One of the most common forms of enrichment for power ministry personnel is the provision of protection (a “roof,” or krysha in Russian parlance) to businesses of all sizes.353 In the immediate post-Soviet period, state law enforcement agencies proved unable or unwilling to protect the property rights of newly legal stores and companies, so mafia groups created demand for “roofs” by running protection rackets. Over time, however, much of this activity was taken over by state agencies - not as part of their legal responsibilities, but on a for-hire basis. For example, the notorious Moscow bar “The Hungry Duck” started with a Chechen mafia roof, then switched to a private security service run by a former KGB general, and finally settled with the extremely reliable services provided by RUBOP, the MVD’s regional organized crime directorate.354 One Russian crime journalist estimated that if in the early 1990s, 70 percent of roofs were criminal, ten years later, 70 percent were provided by the police and another 10 percent by the FSB. Large enterprises were more likely to have an FSB roof.355 Medium and large enterprises usually hire a former officer from the FSB or the MVD to serve as the “vice president” for security, who manages the firm’s relations with law enforcement authorities.
The other major players in the “roofing” business are private security firms, which generally employ former military and law enforcement personnel. Indeed, many of the mafia-type groups originally formed to provide “protection” to private firms went legit in the 1990s and became private security firms. In 2008, the value of this industry was estimated to be about $3 billion annually, employing more than 740,000 people in more than 27,000 firms. The police interact with private security firms and extract rents from them; for example, the head of the municipal militia in St. Petersburg in the early 2000s reportedly oversaw roofing operations in the city, partially by controlling licenses for private security companies.356
In 2008, the MVD promoted legislation that would seriously weaken private security firms by tightening licensing procedures and even depriving them of the right to own firearms. Most observers believed the legislation was designed to allow the police to expand their roofing activities. Gennadiy Gudkov, a Russian State Duma deputy, stated, “for the Interior Ministry, commercial interests are the priority, not those specified in the Constitution, i. e. fighting crime. Unfortunately, this law cannot be called anything else but a commercial law lobbied by [the Interior Ministry.]”357
Under Putin, it appeared that the FSB also was expanding its roofing operations. The Russian scholar and journalist Yevgeniya Albats, an expert on the FSB, claimed that the FSB was trying to push the MVD out of many of its roofing “contracts,” as well as increase the fees for businesses.358
World History
