The 2014 Winter Olympics: Sponsored By The Russian Mafia?

on February 05 2013 9:04 AM
Construction site in Sochi, Russia
Construction site in Sochi, Russia Reuters

The recent assassination of a top mobster in Russia may have consequences for the Winter Olympics, which the country plans to host a year from now.

Aslan Usoyan, a Yazidi Kurd by origin, was shot to death outside a Moscow restaurant by a sniper three weeks ago, sparking fears of a wider mob war over the spoils of his vast criminal empire.

Among Usoyan’s assets: prime real estate in the Black Sea coastal city of Sochi -- which just happens to be the site of the 2014 Winter Olympics, on which the Russians are p0lanning to spend at least $50 billion (making it the most pricey Olympics in history).

Deputy Prime Minister Dmitry Kozak told local media that the government will spend $24 billion on constructing Olympic facilities and upgrading Sochi’s infrastructure. The other $26 billion or so in funding is expected to come from private investors.

(In comparison, the 2008 Summer Olympics in Beijing cost an estimated $40 billion to prepare.)

Sochi is now undergoing a massive construction boom, including hundreds of new hotels and apartments ahead of the Olympics.

But who will actually benefit from these so-called "amateur" sporting events in Sochi?

The Moscow Times reported that Usoyan was deeply involved in not only drugs and weapons trafficking, but he also controlled construction companies seeking lucrative contracts for the Sochi Olympics and numerous properties.

While no properties were listed in Usoyan’s name (following standard Mafia procedure), the Guardian reported that many hotels and restaurants -- which would profit immensely from tourists flocking to the Olympics -- in the city were under his control.

Russian President Vladimir Putin is reportedly enamored with the seaside resort town and frequently enjoys its beaches, warm breezes and subtropical climate.

Now, in Usoyan’s absence, his many rivals and enemies may battle each other for Sochi's riches.

"[Sochi] was [Usoyan’s] fiefdom," Sergei Kanev, a crime reporter for Novaya Gazeta, told the Guardian. "He considered it a second homeland."

"[Usoyan] was like a governor here, but from the criminal world," another local source told Novaya Gazeta. "It's like a second government, [and] everyone is waiting to see what will come next. It's [certain] that something will happen. The money is too big for everything to just sit still."

In fact, as the value of Sochi properties escalates, mobsters have already thrown down the gauntlet. More than two years ago, one of Usoyan’s top lieutenants, Eduard Kakosyan, was shot down by a gunman on a motorcycle in Sochi.

But Viktor Teplyakov, a Sochi MP who is a member of the ruling United Russia party, denied rumors that criminals control the city -- or that he was linked to Usoyan himself.

"Many years ago there was an 'overseer,' but after he was killed, no other criminals came to Sochi," he told the Guardian.

"The city is very safe,” adding that he is “far from the criminal world -- no meetings, no calls, no contacts."

However, the bloodshed has already commenced.

Since the spectacular killing of Usoyan, Russia has witnessed a number of other mob hits  -- including the murder of a lieutenant of Rovshan Dzhaniyev, an ethnic Azeri who is suspected by police of having ordered Usoyan’s murder, as well as the violent death of top gangster Rufat Nasibov in Moscow.

Vladimir Pribylovsky, an analyst with Panorama, a Moscow think tank, told Radio Free Europe/Radio Liberty about rumors that organized crime has a tight grip on Sochi and the motivations behind Usoyan’s sudden death.

"You can list as many scenarios as you like [for why Usoyan was murdered] -- maybe someone wanted to interfere with the Olympics; maybe someone wanted to steal money off [him],” he said.

“You can make a lot of money by interfering with the Olympics. It's all about money and has nothing to do with politics."

Russian government officials clearly do not want to see a repeat of the 1990s, when gangland killings scarred the nation -- but it appears that the murders have only just begun.

In the wake of Usoyan’s death, MP Alexander Khinshtein, a member of the State Duma's Security Committee, told the Russian media: “The killing of such an influential figure cannot go without revenge from his supporters. This is likely to bring about a new wave of attacks and murders.”

According to RFE/RL, Mark Galeotti, a professor of global affairs at New York University and an expert on Russian organized crime, said Usoyan’s killing came at a particularly sensitive and awkward time for post-Soviet Russia and for its criminal organizations.

"The underworld was already pretty unstable, with the pressures of the 2008 financial crisis and then the twin opportunities created by the Sochi Winter Olympics and Afghan heroin, which is increasingly flowing through Russia,” he said.

"All that meant that there was a lot of volatility within the Russian underworld."

Galeotti added that the Winter Olympics will provide a boon for corrupt officials and organized crime.

“This is something that Usoyan recognized really quite quickly, and his organization is most strongly entrenched around it," he said.

"We are talking about everything from buying up real estate ahead of time so that you can sell it at artificially high prices through to penetrating and exploiting the construction and tourism industries."

Meanwhile, Russia eagerly awaits 2014 -- the country has never hosted a Winter Olympics before, and the only Summer Olympics it ever hosted, in 1980, was marred by boycotts in protest of the invasion of Afghanistan by Soviet tanks.

However, it will be extremely difficult for Russia to shed its image as a state where organized crime runs rampant and corruption is as common as air and water.

In December 2010, a U.S. diplomatic cable exposed by WikiLeaks described Russia as a virtual "mafia state" featuring widespread corruption and bribery.

One document included a comment from a Spanish prosecutor named Jose "Pepe" Grinda Gonzales who claimed that the Russian government and organized crime are one and the same.

John Beyrle, then the U.S. ambassador to Russia, said in a damning report: "Criminal elements enjoy a [protection racket] that runs through the police, the federal security service, ministry of internal affairs and the prosecutor's office, as well as throughout the Moscow city government bureaucracy.”

However, some Russian officials now claim those days are long in the past.

"Today we have a different country, different laws, and a different order," United Russia Duma Deputy Irina Yarovaya told Interfax.

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