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Financial Times Gives Wide Coverage to Khodorkovsky Case

khodorkovsky020608.jpgIn tomorrow’s edition of the Financial Times there is remarkable coverage given to the latest developments in the Khodorkovsky case. After the jump, some of the articles. Comments will be forthcoming from Robert Amsterdam. The lead editorial argues the following: “The former oil tycoon describes himself as a political prisoner. Certainly the way he has been treated – in contrast to his fellow oligarchs who have scrupulously avoided playing politics – suggests that he is right. In Russia, politics is about a struggle for power, and Mr Putin holds sway. He is ruthless, even vindictive. The danger for Mr Putin is that he could turn the unpopular oligarch into a political martyr. In his interview with the Financial Times, Mr Khodorkovsky suggests that the absence of any independent rule of law in Russia is the critical failure of the Putin regime. In the short term, of course, it is Mr Putin’s success: that is why Mr Khodorkovsky is behind bars. But in the long term the ex-tycoon is right: no prosperous market economy or fair society can flourish without the rule of law. That is a lesson foreign investors must heed.

“Unbowed in face of ‘absurd’ charges” – By Neil Buckley, Financial Times

Gaunt, a little jaundiced, his hair greyer and sparser than when he was last seen in Moscow at his sentencing three years ago, Mikhail Khodorkovsky stood defiantly in a Siberian courtroom on Wednesday despite being on the ninth day of a hunger strike.He had been brought from a pre-trial detention centre in Chita, a city 6,500km east of Moscow, to a nearby court for a hearing relating to embezzlement charges brought against him last year.During a long break, Mr Khodorkovsky answered questions from the Financial Times and a scattering of his supporters, speaking through the beige-painted bars of the cage in which Russian courts house criminal defendants.His voice fading occasionally, prompting him to gulp water from a bottle, Mr Khodorkovsky spoke of his concerns for himself, his family and Russia.Asked about his health after several days on a “dry” hunger strike before he decided to accept water, he twice insisted he was ­normalno, the shrugging Russian equivalent of OK.Mr Khodorkovsky said he planned to continue his hunger strike until his demands were met for Vasily Aleksanyan, one of his former senior managers at the Yukos energy group who is now on trial on separate embezzlement charges, to be moved from his Moscow prison to a civilian hospital.Mr Aleksanyan has been diagnosed with Aids, cancer of the lymph glands, ­suspected tuberculosis, and is nearly blind. He has accused prosecutors of ­trying to force him to give false testimony against Mr Khodorkovsky in return for medical treatment.“What other way was there?” Mr Khodorkovsky said on Wednesday of his decision to stop accepting food last week in support of Mr Aleksanyan. “My health is OK. I’m fully ready for a long bureaucratic procedure while they check Aleksanyan’s health.”Mr Khodorkovsky was initially on a “dry” hunger strike but decided at the weekend to start accepting water after Mr Aleksanyan said his prison conditions had been improved.A Moscow court on Wednesday suspended Mr Aleksanyan’s trial but said he would not be released from prison. The court said he should receive treatment in the prison hospital, but Mr Aleksanyan’s lawyers say the prison is unable to provide adequate conditions for the treatment he needs. Even the head of the prison wrote to the court saying he needed to be moved for special treatment.Looking generally relaxed in the Chita court, the former business oligarch said the $28bn (€19bn, £14bn) embezzlement charges against him were so absurd it was difficult to mount an effective defence.“I’m being accused of stealing all the oil produced by Yukos over six years. It will be interesting to see how they intend to prove that,” he said.He admitted that when he arrived in Krasnokamensk prison after his sentencing he had been an object of curiosity. But he said inmates and local people had treated him better than ­Muscovites.“Here the word ‘conscience’ has not yet disappeared,” he said. “Of course, to a certain extent, I am a being from another world, an alien [to other prisoners],” he said. “[I told them] ‘So you didn’t have a political prisoner here before? Well, now you have one. They were around before. Get used to that situation.’ ”Mr Khodorkovsky was refused an application when in Krasnokamensk to teach mathematics to other inmates but, along with other prisoners, sewed shirts and gloves.His arrival did seem to raise other prisoners’ awareness of their rights.“I don’t think that I was responsible. But people understood that they could defend their rights by legal means. Previously, when there was a problem, there were protests etc. But when I came to the colony, the situation changed, in that commissions started to arrive constantly, and the prosecutor came.“And the first time the prosecutor came, one person went to see him, and only to talk about his case, not about his imprisonment. And everyone looked at him like he was nuts.“The second time the prosecutor came, there was a whole queue waiting for him, 40 people. So to a significant degree, life started to change.”Since his transfer to Chita, a city of stolid Soviet-era architecture on the trans­Siberian railway where morning temperatures this week have been about -28°C, he has been reading 200 pages of documents a day to prepare for his new trial.The former tycoon declined to comment on ­suggestions that he had embraced the Russian Orthodox faith.“That’s a complicated question. I have thought a lot about this. And I’d rather keep it to myself.”Mr Khodorkovsky said he worried most about his parents. “What’s important is how my parents feel, the rest is not important.”The former head of the stricken oil group argued that Dmitry Medvedev, Vladimir Putin’s likely successor as president following elections next month, would face huge challenges restoring the rule of law in Russia. But he said that, despite the erosion of democracy, he was broadly optimistic about the country’s future.“It’s a question of my ­personality. I can’t provide a lot of arguments for and against but, on the whole, I’m optimistic.”Mr Khodorkovsky said China’s success with authoritarian capitalism was not a model for Russia. “Here in Chita . . . if you ask people ‘Are you more like a Chinese person, or more like a European?’ Here I think people’s understanding is fairly unambiguous. We’re a European country. That’s how we developed. And the way forward for us is the European way.”

“Khodorkovsky still defiant” – By Neil Buckley in Chita, Siberia – Financial Times

Mikhail Khodorkovsky, the jailed Russian oligarch, voiced doubts on Wednesday that Dmitry Medvedev, Russia’s likely next president, would be able to undo damage to the rule of law inflicted during the Putin era.In his first face-to-face interview since his arrest in 2003 on fraud charges, Russia’s one-time richest man spoke to the Financial Times about his incarceration, his concerns for his own future and his long-term optimism for Russia.Speaking in a courtoom in Chita, a Siberian city 6,500km east of Moscow where he is now being held, Mr Khodorkovsky stood inside the metal cage in which Russian defendants are kept in court.Leaning against the bars, he looked gaunt and drawn on the ninth day of a hunger strike in support of an imprisoned manager of Yukos, the oil company he created.He answered questions during a 40-minute break in a hearing related to new fraud charges against him.Mr Khodorkovsky argues that President Vladimir Putin’s regime has used the law to target political enemies, especially business owners like himself. Asked if he thought Mr Medvedev, Mr Putin’s chosen successor as Russian president, could reverse the process, the 44-year-old former oligarch said: “It will be so difficult for him, I can’t even imagine . . . Tradition, and the state of people’s minds, and the lack of forces able to [support] any movement towards the rule of law, everything’s against him. So . . . may God grant him the strength to do it. All we can do is hope.”Mikhail KhodorkovskyThe Kremlin insists that it has imposed order after the chaotic 1990s when Mr Khodorkovsky and others made fortunes through acquiring state assets. But Mr Khodorkovsky said that Russia’s biggest problem was the lack of the rule of law which he said was worse than in China. “Laws can be better and they can be worse. But people must abide by laws, and not use them for their own ends.”However, he said he did not share concerns of some civil society and opposition leaders that democratic freedoms would continue to be eroded in Russia. “People can leave freely, the internet works.” It was just “not possible” that Russia could return to the darkest days of its Soviet past.He said he believed China’s success with authoritarian capitalism was not a model for Russia. “I’m convinced that Russia is a European country, it’s a country with democratic traditions which more than once have been broken off during its history, but nonetheless there are traditions.”The businessman was arrested in October 2003 and sentenced in June 2005 to eight years on fraud and tax evasion charges. His energy company, Yukos, which he built into Russia’s biggest after acquiring it in a controversial privatisation in 1995, was sold piecemeal to pay off $28bn back tax charges – with its assets largely gobbled up by Rosneft, the state-owned oil company.He served the first part of his sentence in a prison colony in Krasnokamensk, a bleak uranium-mining town near the Chinese border, where the man who was once worth $13bn spent his days sewing shirts and gloves. He was moved to the regional capital last year after new charges were brought against him of embezzling more than $30bn in Yukos’ oil sales.He now spends each day wading through documents for the new trial. If convicted, he now faces up to 22 years in jail.He is contemptuous of the various legal assaults on Yukos. “The accusations are not connected with a real crime, but with a desire – the desire to take away people’s conscience, the desire to convince a witness to give evidence. It’s all about their various, conflicting desires.”The Kremlin says all charges brought against Mr Khodorkovsky are legally justified and that he is no political prisoner but a convicted criminal.But Mr Khodorkovsky’s supporters see him as the victim of a politically motivated response to his own political activities.Mr Khodorkovsky said he planned to continue his hunger strike until his demands were met for Vasily Aleksanyan, a seriously ill former Yukos vice-president on trial on separate embezzlement charges, to be moved from his Moscow prison to a civilian hospital.Mr Khodorkovsky said he now accepted calmly the dismemberment of Yukos. “I used up all my nerves in 2004, when a company that was working well was seized and handed over to Rosneft,” he said. “Rosneft today is basically Yukos with a bit added on.”The former tycoon declined to comment on the conditions in which he was being held, calling them “standard” for Russia. Though he has been held in isolation since declaring his hunger strike.

” Biography: Mikhail Khodorkovsky” – By Catherine Belton in Moscow – Financial Times

In January 2003, Mikhail Khodorkovsky was the toast of Davos. As Russia’s richest man, his face had graced the front pages of Forbes and Fortune magazine. He was the symbol of Russia’s new found wealth under Vladimir Putin, as the dust settled on more than a decade of gangster capitalism and the country gradually opened to the west.Mr Khodorkovsky had climbed through the rubble of the Soviet Union’s collapse along with the most ruthless. He parlayed ties in the Komsomol, the Communist youth organization, into a banking business, setting up Bank Menatep in 1990 as Russia lurched on its transition to a market economy. Political ties helped the bank win access to lucrative government accounts and in 1995, when Boris Yeltsin sold the crown jewels of Russian industry at a knockdown price, Mr Khodorkovsky swooped in on one of the biggest: the Yukos oil empire.As Khodorkovsky sought to consolidate control over the oil firm, he played loose with corporate governance practices, locking minorities, including western investors, out of shareholder meetings. But by 1999, having taken full control, he transformed himself. He became a pioneer in disclosure and western corporate governance codes of practice. He was the first Russian oligarch to disclose his business holdings.But as Mr Khodorkovsky won plaudits in the west, tension was rising between Mr Khodorkovsky and Mr Putin. The oil tycoon warned Davos in January 2003 Russia was turning into Saudi Arabia, and he upped funding for independent political organizations. In October that year, the Kremlin struck back. Mr Khodorkovsky was arrested on a Siberian runway on charges of fraud and tax evasion.Mr Khodorkovsky was sentenced May 31 2005 to eight years on jail for fraud and tax evasion and sent to Krasnokamensk, a bleak uranium mining town near the border with China. In February 2007, Russian prosecutors pressed fresh charges alleging he had embezzled more than $30bn (€20bn, £15bn) in oil sales and laundered the proceeds. He was then moved to pre-trial detention in the regional capital Chita.

“Khodorkovsky set to face fresh charges” – By Catherine Belton in Moscow – Financial Times

Russian prosecutors are due to press charges on Monday against jailed Yukos founder Mikhail Khodorkovsky, his lawyers said.The new charges are expected to centre on accusations of large-scale embezzlement and money laundering, quashing any chance of parole this year and potentially increasing his eight-year prison sentence.They come as the Russian government prepares to begin a bankruptcy sale of Yukos, once Russia’s biggest oil company.Mr Khodorkovsky’s lawyers said the additional charges seemed aimed at legitimising the sell-off, which Mr Khodorkovsky’s defence team have branded as “theft”.“They want to give legitimacy to the future auction,” said Robert Amsterdam, a member of Mr Khodorkovsky’s international defence team. “They think if they keep hitting Khodorkovsky something will stick.”The charges could also be politically motivated. Mr Khodorkovsky is eligible for parole this year because he would have served half his jail term since his arrest in 2003. That raises potential political risks for President Vladimir Putin in a crucial pre-election yearMoney-laundering charges could lead to attempts to block funds prosecutors believe could be held by Mr Khodorkovsky’s team in accounts abroad, lawyers said.“They think Khodorkovsky has $10bn [£5bn] stashed away abroad,” said Pavel Ivlev, a former lawyer for Yukos. “They think he could use this cash to fund the opposition in an election year. They are trying to find it and want at least to block it.”The new charges come 18 months after Mr Khodorkovsky and his business partner, Platon Lebedev, were sent to Siberian prison camps after being found guilty of fraud in a case criticised as being politically motivated.Mr Lebedev’s lawyer, Yelena Liptser, said prosecutors had informed her that charges would be pressed against him too.Yury Shmidt, Mr Khodorkovsky’s lawyer, said police detained him and a team of four other defence lawyers for about an hour on Sunday evening as they left Moscow for the east Siberian city of Chita, where they say prosecutors are due to present a formal indictment in court on Monday.Mr Shmidt said that prosecutors could yet postpone handing down the indictment and had not made clear the exact charges.When Mr Khodorkovsky and Mr Lebedev were transferred to Chita in December for questioning, prosecutors said they were preparing to press money-laundering charges, which carry a sentence of 10 to 15 years.Mr Khodorkovsky’s def­ence team said they were expecting the charges to centre on criminal cases already pursued against other Yukos employees: the embezzlement of $13bn in Yukos crude sales since 2001 through two trading companies registered in the west Russian region of Mordovia, and the subsequent laundering of the proceeds.Charges relating to an embezzlement case over transfers of shares of Eastern Oil Company, or VNK, could be pressed too. Lawyers say the accusations in both cases were “absurd”.

The lead editorial from the Financial Times:

Exile in SiberiaMikhail Khodorkovsky, once Russia’s wealthiest oil baron, is no saint. He could not have survived in the free-for-all exploitation and seizure of Russian state assets in the 1990s if he were. But when he was arrested in 2003, charged with large-scale theft, fraud and tax evasion, and jailed for eight years in Siberia, it shook the western world, and foreign investors in particular. It was the first big move by Vladimir Putin, Russia’s increasingly assertive president, to reimpose the power of the Kremlin over the economy – especially the energy sector – after the chaotic rule of his predecessor, Boris Yeltsin.Today Mr Khodorkovsky is languishing in his Siberian prison, facing new charges of embezzlement that could see him condemned to a further 22 years. He is on hunger strike to champion the cause of one of his fellow incarcerated oil company executives who has been denied proper treatment for Aids. Few Russians will have much sympathy: they resent the massive wealth of the oligarchs, and they appreciate the political stability that Mr Putin has brought back, combined with oil-fired prosperity.Mr Khodorkovsky’s crime was not that he was too successful, nor that he cheated on his taxes: they all did that. But he was the youngest, cleverest and most charismatic of that first generation of oligarchs, and he entered the political arena. At precisely the moment when Mr Putin was determined to reassert the power of the Kremlin, Mr Khodor-kovsky refused to stick to business. He financed candidates to lobby for his business interests in the State Duma, and backed liberal political parties that were not under Mr Putin’s effective control. For the president, it was unforgivable.The former oil tycoon describes himself as a political prisoner. Certainly the way he has been treated – in contrast to his fellow oligarchs who have scrupulously avoided playing politics – suggests that he is right. In Russia, politics is about a struggle for power, and Mr Putin holds sway. He is ruthless, even vindictive. The danger for Mr Putin is that he could turn the unpopular oligarch into a political martyr.In his interview with the Financial Times, Mr Khodorkovsky suggests that the absence of any independent rule of law in Russia is the critical failure of the Putin regime. In the short term, of course, it is Mr Putin’s success: that is why Mr Khodorkovsky is behind bars. But in the long term the ex-tycoon is right: no prosperous market economy or fair society can flourish without the rule of law. That is a lesson foreign investors must heed.Will Dmitry Medvedev, Mr Putin’s chosen successor as president, dare to allow an independent judiciary to flourish in a country that has never known one? He faces enormous vested interests if he tries. In the end, Mr Khodorkovsky says he is still an optimist about Russia. Let us hope he is right.