Sunday, May 22, 2005

Khodorkovsky: political victim, perhaps, but no saint

The verdict in the Mikhail Khodorkovsky trial is still being read and looks likely to drag out for weeks to come. Apparently the joke in Russia at the moment is that he's been given a life sentence of listening to the verdict.
From here, of course, it is hard to judge exactly how guilty or innocent he is of the precise charges against him and what exactly was behind the whole trial. If you can get your hands on it, the best article I've read on the subject appears in this week's Economist. It gives an extremely well-rounded account of Khodorkovsky's background, his business affairs, what he did to earn Putin's enmity, the lessons of the trial, and the future for Khodorkovsky if he survives jail (tuberculosis is rife in Russian prisons). Interestingly, it posits that one of the reasons he's enjoying so much sympathy in Russia is because he stayed to fight his case, unlike some of the other oligarchs such as Vladimir Guzinsky and Boris Berezovsky, who fled to Israel. As a Jew, Khodorkovsky could have made the same choice.
What becomes clear, from this account at least, is that if Khodorkovsky did not technically break the law to gain his tremendous wealth, he certainly stretched it and played hard and fast with the rules. This, however, was fairly typical and Khodorkovsky was perhaps not even the worst offender. One of the things about the trial which scares many Russians, foreign investors and observers, therefore, is not miscarriage of justice but the arbitrariness of Russian justice -- which is not the same thing.
There also emerges a certain irony in Khodorkovsky's reputation today as a defender of democracy, law and order and Western standards. Again, he made his money in shady ways (gaining state assets through rigged auctions) and was not always such an upright citizen:
Foreign investors with short memories are now bemoaning the demise of Russia's most “westernised” oligarch, which is what, when it suited him, Mr Khodorkovsky became. But that was only after he used every means at his disposal to take full control of Yukos. Especially after Russia's default-and-devaluation crash of 1998, some of the means were outrageous: squeezing out minority shareholders; moving important meetings at the last moment; hiding shares in offshore vehicles. There were rumours of worse.
Then, as his supporters now prefer to remember, Mr Khodorkovsky was the first of the Yeltsin-era tycoons to see that there was even more money to be made by going straight. Yukos started to keep western-style accounts and courted foreign partners. Oil prices rose; shares in Yukos, which was pumping 2% of global oil output, rocketed. Still in his 30s, Mr Khodorkovsky became, reputedly, the richest man in Russia.
An unfortunate result of his playing hard and fast with the rules:
The huge enrichment of a few insiders while most people struggled with poverty helps to explain why, for many Russians, democracy and the free market are still synonymous with corruption and inequality. If Mr Khodorkovsky and the other loans-for-shares participants helped to make a return to communism impossible, they are responsible also for the warped nature of Russian capitalism, and their country's disillusionment with reform.
Let me be entirely clear: my sympathies here are not with Putin and his gang. The selection of the politically ambitious Khodorkovsky for prosecution rather than other offenders, Putin's grab for Yukos, and the show trial, all reflect an increasingly greedy, autocratic regime which is stifling opposition and applies the law only when suits. I believe Putin is leading Russia in a dangerous direction and is anti-democratic, and that Khodorkovsky would have been convicted on any charges with which they chose to stitch him up. But let's also be honest: the Khodorkovsky case is more complex than the 'Putin hatchet-job' label allows. Khodorkovsky may be a political martyr, but he's no saint.


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