PROLOGUE: SICILY, 1972

In spring 1972, an ambitious young Soviet bureaucrat named Mikhail Gorbachev and his wife, Raisa, spent 15 days here as guests of the Italian Communist Party. They were installed in a villa on the Castellammare coast, overlooking the fishing harbor from which generations of my ancestors set out for tuna each year. The Gorbachevs had a future--that much was obvious to their local hosts, the leading Castellammare families, who saw to it that the Russian couple had every convenience.

Two decades later, as he presided over the last days of the Soviet Union, Gorbachev would tell a biographer that the sojourn on the gulf had been a turning point in his life, a vision, a dream. The seeds of glasnost and perestroika were planted in that Sicilian reverie. A new world took shape.

But it isn't the world Mikhail Gorbachev dreamed of. It is its nightmare image, cast in the precise mold of the Castellammare hills--the heartland of the Cosa Nostra, the cradle of the dons. The nightmare has its own logic, its own bones. Sicilians call it the "sistema del potere." The system of power.

The sistema, which has ruled Palermo and its countryside since my great-grandparents were children, now extends across the face of the globe. Immensely expanded, both by design and by historical happenstance--notably the collapse of the Eastern bloc--it has grown too large for its Sicilian architects to rule alone, too far-flung, too complex.

"A cocktail shaker" of crime syndicates governs the system now, says Alain Labrousse, founder of the Observatoire Geopolitique des Drogues, Europe's most important research center on organized crime. "This is not something that involves just one mafia, the one we all know from Sicily, but seven or eight of them, frequently operating in collusion."

In addition to the Cosa Nostra and its Neapolitan cousin, the Camorra, the cocktail shaker includes organizations based in Turkey and post-Soviet Russia; the Colombian cocaine cartels and their operations in Spain; and ethnic Chinese triads from East and Southeast Asia, which have established key overseas bases in Rotterdam and London. At a lower level, the transport and marketing of contraband is managed by syndicates of Nigerians, Moroccans, Pakistanis, Lebanese, Albanians, and a potpourri of ex-Yugoslavs (who are known to put aside their fratricidal differences in the interest of business).

Together, they have constructed a state in its own right, a trading power of phenomenal reach, an Empire of Crime. Gorbachev's Russia and her lost Asian satrapies are its vast new hinterland. The wretched of the earth are its foot soldiers. Sicily is its model--its dark Platonic ideal.

I. IMPERIAL HINTERLAND: MOSCOW

In the context of the times--the long, stagnant reign of Soviet President Leonid Brezhnev--Aliya had been a high achiever. He's still an achiever today, which is what brought me to his door on a frozen January morning in 1994. I was looking for a new entrepreneur, a story for the business pages. I'd heard that Aliya had money, seemed to buy and sell a lot, and owned a large building. Leads are like that in Moscow nowadays.

Aliya played the game for awhile, spinning patent bullshit about furniture manufacturing and exports. Then he started laughing, and reached for the Jack Daniels. Furniture? Even his dour sidekick, a blond Russian and former casino bouncer named Sergei, laughed out loud now. "No divanz, no chairz," Aliya said in a rough pidgin English, throwing back his head of shaggy post-hippie hair. "Aliya Ibvagimovich, reketiry, aht your sarveez Meester Francesco!"

"Racketeer:" He was proud of the very idea, and delighted to meet an Italian-American--a Sicilian, no less. In Moscow, after the Soviet demise, to be a member of the mafiya is equivalent to being a hippie in the Brezhnev epoch. It has cachet. It marks you as different, and powerful, in a city where there are two distinct power centers but only one that holds much promise. The political class gathered around Boris Yeltsin runs official Moscow, which is crumbling into ruin. The reketiry run the other Moscow, where $75 bottles of Jack Daniels are consumed like water.

In the first Moscow--Russia's "legitimate" capital--a typical month's pay was the equivalent of $45 when I knocked on Aliya's door. President Boris Yeltsin's salary check had just been raised to about $300. Pensioners drawing $35 per month from the state retirement fund stood outside public buildings, stamping their feet in the subzero temperatures, peddling loaves of bread and family heirlooms to stay alive.

In Aliya's Moscow--the reketiry Moscow--scores of new restaurants, supplied with foie gras from France, prime beef from Australia, and the wildly popular Jack Daniels, are booked for weeks ahead; a dinner check for two begins at $120, and climbs rapidly. Cadillacs are sold for $100,000 cash at Trinity Motors, just yards away from Red Square; Audi, BMW, and Mercedes-Benz showrooms dot the blocks around the Bolshoi Theater. Their clients drive straight into the attached garages of solid-oak "executive ranch homes," constructed in the United States, then dismantled and shipped to Moscow for reassembly on special high-security sites in the suburbs.

Nobody in Russia has any doubt about who the conspicuous consumers are, or how they came by their money. "Unless you are mafiya, or maybe a diplomat, you can't even think of such things," Ludmilla Khachikian, an English teacher, told me. "When we see a certain kind of car on our streets, a certain kind of fashionable coat, that's what we all conclude: It must be a foreigner or one of the reketiry."

Aliya and Sergei took me on a spin one night in Aliya's fire-engine red Audi, roaring at harrowing speed through the icy streets. The route was a bewildering zigzag. "You never know," Sergei muttered opaquely, shrugging his shoulders.

As we fishtailed into a series of turns, the two men explained their business. It was quite straightforward; in mafiya Moscow, there's no particular point to discretion. Aliya and Sergei are international oil merchants of a sort. Backed by a network of "friends"--either palm-greasers in the government ministries or ministerial officials themselves--they fill tank trucks with gasoline bought in Russia at the state-subsidized price of about 60 cents per gallon. (If it were any more expensive, Aliya pointed out, "only reketiry could afford to drive.") The trucks are driven to the Russo-Polish border near the military stronghold of Kaliningrad, where another network of friends in the Polish customs service ushers them across the frontier. Yet more friends wait at the German border.

The economics are breathtakingly simple. A 60-cent gallon of Russian regular fetches up to $5.25 in Western Europe. Sell it on the black market at $4, and everyone is happy. The difference between four bucks and 60 cents buys a lot of Jack Daniels and foie gras, fire-engine red Audis, and ranch homes--most of which come into Russia as contraband.

Last year, as Russia's visible economy slid into the deepest recession Europe has seen since the 1930s and its gross domestic product fell to just 60 percent of its 1991 level, $60 billion of goods from the West entered the former Soviet Union--at least $30 billion of it illegally, says the Russian Interior Ministry. What paid for it all, legal and illegal, was the mafiya-induced hemorrhaging of $45 billion in resources. Russian coal by the thousands of tons. Azerbaijani oil by the lakeful. Entire forests of Siberian timber. Miles of railcars stuffed with cotton from Aliya's native Uzbekistan. Truck after truck of gasoline from Kazakhstan (and until recently, Chechnya)--so many trucks that at one point last summer, the line of vehicles waiting to cross the Hungarian-Romanian border, another major contraband gate, stretched dozens of miles and involved a five-day wait.

The scale of this rape is beyond anything the world has ever seen. It could only be the work of professionals. Of a phenomenally efficient system that swallows every legitimate institution it confronts. Of legions of Aliyas and Sergeis, backed by armies of friends. Of a conspiracy that beggars the imagination.

Its most disturbing activity involves neither purloined timber nor smuggled gasoline. Over the past year, German police have intercepted several contraband shipments of enriched plutonium and other nuclear materials from Russia. Their destinations, almost certainly, were clandestine atomic bomb laboratories.

The Audi slid to a bumpy stop, next to a fortresslike red brick building somewhere in the northern sprawl of Moscow. Sergei was explaining the zigzag ride to me: "Your public life, you live publicly," he said. "Let the people see you are a big man. But your private life, if you are smart, you keep that to yourself. Nobody knows where our apartments are. We take a different route every day." Aliya nodded in solemn agreement. "Insuranz, Francesco," he added.

According to Izvestia, there were nearly 20,000 violent crimes in Moscow alone in 1993, up 36 percent from the year before. Nationwide, offenses involving fire-arms were up 250 percent, to 22,100. In 1993 Russia saw 355,500 crimes officially designated as racketeering, and nearly 30,000 premeditated murders.

In Moscow, the slaughter included 1,404 suspected gangland assassinations, and probably thousands more that went unrecorded. By the end of the first quarter of 1994, the toll was running at 84 murders per day, giving Russia the dubious distinction of surpassing the United States' homicide rate--indeed, more than doubling it. "The bulk were contract killings, because of conflicts in the sphere of commercial and financial activity," said Gen-eral Viktor Yerin, minister of the Interior.

On March 1, Vladislav Listyev, Moscow's most celebrated broadcast journalist and the newly appointed director of Russia's main public television station, was shot dead by assassins at the entrance to his apartment building. Listyev had announced his intention to suspend all advertising on the station--a key source of racketeering income--until the industry could be cleaned up. "The merging of the mafiya with commercial structures, administrative agencies, interior ministry bodies, city authorities--nowhere else in Russia do the authorities turn a blind eye to these things as they do in Moscow," admitted President Yeltsin, the day after the killing.

Pyotr Filippov, director of the government-sponsored Analytical Center for Social and Economic Policies, who reports directly to Yeltsin, believes that four out of five Russian businesses are now paying protection money to the reketiry, or to their political henchmen. The public authorities in much of the country are so intimidated by the mafiya, claims Filippov, that they send requests for business permits to local god-fathers for approval. Moscow's chief of police says he is convinced that 95 percent of his own cops are on the take.

An entire generation is coming of age in Russia, says Filippov, "who will not turn to official authorities, but to unofficial ones. These people are more likely to hire a murderer to punish a guilty or even an unpleasant partner than to go to court."

On February 2, Sergei Skorochkin, 33, a prominent deputy in the State Duma (parliament), was found dead in a grove of trees south of Moscow. He was handcuffed and had a large-caliber bullet hole in his head. Skorochkin had always been more "businessman" than legislator, and his business was of a variety that other Duma members tended to discuss in whispers. In May 1994, he had a disagreement with a rival businessman and shot him dead on a busy Moscow avenue, killing a woman passer-by in the process. Skorochkin was the third Russian deputy murdered in a year. None of the three killings has resulted in an indictment.

A Mother Jones investigation