Valery Morozov is a whistleblowing businessman who fell foul of the Russian authorities in Sochi after reporting state bribery. He has been granted political asylum in Great Britain. Morozov posts this dramatic story. What starts as a conversation about Sochi, and corruption in Russia in general, ends in a revelation about the theft of one of Russia’s most important pieces of military technology. — Ed.
After my article The End of the Sochi Olympics, some readers accused me of “painting everything black,” etc. And I understand them, including their desire for the Olympics to be held in Sochi, their desire to unite in a difficult moment, to prevent further terrorist attacks. I myself want the Olympics to be held in Sochi and to become a holiday for billions of sports fans, I want terrorists captured or destroyed, so that they can’t kill Russian citizens who are not guilty of the fact that Russia has become a country of criminals, of a permanent civil war with terrorist attacks in peaceful cities.
Just desire and cohesion are not enough to root out terrorism. It is necessary to understand the nature of the processes that take place in Russia, leading to tragic consequences. To understand in order to fight and defeat.
I have long been trying to explain what is happening in Russia, what is the root cause of our problems: the criminal nature of the entire state system, that was built on the ruins of the Soviet Union, because it’s criminal elements who benefited from the collapse of the USSR. They formed the moral foundations of today’s Russia: the desire to make a quick profit by all means, a criminal morality of a parasite sucking out state resources, budgetary resources, income of other people who earn their living with their labor, skills, initiative, and enterprise. Life and morals of a parasite, a worm, a bedbug has become the ultimate purpose and value in this state.
Because of this morality the worst possible thing happened in Russia: a merger of crime, authorities and special services. It is this three-headed dragon who rules Russia. And, perhaps, now it is time to focus on one element of this criminal “trinity”, one of the dragon’s heads: Russian security services.
In just one article I cannot analyze the reasons for the current state of the Russian special services, causes of their degradation, unsustainable swelling and increasing inefficiency. It is difficult to do even in a series of articles. Everything is, as they say, in an advanced state of decay. But I will try to identify the main reasons and illustrate them by examples of real people, you heard and read about. These are the real facts very few people know about, and those who know, keep silent for obvious reasons. But these stories speak for themselves.
The first story – A testament of a bodyguard
In my previous materials I mentioned several times the name of Valery Gorelov. I will tell you in brief how we met.
I met him in 1994. Back then he was a deputy Commandant of the Moscow Kremlin. Gorelov was responsible for management and maintenance of the Kremlin property and facilities. It was Gorelov who oversaw the contract between the General Protective Directorate (GUO) of the Russian Federation (now the Federal Protective Service (FSO)) and “York Russia”, a subsidiary of the American “York International” corporation. At that time I was the CEO of York Russia in charge of the former USSR countries. Under the contract, York was refurbishing the HVAC systems of the Grand Kremlin Palace.
Part of the money, $3 to 8 million (US) was disbursed under the contract from the General Protective Directorate (GUO) account without submission of work completion reports. York did not submit any invoices, we did not ask for any money, and for some time I did not know anything about the money transfer. The money came to the bank, but was never posted to our account and immediately disappeared. I received the information about the transfer by accident. It was Gorelov, who was not involved in the embezzlement of the funds, who told me about the transfer from the GUO account.
When the Kremlin found out that I was aware that the money had been transferred to the bank, but had never been posted to the company’s account and disappeared, the GUO management (Krapivin, the GUO Chief, and two of his deputies, Nikitin and Sokolov) tried to pressure me into covering up the theft by deliveries of equipment by York International. I refused. Then they tried to pin that on me and York. They didn’t succeed in that, either. (See https://valerymorozov.com/news/767)
Gorelov fell into disfavor, and in a couple of years after we fulfilled our contract, he was forced into retirement. Everything looked decent: the GUO management threw a huge farewell party, speeches were delivered by Mr. Korzhakov, the then chief of the Presidential security detail, and Mr. Barsukov, a former commandant of the Kremlin, who at that time was the Chairman of the FSB. Gorelov was their good friend.
Although Gorelov was discharged with honors and awarded with “The Honorary security officer” title, the GUO management harbored a grudge against him and blacklisted him. Wherever Gorelov tried to find a job, the GUO would make sure he was turned away (more: https://valerymorozov.com/news/1565). Eventually I was the one who gave him a job in my own company, “Conditioning, automation, and heating systems” (SCAT), LLC., on the basis of which JSC “Mosconversprom” was subsequently established
Gorelov worked on the efficiency of boilers and heating systems. In addition, he was in charge of searching for new contracts.
It was a new company, not well promoted. After the default of 1998 it was extremely difficult to find new contracts. Almost for a year Gorelov could not find a single order. The GUO tracked not only him, but me and my company, making it impossible for us to get a government contract. It was suggested that I should fire Gorelov. I refused, hoping to break through, because I did not want to throw a man into the street under the pressure by some powerful thieves.
The situation changed when Yeltsin resigned as the President of the Russian Federation. On his very first day Putin dismissed the GUO/FSO. Putin knew about the conflict between the GUO and York: I involved the FSB in that conflict, which created a certain counterbalance vis-à-vis the GUO and reduced my risks. The FSB had a whole case open on the GUO management (more on this in Enter the Kremlin). As the FSO leadership changed so did the attitude to Gorelov. By that time, Korzhakov and Barsukov lost their jobs. Korzhakov became a deputy and started to write books about Yeltsin. Barsukov stayed in the FSB, as the chief of the Department of Protection of Underground Facilities and Communications.
When Putin came to power, Gorelov cheered up, found his old contacts who had avoided him for years, and obtained the first big order: to supply and install ventilation, air conditioning and heating systems at the biggest Moscow printing house, that was being built at that time. The printing house belonged to some LLC, the real owner of which was Telman Ismailov, who also owned Cherkizovsky market. According the director of the printing house and Ismailov himself, the son of the vice-premier and the deputy prime-minister of the Moscow Government Mr. Malyshkov had a share in that business. They appointed the director of the printing house. It was (of course!) a Deputy Head of the Tax Service of the Russian Federation who had retired shortly before that. Who else can come to work for the owner of Cherkizovsky market, where cash revenue was $200,000 per day? Only a senior taxman!
Gorelov knew the taxman. He also knew the security chief of the owner of Cherkizovsky market, an acting FSO Colonel Avakumov, who together with Telman, was headquartered in a building owned by the Prague restaurant. Who else could be the head of security detail for a man from the Caucasus, an Azerbaijani Jew and the owner of Cherkizon and Prague? Only an acting Colonel of the Federal Security Service, responsible for the safety of “protected government officials,” including the President.
We signed the contract, and it was almost completed, when the taxman who had become the CEO decided to order some additional equipment for a “special zone” of the printing house (VIP room, sauna, banquet room). An addendum to the contract was signed, we ordered the equipment from Trane, an American company (the head of the sales department was my former subordinate Igor Levin). The equipment was manufactured at their factory in France and ready to ship. And at that moment Ismailov refused to pay for the equipment. Allegedly, the addendum to the contract had not been cleared with him. It gave rise to a conflict.
Based on how Gorelova behaved, I realized that he believed or knew that it was not just a refusal to pay, but somebody was putting pressure on the company and on me in order to remove Gorelov. In fact, it was a setup. The former management of GUO/FSO retained their connections and influence, and having found out about the contract, managed to thwart it.
I didn’t have any grudge against Gorelov, I did not demand that he took care of the problem he created. I knew that there was nothing he could do. The conflict had be resolved by myself and several company employees, former FSB officers, we hired urgently to resolve the conflict.
Gorelov started to drink quite often, to come to work with a strong hangover. He didn’t do well at work. He avoided me. I knew that he was looking for a new job.
Before leaving Gorelov did two things. First, he insured himself for a very large amount. Back then it was unusual. Life insurance wasn’t really a common thing. And then I was told that Gorelov had met with an insurance agent from a German company and insured his life, paying a very high premium.
I asked him why he did it. Gorelov said that it was “just in case,” and laughed.
Then he quit. He went to work for “Fromm”, a company that when Gorelov worked in the Kremlin was in charge of surveying and inspecting underground facilities. After Gorelov left, Fromm was removed from the Kremlin.
Before he quit, Gorelov came to my office. He sat in front of me on the opposite side of the table, and said that was quitting and where he was leaving for. I did not mind. Everything was pretty clear.
“Palych, remember, I once told you that they would not crush me… Krapivin, Nikitin, Korzhakov, Barsukov, Sokolov?” he asked, not looking me in the eye.
I realized that he was referring to our conversation during the conflict with his leadership. Then we tried to evaluate our chances: his chances to keep his position, and my chances to stay alive. He asked me if I would hole out to keep my job as the CEO of York Russia. I said I would, although there were rumors in the Kremlin and within the company that because of that conflict with the Kremlin I could be removed. In turn, I asked Gorelov whether he would withstand. Could the generals crush him? With malice in his voice Gorelov confidently said: “They won’t! With what I have on them they won’t have balls to try. Before they do anything I will destroy them, I will bury the bastards!”
“Yes,”I said, “I remember.”
“And now I want to tell you… a story,” said Gorelov, his face red. He tilted his head, looking to the side. At the same time, it looked like he was seeing nothing, looking inside himself.
“What story ?” I asked.
It’s not to say that I was intrigued. I was surprised at Gorelov’s unusual behavior.
“Do you know Varshavsky?”
“No. Who is he?”
“An emigrant. Used to be one of ours. Left for America back in Soviet times.”
“No. I don’t know him. Never heard of him.”
Gorelov paused. Then he looked closely at the edge of my desk, as if there was something written on it, and started to move his finger over the dark polished surface of the table, as if trying to erase what he saw there.
“We sold an S-300 system [a Russian surface-to-air missile system – — Ed.] to Americans,” he said. “The whole set. With missiles. One system. For three million dollars. Cash.”
We were silent for a moment.
“The anti-aircraft missile system?” I asked.
“Yes,” he said.
“With the ‘friend-or-foe’ identification system?” I asked.
“Yes,” he said, then he stopped to ‘wipe’ the table and looked somewhere behind me.
“Who are ‘we’?”
“Korzhakov, Barsukov and me.”
“Korzhakov and Barsukov. And me.”
In front of me sat the former chief of security detail for a Politburo member, Mr. Lukyanov. The former deputy head of Yeltsin’s security detail. The former deputy Commandant of the Moscow Kremlin. My former deputy. And he said that he himself, the chief of the Security Service of the President and the head of the Federal Protective Service (almost the KGB), and before that a former Commandant of the Moscow Kremlin, and now the head of the FSB department responsible for the security of all underground facilities, including control and communication centers throughout Russia (15th Directorate of the KGB), together with two army generals, two heads of the main security services of the post-Soviet Russia, committed a crime, that is called “high treason,” by selling to the U.S. intelligence services the most advanced air defense system, S-300. They sold it together with a “friend or foe” identification system. That is, leaving Russia without an air defense system. For three million dollars in cash.
“Valery Pavlovich,” I asked, “do you realize what you’ve just said?”
We sat silent for a moment.
“I was the one who brought to the Kremlin a suitcase with three million dollars,” he said, as if trying to recall something. “I brought it to Korzhakov’s office. There they waited for me. Korzhakov and Barsukov… Korzhakov picked up the suitcase. We counted the rolls of dollars. Korzhakov says: ‘Now, Palych, you can go now. Come back tomorrow, we’ll give you your share.’ I left.” Gorelov smiled. “The next day I came to Korzhakov’s office. Him and Barskukov hugged me, and said, ‘Well done, Palych, thank you,’… and pulled an Izhevsk rifle… a beautiful rifle, with inlays… ‘Here,’ they say, ‘Palych, here’s for your service! We know you love guns, your collect them.’ Then they hugged me again… ‘Okay, now you can go’… I left the office with the rifle. Came to my office… Bitches! I can’t believe that! They made me do it for a gun … And then I decided that I would never forget or forgive that!”
I looked at Valery Pavlovich, and he was rubbing his finger again against the surface of the table, as if trying to erase something that was written there.
“Pavlovich, why did you tell me this now?” I asked him.
“I decided to do so. Who knows what can happen… I had to tell someone. Decided, that you should be the one…”
I did not know what to say. I couldn’t go anywhere. Could not tell anyone. He handed me a secret for which they could kill quickly and without doubt. But I knew that he needed someone to pass that secret.
“I told you, and now… life will put everything into perspective. Maybe someday you will remember it… maybe you can… Sorry. Goodbye.”
He came out of my office, and I sat there for a while, thinking about what Gorelov just told me.
That was the last time I saw Valery Pavlovich Gorelov. He died in a car accident a couple of months after this conversation. I couldn’t make it to his funeral…
A few years had passed.
We were sitting on the patio at the T-bone Steak restaurant near Vorontsov Park. I’m not sure how it is now, but a few years ago, the meat there was better than anywhere in Moscow. It was very nice to sit outside on a warm fall evening.
“Have you heard that Barsukov’s son shot himself?” the general asked me.
“Yes, I’ve heard that,” I said.
I learned about the death of Barsukov’s son in Sochi from a former deputy chief of the local FSO division, but did not know the details. The former Sochi FSO officer told me about the death of the young Barsukov hoping that I knew the details. But I knew nothing. I decided to learn the details in Moscow.
“What happened to him?”
“He shot himself.”
“He was such a nice, handsome guy! What a tragedy!” said the general’s wife.
“Yes, it’s a strange story,” said the general. “The guy graduated with honors from the FSB Academy. Was assigned to serve in intelligence. In the American Department. Was about to go to the U.S. Excellent officer, a patriot. And suddenly, just before the trip, just before leaving… he shot himself! No apparent reason, nothing… Nobody knew what to think! He had a whole bright career ahead… He was a great officer, an honest man…”
“What a tragedy! And imagine how his father feels! The only son. His pride, hope!” said the general’s wife.
I said nothing. I knew one of the possible reasons. Just before Barsukov’s departure for the United States as a foreign intelligence officer they could try to recruit him using the dirt on his father. He had a choice: to become a traitor or cover himself with disgrace. The guy chose the third option. He was a patriot and an officer who had honor.
I said nothing and had a shot of whiskey for the young Barsukov to rest in peace.
P.S. First. I told this story because now it’s time to tell it. We must know who was in charge of Russian special services, who created them after the KGB was dismantled. That’s when the system began to rot, that’s when that tumor started to grow, the tumor that now decomposes the country and its people.
Second. I’m asking President Vladimir Putin and Prosecutor General Yuri Chaika to consider this an official report about the crime. I hope that it will not be buried, as it happened with my statements and with the criminal case № 355516 against the officials of the Administrative Office of the President of the Russian Federation, including Leschevsky, Shaboltay, Chaus and others, as well as the management of the Department of Economic Security of the Interior Ministry, and the Investigative Committee relevant materials can be found on ValeryMorozov.com and under the Case № 355516).
“Everyone shall be rewarded according to his deeds.”