Facebook: Are You Interfacing with the Russian Mafia & KGB? (2010) | Hacker News Reader

Facebook: Are You Interfacing with the Russian Mafia & KGB? (2010)

thenewamerican.com

106 points0x1243 comments

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.

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

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?

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

I think the answer is simple, he wants to control his own damn company.

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

It's highly un-PC to say, but any money coming out of Russia requires a higher level of scrutiny due to the environment there.

Actually, it's probably a great idea to research any investor throughly before taking money. There's an incredible berth of information on how to create attractive companies for investment, but not so much on dating your investors.

No. In fact, I have never heard of a case where a startup refused investment from a venture fund because of who their LPs were.

Incidentally, the Start Fund is Yuri's private fund. It's not part of DST.

The question is how likely Yuri's private fund is to stay that way.

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.

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.

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.

Everyone in Russia with tons of money did shady stuff to get it because in the 1990s there were effectively no rules. Anyone in Russia who wants to keep there money has to avoid pissing these people off today.

I'm not sure you read the article; the point was not that That Yuri is a shady guy but rather that he is acting as a conduit for shady money from people who would be red flagged if they tried doing big things in the US.

I did not read the article till you asked me and would not change my stylish Hogan Heroes based response even a bit after skimming through it.

Working on a startup starves one of normal social company, so the best I can do is to interact with random friends on HN.

Applying the argument for shady money, I'd have to warrant that we're already past the point of debate with other more strange anachronisms now extant in this game. The overall US debt is just the tip.

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...

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?

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.

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.

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.

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?

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.

> Nevertheless, when he arrived in New York

He blew off the people who flew him out, IIRC

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...

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.

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

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

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

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.

“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.

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.

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?

Front Page???

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