Eni’s Undermining of Human Rights with Gazprom Neft Sale
Robert Amsterdam is quoted by the American Lawyer blog about the controversy behind the sale of Gazprom Neft assets, which were allegedly illegally seized from Yukos and then sold in a rigged auction to the Italian energy group Eni, only to be passed back into the hands of the state. Although executives at Eni denied they had any plans to sell the assets back to Gazprom, we speculated on this blog that the group was assisting in “asset laundering” and contributing to the undermining of human rights while helping to legitimize the show trial against political prisoner Mikhail Khodorkovsky. Eni, as well as Enel, appear to be operating under the orders of the Kremlin ever since the Gazprom MoU with Algeria – at one point they even told Enel CEO Fulvio Conti to cancel a speech. This week, unfortunately, our predictions were proven correct with Eni-Gazprom transaction for $4.2 billion.
The auction was heavily criticized by Khodorkovsky’s international defense lawyer, Bronx-born Robert Amsterdam of London- and Toronto-based Amsterdam & Peroff, who accused the Italian sister companies of complicity in carving up Khodorkovsky’s company. (The Italian government owns roughly a third of both Eni and Enel.)
“Why state-controlled entities would engage in auctions that are facially fraudulent is beyond me to answer,” Amsterdam told CNBC at the time. “Is there anyone who thinks that the Russians are turning to the rule of law when it comes to energy? What Gazprom gets or wants it will get–or it will change the law and destroy the courts to get it.”
In October 2007 Gazprom exercised a call option–set toexpire this month–to buy back the Yukos assets held by Eni and Enel. (Eni independently owned the stake in Gazprom Neft.)
Amsterdam stepped up his criticism, referring to theproposed sales as “asset-laundering,” because they helped the Russiangovernment and high-ranking Kremlin officials extricate themselves frompotential liability in the Yukos affair. (Current Russian president DmitriMedvedev was chairman of Gazprom at the time.)
Amsterdam reiterated his criticism on Tuesday when theGazprom-Eni deal was formally announced at a ceremony in Moscow attended byItalian and Russian oil executives.
“This is the kind of conduct that’s a textbookexample of what corporations shouldn’t do and what the Italian government hasabsolutely no right fostering,” says Amsterdam by phone from Europe.”And it’s easy to see who profits. The Italians had the courage to scoopup stolen [Yukos] assets that even Gazprom and Medvedev didn’t have the courage todo.”
Italian Prime Minister Silvio Berlusconi and Eniexecutives have touted the deal as part of a broad energy partnership withRussia and Gazprom.
As Amsterdam sees it, Italy has been bullied into Russia’s corner as Gazprom forges a closerrelationship with Algeria’s state-owned energy company Sonatrach.(Italyimports nearly 90 percent of its energy needs; Gazprom is the world’slargest producer of natural gas and North Africa is a major sourceof Italian energy.)
Dewey & LeBoeuf’s lawyers for Eni declined to commenton the Gazprom Neft divestiture. Cleary’s Pollack said in an e-mail that the firm does not comment on client matters.
Amsterdamdoesn’t blame the corporate lawyers for advising on the Gazprom Neftdeal. He’s more concerned with his client Khodorkovsky, whose second trial on money-laundering chargesbegan last week in a Moscow court. Amsterdam says that he’s beenworking on the case but from outside Russia–he’s no longer allowedinto the country.
Khodorkovsky faces up to 22 more years in prison if convicted.
