

Facebook: Are You Interfacing with the Russian Mafia & KGB? (2010) - 0x12
http://thenewamerican.com/usnews/politics/4346-facebook-are-you-interfacing-with-the-russian-mafia-a-kgb

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wisty
An interesting article on connections between the Russian mob, Putin, the KGB,
and Russian investors.

The Facebook angle is just a bit of linkbait spice, and is only a small part
of the article.

If I were Zuckerberg, I wouldn't really care where my investors were. Once you
are liquid, you just can't control what happens to your shares. And at
Facebook's stage of development, they aren't going to change direction just to
get another minority investor (unlike a new start-up, which can be sunk by a
VC overthrowing their CEO, stacking the board, wiping out the value of
employee options, and other such tricks). I'd watch my back when travelling in
Russia, though (whether or not I'd taken their money).

edit: other interesting bits - legal threats against bloggers; and ISPs taking
down blogs due to the threats.

~~~
reso
Yeah, Mark controls 3/5 board seats for life. Investors are essentially just
along for the ride.

~~~
fl3tch
TIL.

But let me ask you something. If Mark isn't in this for the money (that's the
way he's painted anyway, since he could have sold or gone public long ago for
tons of cash), what exactly does he want? Why keep that kind of control (3/5
board seats, private company)? What exactly does he want?

~~~
xxbondsxx
He already answered this in an interview about the Social Network. A lot of
people in Hollywood (and in general) don't understand the concept of just
loving to build things. Facebook was built by him and it's gotten insanely
huge and when you've dedicated a large portion of your life to something like
that, you don't want to give it up. No other work would be satisfying;
facebook is his.

Some people truly love doing this stuff and don't build it to flip it and that
throws people off

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dmitri1981
I wonder if any YC companies have passed on Milner's generous investment offer
due to these allegations?

~~~
Hitchhiker
The guy worked for the world bank. He owns a gigantic home and probably has
been vetted by the feds given their recent investment activity.

I think pg must be literally rofl with some of the stuff being posted re Yuri
in recent times. Do think that HN also doubles up as some kind of comedy
central carefully curated by wily partners. Information asymmetry ensures that
some jokes are only understood by the chosen few.

Look at this " official " account <http://twitter.com/#!/yurimilner> for
further insights

<http://www.youtube.com/watch?v=UgcxGFmYyPs> reflects yC quite well.

PG is Colonel Hogan of course.

~~~
felipemnoa
Devil's Advocate: Bernard Madoff used to be chairman of nasdaq and was only
"caught" because he confessed. Even when the SEC was told point blank by Harry
Markopolos that Madoff was a fraud nobody did anything.

When lots of money is involved some people turn a blind eye if it benefits
them.

~~~
Hitchhiker
Devil's Advocate #2: The entire US ( for that matter, the world ) economy is
now functionally a casino. I am sure you've read Liar's Poker, Long-Term
Capital Management etc.

When lots of money is involved, smart people do not turn a blind eye, they
just ensure that the fine-print on contracts are done in such a way that their
house is safe.

------
adlep
This is exactly why Yuri's Milner's involvement in YC is controversial. Most
likely, given the political and economical climate in Russia he did not earn
his wealth by playing fair.

Now some of that tainted money are being handled over to our best for a quick
wash...

~~~
guard-of-terra
What do you mean by "playing fair"?

Like, in post-war Japan and Korea they decided how many big corporations they
are going to grow, allocated resources and appointed people in control. Those
became for-life managers to multi-billion corporations because they were in
the right time in the right place. Was that fair?

The "wealth" had to go somewhere and some people got it with some effort. What
should have they done?

How would you differentiate between someone who got a piece of USSR industry
and pillaged it, and someone who ran his piece wisely?

~~~
eps
Common opinion between Russians is that anyone who accumulated a lot of wealth
in early 90s and managed to stay alive was in mafia or had very close ties
with it - either a criminal or a state one. The reason is simple. If you start
legitimately and your business is successful, you would be approached
eventually by power people offering protection in exchange for sharing profits
and/or company share. No exceptions. You earn - you share. The choice between
the criminals and corrupted officials was yours though.

~~~
guard-of-terra
This applies to running small and medium business, but not to "inheriting"
large chunks of [especially mining and extraction] industry.

There, mafia doesn't have any business commonly associated with them. Mafia
does loans, racketeering and vice. Large industry isn't about any of those
things. Maybe I'm wrong but I think you should not overextend the meaning of
term "mafia".

Anyway, this does not answers the "fair" question. Oneself fairness is not
direcly affected by people the person in question has to deal with. You still
have to prove unfairness, "he was seen near where the mafia usually manifests"
doesn't cut it.

~~~
adlep
You are arguing just for a purpose of arguing. I am not going to play that
game. The way of doing big business in Russia involves bribes, corruption,
ties to organized crime, cronyism, very close ties to the ruling class and
government, and also Russian security apparatus. Also, the idea that a random
"Russian Businessman" can just flash his money and be accepted as an investor
in Silicon Valley should be in fact investigated by the FBI. We do not need to
enrich "Russian Businessmen". We should be working with people from countries
who are our close allies.

~~~
guard-of-terra
Does it make everyone who manages a high-profile international mining business
unfair without trial? Because they are known to do the things you mentioned.

I'm not arguing just for a purpose of arguing. I'm trying to challenge your
idea of "fair rules". If we would not find even one person in this subset who
plays by "fair rules", (and you seem to imply there are indeed none), how do
we know that "fair rules" exist? Who sets those?

------
DevX101
Andrey Ternovskiy also turned down several large investment offers from U.S.
firms. His refusal to deal with DST doesn't necessarily mean he had ethical
problems with the source. Maybe he just didn't want VC money.

~~~
joshu
> Nevertheless, when he arrived in New York

He blew off the people who flew him out, IIRC

~~~
SkyMarshal
I heard that too. Sounds like he had a bit of an ego, pissed off potential
investors, and now Sean Fanning's Airtime is on the way to becoming
Chatroulette done right (your FB friends instead of random pervs), and Andrey
will have to return home empty handed when his Visa expires...

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ChuckMcM
I always find these sorts of allegations lacking a certain credibility. In the
sense that a 10% share holder really can't over whelm the company's direction
without a lot of help from other share holders.

~~~
felipemnoa
Let me play devil's advocate: Does the Mafia care that they have only 10%
share?

~~~
orijing
If we stretch that further, then even a 1% share is not necessary, so why
bother?

~~~
ChuckMcM
This is where I was coming from. If you're willing to threaten's someone's
life why do you need shares?

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darksaga
Its always been scary to do business in that part of the world. I had a few
buddies who were in telecom and were working there shortly after the fall of
Communism. They used to tell stories of caring large sums of cash to pay
bribes and keep the KGB at bay while they went about their work. They made it
seem like this was just the way business was done.

It seems like it's getting more dangerous since these people have no problem
killing influential and powerful people. Scary, very, very, scary.

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demetris
“Are these the folks you want having access to all the personal data on your
Facebook account?”

If I had to choose, I would say these folks do indeed sound scarier than
Zuckerberg.

The piece needed a better closing sentence.

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terse
i'd venture to guess that the majority of fb's shareholders are based outside
the u.s.

fb manages to remain not only a creepy, privacy invading behemoth but also,
for its size and investment, an unusually secretive one. by all means you
should share everything with them, but it doesn't work the other way around.
their books are closed to public view. how is this accomplished?

the newyorker ran a piece about this back in jan.

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skeptical
I get it, Russia is becoming strong again but it's not a business partner, so
let's turn on the old propaganda machine that has been off since the cold war.

Is the russian mob or the kgb so different than other organizations in other
countries? Would an article on chinese government inteligence still be
recieved as seriously?

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jccodez
Front Page???

