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RFE/RL
April 11, 2005
Russia: Oligarch's Case A Sign Of The Times
By Victor Yasmann
Copyright (c) 2005. RFE/RL, Inc. Reprinted with the permission of Radio Free Europe/Radio Liberty, 1201 Connecticut Ave., N.W. Washington DC 20036. www.rferl.org

The 10-month trial of former Yukos CEO Mikhail Khodorkovskii, Menatep Chairman Platon Lebedev, and former Volna General Director Andrei Krainov came to a close on 11 April, with Khodorkovskii giving his final statement to the court. A verdict will announced on 27 April, Russian media reported.

In his closing remarks, Khodorkovskii said that he "didn't make a good oligarch," and that he had not fled Russia despite being repeatedly advised to do so. He said that Yukos was the target of "greedy bureaucrats" and that he was imprisoned to prevent them from ransacking the oil giant. Khodorkovskii maintained his innocence on all charges. "I sincerely tried to work for the good of my country, and not for my own pocket," Khodorkovskii said. "All that I have left is an awareness that I was right, my business reputation, and the power of my will."

In the prosecution's concluding statement on 29 March, prosecutor Dmitrii Shokhin asked the court to convict Khodorkovskii and Lebedev and to sentence them to 10 years' imprisonment on fraud, embezzlement, and tax-evasion charges, newsru.com reported. Shokhin told the court the defendants "deserve" severe punishment because they have refused to admit their guilt. He charged that Lebedev "repeatedly demonstrated his disrespect to the court" and that Khodorkovskii deserved particular severity because he had "organized a criminal group." Shokhin also asked the court to confiscate the assets of Khodorkovskii and Lebedev that have already been frozen, including a 60 percent stake in Yukos and a 30 percent stake in Sibneft that belong to Menatep, "to compensate for harm they caused the state." He also asked the court to make the men ineligible to hold senior public or managerial posts.

Shokhin asked the court to give Krainov a 5 1/2-year suspended sentence because of his "repentance and partial admission of guilt."

'No Crime Committed'

Defense lawyers asked the court to acquit their clients on all charges. Lebedev's lawyer, Yevgenii Baru, said that "enough evidence has been presented for any competent, independent court to acquit Lebedev," newsru.com reported on 6 April. Khodorkovskii lawyer Genrikh Padva said Khodorkovskii not only did not commit the crimes ascribed to him but that "no crimes were committed at all." In his statement, Padva meticulously went over all the prosecution's arguments in an effort to demonstrate that there is no evidence of "the slightest signs of criminal activity."

Padva paid particular attention to the charge that Khodorkovskii and Lebedev had formed a criminal group. He denied the existence of any such group, saying that the prosecution had not shown "what the composition of the group was or what were the roles of its members, and so on." "The joint maintenance of a business cannot be proof of a 'criminal group,'" Padva told the court on 7 April.

"I hope that on the day the verdict is pronounced, the iron gates will swing open and the watchmen will release Khodorkovskii into freedom," Padva said.

Another Khodorkovskii lawyer, Yurii Shmidt, told RFE/RL on 10 April that prosecutors and the public continue to view Khodorkovskii and other rich Russians as "criminals by definition." In the case of Khodorkovskii, he added, they are ignoring the fact that he owes his fortune not only to his hard work and managerial skills, but also to the fact that he invested his money into the loss-making Yukos in 1996 when oil was selling for about $8.50 a barrel.

Difficulty Of A Fair Trial

Shmidt added that it will not be easy for the court to deliver the verdict that the Kremlin expects. He noted that Deputy Prosecutor-General Vladimir Kolesnikov said in October 2003, well before the trial began, that Khodorkovskii should be sentenced to 10 years in prison, the very term that prosecutors at the trial are seeking. However, Shmidt said, it will be difficult for the court to convict without violating the law.

Karina Moskalenko, another Khodorkovskii lawyer, said on 7 April, according to newsru.com: "This case will not be decided in the court, or the Moscow Municipal Court, or the Supreme Court, or the European courts. It will be decided in the court of history, and the court of history will be harsh with all of us."

Throughout the trail, the Kremlin and the state-controlled media did a lot to boost the perception that Khodorkovskii and his colleagues are criminals. The arrests of Lebedev and Khodorkovskii in July and October 2003, respectively, came in the wake of a scandalous report by the National Strategy Council that asserted that the oligarchs were plotting a quiet coup in Russia.

In September 2004, just as prosecutors began presenting their case in court, NTV screened a documentary called "A Terrorist Act, Paid In Advance," which charged that Khodorkovskii used profits from the sale of Siberian oil to provide material aid to Chechen "terrorists." The film included references to some events that happened as early as 1995, before Khodorkovskii took over Yukos.

On 30 March, NTV showed a documentary called "Brigade From Yukos," in which Menatep shareholder and former Yukos executive Leonid Nevzlin was directly accused of organizing paid killings and Khodorkovskii was implied to have been involved. The film linked Khodorkovskii to former Yukos security chief Aleksei Pichugin, who was convicted of murder and attempted murder on 25 March. The documentary included footage of Khodorkovskii, Nevzlin, and Pichugin shooting rifles during a hunting trip or similar outing. The information in this documentary was repeated on state-owned RTR the same evening.

Moscow human rights activists have long argued that the case against Pichugin, a former Federal Security Service (FSB) officer, was manufactured to pressure him into revealing compromising information against Khodorkovskii. The first jury in the Pichugin case was released after it asked the court to dismiss the charges against him, and a second jury was later convened, which convicted him.

Pivotal Point In Russian History

The cases against Yukos and Khodorkovskii are a pivotal moment in the history of post-Soviet Russia. When Khodorkovskii was arrested by the Alfa special-forces unit in Novosibirsk on 25 October 2003, Russia was a different country. Mikhail Kasyanov was the prime minister and Aleksandr Voloshin was the head of the presidential administration. Both were viewed as oligarch-friendly holdovers from the regime of former President Boris Yeltsin. Many in Russia and the West continued to believe cautiously that President Vladimir Putin was leading Russia gradually but perceptibly toward a more democratic future. Some believed that Putin was sincere in his desire to combat corruption.

Putin's policies in the ensuing period have cast such claims in serious doubt. Many of those who believed Putin was combating corrupt oligarchs have come to believe now that he was merely fighting his political opponents and those who financed them. Many of the old oligarchs have not only kept their properties, but have seen their fortunes increase steadily during Putin's administration. At the same time, new oligarchs have emerged from the bureaucracy and the secret services. As a result, Russia had the second-largest number of billionaires (27) on the "Forbes" magazine list of global billionaires that was released in March.