On Monday a Russian court found Mikhail Khodorkovsky guilty for a second time based on his time as the CEO of Yukos, once Russia's largest oil company. The guilty verdict doesn't change Khodorkovsky’s immediate circumstances, he has been locked up in a prison in Russia's Far East since his arrest in 2003 on charges of tax evasion; what the verdict does is ensure that Khodorkovsky won't be getting out of jail next year after serving the eight year sentence he received in 2003.
For a very detailed recounting of the Khodorkovsky saga, check out Martin Sexsmith's book Putin's Oil (or for a recap, check out my review of Putin's Oil). In short, Khodorkovsky was jailed for willfully evading taxes while serving as the head of Yukos during the 1990s; in his defense, Khodorkovsky said that he followed the tax laws as best he could during the chaotic 1990s, when Russian tax laws were constantly changing, and in essence he was arrested for not accurately anticipating what the tax laws would be and not paying accordingly. In fact, the tax situation in Russia in the 90s was so confused, that the tax charges could have been levied against any members of Russia's oligarch class, who also used the economic upheaval as an opportunity to amass huge personal fortunes. That Khodorkovsky was singled out for punishment is clear indication to Kremlin critics that Khodorkovsky’s prosecution was in fact politically motivated (that any number of oligarchs could have been prosecuted, but weren’t, was a thought echoed in a fair number of comments made by Russians on the BBC’s coverage of the verdict).
They say that Khodorkovsky’s real crime was to break a “gentleman's agreement” between Vladimir Putin and the oligarch class where Putin promised to give the oligarchs a free hand in running their business empires so long as they stayed out of politics; Khodorkovsky made some relatively minor contributions to the Kremlin's political opposition in the early 2000s, soon after he found himself arrested at a Siberian airfield on the tax charges. Perhaps it is ironic that Khodorkovsky’s political donations came as part of his philanthropic efforts to build a civil society within Russia at a time when his fellow oligarchs were happy to take their money out of the country and spend it on luxury flats in London and enormous private yachts.
Khodorkovsky’s second prosecution will do nothing to dissuade critics of the idea that once again Russia's legal system is being used for political purposes. Sexsmith's book paints a picture of Putin fearful that Khodorkovsky could at long last be the symbol Russia's political opposition needs as a rallying point; it's not a coincidence then that Khodorkovsky’s original sentence would expire with enough time for him, hypothetically, to enter the 2012 presidential race. For his part, in writings from his Far East prison, Khodorkovsky has come to see himself as a “martyr” for modern Russia. Critics ask why Khodorkovsky, and his business partner Platon Lebedev, were put on trial now on charges that date back more than a decade. To further complicate matters was the judge's decision to postpone his ruling from mid-December until yesterday, a time when most Russians are preoccupied with the upcoming New Years and Orthodox Christmas holidays; perhaps the hope was that the ruling would be lost in the holiday shuffle. Western observers though have taken note, with even the US State Department expressing “concern” over the verdict and the flimsy evidence offered at trial.
Khodorkovsky’s actual sentence likely won't come for several more days as the judge has said he will not give word on punishment until he finishes reading the entire 250-page verdict. Whether this will affect foreign investment in Russia also remains to be seen.
1 week ago