(Bloomberg View) -- The mind-boggling news story of cocaine-filled suitcases at the Russian embassy school in Buenos Aires demonstrates that the tolerance President Vladimir Putin's regime has shown for all kinds of moonlighting and freelancing by its servants has gone too far. The regime needs to find a way to curb it; otherwise it will end up being treated as a criminal organization.
The official version of the story raises more questions than it answers. Some 18 months ago someone (the Russian foreign ministry won't say who) found bags filled with almost 400 kilograms of cocaine stored in the embassy school building. According to Argentine sources, Russian Ambassador Viktor Koronelli alerted the local police. The bags allegedly belonged to a former technical employee of the embassy whose contract had expired. Russian and Argentinian officials then conducted a joint operation that culminated in December 2017, when the bags were filled with flour, fitted with a GPS device and flown to Moscow to determine the recipient. Three people were detained, including the former embassy employee and two people who tried to claim the cargo.
There are problems with this version. Russian economist Maxim Mironov, who lives in Buenos Aires and whose children attend the school, has expressed doubt that 12 massive suitcases could have been moved into the school without the knowledge of the embassy's security service. It's also difficult to explain why a Russian businessman named Andrei Kovalchuk tried to claim the cargo on behalf of the former embassy worker, offering to fly it to Moscow on a private plane; Kovalchuk, contacted by a private Russian news agency, claimed that the bags contained cognac, cigars and elite coffee he had bought for export to Moscow. Reportedly a former employee of the Russian foreign ministry's security department, he used diplomatic channels to avoid paying customs duty on the luxury goods he shipped from various countries. Kovalchuk, inexplicably, is still at large.
Most intriguingly, the Russian daily RBC tracked the number of the plane on which the flour was taken to Moscow -- it appears in one of the photos published by the Argentinian authorities -- to Rossiya, the elite air unit that takes care of top Russian officials' travel. Rossiya is run by the presidential staff's business department, which promptly denied that one of its planes was involved, although a plane with that number was indeed in Buenos Aires in December 2017.
The spins and denials are familiar, and so is the pattern that emerges. Russians, especially security personnel with access to useful bits of government infrastructure use this access to line their pockets. They appear to have unofficial approval from the top to do it.
Yevgeny Prigozhin, who controls the Wagner private military company -- essentially a mercenary army that does some fighting for the Russian government but also gets to carry out commercial jobs -- appears to enjoy this kind of arrangement. The Washington Post recently published a story citing his intercepted communications with a Syrian minister, in which he apparently pledges Wagner's support for the Feb. 7 mission to take an oil refinery from a Kurdish force. He also reportedly said he'd secured permission for that from a Russian minister. In the communications intercept reported by the Post, his Syrian interlocutor assures Prigozhin he'll be paid. If the story is correct, it means Prigozhin seeks and gets authorization in Moscow for his commercial missions, which aren't even legal for Russians to take on -- Russian law prohibits participation in foreign wars as a mercenary.
Certain Russian hackers are another example of this mode of operation. In January 2017, several computer experts working for, or closely with, the FSB domestic intelligence were arrested in Moscow on suspicion of treason. One of them was Major Dmitri Dokuchaev, who had been a notorious black-hat hacker before he was pressed into service for the FSB. He was apparently allowed to continue with his personal enrichment projects, including allegedly those stemming from a theft of some 500 million Yahoo! accounts, a crime for which he's wanted in the U.S. Dokuchaev's appears to be yet another case of unofficially authorized moonlighting.
Perhaps such people can be useful to the state (at least as Putin understands its goals): They're motivated by greater wealth than the state officially can bestow. But their mistakes annihilate all the good they may do the regime. Prigozhin's private army suffered a painful defeat, losing dozens of people on Feb. 7 and putting the Kremlin in the extremely uncomfortable position of being unable to stand up for its citizens -- something that didn't pass unnoticed in nationalist circles. The hackers, corrupted by the state's protection, tend to go too far, as the treason case indicates. As for suitcases full of cocaine, they are definitely not the kind of publicity the Russian foreign ministry wants, even if it cooperated with the confiscation.
In the end, all the moonlighting creates the impression that there is barely a line between the Russian security establishment's activities by day and by night. Are they lending a hand to Syrian President Bashar al-Assad in seizing a refinery because that's somehow in Russia's interest or because somebody wants to, and is allowed to, make a buck on the side? Are they hacking as a matter of policy or for profit? Are they smuggling cocaine as a sideline or because the Kremlin is a drug cartel, using the same planes to fly ministers around and transport drugs? They're making it too easy to assume everything they do is sanctioned by Putin, and the assumption is routinely made even without the evidence to support directly presidential knowledge -- as, for example, in the Olympic doping case that resulted in many Russian stars' ban from the Pyeongchang games.
Domestically, it has long been difficult to separate the sideline business of police and intelligence services from their official work. But now the moonlighting is increasingly visible internationally, in part because Putin has drawn hostile attention to his country with his aggressive policies. That's a serious problem: Putin wants to be seen as a principled adversary to the West, not a mob boss. If he can't curb his security apparatus's greed as it free-rides on the enormous power it has been granted, then maybe he no longer really runs the show as he goes into his fourth presidential term.
This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.
Leonid Bershidsky is a Bloomberg View columnist. He was the founding editor of the Russian business daily Vedomosti and founded the opinion website Slon.ru.
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