MOSCOW — When President Vladimir Putin in July ordered US diplomatic missions in Russia to slash their staff by 755 employees, the State Department said it would need time to assess the “impact of such a limitation and how we will respond to it.”
Part of that response has now become clear: To make up for the loss of security guards axed in the Russian-mandated staff cuts, Washington has hired a private Russian company that grew out of a security business cofounded by Putin’s former KGB boss, an 82-year-old veteran spy who spent 25 years planting agents in Western security services and hunting down their operatives.
Under a $2.8 million no-bid contract awarded by the Office of Acquisitions in Washington, security guards at the US Embassy in Moscow and at consulates in St. Petersburg, Yekaterinburg, and Vladivostok will be provided by Elite Security Holdings, a company closely linked to the former top KGB figure, Viktor G. Budanov, a retired general who rose through the ranks to become head of Soviet counterintelligence.
A State Department official in Washington, speaking on condition of anonymity in accordance with the department’s rules, said that Elite Security and individuals associated with it had been “vetted” with “relevant national and local agencies” and would not increase the threat risk.
“US missions around the world work constantly under intelligence and physical security threats,” the official said. “This contract does not change that fact.”
Russian company records show that Budanov, who, upset by Russia’s direction under its first post-Soviet leader, Boris Yeltsin, retired from espionage in 1992, is a former minority owner of at least three of Elite’s branches — in Moscow, in the Volga region, and in eastern Russia. Records indicate that he no longer holds any ownership stake, but Kommersant, a Russian business newspaper, has reported that the company’s head office in Moscow is run by his son, Dimitry.
Elite Security, reached by telephone in Moscow, declined to comment on the role in the company of Budanov and his son.
Marines will continue to guard US diplomatic missions, but tasks previously handled by local guards hired directly by the embassy in Moscow, like screening visitors, will be taken over by Elite Security employees. Direct hiring of guards allowed closer monitoring of their backgrounds, but any Russian working for a US diplomatic mission, no matter how closely screened, is vulnerable to pressure from Russia’s state security apparatus.
Local guards are mostly restricted to the perimeter of diplomatic compounds and do not generally have access to secure areas.
An official note about the no-bid contract posted on a US government website says that US companies had been contacted about taking on the security job in Russia but that “no US firm has been located with the requisite licensing or desire to operate in-country.” It added that, among Russian companies that could do such work, only Elite Security had established operations and licenses to operate in the four cities where US missions needed guards.
The note said that Russia’s decision to insist on personnel cuts at US diplomatic missions in Moscow and elsewhere had created a “compelling urgency” to find new guards, and that doing so through a commercial contract was “the only available option.”
“This is very good for us,” said Mikhail Lyubimov, a former KGB spy who knew Budanov from their time together in the Soviet intelligence service. “If I were the chief there, I would never do this for a very clear reason,” he said, adding that the Russian Embassy in Washington would not put security in the hands of a US company known to have ties to the CIA.
Like many former Soviet security officers, Budanov went into the private sector after the collapse of communism in the Soviet Union in 1991. He formed a joint venture with Gerard P. Burke, who was once assistant director of the National Security Agency, and headed the Moscow office of Parvus International, a business intelligence firm in Silver Spring, Md., founded by Burke, that employed former CIA, KGB, and Soviet-bloc agents.
In interviews with Russian news media, Budanov declined to discuss his time working with Putin but has voiced great admiration for his former colleague’s subsequent role as president, crediting him with saving Russia from the chaos of Yeltsin’s rule.