Posts Tagged ‘Mikhail Khodorkovsky’

Truthiness Abounds in Russia’s Ratification of Protocol 14

January 15, 2010 Leave a comment

After dragging its feet for four years, the Russian parliament ratified the European Court of Human Rights’ (ECHR) Protocol 14 earlier today. Russia had been the only country out of 47 participating states to refuse to ratify Protocol 14, which improves the efficiency of the Court. The current process has created a backlog of complaints, a third of which are filed against Russia.

Dmitri F. Vyatkin, Russian Parliamentary member mentioned that the impasse was overcome because the ECHR had addressed Russia’s concerns by providing written commitments that Russian judges would be included in reviews of potential cases against Russia, the Court would not begin investigating complaints before cases were formally accepted and the Court would not have new powers to enforce rulings.

Taken together this sounds like Russia wants to transform the ECHR into a Russian court: by hearing complaints against Russia that the Russian government approves of, not delving too much in to the details of complaints filed and if the complaint is accepted for the Court to have no ability to enforce its ruling.

However, Thomas Hammarberg, the human rights commissioner of the Leaders of the Council of Europe, presents a different view of Russia’s approval of Protocol 14, that Russia’s concerns where heard but ultimately Russia will be held to the same rules that apply to other members and that no changes to the protocol were made.

Leaving for now, what Russia’s ratification of Protocol 14 actually means for the ECHR, a central question remains, “What propelled Russia to ratify the protocol after all these years?”

“Smoothing over differences” appears to be the official reason media outlets are reporting, however there may be other reasons political and financial reasons why Russia is offering this carrot to the West.  

Earlier this week, the $100 billion lawsuit YUKOS v. Russia was postponed for the third time because two Russian representatives were unavailable. Perhaps the Russian authorities feel that ratification of Protocal 14 could pave the way for this case to be dismissed.

Additionally, the Financial Times reported earlier this week that Russian companies would be seeking $90 billion over the next two years to finance debt restructuring and capital improvements and perhaps to rebuild the coffers for politically connected Russian business owners who saw their fortunes collapse during the 2008 financial crisis. As demonstrated with the Rusal IPO, concerns over the management of Russian companies remain and ratifying Protocol 14 may be a signal to the investment community that Russia wants to play nice.

Russia may see ratifying Protocol 14 satifying many goals: to reduce the effectiveness complaints against Russia in the ECHR while reassuring investors that Russia abides by the rule of law. But as the trial against former YUKOS chief Mikhail Khodorkovsky and a Russian policeman’s open letter to end authorized corruption demonstrate, Russia remains a feudal state, where

in absence of functional legal or law enforcement systems, people’s only real protection lies in a network of personal and professional relationships with powerful individuals.


YUKOS vs. Rusal

January 11, 2010 1 comment

It was the best of times. It was the worst of times.

On Thursday, January 14th the European Court of Human Rights (ECtHR) is hearing the case of YUKOS Oil Company v. Russian Federation, the first time in six years of litigation that both sides will meet face-to-face in a legal battle on the Russian authorities expropriation of YUKOS and its assets beginning in 2003.  Foreign policy and Russian officials have acknowledged that the imprisonment of YUKOS’s CEO Mikhail Khodorkovsky was due to political reasons stemming from his support of opposition parties.

Meanwhile, the Rusal continues on its IPO path, even as more doubts about the process have surfaced. Its controlling shareholder Oleg Deripaska continues to be linked to organized crime, was refused a visa to enter the United States on those grounds and has received millions in government money funnelled through Russian state-run Vnesheconombank (VEB), controlled by Prime Minister Vladimir Putin.

YUKOS’s Mikhail Khodorkovsky is being charged in a second round of trumped up charges while Rusal’s  Oleg Deripaska is being rewarded for his cooperation and collaboration with the Russian government, stating publicly that he would transfer Rusal back to the government at any time saying, “If the state says we need to give it up, we’ll give it up.”

Der Welt – Khodorkovsky’s lasting shadow

December 15, 2009 Leave a comment

Via the EU-Russia Centre, Der Welt published an article on why Mikhail Khodorkovsky remains significant to Russia’s economic development. According to the article “at least one third of the population expressed according to the survey Institute Levada-Center at the beginning of the conviction that people like Khodorkovsky could help with their know-how of the country in crisis.”

The full article translated below via Google Translate:

Khodorkovsky’s long shadow
Yukos was once an example to be established early on ethics and years later Vladimir Putin again lives in fear of the dead and a group jailed billionaire
Eduard Stein
December 2009, 04:00 Clock 14h

For some reason, Vladimir Putin, sensing a need for clarification. After six years of evasive answers and arcane information about the rise and fall of the government-imposed oil company Yukos was Russia’s most powerful man on television two weeks ago suddenly on the offensive. For years, curious person urged the former President and current Prime Minister, a plausible explanation. Vain. Finally, it was a dish that had sent the once-largest oil company in the country several years ago in the bankruptcy, said Putin and his top officials free of the responsibility: Finally, the court on a repeated sentence or the release would be the Mikhail Khodorkovsky, once Russia’s richest decide.

But it was still Putin himself, who forestalled suddenly in the course of his TV Question Time the court and in unexpected detail, commented on the case. What should spontaneously appear, therefore, ultimately came more through-composed. Do not go there about when to release for whom, “said the Prime Minister go there so that repetition of such economic crimes. They also maintained that the money from the auction of Yukos assets RULE in social housing has been set, “Putin said to the astonished spectators”. Then, to dare the legal tightrope: the ex-security chief of Yukos, Alexei Pitschugin, who has been convicted of three contract killings in 2007 to life imprisonment without the guilt, “has clearly acted in the interest of and on behalf of the owner.

Since Putin knows his opponent over the court, “said Mikhail Khodorkovsky, who himself was never accused of murder, from prison. You may still call upon the Premier to give evidence.

In seven days on the beginning of the Causa Yukos, the topic is thus again a household word. For years, the Russian authorities had hoped that the interest in his most prominent prisoner, who was once estimated at 15 billion U.S. dollars assets, more and more abated. And in the end perhaps totally dies. Too much the case had tarnished the image of the rulers and the country already. No other matter beyond the Chechen war had made the perceptive world opinion against Russia’s development under Putin. No subject had clearly signaled observers abroad that began with Putin after a decade of attempts in a market economy and democracy in a new era of statism and the authoritarian power vertical in Russia.

None other than 25 October 2003 was so obvious. Early in the morning landed on that day a Russian Tupoljew with Khodorkovsky aboard in the Siberian city of Novosibirsk. A few minutes later, the domestic intelligence service FSB special forces stormed the plane. “When I saw the siege was everything to me clearly,” to the then forty-year multi-billionaire said.

Already months before a string of incidents had indicated that was the most modern and most efficient oil company in the country with his boss and major shareholder in the crosshairs of investigators. What followed after the arrest, was an unprecedented geheimdienstgeschulten tug of war between the Kremlin and the relentless head of a mega company with 105,00 employees. At the end Khodorkovsky was convicted of fraud and tax evasion in 2005 with eight years imprisonment in the remotest Siberia. Subsequently, Yukos was filleted and mostly incorporated into the state oil company Rosneft, which rose to the market leader.

Since the spring of this year, Khodorkovsky is in Moscow again in court. Shake about the new indictment not only Putin’s critics around: the tycoon is the whole Yukos flow have been stolen. Previously he had been convicted solely because of tax evasion for the Yukos oil. Now the prosecutor has accused him of having illegally sold oil worth 20 billion euros. In extreme cases, this latest charge threaten to bring more than 20 years in prison.

One should remember the Mafia boss Al Capone, the “30 year old was formally sentenced in the U.S. for tax fraud – but in reality for all crimes he committed,” Putin initiated at the end of November in France. His answers to answer the questions about Khodorkovsky was drastic. He likened his rival on this occasion with the U.S. billion fraudster Bernard Madoff, who was sentenced to 150 years in prison. Nobody has felt the injustice and “even a beep given by itself,” complained Vladimir Putin. Why just the other Causa Khodorkovsky with a measure would be measured?

Because it was politically motivated to be Khodorkovsky’s lawyers never tires of stressing. That’s what Putin himself admitted behind closed doors, said a few months ago, none other than Mikhail Kasyanov, the beginning of the affair, Prime Minister under Putin. The former president had echauffiert about the fact that Khodorkovsky without permission of the Kremlin’s next Liberal parties also began to sponsor the Communists,’ said Kasyanov. Immediately after his assumption of office, Putin had called all the oligarchs to abide by political non-interference. All other tycoons, who like Khodorkovsky, seized during the privatizations of the 90s to questionable nature and at bargain prices, huge fortunes under the nail, and great power within the state itself, had understood Putin’s message – and Khodorkovsky was warned. The wealth had gone to his head and caused a feeling of integrity, he would tell later companions. “Was Chodor,” as his intimates call him, just a strong person with principles to keep his followers against it.

Khodorkovsky has indeed has strong international support. Unlike court proceedings, the lobbying machine of the volatile Yukos billionaire runs very fast. Together with lawyers, they instigated in an information war with the Kremlin, which they have won very early on. In early December, they also achieved a real part of success: An international arbitration tribunal in The Hague ordered former Yukos shareholders to legal action against the Russian government because it had allowed, despite binding to the International Energy Charter, the expropriation of the Group. As the claim will be circulated to the shareholders of 100 billion U.S. dollars.

“In the end, the European Court, but not 10,000 dollars compensation claim,” warns Alexei Makarkin of the Moscow Center for Political Technologies to realism in a new information war. But also includes Makarkin – such as Khodorkovsky’s supporters – not that Putin’s attacks against the detainee associated with the decision of the Court of Holland and the prime minister had once built a defensive line.

For just as likely, but observers think that is on the rise in the Russian government panic because the politicians are afraid because of the absurdity of the charge in the current second trial in Moscow for an acquittal.

Domestically, such a defeat would have to get over, however. The nation does not feel any great sympathy for Khodorkovsky. But at least one third of the population expressed according to the survey by the Institute Levada-Center at the beginning of the conviction, that people think Khodorkovsky could help with their know-how of the country in crisis. “If Khodorkovsky was set free, he would become perhaps less economically, but socially active,” says Sergei Guriev, rector of New Economic School in Moscow: “As a moral authority he could collect a lot of people around.”

An acquittal would have still another effect: When would this year have a pregnant Yukos lawyer suffering from AIDS and the former deputy leader of the group have been released from prison, the verdict further evidence of potential investors that the new president, Dmitry Medvedev, with the modernization seriously. “It would be a sign that the country does not drift to a halt,” says Guriev.

But that when it comes to power, the investment climate for the governance of secondary, Makarkin said: “Being a strong character Khodorkovsky is ready to fight. Putin has made clear with his recent statements that he did not want to see him in freedom.”

NEWS: Mikhail Khodorkovsky and Platon Lebedev Defense Team Seeks Testimony

December 14, 2009 Leave a comment

From the Khodorkovsky and Lebedev Communications Center

On October 28, 2009, Mikhail Khodorkovsky’s defense counsel served a federal subpoena on former PricewaterhouseCoopers (PWC) audit partner Douglas R. Miller, requiring the accountant to provide sworn testimony about his work in Moscow on behalf of the expropriated oil giant and the various legal proceedings initiated by the Russian authorities concerning PWC’s work for Yukos.

But on December 11, 2009, the Russian Prosecution attempted to disrupt Miller’s deposition. Its representatives filed a motion with the Khamovnichesky Court in which they asked the court to issue a decision finding Miller’s scheduled deposition inadmissible as evidence. The court found the motion did not comply with Russian law and denied it.

Miller was the lead partner on the Yukos account in Moscow for PWC, Yukos’ longtime outside auditor and consultant. At the end of 2006, the Russian authorities started a criminal investigation, which is ongoing, targeting PWC and its employees, including Miller, in connection with alleged illegal operating activities and tax evasion in Russia. As a result of increasing pressure on PWC by Russian authorities, in a manner clearly designed to undermine the reliability of the Yukos audited financial statements and to secure incriminating testimony from the management and employees of PWC against Khodorkovsky and Lebedev, PWC subsequently withdrew 10 years of audits of the Yukos financial statements. Miller signed one of the letters officially withdrawing PWC’s audits.

The subpoena already has provided dividends to the defense and established the Russian Prosecution’s further violation of Khodorkovsky and Lebedev’s rights. Miller has produced documents which reveal the prosecution selectively submitted records into the case materials and intentionally withheld documents containing exculpatory evidence.

Andrew Meier’s Interview on ABC Radio

December 14, 2009 Leave a comment

On December 11, 2009, Andrew Meier, author of the NYTimes article “Who’s Fears a Free Mikhail Khodorkovsky?” speaks with Ramona Koval of The Book Show on ABC Radio about writing the article and his decades-long relationship with Khodorkovsky.

During the interview, Meier mentions that Vladimir Putin has “lashed out at Khodorkovsky personally. Ennuerated what was latent in the piece, things that I had just sketched…and he’s gone far beyond what our fact checkers were concerned about, enunciating how much this case means to Russia.”

Listen to the interview here.

Russia Must Face Up to Alternative Energy – Mikhail Khodorkovsky

November 25, 2009 Leave a comment

Mikhail Khodorkovsky shares his thoughts with NEFTE Compass on the future of Russia’s oil reserves, the need for Russia to develop alternative energy technologies and Russia’s role in the shifting oil and gas geopolitical landscape in light of alternative energy developments. Khodorkovsky posits that countries will lessen dependence on one supplier or a group of suppliers as more competition in the form of alternative energies begin to play a role. These changes will not only bring about new technological and economic realities, but improve and preserve human life as well.

Russia may very well experience an obvious reduction in the role of rents from the realization of hydrocarbons in the country’s budget. Russia needs to diversify its economy given the competitive challenges posed by a growing China, and, in the future, India.

NEFTE Compass is a leading weekly oil and gas publication focused on Russia, Eastern Europe, Central Asia and the Caspian Sea.

NEWS: Mounting Russian Investment Risks Highlighted by Death and False Imprisonment of Leading Businessmen

November 20, 2009 Leave a comment

Transparency International released its 2009 Corruption Perception Index (CPI) and again Russia’s low ranking, 146th out of 180 countries, demonstrates it needs to do more to reign in corruption and strengthen its legal system.

This annual survey shows that concern among business people and analysts over state corruption and legal abuse deters direct foreign investment and harms Russia’s economic health. President Medvedev himself has repeatedly stated his commitment to ending “legal nihilism” and spurring a new era of foreign investment.

Yet, Mikhail Khodorkovsky, once Russia’s most successful businessman, remains in jail on a second round of fabricated charges, further eroding business confidence. Mr. Khodorkovsky recently passed the six-year mark of his imprisonment and faces another 22 years in Siberia if convicted in this second trial. This is taking place as capital outflows totaled over $169 billion, approximately 10% of Russia’s 2008 GDP, between October 2008 and March 2009 according to U.S. State Department statistics. Multinational companies, such as IKEA and Carrefour, have announced plans to withdraw or reduce investment in Russia due to extortion and lack of judicial independence.

Pressure on business is building following the recent death while in custody of leading Russian corporate counsel Sergei Magnitsky, 37, a key witness in another absurd legal battle over alleged tax fraud between the Kremlin and Hermitage Capital, once Russia’s top investment fund. The International Bar Association and the U.K. Law Society decried Magnitsky’s death as did Firestone Duncan Managing Partner Jamison Firestone who said the government ignored calls by business and legal leaders to release his former colleague.

“There is no law in Russia at the highest level,” Firestone said. “The higher you go the less there is law. Any lawyer who tells you he can protect you in Russia is a liar.”

Risks to the financial system mount as Russian President Vladimir Putin backs energy deals with German and Italian corporations and moves for the state to take a stake in the controversial initial public offering of the embattled aluminum giant UC Rusal. As Finance Minister Aleksei L. Kudrin seeks government bond financing from London bankers, the Kremlin Deputy Chief of Staff Vladislav Surkov warns Russia risks collapsing into chaos if officials try to fix the political system by adopting liberal reforms.