Monday, February 13, 2012


The Power Vertical

Khodorkovsky, The Kremlin, And 'The Thaw'

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Many Kremlin-watchers point to oil tycoon Mikhail Khodorkovsky's October 2003 arrest as the point when it became crystal-clear where Vladimir Putin's Russia was headed. Opposition leaders are now saying that Khodorkovsky's fate has again become a litmus test -- this time for President Dmitry Medvedev.

On March 2, Khodorkovsky and his business partner Platon Lebedev will face new charges of embezzling and laundering more than $20 billion.

Critics say the case -- like Khodorkovsky's 2005 trial in which he was convicted of tax evasion and fraud and sentenced to eight years in prison -- is a fabricated and made-to-order affair to make sure that he stays in prison for the foreseeable future.

After serving half of his eight-year sentence, Khodorkovsky is eligible to apply for early release. He has already been denied parole once, but the Kremlin apparently doesn't want to take any chances. A conviction in the new trial could lead to an additional sentence of at least 15 and as many as 27 years.

In a recent interview with Vladimir Kara-Murza of RFE/RL's Russian Service, Aleksandr Osovtsov, a member of the opposition group Solidarity, said the new trial will put Medvedev's recent overtures to the liberal opposition and pledges to establish an independent justice system to the test:

For Medvedev the situation is very interesting. Because while this is the second Khodorkovsky trial, it is the first one for Medvedev as president. All this is a test of all his talk about how freedom is better than the lack of freedom, and [his promises to] make courts more independent. It is a moment of truth. If there is another guilty verdict then nobody among those who hoped and counted on changes from Medvedev will have any more illusions about this. Whether Medvedev likes it or not, the Khodorkovsky and Lebedev trial has become the only factor whether or not his declarations will be trusted.

Khodorkovsky's mother, Marina Khodorkovskaya, also says she is placing her hope in Medvedev:

I hope that our new president -- who isn't a Petersburg bandit, but a person from a good academic family who is a lawyer by education -- will not behave in such a lawless manner like those previous comrades.

According to Khodorkovsky himself -- as well as his supporters and independent observers who have followed his case closely -- the main instigator of the Kremlin's campaign against him was First Deputy Prime Minister Igor Sechin. After Khodorkovsky's Yukos oil company was broken up, the majority of its assets were taken over by the state-run oil giant Rosneft, which Sechin chairs.

Opposition politician Vladimir Ryzhkov says anybody placing their hopes in Medvedev will be severely disappointed. Speaking to Andrei Shary of RFE/RL's Russian Service, Ryzhkov said whatever Medvedev might want to do, he isn't the one calling the shots:

The transfer of authority [to Medvedev] was strictly cosmetic. Vladimir Putin is still in charge. And by all appearances, the  people who made the decision [to initiate a new criminal case against Khodorkovsky and Lebedev]  are the same people who made the decision several years ago to destroy Yukos.

Anybody who followed Russia in the 1990s knows that Khodorkovsky -- like all the oligarchs of that period -- was no angel. He used his connections in former President Boris Yeltsin's Kremlin to acquire and expand his business empire on the cheap, evade taxes, and undermine the interests of minority shareholders.
 
But what set him apart in the early part of this decade, was that he decided to go straight. When I interviewed Khodorkovsky in March 2000 he said he planned to bring "efficiency and transparency" to his Yukos oil company's operations.

At the time I was skeptical (and I wasn't alone in that assessment). But the funny thing was that Khodorkovsky made good on his promise.  The company paid its delinquent taxes, posted healthy profits, and paid stockholders hefty dividends. He won plaudits in the West and became Russia's richest man. Yukos became known as one of Russia's best-run companies.

And this unexpected success, combined with Khodorkovsky's desire to dabble in politics, proved to be his undoing.  The last thing Putin's Kremlin wanted was to have a clean and politically independent entrepreneur roaming the countryside.

And the very last thing the Kremlin needs now is a political martyr walking the streets as the economy tanks and the legitimacy of the regime is coming under threat.

-- Brian Whitmore  

Tags: Mikhail Khodorkovsky , sechin , yukos , Vladimir Putin , medvedev , trial

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by: La Russophobe from: USA
February 27, 2009 19:20
Ryzhkov has it right when he states "anybody placing their hopes in Medvedev will be severely disappointed." Khodorkovsky himself already knows this, because prior to his last parole hearing he made a number of conciliatory statements about the Kremlin, including blaming Georgia for the war in Ossetia, statements that many like me took for a sell out. The Kremlin spit on those efforts and denied parole, laughing merrily no doubt.

What Khodorkovsky's people ought to be doing is using this trial as the chance to galvanize opposition and directly challenge the authority of Medvedev and Putin. Instead, they are playing directly into the Kremlin's hands with their "wait and see" attitude that implies legitimacy and is exacltly what the Kremlin wants.

After Khodorkovsky has been convicted again and sent to prison for life, it will be far to late for mournful remonstrations.

by: Ralph Land,CBE from: London
March 01, 2009 17:01
Some two years before Khodorkovski's arrest I was approached by Yukos to help the company in training Yukos managers on the imlementation of Corporate Governance. At the time I was the Chairman of the Russo-British Chamber of Commerce and the Chairman of a small UK software company that developed a computer based system to enable companies to implement and monitor compliance with corporate govenance rules and best practice. Under Khordokovski Yukos was the first organisation in Russia to purchase the package and to start implemntation. Evidence I believe that his conversion to good and acceptable business practice was real and not simply window dressing.

Ralph Land


by: Joker
March 02, 2009 08:04
"He used his connections in former President Boris Yeltsin's Kremlin to acquire and expand his business empire on the cheap, evade taxes, and undermine the interests of minority shareholders".

And

"The last thing Putin's Kremlin wanted was to have a clean and politically independent entrepreneur roaming the countryside".

Does the author read what he writes?

by: Rita
March 02, 2009 14:33
the politics is always so dirty, it's almost impossible to find out who is right and who is wrong - address http://rapid4me.com/ to find and download a film about these events

About This Blog

The Power Vertical is a blog written especially for Russia wonks and obsessive Kremlin watchers by Brian Whitmore. It covers emerging and developing trends in Russian politics, shining a spotlight on the high-stakes power struggles, machinations, and clashing interests that shape Kremlin policy today. Check out The Power Vertical Facebook page or