The Looting of Russia
An FBI agent and an honest Moscow cop stop the plundering of the national treasury
Several days later, while walking his dog, Zhirov was jumped by two men and savagely beaten. "Stop the Golden ADA investigation," one yelled, "or next time we'll kill you!" Zhirov ended up at the hospital, bloodied and with a concussion. In San Francisco, Davidson was shocked--and disappointed--at the news. "Well, he's done," Davidson remembers thinking. "That's the end of the case."
But the Russian cop was undeterred. He built up his team to 15 investigators and sparked probes by other investigators at the Finance Ministry and Tax Agency. Now the pressure was building on Bychkov, who had to explain the disappearance of $178 million in state treasure. Bychkov blamed Kozlenok and the Shagirians. In late September 1995, his agency filed suit against Golden ADA in U.S. federal court, alleging that the company had stolen the gold, diamonds, and other riches meant for its diamond-processing operation.
The FBI's wiretaps, however, suggested a different story. As agents listened in, Bychkov discussed with "the Cleaner," Chernukhin, how to stop the investigations into Golden ADA, according to federal officials. The two men agreed that Chernukhin would come to Moscow, investigators say, and get help from some of Russia's most powerful people: Anatoli Chubais, then managing Yeltsin's re-election campaign; Yuri Luzhkov, the mayor of Moscow; Alexander Korzhakov, head of Yeltsin's Presidential Security Service, and Oleg Soskovets, deputy prime minister. Chernukhin's calls not only went to top officials of the State Treasury but also to powerful ex-KGB officials, to the executive offices of the president in Moscow--even to Yeltsin's own dacha. For the first time, FBI officials believed they saw evidence of a criminal coverup reaching the highest levels of the Russian government. Bychkov calls such allegations "fantasy, however." Chernukhin's lawyer says his client is innocent and only tried to "right the ship."
The FBI learned even more from its informants: Golden ADA was but one of a series of schemes to plunder Mother Russia. "One group was involved in stealing timber, oil, and precious metals," said one agent. "Others were involved in gold and diamonds." And at the center of it stood Kozlenok. The value of goods shipped to Golden ADA equaled $178 million. But taken together, the various scams added up to more than $1 billion, Kozlenok later told the FBI.
Immendorf recalls hearing of plans to import timber from Siberia and to fuel Golden ADA's gas stations with gasoline from Russian stockpiles. Nelson Colton, who had melted down $50 million of coins for Bychkov, remembers his surprise that the Russian was uninterested in chatting about gold. "He talked about us distributing platinum and palladium for them," says Colton. For a while, palladium was worth more than gold; two thirds of the West's supply is Russian.
Clues to the scope of the scandal were found in the $40 million in wire transfers that investigators traced from Golden ADA to Moscow. Some $400,000 was headed to a presidential book fund, to finance the printing of Yeltsin's autobiography, but somehow the cash disappeared along the way, investigators say. Some Moscow press accounts claim the money was funneled into Yeltsin's re-election campaign. Immendorf remembers talk of money going to fund Yeltsin's presidential security force. Investigators also note that Kozlenok typically made multiple purchases in California, buying sets of cars, boats, and condos--"as if preparing an early retirement for certain Moscow officials," suggested one agent.