Russia, Called `Mafia State,' Condemns `Gutter Press' Level of U.S. Leaks

Russia denounced the “cynicism” of leaked U.S. diplomatic cables published by the Guardian newspaper in which a Spanish prosecutor described the country as a “virtual mafia state” and oil experts suggested Prime Minister Vladimir Putin had amassed illegal wealth.

The memos show the “degree of cynicism of those evaluations and often those judgments that prevail in the foreign policy of various states,” President Dmitry Medvedev said today. “In this case I am talking about the United States.”

A document dated Feb. 8 cites Spanish prosecutor Jose Gonzalez as telling U.S. officials that he “cannot differentiate between the activities of the government and organized crime groups.” The cable, released by WikiLeaks.org, was published yesterday by the London-based Guardian.

The leaks come as Republican opposition to rapid ratification of a nuclear arms treaty threatens to set back President Barack Obama’s initiative to “reset” relations between Russia and the U.S. Russian leaders have also warned of a new arms race if the U.S. and its allies fail to cooperate with their country on missile defense.

The content of the documents is “at the gutter press level and verges on madness,” Putin’s spokesman, Dmitry Peskov, said late yesterday in Moscow. “If we assume that these telegrams were written by real diplomats of some country, then we wish this country had more professional and thoughtful diplomats.”

‘Balanced’ Reaction

The U.S. ambassador in Moscow, John Beyrle, said today that publishing of the confidential correspondence “has caused more harm than good.”

“But I see that our partners around the world are reacting in a very balanced way,” he said on his blog.

Medvedev, speaking at a news conference with Italian Prime Minister Silvio Berlusconi in Sochi, Russia, said he saw nothing in the documents that was “critical” for Russia’s relationship with the Obama administration.

Gonzalez, who has investigated the Russian mafia in Spain, briefed officials at the U.S. embassy in Madrid on Jan. 14, according to the February document published by the Guardian.

The prosecutor considers Russia a “virtual mafia state,” according to the cable. There are “unanswered questions regarding the extent to which Russian PM Putin is implicated in the Russian mafia and whether he controls the mafia’s actions,” the cable cited Gonzalez as saying.

‘Illicit Wealth’

Putin has accumulated “illicit wealth” through ties to secretive energy traders, including Gunvor International BV, according to oil industry experts cited in a Nov. 24, 2008, cable from the U.S. embassy in Moscow and published by the Guardian.

Gunvor, whose main trading office is in Geneva, dismissed the memo as based on “old, completely unsubstantiated rumors.”

“Mr. Putin has not, nor has ever, owned any of Gunvor, beneficially or in any other way,” Stuart Leasor, a London- based spokesman for Gunvor, said today in an e-mailed response to questions.

The company has two founders, Gennady Timchenko and Torbjorn Tornqvist, who are joint majority owners, Leasor said. An employee benefit trust for senior Gunvor managers owns a minority stake, he said. Timchenko was a founding member of a St. Petersburg judo club where Putin was once honorary head, Kommersant reported April 28.

Putin’s Successor

The latest leaked documents also cite former U.S. Secretary of State Condoleezza Rice as saying she heard from Russian opposition contacts that Putin didn’t install a strong successor because he feared “law enforcement investigations.” Putin’s aim was to protect “alleged illicit proceeds,” according to the cables published by the Guardian.

Putin, a former KGB spy, served as president for eight years before becoming prime minister in 2008, when legal limits prevented him from running for a third consecutive term. His successor, Medvedev, worked for Putin in the St. Petersburg mayor’s office before joining his presidential administration.

Putin, 58, and Medvedev, 45, haven’t said which man will run for the presidency in 2012.

The prime minister, in an interview with CNN’s Larry King broadcast Dec. 1, criticized attempts to “slander” and divide the two men.

“We didn’t suspect that this would be done with such arrogance, with such a push and, you know, being so unethically done,” Putin said.

Litvinenko Murder

Gonzalez said he agreed with a thesis put forward by ex-KGB agent Alexander Litvinenko that intelligence and security services “control organized crime in Russia,” according to the February cable.

Litvinenko, a Putin critic who received political asylum in the U.K., died from radiation poisoning in November 2006. U.K. investigators say former KGB bodyguard Andrei Lugovoi poisoned Litvinenko during a meeting in London. Lugovoi denies any involvement in Litvinenko’s death.

Then-Assistant Secretary of State Daniel Fried suggested Putin may have known about the murder, according to a cable dated Dec. 12, 2006, and published by the Guardian.

Litvinenko blamed Putin for his own murder in a deathbed statement, an accusation the Kremlin called “absurd.” While the U.K. demanded Lugovoi be handed over for prosecution, the Russian government refused, citing a constitutional ban on extraditing its citizens.

WikiLeaks, a nonprofit group that releases information the government wants to keep confidential, has been posting on its website what it says are more than 250,000 U.S. State Department documents. Department spokeswoman Nicole Thompson this week declined to confirm information in the documents, saying it is the agency’s policy not to comment on specific leaked materials.

To contact the reporters on this story: Henry Meyer in Moscow at hmeyer4@bloomberg.net Ilya Arkhipov in Moscow at iarkhipov@bloomberg.net

To contact the editor responsible for this story: Willy Morris at wmorris@bloomberg.net

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