Mikhail Khodorkovksy and Platon Lebedev in jail (Photo by Itar-Tass)
Read the original article in the extended post
Why are Beltway-types indignant about Enron, but not Khodorkovsky?
What is the motivation for a respectable outlet like The Wall Street Journal to continue to publish the lies and libelous screeds of a convicted felon?
Don't people who support the rule of law understand that it involves prosecuting criminals and making them pay for their crimes?
"The Kremlin this week showed that democracy, human rights and the rule of law are dead in Vladimir Putin's Russia. With extraordinarily cynical timing, new charges -- this time, money-laundering -- were brought against Mikhail Khodorkovsky, who once ran Russia's largest oil company, Yukos," writes Robert Amsterdam, Mikhail Khodorkovsky's international defense counsel, on the pages of the WSJ.
"These charges have nothing to do with upholding Russia's laws," continues Mr. Amsterdam. "They have everything to do with the fact that Mr. Khodorkovsky would have been eligible for parole later this year, having served half his eight-year sentence on a politically motivated tax evasion conviction handed down in 2005. Another show trial will surely propel the machinery of so-called justice toward another preordained guilty verdict."
Russia Blog has written several times about the case of the imprisoned Russian oligarch. The basic facts are that Mikhail Khodorkovsky owned and operated Yukos, the largest oil company in Russia. He was found to have misappropriated billions of dollars and to have operated the company by unscrupulous methods during the 1990s.
Many of Khodorkovsky's defenders argue that all Russian wealth was achieved illegally during those years. However, Khodorkovsky's case is unique - there was no other oligarch in Russia who evaded taxes on such a vast scale or who spent millions of dollars in Washington, D.C. lobbying and advocating his own political significance, or who dared attempt self-aggrandizement on such a large-scale (e.g., by selling 40% of Russia's oil assets to a foreign company). Furthermore, Khodorkovsky's case is unique in that no other oligarch was proven to have a chief of security who killed people (Yukos Chief of Security, Alexei Pichugin, was convicted by a jury of two murders and ordering contract killings).
On the financial side, many independent analysts have pointed out that the amount of taxes evaded by Khodorkovsky was a multi-billion dollar sum (approximately 20-25 billion dollars, however, Russian prosecutors only recently uncovered this fraud). For those who have long followed the story of the oligarch who attempted to sell out Russia for his own gain, his past conviction, and the new charges filed against him should come as no particular surprise.
Another interesting observation is that Robert Amsterdam uses the word "gulag" to describe the prison where Khodorkovsky resides these days. The WSJ happily reprints this nonsense. To be sure, there are prisons in modern Russia, and Russia Blog did a post with photos about Khodorkovsky's life in captivity in his new Siberian digs. But even though conditions might seem rough, the Siberian facility is one of the better prisons in Russia. In sum, Khodorkovsky's time in this facility -- much like the prison sentences of convicted Enron executives -- is well earned. Such a comparison between Khodorkovsky and his American counterparts may actually be flawed, in the sense that Kenneth Lay and Jeffrey Skilling didn't defraud their employees and investors at levels even close to what Mr. Khodorkovsky did.
Mr. Amsterdam complains that Khodorkovsky's support for Russian liberal parties won't be available the coming elections. However, he neglects to mention the fact that liberal parties are largely unpopular in Russia--not because their leaders are imprisoned or persecuted--but for a much more practical reason. In the conscious of mainstream Russians, the liberal parties are largely considered responsible for the disastrous "shock therapy reforms" of the early 1990s. In the recent regional elections, the liberal parties failed to obtain even 5% of the vote.
Russian voters gave the liberal parties a chance in the Nineties and that period of time saw the enormous creation of wealth, but only for a select few like Khodorkovsky. That left much of the rest of the nation in poverty. The inability of the Russian government to collect taxes in the 1990s contributed to the hyperinflation of 1998, which wiped out the savings of millions. In the minds of many Russians, Putin's administration (which Amsterdam refers to as a "regime") has restored the stability of the Soviet Union, but this time based upon a "regime" of free market values and attracting foreign investment. Russia now has a growing middle class. Average salaries have increased by a third in the last two years alone, while pensions and government debt have been considerably better managed. Russia's international debts accrued during the 1990s and inherited from the Soviet Union have been paid down.
The WSJ should be asking probing questions like: How it is that Russia today drills less than in it did during the years of Khodorkovsky, but recently surpassed Saudi Arabia as the largest oil producer in the world?
How is it that between 1992 and 2001 only $9 billion in taxes were collected from oil sales? And how is that today, under the Putin "regime", oil revenue is being used to build critical infrastructure, pay down the national debt, and to put away $300 billion into a stabilization fund?
If Khodorkovsky, who owned the largest oil company in Russia (with rights to over 40% of the country's reserves), contributed just a few billion dollars in tax payments over more than a decade, where did the rest of his profits go?
It stands to reason that Russian prosecutors might need to delve even further into the tangled-web of Yukos finances--perhaps the $22-25 billion that they are seeking from Khodorkovsky at the moment is not enough!
Mr. Amsterdam also writes about Khodorkovsky's charitable giving and "vision" for Russia. When he was the wealthiest man Russia, Khodorkovsky donated scarcely $50 million a year. Khodorkovsky's foundation, Open Russia, spent most of its money bashing the Putin administration while helping out old liberal cronies and/or communist dupes.
By the way, for those worried about the future of Russia's liberal political parties, the former world champion chess player Garry Kasparov has proposed a "grand" vision we shouldn't forget about. In fact, he even presented his ideas in a recent article in the Wall Street Journal: Kasparov wants to bring down Putin by forming a coalition between Russia's liberals and the fascists and communists.
The last time such a team was formed in Europe, things didn't turn out to well. What did Putin do to America and Garry Kasparov to become less popular in the U.S. than Russia's fascists and communists? I do not mention Russia's liberals, because once the new "political group" is in charge--they aren't likely to have a voice for very long at all.
Amsterdam continues to employ the old canards that after Putin "stole" Khodorkovsky's property and that the Kremlin exploits Russia's energy supplies as a geopolitical weapon to dominate Europe. The Canadian attorney forgot to mention that it was natural gas that Moscow was forced to shut off briefly last year, not oil -- making the logical connection between the Yukos case and Gazprom's moves weak at best.
Moreover, corrupt officials in Ukraine and Belarus were siphoning off Russian gas without paying their debts to Russia for previous deliveries. This theft reduced pressure in the gas export pipelines, which in turn caused shortages in Europe. Gazprom temporarily interrupted gas exports to Ukraine and threatened to cut off supplies to Belarus in order to push these countries closer to paying European market prices for energy. (See: "Money, Not Geopolitics, Drives Russian Energy Policy.") While Amsterdam calls this tough negotiating strategy unfair and "non-market", the demands of the Russian and global energy marketplace are what drive the decision-making of Gazprom executives.
Mr. Amsterdam's plea for the world to take interest in Khodorkovsky is simply a ploy to get his client off the hook. Russians have long since ceased to care about Khodorkovsky's "plight" or what happens to him. By and large, Khodorkovsky has been written off as a criminal and consigned to his fate in prison.
Today Russians enjoy an improving lifestyle, one that has been brought to them courtesy of a robust market place. Russians in thegrowing middle class are busy renovating their apartments and frequenting new restaurants and coffee shops. Middle-class Russians are earning money in a stabilized economy while the rule of law is slowly taking hold and fortifying consumer confidence. But the rule of law requires administering justice--as in the case of the prosecution (not persecution) of Khodorkovsky. In fact, the failure of the Orange coalition government in Ukraine to prosecute major criminals was a major reason for their downfall last year.
To see the supposedly "devastating" results of the so-called "Putin regime" for yourself, visit Russia Blog's picture posts from Moscow and St. Petersburg, which the editors of this website visited during our trips to Russia last month. Meanwhile, Mr. Amsterdam is in London, the home of at least one other Russian oligarch and rabble-rouser in exile.
Only a few politicians and pundits inside the Beltway and some politically excited Westerners still care about developments in the Russian state's ongoing case against Mr. Khodorkovsky. In a political culture obsessed with celebrity trials, Americans are blinded as to how their support for a notorious thief and accomplice to murder gets in the way of better Russian-American relations. How much longer will this continue? If Americans believe the propaganda issued by Mr. Amsterdam and his client, the damage will surely continue--dampening hopes for more prosperous and healthy relations between our two countries.
Original Wall Street Journal article:
By ROBERT R. AMSTERDAM
February 9, 2007; Page A10
The Kremlin this week showed that democracy, human rights and the rule of law are dead in Vladimir Putin's Russia. With extraordinarily cynical timing, new charges -- this time, money-laundering -- were brought against Mikhail Khodorkovsky, who once ran Russia's largest oil company, Yukos. These charges have nothing to do with upholding Russia's laws. They have everything to do with the fact that Mr. Khodorkovsky would have been eligible for parole later this year, having served half his eight-year sentence on a politically motivated tax evasion conviction handed down in 2005. Another show trial will surely propel the machinery of so-called justice toward another preordained guilty verdict.
The fresh case means that Mr. Khodorkovsky will be unable to support democratic opposition parties in December's Duma elections or the 2008 "presidential coronation." And it means that the Kremlin will continue to wield pervasive control over the energy sector in which he had done so much to promote market-based competition and growth.
Before his arrest in 2003, Mr. Khodorkovsky set out his vision for Russia. He encouraged the development of civil society and the growth of alternative political parties. He worked to provide schools across with access to the Internet and supported charitable and cultural programs. He publicly confronted the president about the need to stamp out corruption in Russia.
When it became clear that the state did not share his vision and was not going to tolerate dissent, Mr. Khodorkovsky did not flee. He cooperated with the justice system -- convinced of his innocence, and convinced, also, that he could challenge what seemed to be an attempt by corrupt officials to intimidate him. He did not foresee how ruthlessly the law would be disregarded in the Kremlin's drive to crush him. Nor did anyone quite foresee the blatant theft of Yukos assets.
By jailing Mr. Khodorkovsky and stealing Yukos, the Putin regime cleared the energy sector of any competitors. It enabled the Kremlin to use energy as a political weapon against Russia's immediate neighbors and the whole of Europe. Mr. Khodorkovsky and his company, in other words, had to be destroyed for Mr. Putin's non-market, state corporatism and energy imperialism to thrive. So now, no one will build competing pipelines; no one will advocate the breakup of state monopolies; no one will promote the corporate governance and transparency that are anathemas to the state-owned enterprises. The new charges against Mr. Khodorkovsky are, in fact, intended to provide a smokescreen for the Russian government's illegal sale, later this year, of the remaining assets of Yukos, valued at $33 billion, to those very companies.
The Russian regime has lost the moral authority to dispense justice. Its exploitation of prosecutorial and regulatory powers, though shielded by state immunity, has become criminal. Selective enforcement of tax and environmental laws is the favored means of stealing assets from both domestic and foreign owners. Extortion is entrenched as a method of acquisition by the state.
The Yukos saga was followed late last year by the shakedown of Royal Dutch Shell at its Sakhalin-2 project. With each such case, the Kremlin is less concerned about even keeping up pretenses. Moscow calculates it has space to maneuver around legal and moral obligations, whether with respect to existing treaties, or negotiations over developing the giant Shtokman gas field, or its commitments to supply gas and oil dependably without political interference.
When Mr. Khodorkovsky was interrogated about the new charges, he declared that he had no faith in Russian justice, and that he will refuse to cooperate with the prosecutors in another politically driven farce of a trial. This week he appealed to the world not for himself but for all Russians: "Their only chance is the timely voluntary transfer of power in Russia by the means of honest, fair and transparent elections. . . . [The new president] should have nothing in common with the giant corruption machine that has paralyzed Russia."
Even in a Siberian gulag, Mr. Khodorkovsky has the courage to say: Enough! His fate is far more important than most people in the West realize. Some Western leaders such as Angela Merkel of Germany and JosÃ© Manuel Barroso of the European Commission have raised his case with the Russian president. The dictatorial feathers were not ruffled and both were summarily brushed off. And so, another Khodorkovsky trial will soon be upon us. Let's be sure that this time we all recognize that Mikhail Khodorkovsky's fight is for the future of Russia and its relationship with the rest of the world.
Mr. Amsterdam is international defense counsel for Mikhail Khodorkovsky, and is based in London after being deported from Russia
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