May 16, 2004
Michael Mainville
SPECIAL TO THE STAR

MOSCOW—Valentin Velichko hardly looks the part of a Russian secret agent, at least not the kind that would have tangled with James Bond.

With his broad, open face, red-checkered shirt, slight paunch and blue jeans, he seems more like the kind of man you'd see selling hardware supplies.

But behind 55-year-old Velichko's ready smile and easy manner lurks a history of secrets and intrigue.

From 1984 to 1991, he was a KGB spy posing as a Soviet trade representative, first in the Netherlands and later in Germany.

He refuses to go into any detail about his activities, but it is known that he was declared persona non grata and expelled from the Netherlands in 1989.

"They politely asked me to leave — and never come back," he recalls with a laugh.

The Dutch daily Telegraaf reported that he was expelled for spying on the movements of NATO ships in Dutch waters.

Following the 1991 collapse of the Soviet Union, Velichko returned to Russia and retired from the KGB.

But like a growing number of his fellow former spies, he has not faded into obscurity.

In fact, last month found him standing in the place most secret agents spend their lives trying to avoid — the spotlight.

Surrounded by television cameras and reporters, Velichko stood next to Dutch aid worker Arjan Erkel on April 11, following Erkel's stunning release after 20 months of captivity in Russia's North Caucasus.

Velichko had spent months locating and then securing the release of Erkel, who had been kidnapped while working as the head of mission for aid group Médecins Sans Frontières in Dagestan, a volatile region abutting the war-torn southern republic of Chechnya.

Velichko may no longer by working for the Russian government, but he hasn't give up the spy game. These days, along with hundreds of other former Soviet spooks, he rents out his services to the highest bidder.

"We are specialists in solving security problems and gathering information," he says, "so it only makes sense that our services would be in high demand.

"The only difference is that now, instead of working for the state, we help private organizations for a fee."

Velichko is head of the Veterans of Foreign Intelligence, which over the last 10 years has grown from a loose association of former Soviet spies into one of Moscow's most powerful security organizations.

Based in a nondescript high-rise on the southern outskirts of the capital, the 3,000-member association owns more than two dozen companies that provide everything from bodyguards to banking services.

It also has become a political player with the rise of President Vladimir Putin, himself a former spy and head of the Federal Security Service, the successor of the KGB.

Velichko's association has connections in the highest reaches of the Kremlin and has been working steadily to have former intelligence officers placed in government positions across the country.

It is one segment of a vast, inter-connected web of organizations and individuals that make up the so-called siloviki — officials from the military, former KGB and other security services who have grown increasingly influential since Putin came to power in 1999.

Critics say the siloviki — from sila, the Russian word for strength — are behind the statist, authoritarian ideology responsible for the country's recent backsliding on democracy and human rights.

"There are dozens of these organizations, each one representing a different department of the intelligence services, working as private companies and lobbying for their interests," says Olga Kryshtanovskaya, a sociologist who studies the Russian elite.

"These are the people who are coming to power as (Putin), himself a former special services' man, influences the entire spirit of the government."

It's a drastic change from the 1990s, when former agents more often than not found themselves scrambling to survive after the collapse of one of the most extensive and effective spy networks ever created.

"People who had spent their lives serving the state were thrown out on the street," Velichko says.

"And the people who came to power under (former President Boris) Yeltsin saw us as ideological enemies. The first wave of democrats believed the forces of the KGB were the main danger to building a new democratic society."

In those days, retired agents could expect to receive a paltry monthly pension of about $95 a month. Today, thanks largely to Putin, that amount is up to $275 a month, about the average Russian salary.

The difficulties faced by retired agents provided the impetus for creating his veterans' association, Velichko says. Over the years, it developed into a private business and charity fund, employing veterans and providing money to assist them with medical care, housing and other needs.

Velichko estimates that about 10 per cent of association revenues are used to help veterans and their families, but he won't say how much the association earns every year.

The core company managing Veterans of Foreign Intelligence has only about 30 employees, but Velichko says there are thousands more — including more than 800 armed security guards — working for its various subsidiaries.

"We have about 30 companies and firms providing all sorts of services — consulting, research and information, law firms, security assessments, bodyguarding."

The association has dozens of clients at a time, but Velichko refuses to provide details about any of its operations.

Médecins Sans Frontières turned to the veterans after months of what it called "inaction and indifference" on the part of the Russian security services following Erkel's August, 2002, kidnapping.

"It was clear to us the government wasn't taking its responsibility to solve this case seriously," says Stephen Cornish, MSF's head of mission in Moscow.

The doctors' aid organization was put in contact with Velichko last July through an intermediary. The group was skeptical of the veterans at first but finally agreed to allow them to collect information.

MSF agreed to pay all expenses and provide a donation to the veterans' charity fund in exchange. Neither party is willing to say exactly how much money changed hands.

"It was obvious to me they were serious people, that this was not a fly-by-night operation, and that they were in a position to get information," Cornish says.

Velichko took charge of a four-man team that worked the case full-time for nine months. Using their extensive contacts, the veterans traced Erkel's abductors and, after consulting with MSF and Russian authorities, negotiated his release.

Velichko says Erkel was being held by "bandits" who at that point were not interested in getting a ransom, only in receiving immunity.

Many of the details of the case were never given to MSF, Cornish says.

"They sat everybody down at a fictional table and worked it out — we don't know exactly how it happened."

One thing is clear: Velichko's association had official support in working on the case. A source close to the investigation says top security officials made it known to MSF that "it was all right for the veterans to be involved."

In fact, association members hold key positions in a variety of government ministries and regional bodies, their influence extending to the Kremlin's inner circle.

One of Putin's closest advisers, Andrei Belianinov, was once chairman of Novikombank, which the association owns through a group of shell companies.

"We have contributed many of our specialists to top state organizations," Velichko says proudly. "If you analyze the composition of the government and parliament, you will find many former members of the special services."

Kryshtanovskaya has done just that and is more than a little worried about the data she came up with.

By her count, about 60 per cent of the members of Putin's inner circle are ex-military and security people. About one-third of all government bureaucrats are siloviki, she says, and while few cabinet ministers are, almost all of them have at least one deputy from the security services.

She likens the situation to the Stalin-era system of political commissars, in which trusted party members were assigned to state bureaucrats to ensure their loyalty.

"The government is saturated with the siloviki and, more and more, their way of thinking," says Kryshtanovskaya. "They are the ones pushing the authoritarian agenda, the ones who don't like freedom of the press and expression, freedom of discussion, freedom in business."

Critics say the siloviki are responsible for the re-emergence of Russia's age-old apparatus of security and repression. They say signs of the growing influence include tightened reins on independent media, the consolidation of Kremlin control over parliament, the imprisonment of scientists and journalists on dubious espionage charges, and state interference in the private sector.

Velichko and his colleagues don't deny that they support a strong state with the right to be involved in all areas of Russian society. The alternative, they insist, is the chaos of the 1990s, with its rampant poverty, political turmoil and "bandit capitalism."

"What Russia needs is a firm hand, order, a dictatorship of the law," says Velichko. "And the most disciplined and intelligent part of our society is without a doubt those people from the special services."

Michael Mainville is a Canadian journalist based in Moscow.

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