ACCESSION NUMBER:350555 FILE ID:POL104 DATE:06/27/94 TITLE:WOOLSEY SAYS ORGANIZED CRIME IN RUSSIA POSES WORLD THREAT (06/27/94) TEXT:*94062704.POL WOOLSEY SAYS ORGANIZED CRIME IN RUSSIA POSES WORLD THREAT (Could become involved in nuclear weapons transfers) (450) By Paul Malamud USIA Staff Writer Washington -- Organized crime is on the rise within Russia and has "quickly become an international menace" that could become involved in the illicit transfer of nuclear materials, says the director of the Central Intelligence Agency. Speaking before a subcommittee of the House Foreign Affairs Committee June 27, CIA Director James Woolsey warned that a mafia-style economy and black market had been allowed to flourish in the former Soviet society which could sour the Russian democratic experiment and drive Russians "into the arms" of "hardline political forces." That nation, he asserted, faces a "difficult and agonizing future" as it deals with this "long-term threat to Russia and to the international community." Russian criminal groups, Woolsey said, do not have a single hierarchy and 1ompete among themselves for influence. Nonetheless, he said, they have obtained vast profits in a financially bankrupt system by dealing in extortion rackets, narcotics trafficking, bank fraud, illegal emigration and the illicit sale of low-grade radioactive materials. Moreover, Woolsey continued, criminal gangs in ex-Soviet states have created an "infrastructure" of front organizations that could "facilitate the transfer or sale" of nuclear weapons worldwide and have the financial resources to bribe or intimidate "nuclear-weapons handlers." "Trading in nuclear weapons and materials" is not now the primary focus of the Russian mafia, he added, as narcotics trafficking and extortion are more profitable. However, he warned that "hostile states such as Iran, Iraq, Libya or North Korea" might well provide markets for nuclear materials. Woolsey said there has already been some "nuclear smuggling" attempted by "desperate individuals" seeking to make fast money. He said the United States welcomes "the efforts of the Russian government" of President Boris Yeltsin to protect nuclear security. While "to date we have not yet detected any nuclear warheads or significant quantities" of nuclear material for sale by criminal groups, he said, "low-grade nuclear materials" are being sold on the black market and could be purchased by terrorists. "Anyone who believes this new era we're in is an era of dramatically reduced dangers," the director emphasized, "can't see beyond the end of his nose." "If something effective is not done" about "getting to the groups" attempting to corrupt ex-Soviet military and police officials, he said, it will be difficult for the Russian reform movement to succeed in the long run. Woolsey added that the CIA is "devoting more resources to the issue" of international organized crime and said the forces of law and order worldwide "can prevail if we persist." NNNN .