Eagle, I don't want to form an alliance anymore.

Could it be the 5% issue? Did the algorithm deem it reasonable and thus give local officials 5% room for manipulation, allowing for a small-scale corruption?

Yes, this is the truth!

If someone tampered with the production and supply of building materials, such as falsely reporting output, cutting corners, or using inferior materials, the original data would be irrefutable evidence. The original data only exists on the local server; burning it would destroy the evidence.

The corruption in housing allocation is just the tip of the iceberg; the real big fish is the corruption in the building materials supply chain!

The departments involved in this chain are not limited to community cadres and deputy directors of the district administrative committee.

The Construction Committee is responsible for the procurement and allocation of building materials, the Planning Committee is responsible for the formulation of production plans and the collection of data, the Information Technology Committee is responsible for the operation and maintenance of the information center and data management, and the local KGB in Azerbaijan is responsible for the security monitoring of the information center.

If these departments are all cooperating in covering it up, then this is not just a case of corruption related to housing allocation.

That's right! This is what he should be investigating. A systematic, cross-departmental corruption network involving the building materials supply chain is the case he, as a central investigator, should be facing. Housing allocation corruption is just a byproduct of this network—those officials made money on building materials and incidentally allocated newly built houses to their own people.

What convinced Gerdrian even more of his suspicion was that all the local departments were eager to close the case.

The KGB claimed it was rats gnawing on the wires, the Planning Commission said it was algorithm fine-tuning, the Construction Commission cooperated flawlessly, and the Information Commission dismissed the relevant officials... It seemed like a serious matter, but in reality, they were quickly sending away and isolating those who knew the inside story to prevent them from contacting Gerdrian.

Everyone is eager to put an end to this matter.

That's it! It's exactly the same familiar feeling! Normal bureaucracies never handle problems this quickly. If they don't offer bribes, Soviet bureaucrats will drag things out for three months, never two!

Okay, now we can write a report and have the higher-ups send young agents to solve the problem following their investigation.

He made a phone call, told his superiors which young men to send over for practice, and even booked plane tickets for tomorrow afternoon, just waiting to return to Moscow and call it a day.

He glanced at his watch—it was already two in the morning, time to go to sleep.

But I ate too much in the afternoon and I'm too full to sleep. I think I'll go for a walk in the nearby town and maybe take a look at the Ivanovsky Tower construction site. I've never seen what the Ivanovsky Tower looks like before!

At this time, Gerdrian was unaware that his accidental decision would uncover a wider network of hidden interests, ultimately igniting a fire that would spread throughout the entire Warsaw Pact.

Chapter 144 Under the Ghostly Light...

One evening in July 1993, at the construction site of the Ivanov House on the outskirts of Baku.

The construction site was surrounded by a fence, two meters high, topped with barbed wire and bearing the construction company's sign and a "No Trespassing" notice. Inside the fence, the framework of several buildings had already been erected, the tallest reaching nine stories; the concrete columns and beams formed a massive skeleton in the night. Tower crane booms hung horizontally in the air, their red warning lights flashing.

According to the Azerbaijani Construction Committee, this area is located in an earthquake zone—even though no earthquakes exceeding magnitude 3.7 have occurred in the last decade. Here, the Ivanov building is limited to nine stories; the strength of prefabricated construction cannot compare to that of cast-in-place reinforced concrete. In other non-earthquake zones, Ivanov buildings could reach up to 16 stories, but these are currently only on the design institute's blueprints, supposedly to be built after the Khrushchev buildings in earthquake zones have all been replaced.

Normally, Gerdrian was not allowed to enter the construction site at night. But he had two documents: an authorization for investigation from the Supreme Prosecutor's Office of the USSR and an order for cooperation from the KGB. These two documents together could open almost any door in the Soviet system.

The security guard glanced at the documents, made a phone call, and then let him in.

After entering the construction site, Gerdrian first found the KGB inspector stationed there.

All major Soviet state projects, from nuclear power plants to dams to military factories, were overseen by KGB officers during construction. This was a system established during the Andropov era—KGB officers tracked the entire construction process on-site, recording any irregularities or suspicious activity.

The inspector, a captain in his thirties, looked exhausted and had clearly been woken from his sleep. He led Gerdrian to the construction site's makeshift office, a converted shipping container, where the officer pulled a stack of documents from a metal cabinet.

"This is my record. I've been posting one every day since the project started. You can look at whatever you want, but I don't think it's very useful anyway."

Just like when Slava was demoted by Gorbachev to Ukraine to deal with the Chernobyl nuclear power plant a few years ago, many violations and shoddy workmanship during the rush to complete the construction at various sites were recorded by KGB officers, but the KGB only had the right to report, not the right to take action.

After half a century of expansion during the Cold War, the KGB's power had become terrifying. The Central Committee of the Communist Party of the Soviet Union could not allow its power to expand any further. Therefore, the KGB could not control the production plans of ministries. Instead, the KGB would send reports upwards, and the leaders would forward them to the ministries that had been reported for "study and handling," and then nothing would be done.

Back then, the poorly prepared report from Chernobyl Unit 2 was able to reach the hands of KGB Chairman Andropov, who even personally gave instructions and directives, but in the end, nothing came of it.

PS: You can review this event in Chapter 55.

The same was true here. Gerdrian sat down and flipped through the documents, which were very thick, several hundred pages long. The daily reports recorded the progress of the construction, the materials that arrived on site, and the problems that were discovered.

Gerdrian grew increasingly silent as he flipped through the report; he was all too familiar with the problems documented there!

Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

Corruption in the Soviet construction industry was nothing new. It grew alongside the Soviet planned economy.

In market economies, corruption in the construction industry begins as early as the bidding stage—bid rigging, tailored bidding conditions to ensure specific companies win bids, and bribery of evaluation experts.

There are also instances of substandard materials and equipment procurement, cutting corners on cement grade, steel bar diameter/material, and concrete mix proportions, falsely reporting purchase prices, and pocketing price differences (the client designates suppliers but there are related interests behind them). These are the most classic ways to make money, because material costs account for a large proportion of the total project cost, and it is difficult to inspect each batch on-site.

PS: My family is in the real estate construction business, and I know a lot about the shady practices behind the scenes, including how to instigate local thugs to drive out holdout residents.

Hidden factories, unseen by residents in the short term, are particularly problematic. Projects like foundation treatment, rebar tying, and waterproofing layer pipe embedding—which are covered up after completion and cannot be directly inspected by the naked eye—are often overlooked. In some cases, construction waste is even used as backfill material for warehouse walls. During construction, numerous additional work orders are issued to inflate quantities and inflate costs. Design changes often circumvent the original bidding terms, becoming a legitimate channel for additional payments.

However, the corruption patterns in the construction industry during the planned economy period under the Soviet system are quite different from those under the market economy. There was no market pricing or free bidding in the construction industry there, so corruption was not manifested as "collecting more money" but rather as the extra-systemic allocation of materials and labor.

The KGB captain's records were filled with these forms—

Material interception. Due to the launch of a new round of large-scale construction projects in the Soviet Union, there was a shortage of building materials such as cement, steel bars, and timber. Whoever controlled the allocation of warehouse materials and could obtain extra quotas held power. The head of the materials department at a construction site would "intercept" a portion of the building materials that were supposed to be allocated to their site and redirect them to another project for someone with connections—perhaps to a private villa being renovated by a certain cadre, or perhaps to a project manager at another site who owed them a favor.

OGAS can't handle this. The OGAS terminal only knows how much material was received at the construction site—the delivery slip is signed, and the system records that the goods have arrived.

After the receipt was signed for, was the steel bar inserted into the foundation of the Ivanov building, or was it loaded onto a truck and transported to the cadre's villa? The system didn't know.

There's also the classic case of falsifying progress targets. To meet planned quotas and receive bonuses, construction sites inflate their construction progress, writing the seventh floor on the report when the actual building is only the fifth. The "completed" work is reported to higher authorities, but the funds are received while the actual project is delayed.

It is not uncommon for cadres to receive salaries without working. This involves falsely reporting the number of employees, listing non-existent workers on project lists, and having their wages divided among others. Alternatively, it involves assigning actual workers to other tasks, such as using state-owned equipment and materials to build private villas for cadres outside of working hours.

Yes, the Soviet system dictated that high-ranking officials could indeed own luxury cars and villas while in office, and theoretically, these items would be nationalized the moment they stepped down.

However, this does not prevent these officials from abusing their power to build private villas for themselves during their tenure.

However, none of the above were things that Gerdrian needed to deal with. What Gerdrian was most concerned about was the use of inferior materials—was the concrete grade sufficient? Did the diameter of the reinforcing steel meet the requirements? Was the thickness of the insulation layer as designed?

The captain's log mentioned several times: "On XX day, the label of the precast concrete slabs that arrived on site was found to be blurry, and it was impossible to confirm whether they met the standards," "On XX day, the diameter deviation of the steel bars sampled was on the edge of the allowable range," and "On XX day, the thickness of the insulation board was thinner than the design requirements, and the construction party explained it as a difference in production batches."

Each record was followed by the officer's instructions: "Reported to the Construction Committee, Department XX." "Construction supervisor notified." "Awaiting reply."

What's the reply?

Gerdrian found the replies, most of which came several weeks later, and all were worded exactly the same: "We have been informed and have asked the relevant departments to make rectifications."

"Has it been rectified?" Gerdrian asked.

The officer shrugged.

Gerdrian sighed and put the records away.

“Oh, and one more thing,” the officer added, “there’s a slight discrepancy between the amount of building materials arriving in recent months and the planned targets set by the OGAS system.”

"What's wrong?"

"The system said it should be 100 tons of steel bars, but it actually arrived at 112 tons, a difference of 12%. The extra ones were sold off somewhere else."

Huh? Wasn't it said that the algorithm adjustment error was 5%? Who's lying?

Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

Gerdrian stayed at the construction site until dawn. He went to see the building himself, and climbed onto the framework of the Ivanov building, which had been built up to the ninth floor, with a flashlight in hand.

The framework was exposed; interior decoration hadn't started yet, and the concrete columns and beams were starkly exposed to the night sky. He shone his flashlight on the cross-sections of several columns—checking for honeycomb-like pits in the concrete surface and the exposed rebar.

He wasn't a construction engineer, so he couldn't see anything too technical. But he noticed a problem that any ordinary person could see: several columns had noticeably irregular small holes on their concrete surfaces, indicating that the concrete hadn't been properly compacted during pouring.

Honeycombing doesn't necessarily mean a structural problem—if it's just on the surface, it can be repaired. But if it's deep within the core—that's a structural defect! He pulled at it, even pulling out a steel rebar?

Gerdrian looked at his hand in disbelief and weighed it again.

"boom!"

"These bastards... they're destroying the people's trust in the Party!"

"I'm angry," Gerdrian said, but the KGB officer accompanying him pointed to a sign next to him, which made him even more confused.

The sign reads: "If the inspection fails, it will be demolished and rebuilt within 7 days."

"Hey, it seems the person who did the inspection was quite responsible." Gerdrian breathed a sigh of relief.

"Guess whether the loose construction was intentional or accidental? Comrade, the steel bar you pulled out was perfectly intact. Whether it's scrapped or resold later is not something the construction company needs to consider," the officer added.

Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

After returning to his hotel from the construction site, Gerdrian wrote a report overnight and sent it back to the Central Prosecutor's Office.

The report states that the construction of the Ivanovsky Tower in Azerbaijan suffers from systemic problems, including the withholding of materials, falsification of progress reports, and the use of substandard materials. Records from the KGB site inspector corroborate this. It is recommended that the Central Committee dispatch a special inspection team to conduct a comprehensive inspection of all Ivanovsky Tower construction sites across the Soviet Union.

A reply came a few days after the report was sent out.

The reply did not come from the procuratorate's superiors, but from a more vague "above," conveyed through an informal channel.

This means that this phenomenon is not unique to Azerbaijan; similar problems exist at construction sites throughout the Soviet Union! If a comprehensive inspection were conducted now and every construction site found to have problems—what would you do? Halt construction?

Thousands of construction sites halted simultaneously, and the relocation and resettlement plans for tens of millions of people were all postponed? No one in the State Construction Commission, from top to bottom, could escape responsibility?

Besides, there's no problem with the quality! At most, it's just deceiving the government to resell supplies. Don't go too far and end up leaving everyone with nothing to gain.

Moreover, "the higher-ups" implied that if this matter escalates, it will affect more than just the construction committee. The situation in Azerbaijan also involves Committee Member Aliyev.

Heydar Aliyev was a member of the Supreme Politburo and First Deputy Chairman of the Council of Ministers of the USSR. He was Azerbaijani. A veteran of the central government, he had been there since the Andropov era and was a former KGB officer!

Gerdrian knew very well that Aliyev was one of the most untouchable figures in the Soviet power pyramid. Aliyev had cultivated his influence in Azerbaijan for decades, and his people occupied every important position in the country.

The central government's message is: You've found something, that's good. Write it in the report, file it, and then come back.

...

Gerdrian did not return. Because he still had one problem unresolved—a problem that had been hanging over him ever since the burned-down information center.

Five percent.

The number of building materials delivered was 12% higher than the planned target, but the original data from the information center differed from the central backup data by 5%.

Who decided on these indicators and data? If it was deliberately intercepted, then the logistics records of where the building materials went should be traceable. Just send an inspection team to investigate which official the missing laborers from the construction site were building luxury villas for. They would catch them red-handed!

But what if this data wasn't adjusted manually, but rather automatically by OGAS's algorithm?

Gerdrian sat in his hotel room staring at the ceiling.

A thought suddenly occurred to him:

Throughout his investigation—from community officials tampering with files, to the head of the information center installing filtering modules, to the deputy director issuing orders to delete posts, to the shadow of the construction committee, to the interception of materials and falsification of progress at the construction site—all these people were doing the same thing: circumventing the censorship of the information system!

They're playing a cat-and-mouse game with the system. They change the data the system records; they intercept packages after they're signed for, and they falsify reports when the system checks progress.

But these are all peripheral operations, things done at the interface between people and machines on the edge of the system, taking advantage of those gaps that the machines can't reach.

What if... what if someone didn't tamper with the system at its periphery, but instead directly affected its core?

What if someone modifies the OGAS algorithm, those mathematical formulas that determine how much to produce, how much to allocate, and where to send it?

Then they wouldn't need to secretly intercept materials at the construction site. They could have the algorithm directly generate a plan with "5% less," and the system would automatically treat it as a normal optimization result.

No one violated the rules because the algorithm said it was correct.

But who has the ability to modify the algorithm?

That large group of technocrats.

Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

Gerdrian went to prison. The head of the burned-down information center had been under investigation and detained in a detention facility near Baku after being dismissed.

Gerdrian entered the interrogation room.

"Who wrote the OGAS algorithm used for scheduling the production of building materials for the Ivanov building? Who has the authority to adjust it?"

The person in charge looked at him and said, "I don't know."

"You're in charge of the information center and you don't know?"

“I’m in charge of daily maintenance and operation! Server hardware, network connection, data backup—that’s my job. Algorithms aren’t my responsibility; I don’t understand them, those things—” He made a gesture, as if indicating something complex.

"Those formulas and codes were deployed by the central Ministry of Electronics and Information Technology. When they come to us, we just run them, and if there are any problems, we just report them, not fix them."

"Then who will fix it?"

"It should be the central government? Or a counterpart research institute in Azerbaijan."

Which research institute?

The person in charge thought for a moment and said, "The 063 Cybernetics Institute is responsible for the maintenance and optimization of the OGAS algorithm in this region."

Sigrún has taught at the Iceland University of the Arts as a part-time lecturer since and was Dean of the Department of Fine Art from -. In – she held a research position at Reykjavík Art Museum focusing on the role of women in Icelandic art. She studied fine art at the Icelandic College of Arts and Crafts and at Pratt Institute, New York, and holds BA and MA degrees in art history and philosophy from the University of Iceland. Sigrún lives and works in Iceland.

Before going to the 063 Cybernetics Institute, Gerdrian first went to the factory that produced prefabricated panels.

The factory was located in an industrial area about sixty kilometers south of Baku. Several gray factory buildings housed production lines for casting precast concrete components. He found the factory director and the factory's workers' Soviet chairman.

"Where did your production plan come from?" Gerdrian asked.

"Of course it was sent by the system!"

The factory manager was a middle-aged man in his fifties with calloused hands, clearly having worked in the factory for decades.

"The system updates the planned targets every week. How many tons of precast slabs to produce next week, what specifications, and which construction site to deliver them to are all ordered from the system."