The guilty verdict and nine-year jail sentence handed to former Yukos boss Mikhail Khodorkovsky by a Russian court comes as no surprise. His was a political show trial. President Putin is making an example out of him. But it is the exact nature of the politics behind it that is the issue.
If Khodorkovsky is being punished because he was involved in corruption and the trial was intended to send a warning to other Russian oligarchs, then no one can complain. On the other hand, if, as Khodorkovsky’s supporters claim, he is being punished because he decided to support opposition parties in an increasingly authoritarian Russia, and the warning intended from Putin is that Russian businessmen who play politics will suffer, then this is a very sad day for Russia. Russian democracy and Russian freedom are then seen to be the sham that its detractors claim. The Putin administration has presented itself as the hammer of the oligarchs, knowing such a policy to be hugely popular. Over 85 percent of Russians think the oligarchs became wealthy by stripping the country of its wealth during the Yeltsin presidency and that they deserve to be punished.
Nor is it be right to see Mikhail Khodorkovsky as an innocent victim thrown to the crowd by a populist and resentful Putin. There are charges to answer. It is not only the matter of fraud. He has also been accused of being behind the 1998 assassination of Vladimir Petukhov, the mayor of Nefteyugansk. Petukhov had protested about Yukos’ nonpayment of taxes and was about to lodge a formal complaint against Yukos in court.
The trouble is that Putin’s campaign against the oligarchs is extraordinarily limited. Corruption and tax evasion were pervasive during the Yeltsin years; Russia was almost bankrupted. It did not have enough money to pay its bills. It was exactly that which led to the 1998 IMF bailout. If oligarchs stole from the state through rigged privatizations and massive tax evasion, they ought to be charged. But so far, the list is limited to Khodorkovsky, his business partner, Platon Lebedev and Sergei Bidash, the former director of Tagmet. What about Russia’s other billionaires — men like Chelsea football club owner and head of Sibneft, Roman Abrahamovich, recently listed as the richest man in Russia with a fortune of $11.5 billion? There are many others. But they are supporters of Putin. Is that why the campaign against oligarchs leaves them untouched?
The suspicion will not go away. That is deeply damaging to Russia and to the Russian economy. It says that the Kremlin puts power before growth and prosperity. Yukos had become a pillar of an expanding economy, creating jobs and wealth. In the time between privatization and Khodorkovsky’s arrest, its assets doubled in value to $12 billion . That was thrown into chaos by Putin’s pursuit of Khodorkovsky. The subsequent way in which rules were bent to enable Yukos to be bought back under state control makes the picture even worse. It is no wonder that international businesses are now wary of investing in Russia.
