Issue 4471. Last Updated: 09/06/2010

Kremlin Robbed Khodorkovsky and Russia

I don't think there is a point in discussing new charges against former Yukos CEO Mikhail Khodorkovsky. If a thief robs somebody at gunpoint, does it make sense to discuss the robber's claim that his victim did not pay taxes?

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In the Yukos affair, the robber is the state. On Oct. 25, 2003, police stormed Khodorkovsky's private jet and "robbed" him at gunpoint by taking him into custody. In May 2005 he was found guilty of fraud in a classic Russian kangaroo court. As a result, Yukos was essentially expropriated by state-controlled Rosneft in a sham auction, and the oil that Khodorkovsky exported before his arrest is now traded by Gunvor, a company co-founded by Prime Minister Vladimir Putin's friend, Gennady Timchenko. Thus, does it make a lot of sense to discuss the robber's claim that Khodorkovsky did not pay of all his taxes?

In 2003 when Khodorkovsky was arrested, we had a different Russia and a different Putin. During those early Putin years, the Kremlin didn't fear an Orange Revolution and hadn't yet befriended Venezuelan President Hugo Chavez, Iranian President Mahmoud Ahmadinejad and the dictators of Sudan and Zimbabwe.

Before Khodorkovsky's arrest, oligarchs hired Western auditors to improve their companies' transparency because they wanted to launch successful initial public offerings. Putin enjoyed large support from the West and many of the country's liberals.

Nonetheless, by 2003 Putin had already surrounded himself with former KGB officials and members of other siloviki organizations -- none of whom knew anything about running a business. They didn't know how to rule the state either. The only thing they were experts in was how to single out "enemies of the state" and destroy them. If there were no real enemies, they created them.

The obsession with eliminating enemies had two big advantages for the siloviki. First, they got very wealthy by expropriating the enemies' assets. Second, they were able to turn Putin into their hostage. The siloviki scared Putin with the conspiracy theory that Khodorkovsky was planning to overthrow Putin's regime. Then the siloviki scared Putin with another conspiracy theory -- that nongovernmental organizations, funded by the United States and other foreign countries, were plotting an Orange Revolution in Russia.

It is no coincidence that Khodorkovsky became the siloviki's first victim. He wasn't any sneakier than the other oligarchs, but he was far more strategic. His initial goal was to accumulate capital, but by 2003 he was already thinking about how to increase the value of his assets by improving his company's transparency.

Khodorkovsky also understood that the success of his business depended on improving the overall transparency of government -- to create a state that was governed by the rule of law and not by autocracy and organized crime. And this is where he crossed the line with the siloviki. He butted heads with the Kremlin elite who wanted to use their power to seize the country's key assets -- even if that meant creating a Russia that was closed and poor instead of one that was open and wealthy.

In 2003, Putin and Khodorkovsky personified two possible paths for Russia's development. One fought for a more democratic Russia driven by a transparent government because this increased the value of his assets. The other wanted a submissive population because this increased his power.

When Khodorkovsky was arrested, he lived in one Russia -- one that still had some hope of becoming a democratic society. Now he sitting out his prison term in a completely different Russia.

Yulia Latynina hosts a political talk show on Ekho Moskvy radio.



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To Our Readers

The Moscow Times welcomes letters to the editor. Letters for publication should be signed and bear the signatory's address and telephone number.

Letters to the editor should be sent by fax to (7-495) 232-6529, by e-mail to oped@imedia.ru, or by post. The Moscow Times reserves the right to edit letters.



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