Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

Navy Steel Sold to Build New Russians' Houses

VLADIVOSTOK, Far East -- True survivors of Russia's economic collapse are taking things into their own hands. Sometimes they are things that belong to someone else - like the military.

Viktor Kharin, 44, is one such survivor, an opportunist who found there was a profit to be made in pilfering steel from under the nose of the mighty Pacific Fleet, his employer.

"What can you do," shrugged the slim, bearded entrepreneur. "My wife won't allow me to walk off into the sea and drown."

Kharin lives in this far eastern port on the Sea of Japan, which the tsars founded over a century ago to rule the east - as Vladivostok's name translates.

Once the pride and joy of Soviet general secretaries, the Pacific Fleet now moored in Vladivostok has lost something of its former grandeur. Officers say openly that they have been recruited by the patonuvshy flot - the fleet that sank.

Kharin is still employed by a branch of the sinking armada, working in Factory 198, which used to churn out the metal that once was used to create some of the world's most dangerous vessels.

Now the fenced-off plant is redundant, as the ships it once helped build are sold off to nearby clients such as South Korea for scrap metal.

The factory thus may have little use for its steel supplies, but Kharin and associates quickly found an alternative purpose for them. They noticed that the only business here that was actually booming was the construction of princely castles for Russian entrepreneurs on the outskirts of town.

These so-called New Russians preferred to top their creations with metal roofs and to protect their garages with steel doors.

"Over here we had rolls and rolls of steel," Kharin said. "Over there we had very rich clients. It added up to a simple equation."

So Kharin placed a few calls and soon he had his first customer. Only a few weeks later other steel takers began calling him. Soon he was running a business.

It was a business born in the heart of the Russian military - a capital offense that could have seen the entrepreneur executed for treason only a few years ago.

But rules have changed. Kharin concedes that it is impossible to drive steel out of the Pacific Fleet's door without someone noticing.

Instead, Kharin says his bosses "close their eyes" to the fact that a few rolls of metal go astray.

Whether a bit of extra pocket money makes the administration nod off just as its plant's gates open for a truckload of dacha metal, Kharin does not say.

The gates that do pull open for Kharin are rusty, and the Red Army stars emblazoned on them have not gleamed in years.

The entire military complex built on one of Vladivostok's least-inhabited peninsulas is standing still in grave silence. A few young naval types dressed in heavy blue wool greatcoats parade sullenly to the nearest bus stop when the day is done.

Fenced in one corner is a garage for scrap that once served as the navy's armory. Locals do not know if any lethal ammunition is still buried there, but one woman pointing to the snow piles hiding nondescript objects identified the spot as the "factory dump."

Across the street from the armory sits an unimposing navy base where young recruits learn the drills. Next door, deep inside factory 198, is Kharin's metal sales shop.

But unless he starts selling abroad, a prospect Kharin admits is unlikely, his business may soon cease to exist.

Russia's financial collapse in August took the factory's best clients with it.

Kharin, who also moonlights as a taxi driver, said he recently picked up a local financier who lives under a roof supplied by the Pacific Fleet.

"He says he has no company any more, no money, and a big fancy house," Kharin said. "Those guys are soon going to sell off their little castles, but who can buy them?"