Crime Busters

Two years ago the American ambassador to Hungary, Peter Tufo, was already in talks with the Budapest government about strengthening ties between U.S. and Hungarian law enforcement officials when a massive car bomb ripped through the city's busiest shopping district, killing a police informant and his lawyer and injuring 25 bystanders. It was the latest in 150 gangland-style attacks that local police believed were linked to the growing presence of Russian organized crime in the Hungarian capital. "That was the catalyst event," recalls Tufo. Working with the U.S. Justice Department and the Hungarian Interior Ministry, he accelerated efforts to bring U.S. law enforcement capabilities to bear in Hungary. The result is a new precedent for American involvement overseas: a task force made up of local officers and five agents from the U.S. Federal Bureau of Investigation under the command of the Hungarian National Police. Following a two-week training course, the unit is now setting up shop in a faded turn-of-the-century office building a few blocks from the site of the pivotal blast.

The aim is not just to fight street violence, which has fallen off since 1998, but to grapple with powerful Russian gangs running worldwide operations out of Budapest. "These are well-capitalized, criminal enterprises with billions of dol-lars in annual revenues. They are in Brighton Beach ... South Philadelphia, Miami and L.A.," says Tufo, a former chief counsel for the Department of Investigation in New York City. The eastward deployment underscores the importance of fighting organized Russian crime to U.S. foreign policy and a growing recognition, says Tufo, that "you just can't rely on foreign governments to look into attacks on U.S. interests."

The arrangement has stirred some anxiety both in Budapest, where an opposition party accused the government of ceding sovereignty to the U.S., and in Washington, where some congressmen have asked why U.S. agents are putting their lives at risk halfway around the world. "We have to think twice or even thrice before taking each step," concedes the task force commander, Brigadier General Istvan Miko, a lawyer and career investigative officer.

Clearly, something had to be done. With the fall of communism, Hungary, like many of its neighbors in the old East bloc, saw an influx of criminals ready to exploit the lax regulation and abundant opportunities of an economy in transition. Budapest became home to men like Semyon Mogilevich, recently dubbed the most dangerous mobster in the world by U.S. journalist Robert Friedman. His interests today allegedly extend from a company that makes industrial magnets in Hungary to forced prostitution, gunrunning and trade in illicit nuclear materials. U.S. investigators have linked him to the vast apparent money-laundering scheme at the Bank of New York. The Solntsevskaya gang, named for a Moscow suburb and allegedly headed by Sergei Mikhailov, is also believed to be using Budapest as a base. The FBI wants to unravel these groups' byzantine finances, while Hungarian officials would like to rid the country of mobsters whose wealth and power are threatening to hijack the democratic process.

Working on their own, the Hungarian police have made little progress. An organized crime unit set up eight years ago was disbanded last year after failing to make a single major arrest. Part of the problem, says Laszlo Valenta, cabinet chief in the Interior Ministry, is inexperience. In the communist era, police didn't have to bother with the niceties of legal prosecution. "Now we have to use modern methods, and build prosecution step by step," he says. With FBI guidance, Hungary recently introduced new statutes on witness protection, plea bargaining and the use of undercover agents.

Most of the reservations about the joint task force were resolved by negotiation and compromise. Miko promises to minimize the risk to U.S. agents. They will be permitted sidearms "for self defense," he says, but actual arrests will be the "sole responsibility" of the Hungarian National Police. "What we really need here is brainstorming, not gunplay," he says. Most ordinary Hungarians would be happy with both. "At least the Mafia will be scared," says Rozalia Szarka, 34, a Budapest antiques dealer. Maybe, but if the perniciousness of the gangs is even close to what U.S. reports suggest, it will take more than a few of the FBI's finest to put them on edge.

With reporting by Zsofia Kaplar/Budapest