This irked Khodorkovsky, because he was now gripped by an efficiency mania as oil prices soared. He started to want to do for the country what he had done for his company. Especially since he knew exactly what was going on inside the Kremlin. He had sources, former employees and friends right up to Putin’s office. He was also their neighbour: the Yukos gang lived together in exquisite villas in the new Russia’s Beverley Hills, the exclusive Zhukovka gated communities off the Rublevka highway to the west of the city – this was Putin’s home too. Khodorkovsky would complain that the President’s morning escort that closed the highway to traffic made him late for work. Who did this Putin think he was anyway – closing the lanes like a tsar?
Who Is Sovereign over Oil?
Khodorkovsky thought he was better than this St Petersburg ‘chinovnik’ – this bureaucrat. By now he was the richest man in Russia, worth $8 billion; he was also the richest person in the world under forty. He expressed such thoughts privately, then he started dropping the hint publicly. He no longer wanted money. Khodorkovsky increasingly wanted power. Rumours began to circulate that he wanted to be president. Then he made an announcement that he would quit business when he turned forty-five in 2008, exactly in time for what was supposed to be the first ‘post-Putin’ presidential election. The hiss was growing louder that he wanted Putin’s job. His comments did the bare minimum to dissuade people. Referring to himself and his long-time business partner, he quipped:
Leonid Nevzlin and I have reached the conclusion that we have enough personal money to keep us happy. In that sense, money plays absolutely no role. Money is an instrument to be used for other things. It is an instrument like ammunition in the military – you have to constantly replenish it.29
They had already taken aim at the Duma – and were winning the battle for influence in the notoriously chaotic, corrupt chamber. As late as 2003 the Putin clan were, like team Yeltsin, struggling to control it. They did not have a majority. In 1999, the government party only had 64 seats out of 450 in parliament and had only secured 23.32 per cent of the vote. The Kremlin had forged the United Russia party out of factions adding up to 235 seats, but its hold was shaky. Symbolic of their lack of control in Putin’s first term, fist fights even broke out in the Duma as angry, chanting communist deputies blocked German Gref from reaching the speakers’ podium to present the Land Privatization Bill.
This lack of control gave the oligarchs (especially Khodorkovsky) the ability to rent, buy and bribe the deputies. The Kremlin was not the only source of political financing in town, as Khodorkovsky had a rival patronage system. Yukos had bankrolled the liberal and pro-American opposition parties, Grigory Yavlinsky’s Yabloko and Boris Nemtsov’s Union of Right Forces. Khodorkovsky had made hefty donations to Putin’s party. Donations to Fatherland all-Russia, the party that had hoped to challenge Unity, had made the Yukos executive Vladimir Dubov a deputy on its list. He was soon made chairman of the Duma’s taxation committee.
This was the way the Moscow elite saw Khodorkovsky putting his politics into practice. It was discrediting the stand he took publicly. It did not look like publicly interested liberal politics, but the politics of big oil, pure and simple. Khodorkovsky, of course, admitted he was engaged in ‘lobbying’, but the Kremlin did not see it this way. They were furious. The speaker of parliament bemoaned that on oil legislation it seemed ‘as if there are 250 Vladimir Dubovs in the chamber’.30
This was no hysterical remark. The government was repeatedly defeated in its attempts to increase taxes on the oil sector. Putin and his men wanted to increase the state take in oil profits as high as possible, whilst Khodorkovsky was fighting for it to stay as low as it had been in the 1990s. The reform-minded German Gref was distraught, having calculated that this cost the treasury $2 billion a year.31 It would be wrong to see the Yukos affair as Putin’s overreaction to aggressive lobbying. This was not lobbying, but a battle over who would grow rich on the new oil boom – private companies or the state.
Khodorkovsky was practising extensive tax avoidance and throwing everything he had to stop taxes on oil profits going up. This left the government spitting at his grandiose speeches about how his charity work was going to educate 2–3 per cent of students in Russia who had been left behind by an ‘inefficient state’. Even the old Yeltsin man, Mikhail Kasyanov, who saw nothing wrong with Khodorkovsky’s plans to merge with either of the Western oil majors ExxonMobil or Chevron said: ‘The fact that Khodorkovsky was allegedly buying up the deputies, I once angrily told Putin myself.’32
Putin had warned the oligarchs to stay out of politics if they wanted to carry on in business. In 2000, when he had gathered the twenty-one tycoons in the Kremlin to spell this out to them, Khodorkovsky had been there. Putin had showed what happened – through Berezovsky and Gusinsky – if they didn’t. Most tycoons did not see this ‘offer’ as an attack. Most were relieved and did the best they could to comply: they were moneymakers uninterested in politics. They were not real businessmen, who had built up the oil fields, but courtiers who lived in fear of losing their cash cows.
Khodorkovsky was different. He not only interfered but tried to block Putin from turning the oil boom into state power. His lobbying was to show Putin that he held the property rights to Yukos, that he was strong enough to stop his profits being turned into tax – that he was sovereign over oil. Khodorkovsky had always been different. At the very beginning he had been warned – that the last time when young men in the Komsomol were encouraged to dabble in business, in the 1960s, some of them had ended up arrested. ‘I did not remember this,’ he once boasted, looking back gleefully laughing at that moment when he had followed his instinct.33 He was not a man who listened to the cautious – not when every risk had brought massive returns. It was simply too late for him to stop taking them.
I Am Powerful Enough to Insult You
At the time the oligarchs, like most Russians, were more frightened of a weak state than an overbearing one. Moscow was paranoid that the Russian Federation could go the way of the Soviet Union. Putin’s assertion that a ‘weak state is a threat to democracy’, rang true.34 To be more precise – most oligarchs were convinced that a weak state was a greater threat to their property rights than an authoritarian one they got on with. Most were happy to exchange less room for manoeuvre for increased asset security.
Not Khodorkovsky. By 2003 it looked like he was breaking the ‘deal’ to stay out of politics in exchange for his fortune. He was increasingly promoting an agenda at odds with Putinism. Khodorkovsky began to campaign across the eleven time zones with his ‘Open Russia’ foundation. As the Kremlin tried to co-opt elites, Khodorkovsky was building an alternative institutional network of think-tanks and charities, funding political parties and paying for ever more Duma members. He wanted to educate 2–3 per cent of students in his charity schools. So, people began to ask – how many relatives did those 2–3 per cent of students have? So, how many voters does that turn into?