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. Last Updated: 07/27/2016

Banking on a Spymaster




Old-timers at Moscow's Institute of Oriental Studies do not recall their former director and Russia's new prime minister, Yevgeny Primakov, with particular fondness. By contrast, Russia's Foreign Intelligence Service agents sing his praises to this day, and live in the hope that their organization will receive a new lease on life from their old boss following his recent promotion.


But is it realistic for them to expect a helping hand, and why this disparity of feeling with others who have lived under Primakov's directorship?


I remember well the skepticism of the Orientalists when they received news of Primakov's appointment as their director in 1977. Although the institute's directors were always appointed by the Communist Party Central Committee, a candidate had to be a genuine Orientalist and author of numerous academic works. This was not the case with Primakov, who was "appointed" an academician by the Central Committee's scientific department. Respected academics underpinned this decision with their signatures for fear of losing the few perks they enjoyed: foreign travel privileges and the Kremlin ration of generally unavailable caviar, fresh meat and sturgeon.


After taking up his duties in the institute, Primakov exacted a subtle oriental-style revenge upon those who were ill-disposed toward him: He forced them to go to work every day.


At the time, workers of all but military scientific research institutes were paid very little f 120 rubles, when an overcoat cost 200, boots 150 and a bottle of vodka five rubles. But as a sign of their proximity to the government, Orientalists were granted the exclusive privilege of having to go to work just twice a week, leaving them time for their own, unofficial work on the side.


Primakov took this privilege away from them. They had nothing to do at work, and there was not even enough space for them, leaving many to wander around the corridors. But that wasn't all. Primakov forced them to produce regular "situational analysis" reports, a tall order indeed for a specialist in Egyptian pyramids. This show of initiative went down well with the Central Committee, and Primakov's career moved forward rapidly.


When he was appointed director of the Foreign Intelligence Service in 1991, as an outsider he was also initially met with fixed bayonets. Nevertheless, he immediately got to work on the main task of improving the material situation of the service, where state allocations of resources had already been cut back to the limit. It was under Primakov's direction that the Foreign Intelligence Service successfully began to infiltrate banks, not for purposes of espionage but in order to survive. Today, the ranks of Russia's bankers include many KGB agents recruited back in the 1970s. A few banks are even thought to have been set up entirely by officers of the KGB's financial service, whose job in Soviet times was to do the accounting for the KGB's missions abroad. Since the KGB never had its own financial academy, it used to recruit staff from the Defense Ministry's academy. Although their education was weak and the banks set up by its graduates are now barely alive, they continue to bring in a minimum of income.


Over the last seven years the Foreign Intelligence Service managed to establish a strong foothold on the Moscow Interbank Currency Exchange and many commercial banks. Its operatives are not so much in charge of finances, as engaged in the altogether more important task of gathering compromising material on the bank's owners.


Yet while there are grounds for great affection and respect for Primakov within the service, it is by no means certain that he will remember them now, such is the traditional psychology of top dogs in Russia. As they ascend the career ladder they tend to jettison the departments they used to run behind them like a rocket dumps its stages.


Back when Primakov became director of the Institute of Oriental Studies, the chairman of the Soviet KGB, Yury Andropov, was hatching plans to become head of state. At that time my father was deputy head of the KGB border guards and reported almost every day to the all-powerful chairman. Andropov appeared to take a liking to him and ordered that I be allowed to join the service, despite my prohibitively poor eyesight. "Congratulations," I said to my father. "Soon Andropov will take you into the Central Committee and we will travel around in a government limousine. And in 35 years I'll reach the rank of KGB general."


"Alas," replied my father sadly. "Bosses have a short memory."


Sure enough, as soon as Andropov became general secretary, he turned his back on the KGB, refusing even to raise their wages on the grounds that the organization had "still not earned the Party's trust."


The only structure in Russia where things are different in this respect is the Defense Ministry, where ministers never forget the forces where they once served, and grant them privileges that cause resentment in other areas. But soldiers have their own psychology, KGB generals quite another.


All this aside, however, the Foreign Intelligence Service looks likely to benefit under Primakov's government, with or without the prime minister's direct favor. At the psychological level, other departments will start to show greater respect toward the intelligence services simply on the grounds of Primakov's professional background, as will the population at large. In concrete terms, the main payoff comes by way of First Deputy Prime Minister Yury Maslyukov's announcement that he intends to actively revitalize the military-industrial complex by allocating it greater budget funding.


Consequently, and just as in the Soviet years, the Foreign Intelligence Service's "T" division, the scientific and technical intelligence wing that gathers technical military secrets from around the world, will enjoy a stable demand for its information, generating money to expand the service's foreign missions.


Konstantin Preobrazhensky, a former lieutenant-colonel in the KGB, writes on intelligence affairs for Moskovskiye Novosti. He contributed this comment to The Moscow Times.