Gen. Aleksei Nefedov; Material/Technical and Financial Support Service; Operational and Tactical Intelligence Directorate: “...under whose jurisdiction all special brigades fall”  (Nezavisimaya Gazeta 10.09.97, p.2); Personnel Work Directorate (former political directorate); Planning and Control Directorate; Strategic (Agent-based) Special Intelligence; Technical Intelligence (Radio, radiotechnical, space) ; Tbilisi Field Station32.

The GRU played a considerable role in Russia’s attempts to exploit the 1992-1993 war between Abkhazia and Georgia.  While Moscow officially supported Georgia in the conflict, imposing sanctions against Abkhazia, the Minister of Defense, Pavel Grachev, provided considerable military support to the Abkhaz side, apparently on his own personal initiative. Anton Surikov, who as a GRU officer was directly involved in these events (many consider that he was Basaev’s kurator in Abkhazia, though he himself denies it), later stated: “That [Pavel Grachev] carried out in Abkhazia his own personal policy is true.  And this, from the point of view of Russia’s interests, was a very useful and correct policy.  Without Grachev Abkhazia would not have stood.  He personally was the true organizer of the defense of the republic.”  The Russian military, under Grachev’s command, at the very least allowed the Confederation of the Mountain Peoples of the Caucasus to send several volunteer battalions to back the Abkhaz, which proved key to the Abkhaz victory in 1993; most probably, these battalions also received logistical support and training from the GRU.  Information has persistently surfaced that the Caucasian battalions’ most talented commander, Shamil Basaev, who was named Deputy Minister of Defense of Abkhazia, was trained at a GRU base near Volgograd in 1992.  The GRU also reportedly deployed its own Spetznaz unit, under Surikov’s command, tasked, between August and October 1992, with eliminating Georgian field commanders.33

The GRU has at its disposal considerable means: intelligence collection units, commando “Spetsnaz” units, and electronic and signals intelligence means, including spy satellites run out of its Center for Space Reconnaissance.  Since 1993, it has secured increased funds to enter into business, and now controls a network of companies.  After the 1998 crisis, however, its budgets were severely curtailed, and over 20% of its foreign residencies were closed; many officers left at this point, finding top security positions in commercial firms.  The GRU’s loss of capacity abroad only increased its bitter rivalry with the SVR.

There are consistent reports that the GRU has also, since Soviet times, continued to maintain teams of assassins trained to operate abroad to eliminate political enemies.  This was confirmed in February 2004 when two officers from the GRU’s 5. Operational Directorate, named as Anatoly Yablochkov and Vasily Pugachev, along with a Russian diplomat, Aleksandr Fetisov, were arrested in Qatar and charged with the murder of former Chechen President Zelimkhan Yandarbiev (though Fetisov was rapidly expelled, the Qatari resisted all Russian pressure to free the two GRU agents and sentenced them to death; the sentence however was subsequently commuted to life in prison, and the two men were discretely returned to Russia in January 2005).  The scandal publicly exposed the GRU’s limitations.  As the Russian military analyst Pavel Felgenhauer writes:

Neither the GRU nor the FSK, however, were able to prevent the next massive blow to Russia’s prestige: on June 14, 1995, a large Chechen commando led by Shamil Basaev attacked government buildings in the Southern Russia town of Budennovsk, setting several ablaze and killing numerous officials as well as civilians before withdrawing to the city’s main hospital and taking over a thousand people hostage.  Yerin and Stepashin immediately flew to Budennovsk and set up a command post to handle the crisis; Yeltsin, who was due to attend a summit in Halifax, left Russia on the 15^th, leaving Prime Minister Viktor Chernomyrdin in charge.  Tense negotiations ensued as Basaev demanded an end to the war and a full withdrawal of all Federal troops from Chechnya.  On June 17, Russian forces including the MVD’s Alfa commando unit repeatedly attempted to storm the hospital, bombing it and killing over 120 hostages; the Chechens fought them off, killing several soldiers, including three Alfa officers.  Television channels in Russia and abroad showed images of women hostages screaming and waving white sheets from the hospital windows, “an absolute public relations disaster for the government.  Suddenly Russian forces were seen as the brutal ones.”35  Chernomyrdin ordered a halt to the fighting and began negotiating with Basaev, sending as an intermediary the former dissident and Presidential Human Rights Commissioner Sergei Kovalev.  An agreement was finally reached to allow the fighters to return to Chechnya unhindered, with part of their hostages; Kovalev as well as a number of Russian liberal parliamentarians and journalists volunteered to accompany the convoy as additional security.  Basaev returned safely to Chechnya, and the government opened negotiations with Chechen Chief of Staff Aslan Maskhadov; a cease-fire agreement was reached fairly rapidly, but it was never fully implemented by either side, and finally broke down in October.

The debacle cost both Stepashin and Yerin their jobs.  Stepashin however had been making substantial headway in rebuilding the FSK’s capacity: on April 3, 1995, Yeltsin, most likely at Stepashin’s urging, had signed a law “On the Organs of the Federal Security Service in the RF.”  The law considerably boosted the agency’s powers and, to mark the new tack, changed its name from FSK to FSB.  The new law:

• described the FSB role in the regions,

• clarified the FSB role in the Armed Forces and other military bodies,

• gave the FSB director ministerial status and the rank of army general,

• allowed the FSB, in co-operation with the SVR, to conduct intelligence work and to protect Russian citizens and enterprises abroad,

• obliged the FSB to inform the president and the prime minister about national threats, gave the FSB powers of detention, and the right to enter any premises or property “if there is sufficient evidence to suppose that a crime is being been perpetrated there.” The FSB was not required to obtain a warrant but had to inform the prosecutor within 24 hours.

• allowed the FSB to set up companies when necessary,

• permitted the FSB to set up special units, carrying firearms, and to train security personnel in private companies,

• described some aspects of remuneration for the FSB personnel,

• established the control structures over the FSB.36

This law was completed on June 23, a few days after Budennovsk, by a Presidential Edict that “made the tasks of the FSB more specific than any previous laws, giving the FSB substantial rights to conduct cryptographic work, and described the powers of the FSB director. The number of deputy directors was increased to 8; 2 first deputies, 5 deputies responsible for departments and directorates and 1 deputy director heading the Moscow City and Moscow regional directorate”37  (see Fig. 1).

Yerin was replaced as Interior Minister by Col.-Gen. Anatoly Kulikov, a veteran VV officer who commanded the Joint Federal Forces in Chechnya.  Yeltsin took three weeks after Stepashin’s resignation to name his successor: at Korzhakov’s urging, he finally picked Mikhail Barsukov, the Director of GUO.  Barsukov immediately purged several senior officers and close Stepashin associates, including Lt.-Gen. Igor Mezhakov, the senior FSB official in Chechnya.  In November Barsukov was promoted to General of the Army.  As Director of the FSB, he remained unusually secretive, never giving a single press conference; numerous observers felt that he was hiding his incompetence, and that if the FSB continued to develop under his leadership, it was more in spite of him than thanks to his initiatives.

The Budennovsk events, indeed, had fully convinced Yeltsin, already swayed by Stepashin, that the new FSB needed not only “eyes and ears” but also “claws and teeth.”  Immediately after Barsukov’s nomination, the UBT was transformed into a much-expanded Antiterrorist Center (ATTs), to which Alfa and Vympel/Vega were transferred a few weeks later from MVD.  The man chosen to head the ATTs was Col.-Gen. Viktor Zorin, a veteran KGB counterintelligence officer who had headed the KGB’s 7. Directorate (which included Alfa) in 1991, the MB’s Operational-Research Directorate in 1992, and the FSK’s Department of Counterintelligence Operations since 1994.  Zorin, seconded by his Deputy Head Lt.-Gen. Ivan Mironov, built the ATTs into a powerful organization involved in a broad variety of activities.  The ATTs included four Directorates: Operations (Terror), headed by General Mironov; Detachment A (formerly Alfa), tasked with protecting transportation and buildings; Detachment B (formerly Vympel/Vega), tasked with protecting strategic sites (the two were soon joined in a Tsentr Spetsnaz under Col.-Gen. Vladimir Pronichev); and Directorate “K,” tasked with ideological counterintelligence.

Litvinenko, in his book, cites a letter published on internet on March 11, 2000, by a man calling himself FSB Major Vladimir Kondratiev, who claimed to have served in a top-secret Department K-20, set up (within the ATTs) immediately after the Khassav-Yurt Accords of August 1996, with the task “of planning and carrying out operations to discredit the Chechen Republic, so that it would not receive international recognition.”38  Whether or not this department actually existed, the ATTs certainly in the years after the first war carried out such operations, and was most likely deeply involved in many of the high-profile kidnappings that did so much to damage Chechnya’s reputations: foreign diplomats attempting to solve these kidnappings often dealt directly with Viktor Zorin, and it is alleged that he and his subordinates kept parts of the substantial ransoms paid in many cases, in effect playing both ends of the field.  It is impossible to say whether these provocations were part of a more general FSB policy or whether the ATTs and its successor departments were running their own show; certainly it did not reflect the official policy of the government, nor of those officials like Ivan Rybkin, the Secretary of the Security Council, tasked with the Chechen dossier between 1996 and 1999.  The ATTs’s attitude towards Chechnya, though, becomes clearer if we consider its institutional origins.  Directorate “K” is considered by most specialist to be the main inheritor – even if not the direct successor – of the KGB’s 5. Main Directorate, which, after being renamed the Directorate for the Protection of the Constitution in 1989, was disbanded in 1991.  Its personnel was dispersed, but, as stated, many were reemployed in the MB’s anti-terrorist department, as well as later in the FSK/FSB’s UKB (Directorate for Constitutional Security).  An exact filiation cannot be drawn, and it seems that Litvinenko is incorrect when he states that the UKB was directly integrated into the ATTs as Directorate “K;”39 in the 1998 organizational scheme, Constitutional Security (or Protection) and the ATTs appear as two separate departments (they were officially merged as the 2. Department for the Protection of the Constitutional Order & the Struggle against Terrorism on August 28, 1999; this has now become one of the most important branches of the FSB).  Whatever the exact organizational history, a study of the biographies of many of the senior officers leading the antiterror/constitutional protection/Chechnya departmental complex within the FSB shows that many of them initially worked in the KGB’s 5. Main Directorate; and it seems apparent from their style of work and methods that they have preserved both the specific mentality and the practices of their old directorate, known mostly, through its work in persecuting dissidents and religious figures, as a haven for the KGB’s most narrow-minded and incompetent elements.  

It was obvious to everyone, in the spring of 1996, that the ongoing Chechen conflict was a major factor handicapping the reelection of the ailing Yeltsin, whose popularity ratings stood at a rock-bottom 3%.  Steps were thus taken, after the killing of Chechen President Dzhokhar Dudaev on April 21, 1996,40 to initiate negotiations with his successor Zelimkhan Yandarbiev.  At the end of May Yandarbiev was invited with a delegation to the Kremlin, where a drunk and aggressive Yeltsin, under pressure, finally agreed to a deal; further technical negotiations were pursued in Nazran in June.  Yeltsin, backed by the financial might of a group of seven oligarchs (including Boris Berezovsky and Gusinsky, whose NTV probably swung the election), faced two major opponents: the Communist Party’s Gennady Zyuganov and the blunt, highly popular General Aleksandr Lebed, who had publicly opposed the war at its start and resigned from the Army.  Lebed’s strong showing in the June runoff, 15%, worried Yeltsin and his supporters, who decided to coopt him; with his back to the wall, Yeltsin sacrificed the entire “party of hawks,” firing Korzhakov, Barsukov, Soskovets and Grachev before the second round of the elections, which he narrowly won.  The elections were also marked, between June 11 and July 12, by a string of terrorist bombings in Moscow trains and trolleys: 4 persons were killed and several dozens injured.  The authorities immediately blamed the Chechen rebels, and Moscow mayor Yuri Luzhkov threatened to expel all Chechens from Moscow even before an investigation was conducted; the rebels, however, engaged at that time in peace negotiations, had no interest in carrying out such attacks, and a number of observers pointed the finger at the special services, accusing them of trying to sabotage the peace talks (in Chechnya itself, Maskhadov was twice targeted by road-side bombs after returning from talks in Nazran).41

Certainly many groups in Russia bitterly opposed a peace agreement.  On July 4, the day after the election (Yeltsin meanwhile had suffered a massive coronary and had entirely disappeared from public view), the Federal Forces unilaterally reinitiated military hostilities against the Chechens.  Massive thrusts rolled the rebel forces back to the mountains, and a surprise attack nearly cornered Yandarbiev, Maskhadov, and Basaev in Makhketi, though all three managed to slip through the Russian lines and escape on foot or on horseback.  But the Chechens regrouped and, on August 6, passing with ease through the Federal deployment, they attacked Groznyi and within three days seized most of the city, overwhelming a number of objects and blockading 12,000 Federal troops in their bases.  At this point Lebed, who had been rewarded for his support with the position of Secretary of the Security Council, took charge of the situation, overrode the generals who wanted to bomb the rebels back out of the city, and ordered a cease-fire; by the end of the month, he had signed a historic agreement with Maskhadov in Khassav-Yurt, and joint Chechen-Russian units were patrolling Groznyi (Lebed, now allied with the disgraced Korzhakov, soon came into conflict with Interior Minister Kulikov, a powerful “hawk;” when Kulikov, in October, accused Lebed of fomenting a coup, Yeltsin rapidly fired him).

The dismissals of Korzhakov and Barsukov triggered yet another round of reorganization.  The SBP, which now employed 4,000 staff, was resubordinated to GUO, which itself was rebaptized FSO (Federal Guards Service).  Its Director, Yuri Krapivin, named in July 1995 when Barsukov had taken over FSB, remained at his post; though under his leadership the organization became even more opaque, it was brought back to its original functions, guarding the President and other senior officials, and its personnel was gradually reduced.  The FSO also lost a major asset, the government communication system “ATS-2”, which was handed over to FAPSI.42

With the war in Chechnya winding down, but crime and Russia’s economic problems increasing, Yeltsin, in Bennett’s words, “wanted a security technocrat at the helm of the FSB.”  To replace Barsukov he chose a little known and completely apolitical official, Col.-Gen. Nikolai Kovalev, passing over the ATTs’s Viktor Zorin, who had meanwhile been promoted First Deputy Director, but who was considered too close to Chernomyrdin and the Communists and was furthermore tainted by allegations of shady financial dealings.  Kovalev had begun his career in the Moscow UKGB in 1974, and had then served in the 5. Main Directorate.  After serving in Afghanistan he had returned to the Moscow directorate, which he took over after Savostyanov’s removal in December 1994 (the position made him a Deputy Director).  He is said to have been chosen for the Director’s post partly thanks to a successful operation he mounted against an Italian mafia plot to smuggle vast counterfeit sums into Russia.43