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Mikhail Khodorkovsky: An Honourable Man – OpEd

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By Jeremy Putley

Out there in blogworld one can find numerous websites specialising in Russian topics which have adopted the concept – as a given and undoubted fact – that Mikhail Khodorkovsky is a very bad person: variously a crook, a thief, a swindler, a cheat, a money-launderer, or worse. Similar views are expressed by Russian migrants to this country. However, if his accusers are directly challenged to substantiate their generalisations with details of actual crimes that were committed and specific laws that were broken, it is my experience that they are unable to do so, instead falling back on the notion that anyone who acquired significant wealth at the time of market liberalisation in the 1990s has to be condemned for opportunistic crypto-criminality.

Outside the bloggers’ arena, newspaper editorials also favour an oblique approach. The respectable daily paper I read uses a glib formula: “Mikhail Khodorkovsky is no saint. He could not have survived in the free-for-all exploitation and seizure of Russian state assets in the 1990s if he were.” This is an unfair generalisation with which to accuse an unfairly imprisoned businessman who is not in a position to defend himself.

A more rational approach to the subject is given in a new documentary, “Khodorkovsky”, directed by Cyril Tuschi, which premiered in February at the Berlinale film festival. In the film the viewer is told that the assets distributed by President Boris Yeltsin could have been sold to foreign buyers at their full value, but as there was then insufficient wealth in private hands the result would have been that all of Russia’s strategic assets would have ended up in the ownership of non-Russians. As a policy decision in the interest of the Russian people as a whole, therefore, the sale of the assets had to be to Russian entrepreneurs at less than full value.

In 2003, shortly before his arrest, Khodorkovsky was interviewed by Jonathan Ellis for the Independent. His remarks ought to be considered with due care and attention by those who even now blithely accuse him of theft or misrepresentation.

“People don’t understand the political situation at the time. In 1992, Yeltsin formed holdings of partly privatised oil companies in which the state had the majority of shares. But … those holdings were performing extremely badly. Oil production had dropped to an historic low – and this was the commodity that produced between 30 and 40 per cent of GDP. To make matters worse, the oil companies had paid no taxes for three years.

“Yeltsin was in trouble. He had to repay international loans but he had no money – either from the sale of oil or from taxes. And he couldn’t replace the directors of the companies because they had enormous power in the regions. They were constantly telling their employees that it was all Moscow’s fault. If Yeltsin replaced those directors, he would have made martyrs of them, and this may have tipped the balance back in favour of Communism.

“And so Yeltsin called in business people with a proven track record – by that time, I was one of those – and asked us whether we would like to take control of the oil companies. I remember saying ‘Yes please.’ But there were conditions attached. We first had to convince the current directors to sell us their shares and get them to come to Moscow and resign publicly to Yeltsin. It was the only way he could save face. Menatep agreed a share price with the directors for their shares in Yukos and they duly resigned.

“Subsequently, the shares owned by the government were put up for auction, and we obtained those shares in Yukos for $308m. But there was a big catch involved: we also had to agree to pay all taxes in full from the word go, plus all the back taxes. For Yukos, these amounted to $3.2bn.” Subsequently and in due course Yukos paid all of the back taxes.

If one accepts that there was, after all, no impropriety in the manner in which Khodorkovsky acquired his interest in Yukos at an undervaluation there are several questions which need to be examined. What was the real motivation behind both the first and then the recently-concluded second legal action against Khodorkovsky? An answer may be found in Cyril Tuschi’s documentary. There was an attempt to suppress the film by a theft from the director’s studio just a few days before the 14th February premiere, which was frustrated only because a copy of the film was already in the hands of the festival’s organisers.

In my opinion – having attended the film’s Berlin premiere – there is one very clear, even probable, motive for the theft of the film. It may be deduced from a clip of Igor Yurgens, referred to in the film as being an adviser to President Medvedev, talking to camera and describing the famous meeting which occurred in February 2003 at which Mikhail Khodorkovsky accused Vladimir Putin to his face of personal corruption and involvement in a theft of state assets. Yurgens criticises Khodorkovsky’s arrogant manner in addressing the then President in a television broadcast, but in an extraordinarily frank conclusion adds: “But it [the corruption allegation] was all true!” An astonishing, but of course absolutely believable, statement from a highly-placed official who was in a position to know.

Mr Putin is aware that he is personally vulnerable, should corruption charges be brought against him after he leaves office – and, this being the case, the short but dramatic confirmation by Yurgens of Putin’s personal complicity in the theft of state assets indicates who possessed the most powerful motive for the theft and suppression of the film.

The recent courageous statement by the “whistleblower” Natalia Vasilyeva, the assistant to judge Danilkin throughout the recent trial and sentencing of Mikhail Khodorkovsky and Platon Lebedev, to the effect that his verdict was foisted on him by higher authority represents the ultimate confirmation that the trial was a charade. “I fully trust her,” Mikhail Gorbachev has declared. It is now crystal clear that Prime Minister Putin directed the subversion of Russia’s judicial system with deliberate intent in order to keep Khodorkovsky in jail for up to seven additional years.

Correspondingly, Mikhail Khodorkovsky is revealed as being what his lawyers have always maintained since his detention in 2003: an innocent man, the victim of a powerful individual whom he had accused in a public forum of personal involvement in his country’s endemic corruption.

As the new documentary film also makes clear, Khodorkovsky could without difficulty have avoided arrest simply by going abroad, as so many others had done, but did not wish to desert his business partner who had already been detained. His decision to stay marks him as an honourable man. As an earlier Russian patriot wrote:

Not under foreign skies
Nor under foreign wings protected
I shared all this with my own people
There, where misfortune had abandoned us.

The final question which naturally arises is whether President Dmitry Medvedev will see fit to exercise his constitutional prerogative and to declare a pardon for the two men whose status is now revealed to be, not that they are political prisoners, but that they are victims of a malicious persecution and abuse of the judicial system by a corrupt politician. If Medvedev can bring himself to an understanding that this is the reality he faces, his primary and urgent duty is to dismiss Prime Minister Vladimir Putin from the office he now holds.

One thought on “Mikhail Khodorkovsky: An Honourable Man – OpEd

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    June 2, 2011 at 5:08 am
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    It is truly laughable how khodorkovsky’s defenders whitewash him.What they fail to mention is that far from being a democrat ,khodorkovsky tried to buy up the russian duma ,knowing that he could not win an election due to his popularity .He tried to subvert this legislative body so that it could pass laws in his favor .Knowing the author he would ask for proof, I point to various books and newspaper reports written by various western journalists (e.g Kremlin rising pg 281.richer,stronger and sliding back by the economist in 2006,a falling tsar by chrystia freeeland ,an oligarch who challenged the kremlin by gregory white ,putin’s russia by shevtsova who is a fan of khodorkovsky and various other sources). The author omits how in the Oligarchs (by David hoffmann) khodorkovsky admits that in the dying days of the ussr he broke laws and used his connections to party officials for protection or that in the 90s he had the worse reputation of all the oligarchs and that his bank menatep was involved in the theft of $4.4 billion for the rebuilding of chechnya.(see darkness at dawn by david satter). In khodorkovsky’s first trial at least,he was convincinglyshown to be a tax cheat fraudulently using tax havens to evade taxes. In any country in the world, these actions; tax evasion,theft of state funds,vote buying theft of state assets,transfer pricing would result in jail.Yet strangely,the author continues to insist the innocence of his beloved khodorkovsky.Why is this so?

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