Date: 1994-08-29


Phil McCombs
Washington Post
August 29, 1994

For hundreds of families across the United States, Nina Kostina has filled an aching need. Desperate for a child, frustrated by lengthy adoption procedures, they've turned to her when other avenues have failed -- and she's delivered. In the past three years, she has been the driving force behind the adoptions of 600 Russian orphans by Americans

And that's not all. This vivacious 42-year-old Russian emigre has set up a virtual social services network along with her adoption business. She has paid for a new roof for one Russian orphanage and purchased a van for another. Through her nonprofit firm, Frank Associates Child Assistance International, she has sent Russian single mothers on vacations and bought wheelchairs for disabled children.

But Kostina is in trouble. To achieve her goals, she has not always gone by the book, and the methods that succeeded for her in one culture have backfired in the other. Now her company is under investigation by four government agencies in the United States for, among other things, the forgeries of an FBI letter and a Virginia adoption agency license. Meanwhile, Russia seems close to passing a law that could put her out of business.

"Yes, I made mistakes," Kostina said. "I'm sloppy. My management is bad ... but I didn't steal anything. Nobody was killed. The bottom-line outcome is we helped a lot of families. We saved a lot of kids."

Kostina is known in the adoption field as a "facilitator" or "foreign source" of children. Working out of a small suite of offices on 15th Street NW, she employs 20 "coordinators" in Russia who locate children and make official arrangements to get them out. When American adoption agencies approach her with their clients, she arranges for the adoptive parents to travel to Russia, meet their child and go home together. She also orders a medical and family history of each child. For all this, shereceives a $65,000-a-year salary.

From the beginning, Kostina was skillful in negotiating the bureaucracy of her native land, outpacing her competitors in the adoption community and winning praise from many new parents for her speed and efficiency. There are many facilitators like Kostina -- most of them living abroad -- who know how to get things done in their native cultures. "Without local help," says a State Department advisory on Russian adoptions, "negotiating the multilayered bureaucracy is virtually impossible."

While the cost of a Russian adoption tends to be higher than adopting domestically -- approximately $13,500, plus travel costs, translation fees and other incidentals -- the process is faster. Domestically, it can take months or even years.

James and Pamela Fahs of Endwell, N.Y., for example, had tried infertility treatments and a number of different adoption possibilities. None worked. Finally, they heard about Russian orphans from a friend and signed up with an agency for which Kostina was the foreign source.

The Fahses traveled to Russia in December and were introduced to two children in a Siberian orphanage. While a coordinator tried to get the paperwork straight, the couple visited the children daily for two weeks.

Because of bureaucratic roadblocks, James Fahs said, they had to return home without the children. They were devastated. But at that point, Fahs said, Kostina flew to Russia and drove 200 miles through the Siberian winter to plead personally -- and successfully -- with the orphanage's chief doctor.

"She was very concerned," said Pamela Fahs, now the happy mother of Laura and Alex. "She was able to go in there and get those kids out. She certainly seemed to go above and beyond what I would have expected."

Kostina prides herself on her ability to cut through red tape. "We've had families," she said, "six to eight weeks after they stepped into our office return with their child." Most of the children are under 3 years of age.

In Russia today, the government permits only sick or disabled children to be adopted internationally. But over-diagnosis means that 30 percent of the kids adopted by foreigners "turn out to be healthy," according to Alla Dzugayeva, a senior Russian education ministry official who monitors adoptions.

In interviews, many couples who have adopted with Kostina's help said they were aware of the health risks when they decided to adopt a Russian orphan. Often, diagnoses such as "developmentally delayed" turned out to be no problem once the child was out of the orphanage and romping normally around their home.

Even so, there have been some complaints.

"It finally hit home to us; she was just trying to sell us on any child," said Ken Drilling of St. Louis. He and his wife complained to D.C. licensing officials that Kostina pressured them to adopt, triggering an investigation by the Department of Consumer and Regulatory Affairs. Kostina denied that she pressured the Drillings. A department spokeswoman said the investigation is ongoing.

Another couple, Marilyn Harper and David Johnson of Madison, Wis., sued Kostina and her former agency for $4 million, alleging that she failed to disclose that their child had fetal alcohol syndrome. Kostina responded in court filings that she gave them all the medical information she had and that Johnson was given the child's full medical history when he went to Russia. The lawsuit is pending in D.C. Superior Court.

Since international adoptions are largely unregulated, 66 nations -- including the United States and Russia -- signed a treaty May 28, 1993, that would set standards and safeguards, including the establishment of a central authority in each country to supervise adoptions.

While many in the United States believe this would help eliminate abuses, others fear that a new layer of bureaucracy would slow adoptions. The U.S. Senate and legislatures in other countries must approve the treaty before it goes into effect, and the Russian parliament is among those expected to ratify.

Russia is also expected to limit adoptions to those arranged by licensed agencies. This would eliminate independent facilitators like Kostina.

"They'll pass it, and we'll be out," she said. "I hate to think about it. ... What do I do?"

The Program

Since the collapse of the Soviet Union in 1991, roughly 2,000 Russian children have been adopted by Americans, according to the State Department. Kostina attributes her success at facilitating many of these adoptions -- 30 percent, if her numbers are accurate -- to her program.

She sponsors charities for disadvantaged children in Russia and has contacts all the way to First Lady Naina Yeltsin. Kostina arranged for a team of American and Russian plastic surgeons to perform facial surgery on 65 orphans, and she brings delegations of Russian officials to the United States to show them how adopted children are faring here. She also gives generous gifts -- medical supplies, clothing, toys, food -- to orphanages housing many of Russia's estimated 400,000 orphaned and abandoned kids.

"To make this work, you have to work on every layer" of Russian bureaucracy, she said. Rather than simply offering money, she said, "we come and say, 'What do you need?' Then they feel good. They don't feel they're selling the children."

Kostina expanded her program to the United States this summer, arranging an exchange of disabled Russian and American teenagers with a $45,000 grant from the U.S. Information Agency. Bob Persiko, head of the USIA's Russian secondary school program, said the grant was small. "We look on it as a test to see her {Kostina's} abilities."

None of her competitors in adoptions is involved in such a broad range of activities, Kostina said.

Yet some of them consider her overzealous and territorial.

"She's become a little Napoleon," said Tatiana Hogan, who as a small adoption facilitator from Northern Virginia is a professional rival of Kostina's. Hogan said Siberian friends told her that Kostina persuaded officials to halt Hogan's work in the city of Irkutsk, leaving several disabled children stranded.

Kostina denied that she interfered with Hogan's work. She added that she doesn't work in Irkutsk and that, in any case, no children could be stranded because if one facilitator can't get them out, another will.

No one disputes that the adoption field is competitive. An internal Frank memo said that officials in one city "are under pressure from two other adoption agencies and if we keep being passive we are going to lose this territory!"

"What's bad about this?" said Kostina. "You work in the territory, you want to be number one."

The Companies

Kostina got into the adoption field by happenstance. The daughter of Russian geologists, she'd lived in China as a child, studied Russian literature at Moscow State University and married a biochemist. The couple emigrated to Western Europe in 1987, and after their marriage broke up she was hired as a translator for U.S. Wheat Associates, an export promotion organization funded by 17 wheat-producing states that receives annual grants from the U.S. Department of Agriculture.

Promoted to U.S. Wheat's program director for the former Soviet Union, Kostina traveled frequently from the organization's Washington headquarters to Moscow, and eventually moved there. In 1991, while helping an American firm donate pasta to Russian orphanages, she saw visiting "American farmers so troubled because the kids were crawling over them and calling them 'Papa.' "

The following year, Kostina and her boss at U.S. Wheat, Ronald G. Fraase, founded Frank Associates, deriving the name from their own: Fra + N.K. They incorporated the nonprofit company in Maryland on Jan. 6, 1992, and began facilitating adoptions. They took in $522,289 for 70 adoptions in their first year, according to IRS filings, and had plans to expand the business substantially.

Kostina quit U.S. Wheat in August 1992 to work full time on adoptions, and Fraase quit the following year. At first, they worked in conjunction with various adoption agencies, but soon teamed with adoption professional Linda Brownlee to start a nonprofit, D.C.-licensed agency of their own, Franklin Adoption Center (adding the "lin" for Linda). It seemed to Kostina "a perfect model. Linda was a social worker, Ron a businessman. I am creative."

Under D.C. law, the functions of locating the children and finding qualified parents are kept separate. While an unlicensed facilitator may locate children abroad, only a social worker can "place" a child with a family. Under this new arrangement, Kostina wore her Frank hat to acquire the children, then helped in the process at Franklin as they were placed, although a social worker was always involved. By November, Franklin was licensed and operating.

At the same time, Fraase ran En Route Travel on K Street NW, which he and Kostina incorporated as a for-profit business on June 28, 1993. The agency tickets most of Frank's adoptive parents for their travels to Russia, and a Frank Associates news release describes it as a "travel agency with philanthropic interest in orphans." Frank's USIA grant application noted that En Route would do the ticketing for the student exchange.

Keeping all these ventures separate has been problematic.

Last winter, according to an internal Frank memo, a "huge" mailing went out to clients of the nonprofit Frank company that also included "some promotion material" for En Route, the for-profit travel agency. "That wasn't a very good idea," said Fraase. "When we're crossing over like we are, one has to be extremely careful. ... I should have known better."

According to U.S. Department of Agriculture officials, the department's inspector general is investigating whether Kostina misused any of the $10 million in grain marketing promotion and development grants that USDA gave U.S. Wheat in 1992. From January to August of that year, Kostina was a full-time employee of U.S. Wheat at the same time she was, according to Frank Associates' tax return, working 50 hours a week on adoptions. Kostina declined to comment on the investigation.

And the Franklin Adoption Center arrangement fell apart last September after Kostina and Brownlee had several disagreements. Among other things, Fraase charged in a letter to the Franklin board that Brownlee "tried to convince our business associates in Russia to deal directly with Franklin rather than through Frank. ... She cannot continue to solicit business directly in Russia. ... Frank's chief assets are its working relationships in Russia and its highly dedicated staff."

Brownlee said she "never, never" tried to deal directly with Frank's coordinators. In turn, she fired off a letter to D.C. officials saying that she had found out by chance about a dozen families who claimed to be clients of Franklin but of whom she had never heard. She accused Fraase of placing children without her knowledge and accepting the fees. Fraase responded that he had been trying to do right by the families, but the falling-out with her left him stranded without a social worker.

Today, Brownlee continues to run the adoption agency under a different name and has no dealings with Frank.

The FBI and the Mob

To protect her business, Kostina said she's made the fight against organized crime part of her program. Gangs are a powerful force in post-Soviet Russia, and when gangsters tried to shake down employees in her Moscow office, she went to the police.

"They helped us," she said.

As a goodwill gesture in return, Kostina said she offered to pay for a delegation of top Russian organized-crime fighters to visit Washington and meet with FBI officials and others.

In planning this, Kostina contacted George Grotz, chief of the FBI's international training unit. Grotz routinely briefs foreign police and agreed to do so in this case.

However, Kostina said, police in Moscow told Frank Associates that they needed invitations from the FBI to make the trip. But the FBI declined to provide them.

Then, Kostina said, two of her employees prepared fake FBI letters of invitation without her knowledge. Dated April 21, 1994, they were addressed to First Minister of the Interior Mikhail Yegorov, Russia's top organized-crime fighter, and Vladimir Pankratov, a key Moscow police Mafia-buster, inviting them and several subordinates to Washington. The letter to Yegorov addressed him as "Brigadoon General."

Bearing FBI letterheads and signed "George E. Grotz," the letters contained several other errors and seemed to have been written by someone not fully conversant with English grammar. "Our agency," they read, "is nearly completed with the necessary clearances and final arrangements for an appropriate program for your group has been finalized. I sincerely hope that arrangements on your side is near fulfillment."

"Those letters were not written by the FBI," a spokesman said after The Washington Post obtained copies and made an inquiry. The spokesman said Grotz was "incredulous" on seeing them, and that the matter is under investigation.

The police visit took place in mid-May, though instead of the top brass Kostina had sought, only one lower-ranking police official, Nikolai Koptev, showed up, along with a press aide. As planned, they were briefed by Grotz, who wasn't aware of the fake letters at the time.

Kostina said that the forgeries were "a stupid thing" but were created without "any bad intentions." She added that such a thing "will never happen again."

The License

Like other facilitators, Kostina is not required to be licensed in the United States or in Russia. However, she must work through licensed American adoption agencies to place the children with families here. She does most of her placements now -- about 20 per month -- through World Child, a D.C. agency.

Kostina and Fraase realized early on that having their own license would make things smoother. But after the split with Linda Brownlee last September, they were determined to do things differently. Though they immediately began working primarily through World Child, Kostina didn't want to actually merge with that agency, she said, because she wanted no more "fights, discussions, no more partners."

Yet it already seemed the Russian parliament could soon pass the law requiring her to be licensed. "We were in a big rush to get something," she said. So she and Fraase applied for an adoption license for Frank in the District, and at the same time began an urgent search for an agency they could buy.

Meanwhile, Kostina said, she arranged a quick fix.

She'd gotten together with Sharon Richardson, executive director of a licensed Richmond agency, Coordinators/2. Richardson, who had several clients eager to adopt Russian children, agreed to change the name of her agency to include the word "Frank" in order "to facilitate that piece in Russia."

But the first official paper with "Frank" on it didn't arrive from Virginia until Dec. 6, and the actual license with the changed name didn't arrive until March 1. When it did, it included a statement saying, "The modification does not convey a Child Placing Agency License to Frank Associates."

Kostina said she didn't wait for the official name change. Instead, she asked "a gentleman staying in my home," whom she declined to name, to type the word "FRANK" in front of "COORDINATORS/2, INC." on copies of the old Coordinators/2 license.

Copies of the forgeries were translated into Russian and notarized in the Frank Associates office. Then, Kostina said, she gave the falsified documents to her coordinators in Russia for use "if anyone asks you about our license."

"I know I was not supposed to do that," she said. However, she said she didn't consider it "cheating," because "at any time, my new license was supposed to come." A spokeswoman for the Virginia Department of Social Services said the matter is under investigation.

Richardson, asked about the forgery, said she knew nothing about it. "This is just unbelievable to me," she said. "... I feel sick to my stomach." But later, she said she continues to work with Kostina.

At about the same time, last October, Fraase posted over the CompuServe computer network an offer to purchase an adoption agency.

"To continue our work in the former Soviet Union," the message said, "we need an adoption agency license and I need it quickly. I want an agency that is totally controlled by my company so I do not have to spend my time worrying when I will be stabbed in the back."

Christine Adamec, publisher of Adoption Advocates Newsletter, a publication for professionals, said she was surprised to receive the message.

"I never heard of anybody wanting to buy an adoption agency," Adamec said. "It's not like selling a print shop. People invest their personalities into them. And one that's real 'controllable' -- some alarms go off. Agencies have policies and procedures created to protect parents, and I wouldn't think it good to have an agency that was a puppet to the owner."

Frank's D.C. license application has remained stalled while city officials have investigated several complaints.

A couple of them involved Fraase, who as a result resigned as president in January in what Kostina called "a maneuver" to speed the licensing process. Minutes from a Frank board meeting said the resignation was "in no way" an admission of wrongdoing "but only an effort to remove any cloud of suspicion." After his resignation, Fraase continued as a consultant to Frank.

The Families

Despite her problems, Kostina has plenty of happy customers.

"Nina's close to a saint," said adoptive parent Bob LeChevalier of Fairfax. "She'll let nothing stand in the way of her mission, which is the kids." Carol Cohen of Silver Spring said she and her husband, Dave Gross, are "thrilled about our adoption experience." And Meg Shultz of Bethesda, the daughter of former secretary of state George Shultz who has adopted two Russian children through Kostina, called her "a great gal. She's really done something magnificent."

In the Washington area, many of Kostina's clients meet from time to time at parties that Kostina hosts in a church basement or the homes of adoptive couples. The parents swap stories of adoption adventures while the children play and visiting Russian officials look on. Kostina is a bright presence at these events, chatting, dancing with the children and eagerly showing the results of her work to her visitors.

"The parents are happy, and the kids are happy," said LeChevalier. He added that he recently checked with 60 of Kostina's clients in the Washington area "and there's not a single one that has any negative feelings."

As for Kostina, she said she's surprised by the problems she has encountered. After operating in a society where bending the rules is commonplace, she seems startled to find that infractions she regards as minor are taken seriously here.

"Tiny, tiny details," she responded to some of the charges made against her. If it weren't for this article, she speculated, the FBI would forget about the forged letters; "you're making a big deal out of nothing." She portrays herself as a savior battling "regulations ... paperwork {and} bureaucrats" to save helpless kids.

As Winston Wilson, the president of U.S. Wheat Associates put it, "Cutting corners, it's the Russian way. And Nina's a good Russian."

Like a good Russian, she is also philosophical about her problems. "It's a good lesson," she said. "It's the system {in the United States} that I ignored. I didn't count on it."

Washington Post special correspondent Masha Lipman reported from Moscow

Nina Kostina, here with Nicholas McKay, a Russian adoptee, has helped "facilitate" the adoptions of 600 Russian orphans by Americans, but in her zeal admits she has not always gone by the book.

Frank Associates' Nina Kostina, right, with Ann Marie Gleason and her children Tatyana and Stefan at a recent party for Russian adoptees, their American parents and Russians from the children's former communities


Pound Pup Legacy