The following is a letter sent from T.J. Gorton to the London Review of Books in response to the Keith Gessen book review of Richard Sakwa’s work on the downfall of Yukos and imprisonment of Mikhail Khodorkovksy.  Very compelling reading.

I worked for Yukos for four years from June 2001 as one of the Western staff Khodorkovsky brought in to modernise a company that was still more like a Soviet enterprise than an international oil company five years after privatisation. Keith Gessen gets most of the facts right (except that Yukos was never listed in London, only as a US ADR; the predator Rosneft was listed in London), but doesn’t pay enough attention to the prevailing atmosphere of the Yeltsin-era economy (LRB, 25 February). If fear was the staple of personal experience, lack of clarity (neyasnost) was the leitmotif of everything to do with the economy, from heavy industry to the ownership of land and lodgings. The young MBK (as Mikhail Borisovich was known in-house) and all the other future oligarchs had the prescience to see through the murk, and to take advantage of it. That is what capitalists do, and it is never a pretty picture at the capital-formation stage. In the case of Yukos, MBK started with an unwieldy and irrational jumble of rusting oil infrastructure, bought for a fraction of its potential value, and gradually modernised and rationalised it through substantial further investment. To have realised that potential in a transparent sale (which would have had to be to a foreign investor) would have taken time, and that, along with money and credibility, was what the Yeltsin government had run out of.