Chekists Penetrate the Transition Economy: The KGB’s Self-Reforms during Perestroika

ABSTRACT

This article explores the KGB’s penetration of the transition economy by examining its self-reforms and collective practices during perestroika. A formerly classified KGB in-house journal demonstrates how Chekists adapted their work to economic liberalization. The KGB strengthened counterintelligence measures for Soviet–Western joint ventures by infiltrating active reserve officers and establishing intimate relationships with new Soviet businesses by supplying them with commercial secrets stolen from Western partners. Business and foreign trade positions became new covers for Lubyanka. These institutional arrangements, rather than the individual entrepreneurship of Chekists, paved the way for their prominence in the post-Soviet Russian economy.

Acknowledgments

An early version of this paper was presented at the Research Colloquium at the Johan Skytte Institute of Political Studies. I would like to thank Juhan Saharov for his valuable comments. I am also grateful to the editor and reviewers for their constructive suggestions. My special thanks are extended to the librarians of the Library of Social Sciences, the University of Tartu, and the archivists of the Sectoral State Archive of the Security Service of Ukraine for thier kind help.

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No potential conflict of interest was reported by the author(s).

Correction Statement

This article has been corrected with minor changes. These changes do not impact the academic content of the article.

Notes

1. “Chekists” originally referred to members of the first Soviet secret police—the All-Russian Extraordinary Commission (1917–22), known as Cheka—but the term was later used to refer to officers of Soviet security organs that succeeded Cheka. As the KGB Sbornik shows, KGB officers referred to themselves as Chekists. In this article I have used this term to indicate members of Soviet/Russian security agencies, except in the case of military intelligence (the GRU).

2. Using materials from more than 1,000 central and regional media outlets since 1989 and 40 specialized databases, the journal Vlast identified 90 government officials and 60 entrepreneurs who used to work in the KGB. The list was far from being exhaustive because it included only those “whose affiliation to the authorities is officially confirmed and is not a state secret” (“KGB vo vlasti i biznese, ” 2002).

3. For some exceptions, see e.g., Rivera and Rivera (2014); Rivera and Rivera (2018). I will touch on their discussion in the concluding section.

4. Catherine Belton (2020) has recently argued, citing Christian Michel, who is said to have been a Western fund manager for the Soviet and then the Russian regimes, that during the Andropov era, the KGB’s foreign intelligence and economic counterintelligence directorates started to experiment with the creation of a cohort of entrepreneurs, using black marketeers and cultivating Komsomol members such as Mikhail Khodorkovsky (founder of Bank Menatep and then owner of Yukos Oil Company) and Mikhail Fridman (co-founder of Alfa Bank).

5. Exceptions can be made about highly sensitive topics that were apparently unsuitable for publication. For example, the journal does not deal with the Central Committee’s money laundering through offshore front companies allegedly set up by the KGB during perestroika. For these operations, see Albats (1994, 332–334), Waller 1996; Dawisha (2014); and Belton (2020).

6. In the spring of 2019, the Genocide and Resistance Research Center of Lithuania published a scanned version of the KGB Sbornik issues during perestroika from the collection of the Museum of Occupations and Freedom Fights (Lithuania), although the collection is not complete (https://www.kgbdocuments.eu/kgb-journals-and-books/). The issues lacking in the above collection were found at the Archive of Fond 13 of the sectoral state archive of the Security Service of Ukraine.

7. On the difficulties for scholars trying to identify covert intelligence officers, see Kryshtanovskaya and White (2009, 298–300).

8. As the Sbornik shows, at the April 1989 party meeting of the KGB central apparatus, addressing possible access to the KGB archives, KGB chairman Kryuchkov brought attention to the duty of Chekists to “show the utmost concern for our assistants [agents]” so that “they must be absolutely sure that they will not find themselves in an awkward position due to our fault” (Kryuchkov 1989b, 18).

9. Obsessions with the threat of “economic subversion” were observed earlier in the KGB First Chief Directorate (foreign intelligence) headed by Kryuchkov. Around 1985, discussing the import of food from the West, in which the USSR obtained grain at bargain prices, an FCD internal report quoted a Western partner as saying: “The Russians are easy to work with. They don’t haggle, they overpay by eight dollars a ton.” The KGB also suspected that by increasing the Soviet Union’s import dependence, the United States was trying to “make use of the food weapon in future to exert pressure on the Soviet Union” (Andrew and Gordiesvky 1990, 607–8).

10. Russian human rights ombudsman Sergey Kovalyov, who was a member of the commission established under the Russian president to screen officials for higher posts in the state security service in 1994, was initially impressed by Boris Yeltsin’s ostensible determination to implement reforms of the Russian security services. Kovalyov, however, later concluded with disappointment that “in fact he [Yeltsin] just wanted to remain surrounded by the trusted KGB people with whom he had maintained a close relationship since he was first secretary of the Moscow Provincial Committee” (Adler 2001, 292).

11. Chebrikov’s full remark notes that some employees were also drawn “into the field of creative activity of workers of culture and art. Pulling them out of this is not easy.” This suggests that some Chekists were working under cover as artists or curators.

12. Kryuchkov used similar rhetoric to the public in his address to the Congress of People’s Deputies in December 1990 (Popplewell 1991, 541).

13. Amy Knight notes that after 1987 Western governments registered an increase in KGB activities in the sphere of technical intelligence collection abroad (Knight 1990, 319–20). Gorbachev also viewed scientific and technological espionage as a legitimate instrument of Soviet economic policy. In December 1984, Oleg Gordievsky, then colonel of the KGB London station, witnessed Gorbachev praising the achievements of FCD Directorate T (responsible for scientific and technological intelligence) at a private meeting in the Soviet embassy in London (Andrew and Gordievsky 1990, 621).

14. See also the KGB headquarters directive to the Lithuanian KGB dated April 13, 1988, on the infiltration of agents and undercover officers into newly created joint enterprises for the purposes of scientific espionage (“Ob ispol’zovanii sovmestnykh predpriiatii,” 1988).

15. Although this is an internal narrative in the KGB, Chekists’ contribution to scientific and technological progress may have been exaggerated to some extent by the Leningrad Regional Directorate.

16. However, in case of Estonia, as Pool wrote, toward the end of the USSR, more and more local organizations became worried about receiving data from the KGB, fearing that they might be suspected of criminal connections with the KGB.

17. Some may argue that Chebrikov, like Andropov, was a party apparatchik. However, as Amy Knight argues, party men may have come to identify more with the KGB (Knight 1990, 308). In fact, in the late 1990s, years after the collapse of the USSR, Chebrikov worked as an advisor to the FSB director on a voluntary basis (Zhirnov 2001).

18. This misperception further leads to an overly optimistic view about the prospect of democratization in Russia: that when Putin leaves the Kremlin, large numbers of these elite entrepreneurs can push democratic reforms, resisting the pressures from siloviki (Rivera and Rivera 2006, 136–41).

19. Kryshtanovskaya and White (2009, 298–300) divide those alleged Chekists into two categories: (1) “affiliated siloviki,” whose biographies have suspicious gaps implying training periods at the KGB school (Mikhail Fradkov, Boris Gryzlov, Sergei Mironov etc.) or include work experience in KGB-affiliated agencies or an extended working period abroad (Igor Sechin, Sergei Naryshkin); and (2) “covert siloviki,” who in elite circles are rumored to have been Chekists but without any biographical clues.

20. See Hosaka (Forthcoming, a, Forthcoming, b).

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Funding

The author received no financial support for the research, authorship, and/or publication of this article.