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Analysis & Opinion
17.12.10 The Significance Of Khodorkovsky’s Second Trial
Introduced by Vladimir Frolov

Contributors: Vladimir Belaeff, Andrei Liakhov, Alexandre Strokanov

On December 27 Moscow District Judge Alexander Danilkin will start delivering a verdict in the second trial of Mikhail Khodorkovsky and Platon Lebedev, two former principal shareholders in the now extinct Yukos Oil Company, once Russia’s largest oil producer. Both men have been in jail since 2003 on charges of tax evasion. Their sentences are due to expire next year. Is Khodorkovsky’s fate critical to the state of Russian democracy? What is the real significance of his second trial?

In their second trial, Khodorkovsky and Lebedev are both being charged with massive fraud, and are alleged to have stolen all the company’s oil production. Many believe the new charges, filed almost two years ago and carrying a maximum penalty of 14 years in prison, are legally absurd and have been pressed merely to keep the two men behind bars for another decade or so. The court heard the testimony of former and current government ministers (German Gref and Viktor Khristenko), who all but dismissed the charges as absurd.

The outcome of this trial and its potential impact on Russia’s political future has become a matter of intense speculation. As The Economist argued in its latest issue, “The chances that Khodorkovsky will be found not guilty are slim. If he were, it would be a sign that the system of Vladimir Putin, Russia's former president and current prime minister, was beginning to come apart.”

Many believe that were Khodorkovsky and Lebedev to be acquitted of the second charges and freed next year, Russia could become a different sort of place and democracy would bloom. Others argue that Russians are largely indifferent toward Khodorkovsky’s fate, and that nothing dramatic would happen were he to go free. Khodorkovsky himself in a number of interviews has eschewed a political career for himself, stating his preference for spending time with his family and engaging in educational projects.

Is Khodorkovsky’s fate critical to the state of Russian democracy? What is the real significance of his second trial? What would be the political consequences for Russia’s future of the two different outcomes that could emerge from the trial – a new prison term or freedom for Khodorkovsky? What would be the impact on President Dmitry Medvedev and his modernization agenda, were Khodorkovsky to receive a second prison term? Does it really matter? Where does it matter more – in Russia or in the West?

Andrei Liakhov, Attorney at Law, London:

I appreciate the inadequacies of the Russian judicial system, which was unable to prove its case beyond reasonable doubt in the first Khodorkovsky/Lebedev trial. However, based on the sum of my knowledge of the history and circumstances of Yukos’ “business model,” I am convinced that this pair should have been put behind bars long before 2003. In this, Russians followed (up to a point) the 1940s and 1950s American experience of prosecuting major gangsters (Al Capone, Lucky Luciano, etc). After all, Al Capone was jailed for tax evasion and fraud, not for racketeering and murder.

The publicly available excerpts from the second indictment, in combination with other trial information leaked to the press (provided that these are all true and not doctored by each side of the process) do not give a clear picture of the nature of the indictments and of the evidence that the prosecution is using to support them. Some of the statements indeed (if true and not taken out of context) look very questionable, given the fact that Yukos was a private company, majority owned by the defendants. The nature of the charges in the second trial seems (if one assumes all leaks are correct) to be of a civil rather than a criminal nature.

The totality of the circumstances surrounding the trial (which, by the way, does not have much national coverage) leads me to believe that the trial is an attempt by the group that orchestrated the first trial to force the defendants to take a certain course of action (or to refrain from doing so). The big question is whether the largest corporate raid/war in recent Russian history is blessed by the duumvirate and is deemed by the ruling clan important enough to throw its weight behind the prosecution no matter what.

It definitely seemed like neither. The reasons behind this thesis seem to be relatively low-profile coverage and a lack of open, high-profile international support for the defendants; relatively easily obtained witness statements by former and current cabinet members and other senior civil servants (Bogdanchikov), some of whom clearly support the defendants; a lack of comments by any senior member of the current administration on the trial, and some other Soviet-style hints (interestingly, commentators have to rely on the classic methods of Leonid Brezhnev’s era of “body movement” reading to understand what is really going on behind the scenes).

Thus I believe that the most likely interpretation of the significance of the current trial is that it is an attempt to “tie up the lose ends.” It seems that the neo-Politburo has lost any interest in the defendants and the trial, and it is the exclusive responsibility of the group that orchestrated the first trial not to allow any of the defendants any place on the 2012 Russian political landscape. As such it has no significance for Russia’s political future and is viewed as an unpleasant, chilly and smelly blast from the past.

Alexandre Strokanov, Professor of History, Director of Institute of Russian Language, History and Culture, Lyndon State College, Lyndonville, VT:

In my opinion the majority of Russian people today are absolutely indifferent toward Khodorkovsky’s fate and many (in the provinces in particular) will have a hard time even identifying him as something other than “that rich guy who went to prison several years ago.” Among those who are still paying attention to this story and his trial, only some will see him as a hero and a fighter for democracy in Russia. Actually many more people will regret that not as many oligarchs followed in his footprints to prison and will reasonably criticize the selectiveness of the Russian justice system toward the tycoons and criminals who robbed the country in the 1990s.

Certainly, Khodorkovsky’s fate is absolutely not critical to the state of Russian democracy, and his second trial, regardless of its result, has very little significance for the country in general. Neither will it have any influence on the modernization agenda or the future of president Medvedev. For Russia and for Russians Khodorkovsky, his era and his political ambitions are in the long gone past and unlikely to come back.

At the same time, because it is often late in its reaction to changes on the Russian political scene and probably because of serious investments made earlier into Khodorkovsky’s political future, the West still believes that this “project” may bring some dividends. I have no doubt that the West shows much more interest in Khodorkovsky’s fate than Russia or the Russians. You can see it in the number and character of publications in the Western media, as well as in different types of appeals to the Kremlin.

Today the Russian political scene, despite a serious lack of competitiveness among major parties, is quite dynamic, and the speed of change in Moscow exceeds, for example, the same speed in Washington, despite promises of change made by Barack Obama during his presidential campaign.

In the middle of the 1990s the major challengers to the newly established post-Soviet Kremlin regime were the communists and the so-called “patriots.” Later the major challenge came from the elite who began their carreers in the Soviet era, although they broke their ideological ties with the past. They were led by then-Mayor of Moscow Yuri Luzhkov, former Prime Minister Evgeny Primakov and some regional leaders, like the presidents of Tatarstan and Bashkortostan who were capable of building an alternative to Boris Yeltsin’s regime in 1999.

Khodorkovsky and several other oligarchs, like Boris Berezovsky and Vladimir Gusinsky, who live outside Russia today, came into the limelight after Putin took control of the Kremlin. They were potential challengers or just irritants and obstacles for the new regime, which enjoyed the widespread public support that Yeltsin obviously lacked. Putin turned against these oligarchs because they probably attempted to privatize the state in the same way they acquired their financial fortunes in the previous decade. Yeltsin had to rely on their support and money in exchange for even more lucrative pieces of the state pie that they demanded from him. For Putin, these former supporters of the predecessor’s regime were more of a ballast and liability than an asset, and it was better to get rid of them since they became an obstacle on his way of empowering the state. Their fate is well known. Today, all these challenges and irritants are in the deep past, but new challenges appear quickly.

I was quite surprised that the Western media almost ignored the signs of the arrival of new challenges: Russian youth and ethnic radical nationalism that in my mind will be playing the dominant role as the major headache for the Kremlin and for the Russian elite in the foreseeable future. I read several articles online from CNN and MSNBC, as well as in some Western newspapers, and I was shocked at how shallow their analysis was, explaining the events on the Manezh Square on December 11 as simple soccer fan riots and clashes with the police.

At this point I only wanted to say that the attention of the Russian people in the long term will be given much more to radical nationalism and the ability of the Medvedev-Putin tandem to handle it, than to whatever verdict will be made in Khodorkovsky’s case. This verdict is going to be announced now right before the New Year, when the Russian people will have much more pressing issues to worry about: how to spend their long winter holidays, what to cook and what to wear on New Year’s Eve.

Vladimir Belaeff, Global Society Institute, Inc., San Francisco, CA:

Russia’s political future will not be defined by the outcome of the second Khodorkovsky trial. Khodorkovsky’s supporters, The Economist a prominent one among them, seem to be trapped in their own hyperbole. From the start, for reasons that they cannot clearly explain, they have attempted to make a cause c?l?bre from what is a rather banal case: a billionaire wheeler-dealer caught in schemes and webs of his own making.

And in this season of economies and lives wrecked by billionaire wheeler-dealers, of worker protests on the streets of Paris, London and Athens, of double-digit unemployment rates and of sovereign debt measured in trillions of dollars, popular sympathy will be scarce for a former billionaire who in the opinion of many remains today a very wealthy person.

Preoccupation with “l’affaire Khodorkovsky” in reality has a limited audience, primarily in circles that have decided a priori that their hero is blameless. They have not provided a single item of real, objective, unambiguous evidence to support their belief. All their statements are innuendo and ad hominem commentary. It seems by the logic of these advocates that Khodorkovsky’s innocence is proven simply by the fact that a government prosecutes him which his advocates abhor.

Looking globally, today there are tens of prominent executives, senior government officials and other business people being convicted of crimes similar to the ones ascribed to Khodorkovsky, and are serving prison terms much longer than the harshest sentence the latter can expect. No one advocates leniency for Bernard Madoff, for example, nor is the fate of U.S. politics tied to the imprisonment of this individual, or of the ex-CEO of Enron, or many other crooked American businessmen currently in prison.

There is also the matter of Russia’s legal zeitgeist. There have been major, rather spectacular recent scandals in the prosecution of crimes and corruption in Russia. These judicial failures caused a notable adverse reaction in Russian public opinion. One is reminded of the high-resonance case in 2010 of a politically well-connected young woman in Irkutsk who committed vehicular manslaughter, killing a female pedestrian and crippling her sister. The guilty driver received a light sentence, deferred for 14 years on the pretext that she has to raise a child, not yet born at the time of sentencing. This ridiculous sentence caused widespread anger and was overturned. Similarly, in Moscow, major ethnic clashes were triggered by the prosecutorial release of a suspect in a killing motivated by inter-ethnic hatred.

In this atmosphere any leniency in the sentencing of a billionaire tax evader will further erode the public’s expectation of a justice system that is direct and punitive. Russia’s jurisprudence must demonstrate that it is consistent and equitable for all citizens – any appearance of favor toward a rich convict will not help to increase respect for law and justice among Russians. So the logic of the situation indicates a maximum stipulated sentence for Khodorkovsky in his second trial.

There is another, ironic aspect to this whole affair. From a marketing perspective, Khodorkovsky’s advocates packaged their “product” in a format guaranteed to fail. Glamorous images of a buff younger man, smugly smiling in the courtroom dock, oozing an attitude suitable for an American glossy magazine, do not evoke sympathy in people who have a healthy disdain for the nouveaux-riches of the 21st century. Very stupid marketing.
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