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Russia Report: May 31, 2005

31 May 2005, Volume 5, Number 21

By Robert Coalson

After five days of reading the verdict in the case of former Yukos CEO Mikhail Khodorkovskii and his fellow defendants, the judges of Moscow's Meshchanskii Raion court on 20 May were less than one-third of the way through the 1,000-page document. Moreover, they had not yet issued a single solid decision, although all observers agreed that the language and tone of the verdict indicates the three defendants would almost certainly be convicted on all charges.

According to "Nezavisimaya gazeta" on 19 May, the judges are reading between 20 and 40 pages of the verdict each day, cutting each day's session short after about three hours of reading. Lawyer Pavel Astakhov told "Moskovskie novosti," No. 19, that he has never known a court to produce such a long verdict or to read it so slowly. He said that in the embezzlement trial of Valentina Soloveva, the court read out its 860-page verdict in two days. In the case of Alfa-Bank's libel claim against the Kommersant publishing house, Astakhov said, the court extended its working day until 8 p.m. in order to read the entire verdict in one day. He declined to speculate on why the court in the Khodorkovskii case is taking so long to deliver its verdict, saying that the Moscow City Lawyers Collegium prohibits attorneys from commenting on cases in which they are not directly involved.

Defense lawyer Genrikh Padva told "Nezavisimaya gazeta" on 20 May, "I don't remember what the record is for reading a verdict in my experience, but I can say that the Meshchanskii Raion Court of Moscow has already broken it." Fellow defense lawyer Yurii Shmidt told Regnum on 20 May that the defense team now expects the reading of the verdict to last at least 10 more days.

When the court began reading the verdict on 16 May, almost no one expected that the process would take more than two days. Pro-Khodorkovskii demonstrators applied for a permit to hold a demonstration outside the court on 16 May from 10 a.m. until 2 p.m. However, anti-Khodorkovskii protesters seemed more prescient, "Moskovskie novosti" reported. Two Moscow residents identified only as Sergei Basyukov and S.A. Michurin applied to hold a demonstration outside the courthouse each day from 16 May until 20 May from 9 a.m. until 6 p.m.

Many media reports noted that the anti-Khodorkovskii protesters were particularly well organized, sporting professionally printed signs in Russian and English. "Nezavisimaya gazeta," which is controlled by former oligarch Boris Berezovskii, a dedicated foe of President Vladimir Putin, reported on 19 May that Committee-2008 press spokeswoman Marina Litvinovich had presented photographs of young men carrying stacks of anti-Khodorkovskii placards down a street adjacent to the Federal Security Service (FSB) building on Lubyanka Square. Litvinovich told the daily that she had seen the men emerge from a nearby cafe called Shield And Sword. FSB spokesman Sergei Ignatchenko told the daily that the FSB was not involved in organizing any public demonstrations.

Most analysts argued that the Kremlin is orchestrating the reading of the verdict, which was originally scheduled to be read on 27 April but was postponed without an official explanation until 16 May. Observers speculated that the purpose of the delay was to avoid having the trial overshadow the 9 May commemoration of the 60th anniversary of the end of World War II in Europe, which was marked in Moscow by celebrations involving more than 50 heads of state.

Among the reasons given by analysts for the slow reading of the verdict are that the Kremlin wants to create the appearance that the court has been meticulous in its consideration of the evidence. However, most observers agree that this argument is not working out; the fact that the court's verdict so far echoes word-for-word the prosecution's charges against the defendants has been seen by many as undermining faith in the independence of the court. "The fact that the announcement of the verdict is dragging on clearly shows that the Russian judicial system is highly politicized," political analyst Sergei Markov told Interfax on 20 May. "The people who have set up such a system are inflicting damage on Russia." Politika foundation head Vyacheslav Nikonov told the news agency that the fact that the Kremlin is so closely associated with the prosecution in this case means that "an acquittal would have been a blow to the authorities' legitimacy."

In addition, observers believe that the state media is using the time to swing public opinion away from sympathy for Khodorkovskii. Kremlin-connected political consultant Gleb Pavlovskii has been given particular prominence on state-controlled television, including a long interview on RTR's main analytical "Vesti-Podrobnosti" on 16 May. In that interview, Pavlovskii said that the oligarchs "tried to buy [Russia's] political system" and to "put themselves between the citizens and the state." "Then the state becomes private property," Pavlovskii said, "no longer the property of the citizenry. People couldn't go along with that. This is the moral problem that proved to be the undoing of Yukos." He further accused Yukos of waging a deliberate campaign to smear Russia's image abroad and domestically.

Pavlovskii concluded by saying that after the Yukos case there is "some real chance for liberalization of political and economic life in Russia." "The lesson of Yukos," he said, "is whether we want to be free in our country or not. If we want to be a democracy, we must have rule by the people. If the people want to have a credible government, they must have a state and they must strengthen it."

Analysts also argue that the purpose of dragging out the verdict is to reduce public interest in the case. By the end of the week, media were reporting that even most of the defense team and the defendants' relatives had stopped attending the hearings, as had many journalists. "Nezavisimaya gazeta" reported on 19 May that increasingly the words "I'm bored" and "nothing interesting" are dominating conversations at the courthouse and trial participants are most often asked, "How long are they going to read?" Some observers also note that the Russian media have been flooded with stories of rumors of the purportedly imminent dismissal of the government of Prime Minister Mikhail Fradkov, which they argue is also a distraction tactic.


The trial of former Yukos CEO Mikhail Khodorkovskii and Menatep Chairman Platon Lebedev has entered its final phase, but this high-profile case is only the tip of the iceberg as far as the prosecution of Yukos-affiliated individuals is concerned. Below is a timeline of the criminal cases filed against company managers. (Compiled by Robert Coalson)

19 June 2003: Yukos security official Aleksei Pichugin arrested and accused of organizing two murders and two attempted murders. Prosecutors argued that Pichugin committed the crimes on the orders of former Yukos top manager Leonid Nevzlin. In March 2005, Pichugin was convicted and sentenced to 20 years' imprisonment.

2 July 2003: Menatep Chairman Platon Lebedev arrested on suspicion of embezzlement and tax evasion.

October 2003: Former Yukos-Moskva CEO Vasilii Shakhnovskii, a former Moscow deputy mayor, arrested and charged with fraud and tax evasion.

25 October 2003: Yukos CEO Mikhail Khodorkovskii arrested and charged with organizing a criminal gang, embezzlement, fraud, and tax evasion.

24 January 2004: An arrest warrant issued for Leonid Nevzlin, who is living in Israel. In addition to charges related to the crimes with which Pichugin was charged, prosecutors accuse Nevzlin of tax evasion and fraud.

January 2004: An arrest warrant issued for Menatep shareholder Vladimir Dubov, a former State Duma deputy. He is accused of participating in allegedly illegal Yukos transactions intended to avoid tax payments. Dubov currently lives abroad. In February 2005, he attended a prayer breakfast in Washington, D.C., that was also attended by U.S. President George W. Bush.

5 February 2004: Moscow's Meshchanskii Raion Court convicts former Yukos-Moskva CEO Shakhnovskii of tax evasion and sentences him to a one-year suspended sentence. The court ruled that since Shakhnovskii no longer worked for Yukos, he presented no danger to society and that he had compensated the government for all losses it had incurred.

11 March 2004: An arrest warrant issued for Menatep shareholder Mikhail Brudno on tax-evasion charges. On 4 March 2005, an additional warrant for Brudno was issued on charges of fraud and money laundering. Brudno currently lives abroad and in February 2005, he attended a prayer breakfast in Washington, D.C., that was also attended by U.S. President George W. Bush.

September 2004: An arrest warrant issued for former Rosprom executive Natalya Chernyshevaya and former Yukos deputy financial manager Dmitrii Maruev. Russia has asked the United Kingdom to extradite Maruev, while Chernyshevaya's whereabouts are unknown. Prosecutors accuse the pair of participating in a criminal organization headed by Khodorkovskii and of involvement in the allegedly illegal 1994 privatization of the Apatit fertilizer plant.

12 November 2004: An arrest warrant issued for Yukos lawyer Dmitrii Gololobov, who is currently living in the United Kingdom. He is accused of fraud in connection with the Yukos takeover of a subsidiary of the Vostochnaya neftyanaya kompaniya (VNK).

18 November 2004: Yukos-Moskva manager Aleksei Kurtsin arrested and charged with large-scale embezzlement and money laundering through alleged charitable donations.

5 December 2004: Yukos manager Svetlana Bakhmina arrested in connection with the case against Dmitrii Gololobov.

8 December 2004: Yukos lawyer Yelena Agranovskaya arrested in connection with the case against Dmitrii Gololobov. She was released from pretrial detention on 17 December because of poor health.

10 December 2004: Ratibor General Director Vladimir Malakhovskii arrested. Prosecutors allege that Ratibor was a shell company created by Yukos to commit fraud and launder money.

16 December 2004: Yukos personnel manager Anton Zakharov detained and questioned by prosecutors for two hours in connection with the case against Gololobov, Bakhmina, and Agranovskaya. On 18 December, charges in the case were filed against lawyer Pavel Ivlev, but a Moscow court dismissed the case against him as unfounded on 15 February 2005.

18 December 2004: Former Yukos Deputy Director Vladimir Pereverzin arrested and charged with fraud and money laundering.

January 2005: Rosinkor financial group President Dmitrii Velichko arrested and charged with participating in a criminal group allegedly organized by Khodorkovskii and with large-scale embezzlement.

February 2005: An arrest warrant issued for Yukos-Moskva First Vice President Mikhail Trushin on charges of embezzlement in connection with the case against Kurtsin.

February 2005: Charges filed against Tomskneft General Director Sergei Shemkevich, who was released on his own recognizance pending trial. He is charged with exceeding his company's production-license quotas.

25 February 2005: An arrest warrant issued for Yukos PM acting President Mikhail Efremov.

13 May 2005: Former Yukos Deputy Director Aleksandr Temerko charged with fraud. Temerko is currently in the United Kingdom and an international arrest warrant has been issued for him. Prosecutors have also named lawyer Ivan Kolesnikov as an accomplice in this case. Kolesnikov is currently in Cyprus and Russia is negotiating for his extradition.

(Sources: RFE/RL,, "Vremya novostei")


By Claire Bigg

The State Duma on 20 May approved in its first reading a package of amendments aimed at penalizing media outlets for reprinting or rebroadcasting erroneous news reports during electoral campaigns. Experts have voiced concern over the Kremlin-initiated bill, saying that passing it into law could force some news outlets to close down.

If the legislation is ratified by the parliament and signed into law, media outlets will become liable for retransmitting erroneous reports from other news organizations during election campaigns and campaigns preceding referendums. Under the draft legislation, news organizations can be prosecuted even if they republish or rebroadcast a report in good faith and were unaware of its errors.

Andrei Richter is the director of the Media Law and Policy Institute in Moscow. He says such a law would considerably extend news organizations' liability for incorrect information.

"People whose interests were violated [by the report] used to take action against the person who first published the erroneous information. Those who retransmitted this information only had to publish a correction if this was required by the plaintiffs. Now, everyone is responsible: those who first published such information, and those who reprinted it not knowing, or even suspecting, this information was incorrect," Richter said.

A Duma spokesperson, however, told RFE/RL that the text of the draft law is not final and that the parliament is open to suggestions and objections from journalists.

Richter says such a law does not exist in other countries, where -- as in Russia -- legislation on mass media protects journalists from prosecution if they can prove they were unaware that the information they used was untrue. However, the Russian Civil Code stipulates that news organizations can bear legal responsibility if a court rules that they acted in bad faith and deliberately published an erroneous report.

Richter says journalists will be hard pressed to comply with the legislation even if it comes into force.

"Of course, this will have negative effects. Journalists from a traditional, average media outlet are simply unable to check the veracity of information on events that took place in Novosibirsk, Paris, or in rural regions. In practice, editorial offices will have to write only about what happens in their field of vision," Richter said. This is particularly true for low-budget or regional news outlets, which lack the funds to double-check all reports.

Richter says the Kremlin's motive in proposing the amendments was to prevent media outlets from abusing their immunity when they redistribute wrong information. But the existing legislation, he contends, provides enough tools to curb this type of abuse.

Anna Volodina is a lawyer at the Glasnost Defense Foundation, which monitors media rights abuses in Russia. She says new organizations could face heavy fines or even closure if the draft legislation becomes law.

"The biggest sanction faced by news organizations for violating the law on election and referendums is either a relatively important fine or the suspension of its activities," Volodina said.

However, she says, the legislation, would not provide a sufficient basis for putting journalists behind bars for libel unless the charge is combined with another serious offence.

(RFE/RL's Tatar-Bashkir Service contributed to this report.)


By Claire Bigg

Russian environmentalists have called on the government to review its energy policy and give up plans to build dozens more nuclear reactors in Russia. In an open letter to the Kremlin, environmentalists said the recent arrest of former Atomic Energy Minister Yevgenii Adamov for embezzlement has highlighted the corruption and incompetence that plague the industry. In such conditions, they warn, putting additional nuclear reactors into service could lead to a massive nuclear catastrophe.

More than 40 environmentalists from across Russia sent an open letter this week to President Vladimir Putin and Prime Minister Mikhail Fradkov urging them to renounce plans for developing civil nuclear energy.

The signatories say the letter was prompted by the arrest of Adamov earlier this month. Adamov was seized in Switzerland on an extradition warrant from the United States, which accuses him of embezzling funds earmarked for the improvement of Russian nuclear security. Russian prosecutors have charged Adamov with fraud and abuse of power and are seeking his extradition to Russia.

Aleksei Yablokov, the director of the Moscow-based Center for Russian Environmental Policy, is one of the most prominent signatories of the open letter. "The nuclear field is in a bad way," Yablokov told RFE/RL. "Adamov is not the only one to have [allegedly] mismanaged funds -- there are thefts and the general working discipline in the field is below any acceptable level, and this worries us. Taking advantage of the fact that Adamov has been arrested and attention has been drawn to the situation of the industry, we are declaring that not only Adamov, but the industry as a whole is in a state of crisis."

He says the government's plan to build up to 50 more nuclear reactors in Russia is irresponsible and, considering current conditions, could easily lead to a nuclear disaster like the one in Chornobyl.

"We are saying that in the present conditions of the [nuclear] field -- when discipline is poor, thefts take place, security measures related to nuclear radiation are not sufficient -- it is madness to decide as the government did two years ago to build 50 more nuclear reactors in the long term," he said. "This decision by the government seems irresponsible to us. If it is implemented, other Chornobyls are unavoidable."

The Atomic Energy Agency's press service could not be reached for comment on 25 or 26 May.

Russia currently operates 31 nuclear reactors, but environmental rights groups say nuclear plants are poorly run and some of them are in desperate need of repair. They have repeatedly accused the Mayak plant, near the city of Chelyabinsk in the Urals, of releasing massive quantities of radioactive materials in the atmosphere and the water.

As a result, incidences of cancer and birth defects in the Chelyabinsk region have risen more than 20 percent over the past three decades, and half the men and women living there are estimated to be sterile.

Environmentalists also blame the authorities for extending the working life of aging nuclear plants without carrying out proper environmental-impact studies.

The open letter comes just days after a U.S. report said that, despite recent progress, security at Russian nuclear plants remains inadequate. It cites incidents in which guards left security doors open and patrolled facilities unarmed.

Yablokov also laments the poor energy efficiency in Russia. "There are vast possibilities to save energy," he said. "Between 30 and 40 percent of the electric power we produce can be saved. It is used badly, squandered. To be produced, one item here requires three or four times more energy than in Europe, and five to six times more than in Japan."

The United States, China, Iran, and Finland are among the other countries that are either building nuclear plants or have announced plans to do so. Most European countries are gradually turning to sustainable resources to meet their energy needs.

Yablokov says Russia should follow Europe's example and has all it needs to produce energy using alternative methods.

According to him, wind power in the Kola Peninsula, in Russia's northwest, could generate more energy than the local nuclear plant. He also notes that two tidal-energy plants located in the Far East of the country are able to provide for the total energy needs of the region.

In Russia's south, he says, attempts to use solar energy have shown promising results.

Environmental groups estimate that alternative power sources, which currently account for less than 10 percent of the energy produced in Russia, could grow to cover at least 20 percent of Russia's needs.

Nuclear plants produce roughly 15 percent of Russia's electricity, which is mainly generated by hydroelectric and natural gas and coal-fired plants.


By Claire Bigg

The parliament of the Republic of North Ossetia-Alania has given its final approval to legislation that would downgrade the title of the region's leader from "president" to "head of the republic." While the republic's leader would retain all previous powers, the parliament insists Russia must have only one president -- Vladimir Putin. Analysts say other Russian regions could soon adopt similar legislation. They view the move in North Ossetia as part of a Kremlin-led campaign to increase Putin's standing and to rein in ambitious regional leaders.

North Ossetia's leader Aleksandr Dzasokhov will give up his title of "president" if he signs the proposed constitutional amendments into law. He and his successors would then take the more unassuming title of "head of the Republic of North Ossetia-Alania" as of January 2006.

Fatima Khabalova, a spokeswoman for the North Ossetian parliament, says she is confident Dzasokhov will approve the legislation. Just like local deputies, she says, Dzasokhov considers it wrong for Putin to have to share his title with leaders of the country's 21 republics.

"He [Dzasokhov] has also said that having 20 presidents in one state is nonsense. On Saturday [21 May], a constitutional law was passed in third reading to make amendments to the Constitution of North Ossetia-Alania, which rules that the top official in the republic will be called 'head of the Republic of North Ossetia-Alania' instead of 'president,' so that there will be only one president in Russia -- that of the Russian Federation," Khabalova says.

The authorities of North Ossetia make no secret of their desire to limit the influence of regional leaders and reinforce the country's 'vertical of power.'

Putin has done much to consolidate this structure by shifting power to the center of the federal government -- the Kremlin. His efforts have prompted strong criticism from the West. He recently proposed and saw passed new legislation that replaced the popular election of regional leaders with a system under which they are nominated by the president for approval by local parliaments.

Echoing earlier comments made by the speaker of North Ossetia's parliament, Taimuraz Mansurov, Khabalova spoke in favor of a vertical power structure and said that regional leaders in Russia enjoy too much prestige.

"It [the law] follows the same direction as the consolidation of the vertical of power, because the titles 'president of the Russian Federation' and 'president of the Republic' have almost the same meaning. Local presidents are starting to resemble princes. We think this is not quite right," Khabalova says.

Analysts, however, say the Kremlin is the main driving force behind the North Ossetian parliament's decision.

Andrei Piontkovskii is the director of the Center for Strategic Studies in Moscow. He says the decision is a move from the Kremlin to prevent regional leaders from casting a shadow over Putin.

"They [Ossetian deputies] did this on the order of the Kremlin. Such decisions are under way in other national republics. In order to further extend Putin's greatness, it is inadmissible that other people in the country hold the title of president. It does not change anything, but there is only one leader -- nobody can compare to him, nobody can be called president in a country where the president is Vladimir Vladimirovich Putin," Piontkovskii says.

Some prominent politicians close to the Kremlin have openly expressed their desire to see regional leaders' titles downgraded.

Federation Council Chairman Sergei Mironov, for example, once declared that "there are too many presidents, and there should be one."

North Ossetia's parliament is the first in Russia to approve legislation that would ban a regional leader from holding the title of president, but observers predict that other regions, including republics in the North Caucasus whose leadership is traditionally close to the Kremlin, could soon follow suit.

Such legislation, however, could be met with resistance in republics with a stronger and more independently minded leadership -- such as Tatarstan, analysts say.

Midkhat Faruqshin heads the politics department at the Kazan University in Tatarstan's capital. He says the Kremlin is trying to make Russia a uniform country in which all regional leaders hold the same title.

"This striving for the abolition of the title of president in republics is a manifestation of the general policy carried out by the Russian government toward unification and uniformity. This is completely in line with the norms of Russia's political culture," Faruqshin says.

A proposal by the authorities in Udmurtia, a republic located northeast of Tatarstan, to hold a referendum on downgrading the title of president was rejected by the local parliament in April.


30-31 May: Foreign Minister Sergei Lavrov to visit Japan

1-3 June: World Newspaper Congress and World Editors Forum to be held in Moscow, hosted by the Guild of Publishers of the Periodical Press

2 June: A meeting of the foreign ministers of Russia, India, and China to be held in Vladivostok

3 June: Meeting of CIS prime ministers in Tbilisi

3 June: Prime Minister Mikhail Fradkov to meet with Ukrainian Prime Minister Yuliya Tymoshenko in Tbilisi

Late June: Chinese President Hu Jintao to visit Moscow

19 June: Referendum in Samara on dismissing Mayor Georgii Limanskii

20-22 June: Meeting of the Collective Security Council (Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan) in Moscow

23 June: Yukos shareholders meeting

24 June: Gazprom shareholders meeting

25 June: Meeting of the CIS Defense Ministers' Council

July: Shanghai Cooperation Organization summit in Astana, Kazakhstan

4 July: 750th anniversary of the founding of Kaliningrad

6-8 July: G-8 summit in Scotland

9 July: End of the Duma's spring session

August: CIS summit to be held in Kazan

September: First-ever Sino-Russian military exercises to be held on the Shandong Peninsula

1 September: Date by which President Putin has ordered the government to submit its plans for the elimination of the estate tax, the simplification of individual tax declarations, and the simplification of the requirements for real-estate purchases

5 September: Fall plenary session of the State Duma opens

1 October: Date by which President Putin has ordered the government to submit its economic-development plans for the Far East, the North Caucasus, and Kaliningrad Oblast

23 October: Referendums to be held in Kamchatka Oblast and the Koryak Autonomous Okrug about the merger of the two federation subjects

1 November: Public Chamber expected to hold first session

1 November: Date by which President Putin has ordered the government to submit its proposals for limiting foreign-capital participation in the defense sector and strategic-resource development

1 November: Date by which President Putin has ordered the government to submit its proposals for judicial reform and combating crime, especially terrorism

Second half of November: Chechnya to hold legislative elections, according to pro-Kremlin Chechen President Alu Alkhanov

1 December: Date by which President Putin has ordered the government to submit its plans for reducing traffic accidents, alcoholism, and drug addiction, as well as its proposals for improving health care

1 December: Date by which President Putin has ordered the government to submit its plan to increase state-sector wages by 50 percent within three years

2006: Russia to host a G-8 summit in St. Petersburg

1 January 2006: Date by which all political parties must conform to law on political parties, which requires at least 50,000 members and branches in one-half of all federation subjects, or either reregister as public organizations or be dissolved.