#7 - JRL 8408 - JRL Home
Mosnews.com/Gazeta.ru
www.MosNews.com
October 13, 2004
The Locomotive of Redistribution

By pushing ahead with the sale of Yuganskneftegaz ­ the core asset of the embattled oil giant Yukos ­ the incumbent Kremlin team has shattered any remaining hopes for a lawful transfer of power in 2008.

Representatives of the Russian establishment today believe that it is time to somehow bring the Yukos affair to completion, to put an end to the nerve-racking farce, to turn that disgusting, disgraceful page in the country’s history.

The liberals who have managed to retain their influential posts are especially keen on the idea. This, for example, was exactly what Mr. Illarionov, Putin’s economic aide, recently alluded to in an interview with The Financial Times, as he insisted that the Yukos affair has its own logic and there is no political force in the world that could stop the process.

As we know now, in truth Mr. Illarionov sought to prepare the world community for a decision that had already been taken by the Kremlin and that is seen by that community as sheer banditry.

Thus, the story that began some 18 months ago has entered its decisive stage. It began when Vladimir Putin, insulted and intimidated by Mikhail Khodorkovsky’ political ambitions moved to rob the oil tycoon of the largest and most successful oil company in Russia.

It is said that nearly a thousand law enforcement officers were involved in the Yukos affair. They gathered evidence, drew up plans and prepared proceedings. For Putin, robbing Khodorkovsky of his assets was a matter of principle. Any objection, any questioning of the lawfulness of his actions drove him into a rage.

It seems that initially the authorities had hoped that once jailed Khodorkovsky would part with his assets voluntarily in a freedom-for-property swap deal, so widely practiced by the Vladimir Putin team over the past few years. This, however, did not happen. The case dragged on for months, generating incessant scandals and a political crisis.

The Yukos affair inflicted grievous damage to Putin’s image in the West that again grew to perceive the Russian power as a machine of criminal reprisals, where legal provisions and judicial procedure serve only as a cover to conceal the real state of affairs in a country living by criminal rules. The Yukos case destroyed the status-quo and the coalition of the so-called Putin consensus, whereby various political forces had co-existed in relative harmony.

It forced Putin to renounce the key targets of his ’new course’, including the reform of the judiciary, of law enforcement agencies and the prosecutor’s office; and to drop the Gref package of economic reforms closely intertwined with the changes in the political system. To reject the services of a more or less capable team of experienced Kremlin bureaucrats. The political course pursued during Putin’s first term in office collapsed.

Mr. Illarionov and other ’liberals in power’ have put their trust in the hope that once the Yukos affair is over, the old policy will be resumed.

Although not formally at odds with the law, this week’s decision on the sale of Yuganskneftegaz is in essence unlawful. The unlawfulness of the Kremlin team’s actions is exactly what will determine its future policy.

The Yukos affair is a locomotive pulling a far wider process in its wake.

This will include the re-distribution of property in favor of the new team. This is how it is seen by the Russian business community today.

And from the standpoint of that community, such a re-distribution, being unlawful, exempts it from its own obligations to the authorities. The only instrument the Putin team will retain in this situation is coercion and intimidation

Furthermore, the decision on selling Yuganskneftegaz robs the Kremlin team of its last chance of ensuring a legal transfer of power in 2008, when Putin’s term in office expires.

And this is perhaps the most dangerous of all the consequences of the Yukos affair. The authorities do not only act against the law ­ they are well aware of the unlawfulness of their actions, and therefore are no longer able to continue acting within the framework of the law. Having seized the property they want the Putin team is forced to usurp power. For Putin there is no turning back.