Our Thieves’ World, Part I

GUEST: Claire Sterling
VTR: 6/16/1994

HEFFNER: I’m Richard Heffner, your host on THE OPEN MIND and to begin our program today about what seems now to have become a global network of organized crime, let me read excerpts from a truly chilling new book published by Simon & Schuster. “Modern criminal power has surpassed the government attempts to contain it. International organized crime is too big. Nobody knows how to deal with it. Perhaps it can’t be dealt with as long as the world is divided into nearly 200 sovereign states. While the big crime syndicates simply go where the money is, sovereign states cannot do anything simply. If they go down to dismal defeat in the war against crime it will be largely because they are hampered by all the baggage of statecraft: Patriotism, politics, accountable governments, human rights, legal strictures, international conventions, bureaucracy, diplomacy, whereas the big criminal syndicates have no national allegiances, no laws of their own, no frontiers”. This extraordinary book’s title? “Thieves’ World: The Threat of the New Global Network of Organized Crime”. It’s author, my old friend and guest today, Claire Sterling, whose perceptive writing and reporting from abroad has for decades now been leaps and bounds ahead of what so many other journalists have reported, or even have been willing to see concerning crime and terrorism around the world. Claire, I’d like to begin our program today by asking why there has been over the years, and we’ve sat at this table and talked many times, the reluctance to see the dark side of the moon?

STERLING: I think it’s hard to take, and it’s getting much harder to take than it ever was, and especially in America. Americans like to believe that there is a solution to everything. I’m not sure there is a solution to what I’m writing about. There could be measures taken that might help, but I can’t promise, I can’t offer solutions. And what I see, what I have seen over the last 10 or 15 years, this is moving on from just terrorism, political terrorism, to organized crime which is the acme of terrorism to organizations like the Sicilian Mafia that grandfatherism…is that they are getting better at it all the time. And the possibility of solution therefore becomes still more remote. I’m afraid that we’re all afraid that we’re facing something that we don’t know the answer to.

HEFFNER: Do you think that there are any signs of hope or of…I understand what you say, that one of the problems with Americans is that we tend to think that there has to be a solution to every problem and an answer to every question. And you and I know that’s not true. Any, any indication among our own law enforcement people that there is some coming to deal, coming to grapple with this large question of organized crime around the world?

STERLING: Yes, there is. There is the beginning of awareness, at least, of the dimension of the problem, something that wasn’t even true when I started to write this book, to work on this book in 1990. In 1990 there was no documentation of what was happening across frontiers in organized crime groups. I couldn’t find a document to confirm what I was looking at. I had to create my own documentation in a way, by talking with people who were close to a situation in a dozen different countries and matching together what they were telling me to see if there was some kind of pattern, for the most part, that none of them were seeing. This is the old problem I had with terrorism, too, when I first began to write about terrorism. I could find in Spain people and policemen and ministers and journalists and academics who knew a great deal about terrorism in Spain and nothing about what was happening in Germany or in France, just across the border. And in this case, the organized crime people have moved so smoothly and quickly and efficiently that a lot of people, law enforcement people simply didn’t perceive what they were doing, were not aware that there was a problem, were therefore not looking at the problem. This is no longer true, at least at a high level. I won’t say that a New York cop will know what’s going on in Russia or Germany or France or Britain, or Romania, Bulgaria, and so on. But the high level law enforcement know in the Western world…are drawing together, recognizing that they have go to work in some international context that they never had before. That is…just a couple of weeks ago Senator Nunn had the first of a series of hearings on the new threat of the Russian Mafia, in which Louis Freeh, head of the FBI testified, the head of the Bundes(?????) In Germany, which is the opposite number and counterpart to the FBI, and the man in charge of organized crime for the Russian Interior Ministry all testified. And they testified to the really alarming threat of which ordinary people are still not truly aware, that the Russian Mafia itself, which has become an explosive phenomenon in the international underworld, together with other groups like the Sicilian Mafia, the American Mafia, the Columbian cartels and so on, are in a position now to put their hands actually on atomic weapons. They have, as I write in this book, they have in the last 3 or 4 years, certainly in collusion with officials of the KGB (yes, the KGB, still the KGB!) have been dealing in nuclear materials. The controls over nuclear materials essentially don’t exist in Russia. But that’s one thing to be trafficking in nuclear materials, now Louis Freeh and others are talking about the possibility that they actually can get or have gotten their hands on atomic weapons, at least tactical weapons for their own use in order to blackmail the world, for the sale to terrorists to blackmail the world, or for sale to the terrorist countries who have been trying for years to build the atom bomb. And that’s not just North Korea, which is our present concern. But it is a long list of countries we all know about, starting with Libya, Syria, Iraq, Iran, and so on, who, with the help of this underworld, now have to organize underworld channels to get access to materials which they never enjoyed before. And therefore, this has really driven home as nothing else has so far the need for crossing frontiers, conquering some of the worst bureaucratic obstacles that stand in the way of exchanging information, trying to find some kind of structure whereby criminals who move freely around the world now – I mean big criminals, not just the ordinary bum on the street corner – whereby these criminals can be contained and tracked. When we talk about…Europol is supposed to be the great new frontier for Western Europe and the European Union…

HEFFNER: You don’t describe it as such in your book.

STERLING: (Laughter) No, Europol, I think is a pathetic effort to recognize…it doesn’t recognize the nature of the problem. It doesn’t recognize the dimensions of the problem at all. It has no police powers. It’s simply a clearinghouse for an exchange of police information under very strict limitations, depending on the nature of the national laws of the country, the member states of the European Union. It exchanges information back and forth among the countries making up the European Union. It has no mandate to go, no powers to go beyond the Eastern Frontier of Western Europe. Therefore it cannot look at, really, at what is happening across the border.

HEFFER: But you know, Claire, one, then is not unfair, it seems to me, going back to the quotation that I offered from your book…one then has to say, well, then Claire Sterling, you say that if the West, if these sovereign states, these 200 sovereign states, not just in the West, obviously…if they “go down to dismal defeat in the war against crime it will be largely because they are hampered by all the baggage of statehood”. Well, which of those “bags” would you dispose of? You list them: “Patriotism, politics, accountable governments, human rights, legal strictures, international conventions, bureaucracy, diplomacy”. Well, we could strike “bureaucracy”!

STERLING: (Laughter)…that’s the first instinct…

HEFFNER: But seriously…

STERLING: None of those things can be dispensed with. Obviously they can’t be dispensed with. This is defeat if we begin to…if we join them. And obviously that’s not what we can…we mustn’t do that. But what we CAN do, I think, once the size of the problem is recognized, is try to harmonize our national policies. Try to recognize that the motivations of patriotism don’t necessarily include a jealous protection of our own knowledge that we refuse to share with others, or a jealous protection of our own concept of fundamental laws without the flexibility to make them work in harmony with other national fundamental laws. For example, in Western Europe and in the United States, we have now the Sicilian Mafia and the American Mafia working together as they have never worked together for 50 years, since the collapse of the Soviet Empire, the fall of the Berlin Wall, the extraordinary appearance and growth of the Russian Mafia, the incredible possibilities of laundering money and making money in what used to be the Soviet Union and Eastern Europe. Since that has happened, these organizations have become totally interchangeable, that is what happens in the United States is affected absolutely by what happens in…or Kiev or in Prague or in Warsaw. Yet Italy has a law, for example, making association in the Mafia a crime. Somebody who is convicted in Italy, of Mafia association, for which he can get a sentence of seven or eight years or more, simply for Mafia association, can simply cross a now non-existent frontier between Italy and France, or anywhere in Western Europe actually, within the European Union, which is itself supposed to be a consolidated area, and he cannot be extradited from France or from Germany or from Holland to Italy because he has been condemned or convicted as a member of the Mafia, because they don’t have the laws.

HEFFNER: So you’re suggesting some kind of unity of purpose seen through the unity of laws.

STERLING: Absolutely.

HEFFNER: Now, your book seems to put a good deal of emphasis on the role that’s played…the sums of money that you deal with are absolutely extraordinary, that…you seem to put a lot of emphasis upon the banks, and the roles that they play. Let’s go buy a bank and wash some dollars…

STERLING: Yes, you know, it’s a measure of how far they’ve gone in the last few years. When I wrote my last book about the Sicilian Mafia octopus, I talked about their big money launderer Michele Sindona, and of course another big launderer they used was Roberto Calvi. The old crowd used Sindona, the new crowd used Calvi, then the war for Sicilian power. Then both men came to a bad end because they didn’t keep their commitments with the Sicilian Mafia. But these days they use a hundred bankers, 500 bankers. They buy their banks. I mean, they don’t bother depending on other people to do this stuff for them. The American Sicilian Mafias have a bank in Sverdlovsk, in the heart of the military industrial complex of Russia. The Comoda was caught in the act of trying to buy 2 billion worth of rubles in Germany in order to buy a bank in St. Petersburg. They have banks in Czechoslovakia and I’m sure they have banks in the United States. By now in Russian itself, according to the latest report by the professor assigned to analyze the situation for President Yeltsin in Russia, they own…the Russian Mafia itself owns over 400 banks, or 400 private banks. Therefore they have this possibility to maneuver their money beyond our own possibility, utterly beyond our own possibility of detection. Unless we are willing…well, here’s a question of what we have to think about giving up to a degree: to sacrifice to a degree of our right to privacy of our money. I mean, we all feel very strongly that we don’t want any government body nosing into our private financial affairs. But if government bodies don’t nose into our financial affairs they cannot nose into the kind of money now being moved around the world by crime groups who, from the drug traffic alone, have a turnover of about 500 billion dollars a year. By crime groups who, according to the G-7 financial group GAFI have accumulated, from their interest on investments over the last 10 or 15 years, almost a trillion dollars, 827 billion dollars of capital invested largely in legitimate enterprise.

HEFFNER: Are you suggesting that we’re in the wrong business?

STERLING: (Laughter) Well, sure, we must have taken a wrong turn somewhere!

HEFFNER: How…and I’m very serious about this…how have you survived digging up this information and publishing it? How do you survive, since you are THE leader in this exposing the Mafia and the other kinds of criminal connections?

STERLING: Well, you ask…I was on a hit list before, but I never believed it to tell you the truth. That is…

HEFFNER: With all that money involved?

STERLING: Well that was before, that was before. I mean, when I brought about the Red Brigades and other terrorist groups before I was told that I was on the terrorist hit list and I didn’t….I mean they had a lot of people to think about before they got around to me, and in fact I didn’t take that very seriously. I didn’t even take it very seriously when I was told that writing about the Russian and Sicilian Mafia was very dangerous. I didn’t believe they were dangerous because I was writing what was already known to some authority. I wasn’t betraying something that I had discovered alone, or (??) and I had discovered alone, and I was very careful not to twist or lie about things that people in the Mafia had said or done. And I felt that was sufficient protection. The Mafia didn’t really have a serious motivation. I will confess that this time I am alarmed, well, I am pre-occupied by the Russian Mafia, which is, even in the terms that I have been looking at this phenomenon of organized crime for 10 years, is the most frightening, violent organization I have seen, which is really capable of…it doesn’t have the kind of…even the kind of restraints…not “even” because they’re important restraints, that the Sicilian Mafia has generally in who it decides to kill or…

HEFFNER: Tell us about that. What do you mean restraints?

STERLING: Well, for example…

HEFFNER: …thieves?

STERLING: …the Sicilian Mafia doesn’t kill unnecessarily. It doesn’t kill for just silly reasons. I mean, it happens, it’s happening now because some of their old code of behavior is falling apart under the pressures of making so much money now in the drug trade and other things besides, but they still have a very strong degree of control. You have to get approval from the Commission of the Sicilian Mafia to kill anybody of importance. You can’t just go out and shoot or bomb or whatever. And you have to have…it has to belong to a set of reasons, in the interest, in the Mafia’s interest. You kill in the Mafia’s interest, in their own organization’s interest, not to vindicate…as a matter of honor…that’s another thing. It used to go on a long time ago, and it still happens but that’s not the major thing. The major thing is they have to protect their secrets and their sources and their connections and their money making operations, the way they handle their money. The Russian Mafia is something else. The Russian Mafia has come out of the Soviet Empire. The rulings of the Soviet Empire was total…the total conviction that there is nothing around to stop it at all. And there isn’t anything around to stop it. It has come into a situation in which there is no law enforcement. There are no laws. There are no laws against the Russian Mafia. There are no laws against…serious laws against corruption, no laws about what they have to support legally or illegally of these enormous resources of Russia. They have bought…whoever is new in the governing class of Russia, they had bought the old governing class of Russia. The politicians are in their pockets. Therefore they have a license to kill, which I have never seen in any other organized crime group.

HEFFNER: You know, we all use the word “mafia” rather loosely. Could one substitute for that word in Russia or in the other former Soviet states or republics just “crime”?

STERLING: Crime…There is a mafia, and there is also crime in Russia. The two are interconnected, but it is wrong to assume that this is just an explosion of criminal groups who just operate on the loose.

HEFFNER: Lawlessness.

STERLING: It’s not just lawlessness. There is a tremendous amount of lawlessness which grows by the day, by the hour, as it becomes clear that the only way you can make money in Russia is to be a criminal, and second, that you can get away with it absolutely without any fear of getting into any trouble about it. But within this seemingly unstructured lawlessness there is a structure. And there is a body which calls itself the Mafia, or is called the Mafia – there’s only one official Mafia which is the Sicilian one – but Judge Falcone, who was the world’s greatest expert on the Mafia conceded before he died that other very big crime groups could be called mafias if they matched the Sicilian Mafia in capacity for violence and versatility in kind of crimes and their capacity to corrupt, the capacity to buy protection, and so on. The Russian Mafia, in this sense, exists with a structured chain of command. It is not structured in the way that we are used to in the Sicilian or American Cosa Nostra. It has groups that fight amongst themselves, fight over territory, are unruly, riotous, and so on. However it does have, at a higher level, a strange, unique institution, which in English, for lack of a better translation, we call “Thieves Within the Code” or “Thieves Within the Law”…sorry I can’t even speak Russian myself…anyway, it’s in the book. However, these are, are leaders whose moral authority is established. They’re mostly people who have been in prison many years, who have spent most of their lives in prison, who have learned to do without, to reject any of the softnesses of life that might soften their resolve, and who have a long, long experience in how to manage crime, how to develop criminal strategy, and how to get it protected, within whatever the establishment may be. There are now about 700 estimated godfathers, of this kind. We like to call them “thieves within the law”, whose job is to protect the code of behavior within the…it goes back many centuries among the thieves in the old Czarist world before Communism, which is a very strict code bristling with death penalties for betraying another member of the Mafia, for working outside, outside in the “outside” society, (that one, that part of the code is lost now) nevertheless…for betraying any of the secrets, for sleeping with the wife of another member, very much like the Sicilian Mafia’s code, full of, just as full of death penalties. Also requiring that to join this inner structure, which is a mafia, you must kill first, just like the Sicilian Mafia requires this.

HEFFNER: The “made” fellow…

STERLING: The “made” fellow, yes. And then they have tattoos, and costumes and rituals and ceremonies and so on. Again, it’s not like…it’s not a copy of the Sicilian Mafia. However it is increasingly, it leans, as do the other big organized crime groups, the Chinese, the Japanese, ah, the Columbian, leaning towards, or have a particular respect for, the Sicilian Mafia model, which is extremely sophisticated and successful, as we all know. And this structure, at least at the level of the “thieves within the law”, is capable of making policy for the Russian government, and has done so, as I say in the book, and has done so on several occasions. When it decided, for example, when Prime Minister Pavlov, just before the end of the Soviet Union, decreed the withdrawal of 15 ruble notes, which were then the largest in circulation, which he said he had done to prevent this enormous flow of rubles out of the country and flow of black market money into the country. And people laughed at this in the West and said that he was just a hard-lining Communist leader who was just trying to grab the savings of the poor, which he did grab, by the way. But what he said that time was true, nevertheless, about what he said. However, the poor people who were hiding rubles under their mattresses because they didn’t want the tax collectors to know about whatever money they had didn’t lose their money in that case. But the “thieves within the law”, the leaders of the Russian Mafia, held a Summit meeting to discuss how best to handle this decree. This was all documented and confirmed by top officials. And they decided where, in which parts of Russia they should ship their cash money, which cooperatives, which state firms could be used to submit impossible sums of 50 ruble notes and change them into the new usable sums, and they got…they saved their money.

HEFFNER: You know, Claire, there is so much to this. We’re at the end of our program now and I’d like to ask you to stay where you are. We’ll do another program after we end this one, and I’m going to ask you whether in history there has been the similar growth in any other nation, or any other region of the world of crime as you described it, of any organized crime as you describe it in the former Soviet Union. Thank you for joining me today, and come back next time and stay where you are. Thanks, Claire.

And thanks, too, to you in the audience. I hope you’ll join us again next time. And if you care to share your thoughts about today’s program, today’s themes, please write to THE OPEN MIND, P.O. Box 7977, FDR Station, New York, NY 10150. For transcripts send $2.00 in check or money order. Meanwhile, as another old friend used to say, “Good night and good luck”.

Continuing production of this series has generously been made possible by grants from: The Rosalind P. Walter Foundation; The M. Weiner Foundation of New Jersey; The Carnegie Corporation of New York; The Thomas and Theresa Mullarkey Foundation; The Richard Lounsbery Foundation; The New York Times Company Foundation; and, from the corporate community, Ruder-Finn, Inc.