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The would-be ‘master’ of Yakutian diamonds

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On July 8, 1954, Colonel Aleksey Mikhailovich Malgin, the last head of the Uralalmaz Trust (multicorporate enterprise) and a Cheka (All-Russian Extraordinary Commission) serviceman, was dismissed. At the time of his dismissal, Colonel Malgin was only 46 years old, he was a man of excellent health and had extensive experience in operational work and service in the GULag (Main Directorate of Camps and Places of Incarceration), but there was no job for him at the newly created KGB (Committee of State Security) or at the Ministry of Internal Affairs restructured after the execution of L. P. Beria. Malgin’s dismissal from the state security and law enforcement agencies looked like an exaggeratedly ordinary event: instead of a state or at least departmental state security award, he received the badge for Excellence in Socialist Competition in the Gold-Platinum Industry, which was a kind of mockery because Malgin had nothing to do with mining gold and platinum at all. So, that was the end of the career of a man who had great chances to go down in the history of the world diamond market as the first head of the commercial production of diamonds in Yakutia. Today, his name is practically forgotten, undeservingly so, since Malgin’s biography is very interesting and can serve as a life lesson.

Aleksey M. Malgin was born on 21. 08.1907 in the village of Filisovo, the Ivanovo Region, to the family of a priest, his closest male relatives were also churchmen. After the revolution of 1917, this ‘class origin’ served as an obvious obstacle to his career, so young Malgin turned away from his religious relatives and became an active Komsomol member - he was the head of the village library and reading-room and the secretary of the Komsomol Committee of the Filisovo Volost (district). And in 1928, he joined the OGPU (Joint State Political Directorate). He did not get any systematic professional education but he was a knowledgeable and well-read person thanks to his father’s large library.

Malgin’s career at the state security agencies was successful: by 1935, he was the head of Department 4 of the Secret Political Department of the State Security Directorate of the NKVD (People’s Commissariat for Internal Affairs) for the Ivanovo Industrial Region. And as the head of Department 4, he took part in a high-profile investigation into the case of “a branch of the Russian National Party, a counter-revolutionary fascist group that was preparing armed actions against the Soviet power”. The main defendant in the case was Grigory Vasilyevich Sarenko, a former collegiate counsellor and a famous Russian architect awarded the emperor’s orders; Malgin interrogated him personally. During the investigation, tortures were used, including sleep deprivation for several days, and interrogated people were kept ‘at attention’ for 10 hours in front of investigators who changed shifts. As a result, confessions were obtained, and all the accused were convicted by the members taking part in the Special Meeting at the NKVD. Malgin received his first state security service’s award - the badge of the Honorary Worker of the Cheka (order of the NKVD of the USSR dated October 15, 1937).

Malgin’s zeal for service was noticed by his superiors and he was assigned to one of the most important GULag’s projects - the construction of the North Pechora Railway in the Komi Autonomous Soviet Socialist Republic. Malgin headed the operational-chekist (insider threat detection) department that was subordinate directly to the Operational Directorate of the NKVD of the USSR, i. e., he was closer to the central state security authorities than any of the top managers of the construction project. And again, he showed himself to be a completely successful state security officer. “The counter-revolutionary groups that tried to launch vigorous activities in connection with the outbreak of the war were liquidated in former Departments 3, 8 and 9. A number of individuals were arrested who were in registration files and charge cards, or who made active efforts since the beginning of the war. Totally, 52 active counter-revolutionaries were arrested as of July 10, this year.” (from Malgin’s report to the head of the GULag Operations Department dated July 12, 1941).

In the Komi Autonomous Soviet Socialist Republic, Malgin received his first Order of the Badge of Honor. Later, the combat orders like the Order of the Red Star and the Order of the Red Banner were added to this award, as well as the Medal for Victory over Germany. Taking into account that Malgin did not spend a single day at the front, combat awards could rightfully be considered as a sign of the special favor of the NKVD leaders towards the officer with high potential. By this time, he had gained a reputation of a tough, even cruel, but extremely efficient person, and also an excellent organizer. It is difficult to say now where, at what stage of his biography, the nickname ‘Wolf’ tightly stuck to him (it is mentioned in the agent reports and complaints against him), but it was a correct one for his lean body, quick movements and cold stare.


In 1950, Malgin was involved in the atomic project and at the same time, he became a member of the Minister of Internal Affairs as he was appointed deputy head of the Eastern Lead Mining Administration and the Yeniseistroy prison camp. His immediate commander was two-star General I. S. Lyuby, a GULag’s legendary higher-up who was under the special patronage of the Ministry of Internal Affairs’ leaders. It was Lyuby who recommended Malgin to be appointed the head of the diamond project that held excellent promise for the future.

In late January 1951, Malgin was summoned to Moscow to S. N. Kruglov, the Minister of Internal Affairs. At this meeting, Kruglov told Malgin the following information: in 1950, several diamond placers were discovered in Yakutia, their diamond grade was an order of magnitude higher than that in the Ural placers. The country’s leadership decided to develop these deposits by the Ministry of Internal Affairs’ Special Main Directorate (SGU) that included Uralalmaz. A team of the SGU’s specialists was scheduled to travel to Yakutia in 1951 to work out a detailed project by the spring of 1952. In the summer of 1952, it was necessary to begin experimental development of the placer deposits in Yakutia, and a full-scale development was scheduled for 1953. Uralalmaz was responsible for providing the professional personnel and supplying the equipment for the implementation of this project, and the plans were that all the construction work would be carried out by prisoners; the Dzhugdzhurlag was chosen as the support base with its headquarters in Yakutsk. Malgin was offered to head Uralalmaz, carry out all the necessary work to train and send personnel and equipment to Yakutia, and then he was supposed to become the head of Yakutia’s diamond project.

Malgin appreciated the minister’s offer at its true value. He got a real chance to get appointed to become a general and, perhaps, be awarded the Gold Star of the Hero of the Soviet Union. His colleague I. F. Nikishov, the NKVD’s commissioner for Dalstroy, was able to get these rank insignia and was even awarded the combat order of Kutuzov when working on GULag’s projects! Malgin agreed and Kruglov immediately signed the corresponding order and gave the colonel a week to rest; from February 10, 1951, Malgin became the head of the Uralalmaz and the Kusinsky Corrective Labor Camp (ITL).

There were reasons for the minister to choose and appoint Malgin. All previous heads of Uralalmaz, their deputies and chief engineers were not professional state security officers. They had the word ‘engineer’ in the title of their ranks and were indeed professional mining engineers who got appointed to the state military service by circumstance. They were experts in their field: after all, the world’s first diamond dredge appeared at Uralalmaz, but they were unwilling to be heads for prisoner labor, and Kruglov did not value their organizational abilities highly. The Yakutia project a priori required extra efforts and a person with Malgin’s qualities and skills was required there. The GULag’s ‘Wolf’ was required.

From his first days at Uralalmaz, Malgin began to establish order with an iron fist. Penalties, punishments and regimes became extremely tough. Since there were both men and women at the Kusinsky Corrective Labor Camp, the issue of ‘camp love affairs’ and the ensuing problems had been a headache for all previous commanders for years. Malgin decided to solve the problem radically and corridors were allocated between the barracks; prisoners who entered the corridors without authorization turned into a target and were shot by the prison camp guards at sight, without prior warning. If the bullet hit the prisoner’s leg and the victim retained his potential to work, the shooter received a bonus. In the event of the victim’s death or disability, no bonus was paid to a shooter. By the summer of 1951, a couple of dozen people walked on crutches, but discipline at the prison was almost perfect.

Meanwhile, the Ministry of Internal Affairs’ SGU team worked hard in Yakutia. Six fields were planned for the development, including the Skazochnoye, Sokolinoye, Upper Islands, Molodezhnoye, Rybachye, and Ogonyok ones. The Vilyuiskaya and Markhanskaya hydro-electric power plants were built, as well as the pier in Ust-Markha and the Turukta and Khadan support bases. The plans were to create 11 prison camps in the diamond-bearing region, it was supposed to involve 5,000 prisoners at the first stage. In the early 1952, a detailed three-volume project for the development of Yakutia’s placer deposits was ready and Malgin was summoned to Moscow to get it approved. All approvals and endorsements were received by March. At the same time, a draft order was drawn up by the minister to appoint Malgin as the head of the newly created unit for the development of Yakutia’s diamond deposits. Malgin returned to the Urals, having received clear instructions to prepare part of the Uralalmaz’s equipment for transferring it to Yakutia.

But in April and May 1952, the events occurred that dramatically changed the Soviet diamond industry’s development vector. Instead of the resolution of the Council of Ministers of the USSR “On the Development of Yakutia’s Diamond Deposits,” Stalin signed secret decree No. 10503-rs on additional purchases of industrial grade diamonds from England. And the Minister of Finance A. G. Zverev reported to the Bureau of the Presidium of the Council of Ministers that taking into account these purchases, the stock of industrial grade diamonds at the Gokhran (State Precious Metals and Gems Repository) can satisfy the need for these rough diamonds for 6 to 15 years, depending on the type of rough diamonds. The volume of new supplies, exceeding the supply of diamonds under Lend-Lease, thwarted the attractive promising plans for the development of Yakutia’a diamond deposits, as well as the Malgin’s dream of general’s title because the order on his new appointment had never been signed.

Not many people knew the reason for such a drastic change in plans in the diamond industry, but Malgin was among those who were aware of it. He was one of three Uralalmaz officers who had access to the documents marked ‘OV’ (Especially Important)”, he endorsed the first volume of the project developed by the Ministry of Internal Affairs’ SGU and knew the proposed scheme for the export of Yakutia’s diamonds, and was most likely aware of the De Beers corporation’s role. It was not difficult for him to guess that it was a ‘trade-off’, and the development of Yakutia’s deposits was suspended to have deliveries of huge quantities of industrial grade diamonds at a crazy discount. De Beers was not interested in putting additional pressure on the rough diamond market it controlled and ‘bought’ a suspension from Stalin.

Apparently, Malgin was terribly disappointed. The prospect disappeared, and so did the reason of his work at Uralalmaz. He began to turn into a corrupt official who did not obey the rules. There was a flow of reports to the authorities against him (that resurfaced even more often than before), “In August 1952, a certain Ilyin P. Ya., a relative of Comrade Malgin, the head of the Uralalmaz Division, was appointed the head of the Uralalmaz’s Human Resources department. From his first days at Uralalmaz, special working conditions were created for the new head of the HR department. Ilyin was given half a house for his apartment, while the engineers and technicians lived for several years in dormitories, office premises, and at a ‘hotel’. The new head of the HR department was given a personal salary and a 100% salary bonus for his service in the diamond industry. According to the regulation, a person should have at least a 6-year experience in the diamond industry to receive a 100% service bonus. The head of the Uralalmaz Division does not ‘forget’ his relative when distributing monthly bonuses; for meeting the production targets, the engineers and technicians of the [Uralalmaz] Division, usually received a bonus equal to 10% to 25% of their monthly salary, and Ilyin got at least 100% of his monthly salary. With a monthly salary of 2,000 rubles, Ilyin illegally received additional 52,000 rubles (2,000 rubles x 26 months) from July 1, 1952 to September 1, 1954. In the Uralalmaz system, there were quite a number of ‘persons’ like Ilyin...”

After Stalin’s death, the Ministry of Internal Affairs’ SGU was liquidated, Uralalmaz came under the jurisdiction of the Ministry of Metallurgical Industry, and the Kusinlag came under the Ministry of Justice. New Minister I. F. Tevosyan hated people like Malgin fiercely and had every reason for this because his sister died in 1937 at the NKVD prison during an investigation. It is quite surprising that Malgin continued to remain the head of Uralalmaz. He felt extreme pressure, and his initiatives, such as nominating Uralalmaz employees for the Stalin Prize, were rejected at once. He was dismissed from the military service in 1954, and in 1957, as the head of Uralalmaz, he received the last order that read as follows “To: Head of the Uralalmaz Division, Comrade Malgin: a) dismantle the processing equipment at mothballed beneficiation factory No. 17 (screens, elevators, hydraulic monitors, pumps, classifiers, conveyors, etc.) that are required for the construction of a factory at the Mirny mine (the Yakut Autonomous Soviet Socialist Republic) and ship the equipment to Irkutsk before February 15, 1957; b) dismantle two NML-3 electrostatic separators at one of the Uralalmaz’ operating factories and ship them to Irkutsk before February 1, 1957.” Biting irony! This was exactly what Malgin had to do in 1952, and by 1957, he could probably have had the rank of general on his anniversary, as well as the fame of the ‘master’ of Yakutia’s diamonds!

Malgin shipped the abovementioned equipment to Yakutia and left Uralalmaz forever. He settled in the town of Teykovo, the Ivanovo Region, not far from his native village. And he even became the chairman of the executive committee of the Teykovo Town Council of Deputies. He was respected by his fellow countrymen, was an honorary citizen of the town, took part in erecting monuments to memorize the fallen defenders of the Motherland and spoke at numerous meetings as an honored veteran. However, one trouble happened because in March 1960, the Prosecutor General of the USSR protested the verdict in the case of the “branch of the Russian National Party”, which was investigated by Malgin. It turned out that it was a false charge and the case was completely framed, the methods of investigation were illegal, and the corresponding resolution taken at the Special Meeting at the NKVD of the USSR was canceled due to the lack of corpus delicti in the actions of the accused. But in this case, the Committee of State Security gave the last gift to its loyal ‘Wolf’ as the prosecutor’s protest was classified as ‘secret’ and data on the rehabilitation of people illegally repressed with the participation of Malgin became available only after the collapse of the USSR. Although even without this precaution, the honored veteran could easily escape revenge.

Collegiate counsellor (Colonel) G. V. Sarenko, a famous Russian architect awarded the Orders of St. Stanislav and St. Annet, ‘revealed’ by the NKVD as a member of the “Russian National Party”, was executed on 14.02.1938 and was rehabilitated on 21.04.1960. His burial place is unknown. His son, Sergeant Vasily Sarenko, died on the Southern Front in October, 1941. His burial place is unknown.

Colonel A. M. Malgin who was awarded the Order of the Red Star and the Order of the Red Banner survived the disintegration of the USSR and died at the age of 92, on October 14, 1998. He was buried with military honors corresponding to his rank and awards.

Sergey Goryainov for Rough&Polished


Annex: Autograph note of A. M. Malgin.