By now, Yukos was doing well. We had worked hard to transform the company from a polluting, loss-making dinosaur into an efficient modern business; we had battled through the perils of the 1998 crash and I was in no mood to hand over the firm we had created. Boris Berezovsky and Vladimir Gusinsky had been threatened with arrest and worse, intimidated into relinquishing their businesses and moving abroad, but I was not inclined to do so. The Kremlin’s response was to mount a series of threats against me and my colleagues.
In June 2002, I was asked by the newspaper Kommersant if I felt safe in Russia and I had no hesitation in replying, ‘Of course not. As an individual – absolutely not … The risk that I, Khodorkovsky, could be made to disappear? Yes, of course that could happen. But I don’t think they could make Yukos disappear. Society understands that the loss of such a major business would be an unacceptable loss for every single Russian person … That is why even if Putin does not like our company, he still talks to us…’ My optimism, as events would prove, was hopelessly misplaced. Within months, the talking would stop and the repression would begin.
In January 2003, we were considering making a bid to buy an oil extraction business in northern Russia called Severnaya Neft. The owners were asking for $200 million, which was well over the realistic asking price. No oil company was willing to pay it. But then we heard that Rosneft had bought the firm for a ridiculous $600 million, at least three times its real value. The deal had the hallmarks of corruption and it was likely that the excess $400 million of public funds furnished by Rosneft had simply gone into someone’s pocket. For me, it was the last straw, the final confirmation that the Siloviki were pushing Putin away from leading Russia on the path of transparency and integrity towards the old ways of cronyism and corruption. As for Putin himself, despite all his ills, I thought that maybe he was still undecided about which way to go. I would soon realise that I was mistaken.
On 19 February 2003, Putin summoned the country’s leading businessmen to another meeting in the Kremlin. It was one of a series of widely publicised forums that were designed to show the people that the president was taking seriously the problems of ordinary Russians. Recordings of the meetings were shown on national television and reported in the press. The subject of this particular meeting was ‘the fight against corruption’. The participants were expected to talk about the need to tackle corrupt practices and we thought the presence of television cameras would ensure that the president would express his determination to do something about it. We thought he would give the green light to us and our political allies in the government and the administration to take practical measures to change things for the better.
After a series of speakers had mouthed meaningless platitudes, the microphone came to me. I had prepared a speech, complete with slides, that would deliver a stinging rebuke to those who perpetuated corruption in Russia, up to and including the president himself. When the moment came, I was nervous, but I pressed ahead. ‘Corruption in Russia – a brake on economic growth’ flashed up on the participants’ screens, followed by a damning series of statistics. According to opinion polls, 27 per cent of Russians believed corruption to be the most dangerous threat to the nation; 49 per cent believed corruption had spread to the majority of state officials, including the police, the tax and customs agencies, the security services, the judiciary, the traffic police and the highest levels of federal power. The finding that almost half of the Russian population believed the president and his closest allies to be corrupt sent a buzz around the table. Putin was listening and staring at the slides, but like the trained KGB man he was, he betrayed no sign of emotion.
The next statistics were about people’s views of the Kremlin’s relationship with corruption: 32 per cent of Russians, reported the pollsters, believed that the Russian leadership would like to tackle corruption, but was powerless to do so; 29 per cent believed our leaders could tackle corruption but chose not to do so; and 21 per cent believed it neither wished nor was able to tackle it. The meeting had moved from the empty expression of pious hopes to something much more concrete: evidence that one third of Russians believed their president to be powerless in the face of organised corruption, while another third believed he was complicit in it.
I could see that Putin’s patience was running out. He was looking at me with steely eyes, a tense, fleeting smile on his lips, ready to cut me off. But I had something more to say, this time about a specific instance of corruption involving one of the president’s own sidekicks. ‘We need to make corruption something that everyone is ashamed of,’ I said. ‘Let us take for example the purchase by the state oil company Rosneft of the firm Severnaya Neft…’ There was silence in the room; all those present knew I was accusing the president of Russia’s inner circle of personal involvement in a crooked business deal. I forced myself to continue. ‘Everyone knows the Severnaya Neft deal had an ulterior motive … I have to tell you that corruption is spreading in our country. You could say that it started right here – and now is the time to end it!’
Unbeknownst to me at the time, the beneficiary of the Severnaya Neft deal was not merely a sidekick of the president, but the president himself. I was told later by sources close to Putin that the missing $400 million had gone directly into his personal account, so I was in fact accusing him personally of sitting at the centre of the web of corruption. His response was telling. Instead of denying the charges, he retaliated with a not very veiled threat against me and my company.
‘You mentioned Rosneft,’ Putin said, ‘and the deal to buy Severnaya Neft … The first things to say about that are clear: this is the state oil company and it needs to increase its stocks of oil, which are currently inadequate. But some other oil companies, including for instance Yukos, have got excess reserves. The way it got hold of them is a question that forms part of the theme we are discussing today. And that theme also includes questions about the payment or the non-payment of taxes. You and I have at times talked about the problems your own company has had with tax payments, although, to be fair, the leadership of Yukos reached an agreement with the tax office and dealt with … or is dealing with … all the charges against it, all the problems with the state. But nonetheless, one has to ask, “Why did these problems arise?”’
Putin had evidently been taken aback by my words. Unusually for the calculating KGB man that he is, he was shocked into an unguarded response, first raising the question of Yukos’s own oil reserves, then muttering darkly about an alleged underpayment of taxes – an issue that he and I had discussed and resolved to everyone’s satisfaction several weeks earlier. After this initial outburst, he forced himself to regain control, even acknowledging that we had in fact settled the tax issue, which is pretty much Putin’s modus operandi – attack, then take a step back. It allows him to observe a person’s reaction, affording him time to plan his follow-up, then launch his deadliest assault when his target is thrown off guard.
His anger was clear, and so was the threat. He was horrified to have the business machinations of his close entourage exposed to the Russian people. I had challenged him and he came out against me. The way Putin responded to my challenge was the clearest possible signal of where he would take the nation in the years ahead. Since then, Putin has taken Russia down a route that is a dead end; a dead end for the economy, for society, and the wellbeing of the Russian people. As part of his programme to replace liberal market democracy with centralised state autocracy, Putin would need to crush all those who had other ideas. I came away from the meeting satisfied that I had not shirked my duty of speaking out against institutionalised corruption, but I was also convinced that punishment would not be long in coming.