This was the main slogan chanted by pro-Putin demonstrators who gathered yesterday to jeer a man believed by many to be a political prisoner, the former richest man in Russia, a strong supporter of Putin's opposition, and a businessman whose business was stolen and destroyed by Putin and his comrades - Mikhail Khodorkovsky. The much larger group of anti-Putin demonstrators were dispersed by the Russian MVD teams. Some were jailed, and others were beaten by police. The bodyguards of chessmaster turned dissident Garry Kasparov, who showed up to support the demonstrators, spared him the same humiliation.
The court started reading the indictment against the former CEO for multiple crimes, but it seems reading the charges will last for almost two weeks in order to bore and distract the media's attention from this injustice done by the Putin administration.
"If this trial is legitimate, why do you need that many police, dogs, metal-detectors, and fencing?" asked Robert Amsterdam, a Canadian attorney representing Khordokovsky. Well, because this trial is not legitimate, and the Russian court system is not independent of the Kremlin.
500 police officers with dogs; fencing to prevent "undesirable" witnesses and journalists from watching the trial; special forces equipment for scrambling cellphone and radios in the area; four blocks of the city shut down; rent-a-demonstrators supporting Putin getting receiving $10 a day (according to Gazeta.Ru) that's considered a fair public trial in Russia. While Business Week has a great article on the past two days of the verdict reading, Russia Blog will take a look at the story-behind-the-story.
Mr. Khodorkovsky has been jailed for the past year and a half, while Putin nationalized YUKOS, the most successful company in modern Russian history. Now there isn't much left of the company. In December the largest part of YUKOS, oil giant Yuganskneftegaz, was put on the auction block despite the rulings from American and European courts stating that such actions were illegal according to the international contract laws and regulations. But why should international business law inconvenience Mr. Putin and his ex-KGB pals?
The Russian government was supposed to receive credits worth $10 billion dollars from European banks to complete the sale, but after the court rulings Western banks refused to lend to Gazprom, Russia's government-owned monopoly, and backed off, for fear of lawsuits in American courts. The decision was made on Friday, December 17, and everything seemed to be just fine; contract law was no match for rapacious Russian gangsters/officials/bureaucrats. Russia has thirteen centuries-long history of bribes and corruption, and there was only so much that a bankruptcy court in Houston, TX could do.
The auction took place over the weekend, when all the markets were closed. Some unknown company conveniently happened to have exactly $9.3 billion dollars on hand for the purchase, and lucky for that organization there was no competition for the bid. That is how a company with a market value anywhere between 20 to 30 billion dollars was sold for less than $10 billion.
But there is much more to the story. Later on, 100% of the shares were purchased by another shell company, then by another one, and eventually there happened to be almost a dozen fake and unknown companies involved. The final purchaser of whatever was left of YUKOS was Gazprom, the "financial department" of the Russian Mafia (aka the government).
Putin's allies obtained 30 billion dollars for 10, and while this is amazing and (according to several courts) illegal, there is much more to this story. You would ask: where did Gazprom find 10 billion dollars overnight (literally from Friday to Saturday night)? Answer: the Chinese paid the bill. In Russia if you borrow money from another country you have to eventually give it back. Well, the Putin administration was so greedy that even after netting 20 billion overnight they still did not want to give away the other 10. That is part of the Russian character, always wanting it all.
The $10 billion from China was not for a stake in Gazprom; it was prepayment through the year 2010 for a future product, crude oil. And when the government owns the business and controls it as well, it is very easy to have a few thousand barrels go unnoticed. All this means that Putin's cronies in charge of the deal obtained anywhere between 20-30 billion dollars without putting down a penny.
Future Russian generations will pay back the Chinese in spades – Russians are used to squandering their natural resources and sacrificing so that their elites can send the nation's wealth abroad. And a few years from now, when the Chinese get their oil, Khodorkovsky is wasting away in prison, and there are few more Russian billionaires on the Forbes' list, who will be the loser and who will be the winner? There will be very few winners, but one big loser - the Russian people.
For Russians the idea of free-market democracy has been poisoned, and they have lost much more than their natural resources. Putin and his clique have had very good training in Soviet intelligence, and brain-washing is part of their profession. If you ask almost any Russian about Khodorkovsky and Putin, he will tell you that Khodorkovsky is a criminal who stole nation's money, and Putin is a "Good Czar" who gave it back. That is what happens when "free" media and government are controlled by the former KGB officers.
