The privatisation of force in Russia is not a new phenomenon. Nor is the practice of active employees of the Russian security services freelancing.
Ćstensen and Bukkvoll start their story with the Cossacks.
The 1990s witnessed the emergence of a new generation of violent entrepreneurs, as the Soviet state collapsed and members of the security services sought either new employment or to take advantage of new opportunities.
This story of PMCs is concerned with the more recent iteration of a narrower phenomenon.
Varese (2001:61): āPrivate Security Firms (PSFs), a feature of post-Soviet Russia, are another possible āroofā. Reportedly 500 such firms sprang up in Russia around 1989 and at least fifteen licensed training camps existed outside Moscow. By the end of 1999, 6,775 private security firms and 4,612 armed security services (attached to a specific parent firm) were registered in Russia. Licensed security personnel stood at 196,266 people.ā
Varese (2001:62): āAccording to a study of the Russian Ministry of Internal Affairs (MVD), 17,000 former employees of the MVD and 12,000 from the KGB worked for registered and non-registered security and detective firms in 1995.
Varese (2001:65): āMajor economic conglomerates have internalized protection, hiring a host of bodyguards, which constitute in effect little private armies. The gas monopoly Gazprom has a 20,000-strong security service under Vladimir Marushchenko, a KGB veteran who also served as senior officer within the state tax service. The financial group Most can resort to more than 2,500 armed officers in Moscow alone, while Lukoil has an army of a similar size in its Novorossiisk oil terminal. These economic giants also employ commercial intelligence officers and a system of secure communications.ā
Volkov (2002:127): āThe role of the state is often seen by scholars in negative terms in connection with corruption and rent-seeking as the conĀversion of administrative capital. The opportunistic behavior of bureaucrats at various levels and arbitrary administrative actions have only further unĀ derscored the way the state has withered away as a public governing instituĀtion.ā
Volkov (2002:133): āUnder the new law on private protection, private agencies were entitled to āprotect the legal rights and interests of their clientsā on a commercial basis. The law permitted private agencies to pursue a broad range of activities: to physically protect citizens and property, engage in security consulting, colĀlect data on lawsuits, conduct market research, collect information about unreliable business partners, protect commercial secrets and trademarks, search for people claimed to have gone missing, recover lost property, and conduct investigations into the biographies of prospective employees of client companies.ā
Volkov (2002:133): āThe most widely cited data on the service backgrounds of the heads of private security agencies are those provided in 1995 by the executive director in charge of security for the Association of Russian Banks, V. Sidorov (forĀmer deputy minister of interior). According to Sidorov, half the heads of priĀvate security agencies are former KGB officers, another quarter are from the MVD, and the rest are from GRU (army intelligence) and other organizaĀtions. These rough figures probably refer to the Moscow banking sector.ā
Volkov (2002:134): āAll enterprises, independently of their size and form of ownership, were allowed to establish a special security subdivision, the private security service (PSS). These were set up in large numbers by private and state enterprises and financial institutions for physical and economic protection and inforĀmation gathering and analysis.ā
Volkov (2002:135): āIn contrast to PSSs, private protection companies (PPCs) are autonomous from their clients and act as independent market agents supplying services on a contractual basis.ā Often they emerge providing services to a particular client, but evolve to become autonomous suppliers in a market.
Volkov (2002:137): āBy the end of 1999 the number of private security agencies reached 11,652, including 6,775 PPCs and 4,612 PSSs, while the number of licensed security personnel (i.e., those entitled to carry firearms) reached 196,266 (the total number of employees exceeds 850,000).ā
Volkov (2002:147): āUnlike criminal groups, PPCs normally do not interfere in the businesses of their clients, but neither do they provide loans. As mentioned earlier, clients of criminal groups are comĀpelled to pay up to 30 percent of their profits, while the cost of recovering a debt is normally 50 percent of its value. The price of security and enforceĀment charged by noncriminal PPCs is negotiable and varies with the size and nature of the client business. But it takes the form of a fixed monthly payment rather than a tax on profits or turnover, as is the case of criminal protection.ā
Volkov (2002:152): āTo distinguish themselves from the front companies of criminal groups, PPCs operated by former security and police employees turned to traditional market methods for generating trust. They formed a number of business associations and leagues with closely moniĀtored membership, achieved recognition by internationally established forĀeign security companies, and advertised their business records and tradeĀmarks.ā
The relationship between PMCs and the state