The Komsomol Mafia, How the Children of the Nomenklatura became Russias first Generation of "Successful" Entrepreneurs

Part 2 of Why did the Late Soviet Elite Decide to Murder the USSR?

From now on we are the strongest. Soon everything will belong to our Komsomol, if I gave you my word that means I keep it.

Denis Konevich, Representative from the Komsomol in Slovo Patsan

Denis Konevich is a fictional character but his portrayal in the very popular Russian TV show referenced above was accurate to the times it took place in which was the late 80s. It’s a big shame the show isn’t available in English, it’s a total binger. Slovo Patsan is a brutal but very well written series about the origins of Gopnik Culture and Denis is only a side character, but he was the directors favorite for good reason imo. The words from him I quoted above were spoken to one of the central characters named Marat when Marat was at his lowest. Everyone in the show had let down or betrayed him in some way including his closest friends and older brother while Denis was literally the only person in the show who made a promise to Marat and kept it. This isn’t because Denis is a good guy, the first impression he makes on the viewer is that of a dorky, weak, goodie 2 shoes hall monitor. Probably most my Respected Readers have figured out by that description that he is the guy in this posts thumbnail. But as the plot develops it becomes more and more apparent that his wholesome rule following exterior hides a calculating, ruthless mind that is far more forward thinking and able to grasp opportunities that others don’t see. If the Gopniks that the show is mostly about are wedded to extroverted force, then Denis accumulates his strength and influence far more effectively and wields it subtly while keeping his hands clean. “Slovo Patsan” means something along the lines of a lad or boys word, that word being his honor. In the end Denis is the only one who does this. In the show Marat’s downward spiral begins in earnest when a girl he is crushing on is raped by a rival gang member and his own gang spreads a rumor that actually she didn’t even resist much which wasn’t true. The girl ends up committing suicide and Marat falls out with his gang over this and even goes to the police in hopes of getting the rapist brought to justice. The Police use Marat hoping to put away the Gopniks ravaging the town, but they aren’t interested in prosecuting the rape very much. At his lowest point Denis approaches Marat with a deal, join the Komsomol and become reformed a thug, that is make Denis and the Komsomol look good, and he will provide Marat with payback against the rapist. Marat takes the deal and Denis keeps his word.

The fan edited clip linked above starts with Denis making the quote I led off with to Marat as they walk down the hall of the local police Station. They stop at the door to the bathroom and Denis says “I promised…well collect” to Marat. Marat responds with “I don’t want to” as he isn’t sure what waits in the bathroom and he doesn’t trust Denis yet. Denis insists “come on already” and then we see Marat enter while a cop s making sure that nobody who isn’t supposed to see what follows is left in the bathroom before leaving. Marat gets his payback on the rapist. Denis subtly reveals to Marat just how much influence he has. He can make the police bring in the rapist and turn him over to the Komsomol to do with as they please. Earlier in the show he tells Marat about how via special rules that only apply to the Komsomol which allows them to legally run private business ventures that he is already by far the richest man in town by a big margin. Marat didn’t know that before, those not in the know would never suspect such a thing. Unlike the Gopniks Denis doesn’t flaunt his status publicly which brings us to the main thing I hope to succeed at with this article, shedding light on a much less understood slice of the Soviet Elite. The Youngsters, the Komsomol.

In Part 1 of this series we covered how the Communist Party Elite was synonymous with the Leadership of the USSR. The Real Head of State in the Soviet Union was the General Secretary of the Communist Party, not the Prime Minister. These could be and more often than not were 2 different people. Real Authority in the country was found in the party, not the state apparatus which was just an appendage of the Central Committee and Politburo. Stalin correctly foresaw that this was a recipe for disaster and tried to transfer Authority out of the Party and into the State Apparatus, but he was murdered before being able to complete this task. The result was the Nomenklatura murdering the country, and the Nomenklatura were all Komsomol and accordingly in the late 80s/early 90s the Komsomol were the children of the Nomenklatura.

In Part 1 I leaned heavily on the book by Yuri Muxin “The Murderers of Stalin and Beria” and I’ll be quoting from it a bit in this installment as well but Ill be introducing another book for part 2 in a bit. But first lets read about who Yuri thinks runs Russia today, the following block quotes without any embedded links are taken from the same Murderers of Stalin and Beria book we examined in part 1.

And so, the apparatus of the CPSU, with the hands of brainless sheep in the Government of the USSR and in the Central Committee of the CPSU, achieved its goal - to destroy both the USSR and the CPSU. Did the apparatus hand over power? Hardly, the party mafia simply moved their offices out of Government Buildings and into all sorts of inconspicuous consulting firms. And the power remained in its hands. True, today it is represented not by brainless and vile secretaries of the Central Committee and secretaries of Regional Committees, but by our current Presidents, Parliaments and Governors.

Why did the apparatus remain in power?

Because all current official leaders are thieves, and it is easy for an official to steal (one signature can steal billions), but it’s very difficult to dispose of what is stolen. After all, first you need to at least open an account in a Western bank, and this, as a rule, requires presence in it. That is, any official - whether Yeltsin, or Zyuganov - needs someone who can be trusted and who can be entrusted with the technical issues of organizing theft and preserving stolen goods. This can only be trusted to people who have been proven in relative competence and loyalty, but, most importantly, these people themselves must be invisible.

Take Yeltsin for example. Well, who could he trust, except for those whom he knew and had worked for many years? But he knew only people of the CPSU apparatus. Second. Even if there was a loyal person among the democrats (among professional traitors?), these democrats are known to everyone - their faces are on the TV screen every evening. And the mafia of the party apparatus of the CPSU are modest and quiet people, no one knows them at all. Their appearance in any bank in the world will not arouse interest even among the doorman.

Third. Yeltsin is a complete puppet in state issues, but the issues must be resolved by someone. To whom could he entrust the preparation of his decisions? Americans, his friend Bill Clinton? To an extent, but we must not forget that Western and domestic predators are competitors. The West will deceive you and not even apologize. So, you need to have your thief at hand who has the same interest as you. Accordingly, Yeltsin often enough prepared his own final decisions, which is why he apologized to Bush for replacing Gaidar with Chernomyrdin without even informing Washington about it. Then who are these “friends”? The Liberals? But you saw that Yeltsin did not even care about this “democratic” nonsense. Even those who agreed with Yeltsin on everything did not stay long. All these “Liberals” are figureheads, a screen for the true Presidential Apparatus.

Whoever had power in the USSR still has it today. At that time, we did not see the people who prepared decisions for the government, and today we do not see them.

The Soviet Deep State in the form of the higher level Nomenklatura which orbited people like Gorbachev and Yeltsin and guided their actions did not go anywhere according to Yuri. We have already established that in the USSR that real authority was located in the Communist Party as opposed to the State, it follows from this that the Soviet Deep State would be in the Party. Yuris point about even Yeltsin needing people that weren’t appointed by the Americans and whom he could personally trust is pretty logical, and indeed, who else besides the Old Nomenklatura would Yeltsin even know? Needing his own cadre that are not handpicked by the West has nothing to do with Yeltsin being secretly BASED and Anti Western, quite the opposite actually. Yeltsin needs people that can open bank accounts in the west on his behalf, own property there on his behalf and deal with western bureaucracy without raising any suspicions. Yuri mentions Yeltsin replacing Gaidar with Chernomyrdin against Washingtons will as an example of him being able to do his own thing domestically and he gives plenty of other examples, but I will save those for part 3 when we cover the Nomenklatura. For now, it’s enough to understand that Yuri reasons, and I agree with him that the Western occupation of Russia is more a case of the ruling class heart and soul adopting the Western World View and Value System as opposed to the Kremlin receiving direct instructions from Langley though that does happen as well. It’s just that even Yeltsin eventually understood as Putin does today that the West is more then capable of turning on and eating its own, thus as a matter personnel survival and safeguarding ones authority and Western Assets a degree of personal autonomy is needed as well as a discreet faceless cadre of fixers. Once more though all this has nothing whatsoever to do with Moscow being anti Western, it’s just that the Russian Ruling class figured out very fast that they are not untouchable, nor are their assets and families located in the West. This is why even Yeltsin was perturbed about Yugoslavia being bombed, sure he wasn’t going to openly defy the West by helping the Serbs in some kind of tangible way but he wasn’t happy. This is what the whole conflict, such as it exist today between Russia and the West is actually about. Russia wants more untouchability within the Western System as we covered in the post about why Russia can’t win in Ukraine.

In that block quote above Yuri specifically says that the Old Soviet Nomenklatura Deep State simply moved their Offices out of Party Buildings and into non-descript Office Buildings where various “private” firms operate and, on that point, I will introduce the book on which I’ll be leaning quite a bit in this post about the Komsomol Mafia. The work is entitled “Komi at the Turning Point” and it’s written by 2 Investigative Journalist Native to that Republic in Russia, one of whom is the Father of one of my Wife’s School Classmates. During her last trip to Russia Proper while taking care of Family Affairs my wife received a copy of the book and brought it back and in the ensuing 4 or 5 months it sat on a shelf in our apartment here in Belarus untouched. A few days ago, I finally started thumbing through it and now wish I had done so sooner. It turns out that this book about 90s politics in the fairly unknown to the wider world Republic of Komi is a gem in its own right. It basically gives a scaled down case study of what Yuri Muxin describes above about how the old Party Elite of the USSR still have Authority in Russia today. For example, in a chapter entitled “Komis Corruption Mirror” we read the following episode about the privatization of a chic Soviet Era Restaurant named Northern Territory:

March of 1992, the process of privatizing former State Enterprises is Commercial Auction. The Commission overseeing the auction has set the price of the Restaurant at 103, 800 Rubles and the only 2 parties participating are the Restaurants Employee Union and the Closed Joint Stock Company Pecherlend which immediately offered 500, 100 Rubles to acquire Northern Territory. The Restaurants Employee Union offered to pay 5% more than whatever sum Pecherlend named but as they declined to bargain in a concrete sum the Commission declared Pecherlend the victors. The Union declined to dispute the results as the new Owner of Northern Territory, K. Kehoz, ex Komsomol and employee of Pecherlend guaranteed the Restaurant Workers that they would keep their former benefits including pensions. With in a few months new owners from amongst the Local Ex Party Nomenklatura and their firm registered in Gibraltar would acquire the restaurant. Eventually they would sell Northern Territory for 600 Million Rubles and the apostille stamp alone on the contract would cost more than the entire city budget. Naturally any talk of the Restaurant Workers maintaining their benefits and pensions is moot now days.

Komi at the Turning Point. I literally couldn’t find a picture of the book on the internet so here is one from my kitchen table. All block quotes in this post without any link are taken from this book besides the very the first one which is from Yuri Muxins.

That anecdote is a tiny microcosm of a process that played out over the entirety of the Russian Federation in the early 90s. In it we see the “non-descript firms” operated by the ex-Soviet Nomenklatura, and we see the Komsomol mafia working with them to asset strip Russia and screw over the workers that they once claimed to represent. It’s in these firms and joint stock companies that real power is concentrated in Russia, just like in the US and Europe. Russia now has an Oligarch Politburo instead of a Soviet one and the Oligarchic Successor is even more opaque and less accountable than its predecessor, which was the whole point of dismantling the USSR to begin with. The city this took place in is Syktyvkar BTW, Capital of the Komi Republic. Syktyvkar is the first place in Russia I lived long term, the place where my kids were born, the place where I got married and bought my first apartment (now sold, kinda regret that now because real estate prices have since gone way up). It’s the place where I took the first steps typically associated with adulthood and all that, so I have a vague sort of nostalgia for it. On the balance it really is a nice place other than the Typical Russian Roads and absolutely brutal winters that seem to go on and on forever.

Syktvkar

I feel like most readers already know what the Komsomol was so I’m not going to waste a bunch of time recounting its history. For anyone who might not be familiar with it it’s enough to know that if a Soviet Citizen wanted to advance in the Party or get into university that they would typically join the Komsomol as young teenagers and they could remain members well into their late 20s. The point of the organization was to prep young people to become upstanding Party Members who would go on to lead the country. This is where the Nomenklaturas children met and networked. When I first picked up Komi at the Turning Point I immediately flipped to the table of contents out of habit and noticed that there was a small chapter dedicated to the exploits of the Republics ex-Komsomol alumnae. We are going to use this chapter as a case study to get an idea what role these children of the Nomenklatura played in Russia as whole in the 90s.

Former members of the Komi Komsomol have written a respectable page in the Republics History as being amongst its first entrepreneurs. At first, they earned money more or less honesty at the so called “Youth Centers of Scientific and Technical Creativity”. Here Start Up Enterprises manufactured furniture, printed literature, made clothing, and sold popular magazines

In other words, there were special rules in the USSR which allowed the Komsomol to do what normal citizens weren’t allowed to do, engage in private business. If regular citizens just started making furniture or clothes and selling them, they would be arrested as speculators. Remember the example of Denis from Slovo Patsan that we started off with, in the show it is revealed that he exploited these special rules to become a young budding oligarch behind the scenes. That is what happened in real life.

Out of the Youth Centers came a host of “successful financers” financial speculators and loan sharks. As a rule, the more questionable projects such as cheap bootlegged alcohol of doubtful safety were not ran by Komsomol Members but operated under the Youth Centers Krisha.

This is why Denis’s Character in the show was so well written. The 20 something year old Directors of these Komsomol Youth Centers engaged in corruption in the same manner as their parents. They kept it discreet with an eye to the future; they always made sure that if something was illegal that someone else would be held responsible. They aren’t like modern young elites who purely rely on the media just not reporting when they get arrested. The closer we get to the end of the Soviet Union the more ambitious the Komsomol Plans would become:

Edward Gervik, Retired Police Colonel and Former Head of Internal Affairs for the City of Vorkuta discussed some creative aspects of the Komsomol’s Business Practices.

In 1990 the Regional Trade Stock Market was registered in Vorkuta whose director was also the head of the City Komsomol. The RTSM (the regional trade stock market) was the result of a joint venture between the Komsomol and the State Owned Vorkuta Coal with the goal of selling coal on the European Market. At the same time a French Firm called Sovmedia, headed by 2 Former Soviet Citizens Phillip Fershut and Frank Tamdo registered a subsidiary in Moscow called Strek which included RTSM, the Latvian Railroad and Riga Port. In short, Sovmedias goal was to Monopolize the sale of Vorkuta Coal. The scheme worked like this, RTSM received the coal from Vorkuta Mines, the Latvian Railways transported it at subsidized rates, the Riga Port loaded it up and Sovmedia sold it on the external market. Finally, in Vorkuta, Strek North LLC was registered whose owners included the directors of enterprises associated with coal extraction in Vorkuta. On the outside everything looked more or less legal but soon it was revealed that the French planed on buying Vorkuta Coal at less than market value. They were going to pay 4 dollars a ton which was to be spread amongst “interested parties” while selling at market value abroad. Whoever wouldn’t sign the cabals agreement just vanished or committed suicide. Under these tense circumstances an urgent meeting was held between the mine directors and the founders of Strek where the LLC agreed to pay for any shortfalls caused by the below market purchases of Vorkuta Coal. Voila, the criminal business was legalized and Strek received a license to export strategic resources and coked coal. The Owners of the Finnish Metal Combine Rautaruki, the main purchaser refused to sign any deal with the Vorkuta Miners without the mediation of Sovmedia. Where the octopus tentacles actually took the coal we have no idea but it went abroad to the harm of Russia’s Economic Interest and whoever got the way didn’t live too long.

1990…The USSR was not officially dissolved until December 26, 1991. Before the Country was officially dead the general looting scheme in regard to Russia was already arranged. All the excess of the 90s wasn’t the random unfortunate result of feral unregulated Capitalism or the growing pains of overcoming Communism. The people who ran the USSR and their Children already knew exactly how the Russian economy was going to operate in the 90s because they created the system while the USSR was still alive technically. No accidents involved whatsoever. We have all heard the dumbass stories about how Yeltsin and whoever visited supermarkets in America and decided that Russians should have the same and plus the USSR was having economic problems and blah blah therefore Market Reforms and the end of the Soviet Union. All total BS. Does the scheme outlined above regarding the Coal of Vorkuta sound like it arouse because of a lack of grocery stores and because people had to wait in long lines to buy refrigerators? This was a system designed to enrich the people that created it, the Nomenklatura and their kids plus their Western Partners. The Internal Affairs Officer who recounted the Story to the authors of the book says he doesn’t even know where the coal actually went and the Finns wouldn’t negotiate contracts directly with the Mines. But the Finns were buying at market price…that means that they were in on it….Needless to say the Miners concern about this scam was justified and in the end they lost bigtime. Check out what Vorkuta looks like today:

Watch a little bit of that video and think about the passage from the book we just read. The common BS excuse for why Vorkuta now resembles the Stalker/Fallout style hellscape you see in that film is because the town was not “economically viable”. Well now we know that all the way back in 1990 at the very least and probably well before that the town Komsomol, State Owned Enterprises in the form of Vorkuta Coal, Latvian Rail Roads and the Riga Port, a French owned Firm plus all the people in Moscow who signed off on this KNEW ALREADY that eventually Vorkuta would look like this because they set in motion the plan to bring it about in exchange for Penthouses and Yachts and whatever. They Already Knew that they were going to be selling Vorkutas riches for below market price to foreigners and they killed anyone who objected. This was murder, not the market and economy correcting itself and the main the perpetrators were the Nomenklatura and Their Children. Yes, they did this all in partnership with Westerners and in pursuit of the American dream, but they had to agree first. They had to take the deal, therefore they are the guiltiest. My Aunt was born in Vorkuta BTW.

An especially famous Komi Komsomol Alumni is Michael Kruglitz who headed the Ministry of Trade for the Komi Autonomous Soviet Socialist Republic which was part of the Russian Soviet Socialist Republic of the USSR. He frankly described his days directing the local Komsomol with the following:

When the time came to start working with the district Komsomol I agreed, then I transferred to the regional department. There was more perspective there, I often traveled on business trips to Petersburg. One of my classmates there had already become director of a wine and water shop, bought himself a nice apartment, basically he was living it up. In 1986 the famous Komsomol Business Programs started and in the role of Region Director I started organizing Youth Initiatives. In 1989 we created the Commercial-Information Bureau which was headed by Igor Turkin. We looked for strong investors for realizing Government Programs. We worked with clients like Gluzman.

Kruglitz means that in 1986 Komsomol was allowed to openly start doing private business. Given how this all ended with the example of Vorkuta one has to wonder if the Nomenklatura weren’t consciously setting themselves and their kids up for success well ahead of time via this privilege. When he says he was looking for investors to realize government programs he just means investors in the Komsomol’s startups as the Komsomol was a State Organization.

The work wasn’t boring by any means, we often went on business to trips to Europe..but it all ended quite banal.

LOL yeah sure.

We all know how things turned out with Gluzman, Turkin lives in London now days.

You can’t make this shit up

In 1996 I started my own store chain and an acquaintance of mine in Uktha had by then become the distributor for a meat plant and he offered that we go into business together. Honestly I wasn’t very excited about it, back when we had been in the Komsomol our products were clean, business had been honest, we had no responsibility and everything back then was cozy. Now…it was all rotten from top to bottom. After 2 years our business failed, as always happens when there is not enough money to spread amongst 2 or more institutions. Needless to say, we parted ways on bad terms. At least we didn’t shoot each other, that’s always positive. Of course there are no perfectly ideal people, we all have faults. In the Spring of 1998 I started working alone without a business partner and it was tough. I barely slept for 2 months and hung on by a thread but for the customers of my stores nothing changed.

About the Igor Turkman and Gluzman mentioned in Kruglitz’s recollections:

"In 1992, on the initiative of Yuri Spiridonov, then Chairman of the Supreme Soviet of the Komi Republic, as well as Alexander Okatov, former deputy government of the Komi Republic, the Komi Lux company was registered in Luxembourg, created to accumulate funds received from export contracts. The main share of them was oil contracts of the Komineft company, the monopolist of oil production in the republic at the time.
The practical creation of Komilux was carried out by Igor Turkin, a now British citizen, former director of the Information and Commercial Bureau under the Council of Ministers of the Republic of Kazakhstan, and now co-owner of DTV GMBH; Boris Gluzman, the former chairman of the board of the Eurasian North Bank, is now an Israeli citizen, who served a prison sentence in Israel for extortion.
The consultant of the project was a somewhat forgotten businessman Artyom Tarasov.
Informally, the project was supervised by: Viktor Zakharov, now the husband of Masha Rasputina, the representative of the LUKOIL-neftegazstroy company in the Northwestern Federal District, who is part of the inner circle of Roman Abramovich (a native of the city of Ukhta, Komi Autonomous Soviet Socialist Republic), Sergey Kublitsky, known in certain informal circles as "Dusya", "Vorkuta".
The Komilux project existed until 1997. With the money accumulated in the accounts of Komilux, a paint factory in Croatia and a furniture factory in the Netherlands were purchased. Both enterprises played the role of compensation for the leadership of the Republic of Kazakhstan during the acquisition of Komineft by LUKOIL.

So, Kruglitz’s acquittances from his days working with Komsomol big shots and generous investors lead straight to the inner circle of Roman Abramovich himself who is also a native of the Komi Republic. Shock. They do not live in Russia, and they are running business associated with looting Komis natural resources with all the income offshored. Seriously, why is Komi Lux registered in Luxemburg? And it’s frankly hilarious how these people, the people with actual power in Russia despite where they live made sure to compensate the old Nomenklatura of Kazakhstan for income lost via their shares in Komineft being bought out. I mean that is apparently exactly why Komilux was created in the 1st place. And it was specifically registered in Luxemburg by people with actual influence in Russia to avoid paying anything into the Russian budget.

So, as we can see here the Komi Komsomol heavy weights were neck deep in the planes to asset strip and impoverish the Republic which all began well before the USSR was clinically dead. This dynamic can be applied to all of Russia and now let’s circle back to where we started in regard to the non-descript firms that Yuri Muxin claims and truly appear to be where real power is held in Russia. Would it shock you to find out that the first generation of banks in the RF also came out of the Komsomol? As we covered already the Youth Centers of Scientific and Technical Creativity were the only institutions legally allowed to do business as they saw fit in the USSR, they received state patronage, plus as we read with Kruglitz the directors of these centers made trips to Europe. Kruglitz says nothing interesting happened there, but this is not credible. The Komsomol where free to buy shit in Europe and resell it in the USSR duty free, computers, electronics, clothes, etc and this was at a time when even normal Russians and not just the ruling class absolutely adored the West. On top of that, the USSR was a State where people had money but often not a whole lot to spend it on. This meant that Komsomol could sell all this stuff they bought in the West at huge mark ups. This is on top of running cover for people doing business illegally, like the bootleggers for example plus the Komsomol’s normal work like making clothes and furniture or doing construction projects. BTW, there is a legend that the whole reason the Komsomol was afforded these privileges is because the Kremin realized that there was a looming housing crisis in the USSR and the only way to fix it was self-financed young people, under the States Control of course building their own homes. The fact is that the Komsomol really did build lots of high rises and what not in Soviet Cities and if they aren’t especially pretty buildings, they definitely are sturdy and will last for many, many decades. I live in one myself now most the time as I’m rarely in my actual home now days. Anyway, just look how well all these commie blocks are holding up in Ukraine after taking God knows how many bombs, artillery rounds and drone strikes. How well do you think American Cardboard Apartments and condos would hold up?

Be that as it may, I don’t think that’s the real reason that Komsomol was allowed self-financing, I think it was because when the USSR was murdered the people running the country were covering their basis to make sure they stayed in charge. Komsomol was a Party Organization and how convenient that the first banks and stock companies in the RF came straight out of it. Remember in the first passage from Komi at the Turning Point we read there was a Joint Stock Company ran by a former Komsomol buying a chic restaurant formerly owned by the State, then a non-descript firm registered in Gibraltar ran by Ex Nomenklatura acquires the Restaurant and resells it for like 10x what they bought it for. So, let’s look at where these organizations came from in a bit more detail:

By the beginning of the 90s, there were already more than 600 STCY centers in the USSR: they did not pay any (!) taxes, but deducted 3% of their income to the all-Union STCY fund and 27% to local funds, which were managed by the coordinating councils of the STCY. At the same time, the state received nothing at all: the funds were used for "the development of scientific and technical creativity and social goals" (the total turnover of funds in 1989 amounted to 1.5 billion rubles). Having received the right to cash out, STCY centers have become both the cradle of the Russian business elite and the locomotives of inflation. Komsomol capital grew by leaps and bounds - at that time there was simply nothing to spend it on.
(What the author means by “cash out” is that the STCY centers had no limit on how much money they could withdraw from their accounts to pay people they were in contracts with, including employees. In the USSR State Businesses, that is all businesses could never pay employees more then 50% of their base salary for overtime or extra work. STCY Centers did not face this restriction)
In the 90s, youth communities reserved for themselves a very lucrative status of intermediaries.
The turning point in the Komsomol business occurred just before the collapse of the USSR: on March 12, 1990, the founding conference of the Union of STCY Centers, Small Venture and Innovation Firms of the USSR was held in Moscow. The Central Committee of the Komsomol, the All-Union Central Council of Trade Unions and the All-Union Coordinating Council under the State Committee for Science and Technology of the USSR - the governing body of the STCY system. In the course of the debate, it became clear that the youth centers do not live up to their names at all: only 17% of the associations are engaged in production and scientific activities, and the rest specialize in small-scale intermediary. Not everyone found a way out of the situation, but the most resourceful centers subsequently received most of the Russian industry. Possessing their own capital, having established business relations in the leadership of the country, youth commercial associations officially secured the profitable status of intermediaries. In a matter of months, the country was covered with a network of commodity, stock and other exchanges created on the basis of STCY centers.

The next step suggested itself: the country desperately needed a new system of credit institutions. Komsomol members made a breakthrough - the capital accumulated by the founders of the stock exchanges became the basis of dozens of banks. Usually they arose as subsidiaries of successful enterprises. For example, on the basis of one of the Moscow NTTM, the well-known MENATEP bank appeared. Its future leaders applied to Zhilsotsbank with a request for a loan, but they said that they did not have the right to give a loan to the center of creativity, but they were welcome to give a loan to another bank. As a result, MENATEP was initially registered as a "subsidiary farm" of NTCY for the unhindered receipt of loans.

The further development of Komsomol capitalism was marked by numerous scandals of Chubais's wave of privatization. The funds of the newly minted banks were used in the so-called loans-for-shares auctions, at which the largest Russian enterprises were put up. The winners of these auctions are now known to everyone, they were included in the famous list of the richest people in Russia, compiled by Forbes magazine.

What is an intermediary in business terms? It’s a consultant that you pay, or some kind of parasitic entity typically. Also:

So already by the early 90s, that is before the USSR was officially gone, the Komsomol were already facilitating official and unofficial economic activity. Then when the RF emerges the Kremlin just formalized what already existed and dissolved the social nets that protected the population as well as the legal constraints that limited the Nomenklaturas ability to loot and rob. It was these banks which came out of the Komsomol that provided the capital in the loans for shares scheme that created what is today known as the “Russian” Oligarchy, the main architect of which was Vladamir Potanin. Potanin naturally enough started his career in the Komsomol, selling fashionable decorative masks. Think of the very expensive African and Islander style masks that upper middle class boomers like planting around their homes for some reason. Presumably he also was acting as an “intermediary” and running lots of side husseles on the DL. A favorable article about him describes his role in the loans for share scheme like this:

In the mid-1990s, Potanin organized famous auctions on the principle of "loans in exchange for shares", as a result of which the largest industrial enterprises in Russia went to a handful of businessmen at bargain prices. And now he is leading this gradual evolution. He was one of the first Russian tycoons to engage in philanthropic work at the beginning of the last decade, and he tried to gain prestige in the West by donating $1 million annually to the Guggenheim Foundation.

Vladamir Potanin

Potanins Father was the Soviet Union’s Foreign Trade Representative in Turkey, New Zealand, and a bunch of African Countries, Classic Nomenklatura. The details of how Loans for Trade worked isn’t very important here but basic TLDR for anyone who doesn’t know is that Yeltsin needed money for his reelection campaign in 1996, so these former Komsomol Banks gave Yeltsin money in return for the bank owners receiving shares in Government Enterprises. The more important thing to consider here though is that none of this was accidental. Some Russian PHD History guy named Alexander Ershov writes:

The history of the last years of the Komsomol is the history of the formation of entrepreneurs and officials of the Yeltsin wave. The democrats, as less indoctrinated, but having real experience in government (as in running private business), trusted them more than old Soviet Officials.

That linked article quite correctly notes that most Komsomol members didn’t become oligarchs or even particularly wealthy in the 90s but there is also absolutely no denying that Russia’s first generation of oligarchs came right out of the Komsomol via their banks, stock exchanges, and the privilege to “cash out” which only they enjoyed. That quote points out another critically important thing about the Komsomol, they were perceived as “democratic” and “less indoctrinated”, regular people, especially the young were more likely to trust them. During Perestroika the USSR was basically conducting nonstop propaganda against itself, the Nomenklatura wanted to liquidate the country, so they had to try and convince people that the USSR was unsavably screwed up. They didn’t succeed in this, when the question was put up for referendum the overwhelmingly majority of citizens wanted to preserve the Country as we have covered in my previous posts. Nonetheless the USSRs Negative PR campaign against itself inevitably discredited the Elites but this was compensated somewhat as it very successfully stoked separatism in some minority Ethnic Republics. That’s a different story though and the Nomenklatura were not total morons, they knew that the propaganda campaign against the Country would harm their own image, hence make sure the Organization where their kids were acting as directors were perceived as hip, democratic, less indoctrinated. If the peasants and plebs think we are squares at least make our kids look cool and enterprising. Then when the time comes to murder the country, our kids have all the money, all the banks, the stock markets etc. It actually is clever, isn’t it? If you’re part of the ruling class of a country you want to liquidate and you need to make sure you remain part of the elite in the successor state wouldn’t this, be an elegant way to do it? With the example of Vorkutas coal we read about earlier we saw a scheme that could not have been realized without Moscows Approval at the very highest levels, so we know that the Nomenklatura itself was pulling the Komsomols strings. That is their hip, non-dogmatic, democratic image was all part of the charade to make people trust the institutions that came out of them. And they really did put in an effort to be hip. A close assoicate of Potanin was a man named Sergei Lisovsky:

On Sergei Lisovsky's website, he is called a pioneer of social and political advertising and an expert on modern electoral technologies. Lisovsky was the general producer of the youth campaign "Vote or Lose" and persuaded young people to take part in the elections and vote for Yeltsin, who had previously been him, roughly speaking, to the point of "feni". A successful businessman, three times senator and says everything thanks to the Komsomol.

When we announced a market in this cruel society, where every man for himself, the Komsomol members, knowing this whole system, were naturally more prepared, for the struggle.

Sergey Lisovsky was a DJ at all discos at the Radio Engineering Institute and once he was offered to become an instructor of the Bauman District Committee of the Komsomol.

In 1987, Lisovsky registered the "Youth Leisure Center". Like the Centers for Scientific and Technical Creativity of Youth, it could work with cash, set free ticket prices and its own rates for artists. Alla Pugacheva had an official rate for the concert of 36 rubles, and for a concert in the Olympic Lisovsky paid the prima donna a thousand.

Lisovsky got the most popular disco in Moscow, a nightclub, a TV channel, an advertising and concert agency, and all of them laid golden eggs.

My Readers may recall Alla Pugacheva from my post about how the R.F. is structurally incapable of winning the war in Ukraine. She is the washed up jewess who moved to Israel after the SMO was launched and makes all kinds of statements about how Russians are stupid slaves unlike the dignified hohols. This didn’t stop Peskov from kissing her hand when she flew back to Moscow for a funeral. Anyway, that TLDR about Livovsky should be more than enough to demonstrate that the Komsomol’s hip image was nothing more than astroturfing directed from the top so that naive normal Russians would trust their financial institutions and also vote for Yeltsin when the Komsomol DJ and TV guy says to do that. It’s absolutely surreal, isn’t it? Anti Sovietism and especially anti Stalinism were hallmarks of Yeltsinite PR, and this PR was done by Komsomol People. Sergey Lisovskys Father Feydor is mostly known for his works dealing with Radio Engineering and Physics, my background check indicates that he really does have a huge and respectable body of work dealing with those subjects. He was also the Head of the Partys Moscow Regional Committee from 1987-1989…..right when his son started running the hip and cool Komsomol Youth Regional Center.

The infamous merchants and villains Mikhail Fridman, Mikhail Khodorkovsky and Ukraine’s Yulia Timoshenko, all got their starts in the Komsomol. Fridman like Livosky ran a Youth Entertainment center called Strawberry but since he his jewish he paid the performers fairly little unlike his more generous counterpart. Khodorkovsky made a fortune selling used Electronics from the West and money laundering in the late 80s. Timoshenko sold boot legged Western Movies in her Komsomol days, including porn.

In summary the Komsomol had privileges that set them up to become the rulers of the New Shittier Order once the old one was done away with. Similiar to how jews since medieval times were exclusively allowed to run banks, stores etc and always benefited after revolutions and upheaval. In the case of the USSR though the State 100% overthrew itself, and the Komsomol was needed to ensure that the exact same people stayed in charge only with even more power and privilege and with regular citizens being correspondingly worse off. It’s also worth mentioning here that there are few examples of Bonafide Soviet Nomenklatura becoming Famous Oligarchs in the RF. The more infamous oligarchs are either “new money” or straight out of the Komsomol, they became oligarchs either based on their parents Nomenklatura Status like Potanin, or because they are jewish like Khodorkovsky, Timoshenko and Fridman. However, as I attempted to argue in this post, hopefully successfully, the whole point of the Komsomol was to ensure that the Nomenklatura stayed in Authority, that is making sure that the RFs Deep State was made up of the same people that ran Gorbachev’s Soviet Deep State. In part 3 we will address the Nomenklatura.