graphic
News
Playing Russian roulette
November 7, 1996: 9:15 p.m. ET

Murder of American hotel operator highlights dangers of Russian business
From Correspondent Kitty Pilgrim
graphic
graphic graphic
graphic
NEW YORK (CNNfn) - Doing business in Russia is a risky proposition. Organized crime, extortion, and murder are realities of business everywhere in the country.
     The dangers were clearly illustrated by the murder last week of American hotel operator Paul Tatum, who died over a dispute on how to run a Moscow hotel.
     Tatum was shot 11 times in the back with an AK-47 rifle, paying the ultimate price for dealing with business partners tied to the Russian mob.
     Some westerners doing business there downplayed Tatum's assassination as an exception to an improving rule of law.
     Robert Jutson, managing director of Griffin Capital, explained it was rare for a Western businessman to take a bullet.
     "There have been hundreds of incidents where East European or Russian bankers were assassinated," he said. "But the situation with Tatum was an (aberration that) should not effect anyone's plans."
     More than 200 Russian businessmen have been killed by mobsters in the past year, with thousands more victims of extortion.
     Security expert Norb Garrett of Kroll Associates said the underpaid and easily-bribed Russian police are simply over-matched. (190K WAV) or (190K AIFF)

"There's the Chechen Mafia, there's the Dagistani Mafia, there's the Russian Mafia. There's not just a single Mafia."


But Garrett and others said Westerners can do business safely in Russia if they follow a few rules:
  • Arrange for private security, known as krysha (Russian for roof), preferably one not tied to the mob.
  • Run thorough background checks on all Russian partners.
  • Keep a low profile.

     These are lessons that some said Paul Tatum may have ignored.
     In the end, there will probably be more conflicts while Russia seeks to find its way, said Joseph Blasi, author of Kremlin Capitalism.
     "We're watching a country in transition and it's messy and it's not open to neat generalizations," said Blasi.
     "We must feel sad with this crossing of the line with Paul Tatum. On the other hand, we shouldn't romanticize the Russian criminal element." Back to top

  RELATED STORIES

Russia bears on Wall St. - Sept. 23, 1996

Ready for the Wild East? - Sept. 19, 1996

  RELATED SITES

Russian Business & Trade Connections

Russian Financial Pages


Note: Pages will open in a new browser window
External sites are not endorsed by CNNmoney




graphic