The local branches of the Russian Forestry Service, the leskhozy, were known for their efficiency and management skills in the Soviet era and were one of the very few community-based "Soviet-type" institutions to survive the transition. This article examines the role of the leskhozy in the new market economy. Our analysis is based on data from interviews with informants attached to the forestry sector in the Murmansk area. In some cases their knowledge of the leskhozy stretches back to the emergence of the system in 1947. Our principal finding is that the struggle to survive as a federal body in the current legal and economic climate is forcing the leskhozy to relegate sustainable forestry management, presumably their primary raison d'être, to the lower portions of their list of priorities. Several consequences result. There is a heightened incidence of illegal logging, and corruption informs the allocation of forest areas to private interests. Stumpage prices have plummeted as timber from subsidized commercial cutting (ostensibly sanitary cutting or thinning) has flooded the markets. The root cause of these tribulations lies with the market-based harvesting permit system. Its introduction in the 1990s did little to eliminate the self-seeking practices of the old Soviet forestry management hierarchies. In the free market, local forestry managers can turn their dual responsibilities to their own advantage inasmuch as they control the allocation of harvesting permits while at the same time controlling logging practices.