Leutheusser-Schnarrenberger issued a formal report documenting Russia’s ‘gross infringements’ of the European Human Rights Convention and concluded that the Yukos executives had been ‘arbitrarily singled out … in order to weaken an outspoken political opponent, intimidate other wealthy individuals and regain control of economic assets’. I had been arrested because I was perceived to be a figurehead for the democratic, Western-friendly, internationalist future that many of us wanted for our country, while Putin and his ex-KGB colleagues were plotting a return to authoritarian rule.
Behind bars in the courtroom, surrounded by the press and media
At our televised clash in the Kremlin in February 2003, Putin had responded to my exposé of the huge scale of government corruption by implying that I myself had improperly benefited from the privatisation of Yukos. Yet nowhere in any of the charges against me was there any mention of the Yukos privatisation. Instead, there was a grab bag of indictments relating to long-forgotten business deals that Group Menatep had completed in the 1990s, including the privatisation of the Apatit mineral fertiliser company; the sales of Apatit production; the privatisation of the Research Institute for Fertilisers and Insecto-Fungicides; the use of a specially legislated zone for reducing Yukos’s tax burden; the tax implications of registration as private entrepreneurs; and the investment of Yukos funds in Media Most Corporation.
The prosecution’s case was conspicuously light on facts and figures, relying instead on misrepresentation and misinterpretation of the law, demanding a conviction based on untenable declarations and ominous insinuations rather than relevant evidence or cogent analysis. None of which mattered in the slightest, of course, because the judges were never going to decide the case on the facts; their role was simply to play the part of an independent judiciary, while waiting by the telephone for the Kremlin to ring and dictate their verdict. The prosecution knew before the trial began that it would be triumphant, yet even with all the advantages it enjoyed, it still managed to demonstrate its professional incompetence and woeful lack of understanding of the fundamental concepts of business law. The judges showed themselves to be equally clueless, making unsubstantiated pronouncements that simply parroted the prosecution’s lines, ignoring obvious violations of Russian law and refusing to consider even the most irrefutably well-founded arguments from the defence. Extensive defence evidence was simply discarded, while the judges copied vast tracts from the text of the prosecution’s indictment directly into their verdict.
Independent observers from European institutions catalogued the court’s violations of due process. Sabine Leutheusser-Schnarrenberger wrote:
The sheer number and seriousness of procedural violations in my view exceeds a mere accumulation of mistakes that could be explained by a lack of experience or professionalism. During my mandate, I have been confronted with a number of examples of the serious problems from which the Russian judiciary suffers in general, including its notorious openness to corruption, lack of respect for the rights of the defence, and, in particular, the overwhelming influence of the procuracy, which in turn is a tool in the hands of the executive.
The list of due process violations reported by observers at the trial was extensive:
The court did not treat the prosecutors and the defence equally.
The defence was not provided sufficient time to present its case and the overwhelming majority of defence motions and requests were denied.
The prosecution was allowed to introduce impermissible evidence, including unauthenticated documents and materials obtained illegally.
The defence was denied the opportunity to introduce exculpatory evidence, including key expert reports.
The scope of direct questions to defence witnesses and of defence cross-examination of prosecution witnesses was restricted.
The defence was denied cross-examination of prosecution expert witnesses.
The defence was denied requests to subpoena prosecution expert witnesses.
Witnesses were harassed and improperly influenced, including through continued investigation and interrogation; threats of searches, arrests and prosecution; and improper questioning during trial.
The court made motions on behalf of the prosecution.
The court questioned witnesses on behalf of the prosecution.
The defendants were denied effective assistance of counsel, including through interference with access; interference with confidential communications; and harassment of counsel.
The prosecution failed to disclose exculpatory evidence.
Further legal abuses included the selective and retrospective application of laws – selective because such sanctions were never invoked against any entity other than Yukos, and retrospective because the law in question did not exist at the time of the alleged offence. For instance, the prosecution charged that Yukos had used a specially legislated low-tax zone to reduce its tax burden, a fact we never hid, and a scheme of which other Russian oil companies also took advantage. Indeed, the Kremlin itself had encouraged the creation of low-tax zones in order to boost economic activity in areas that were suffering through the post-Soviet transition. The Russian tax authorities had explicitly approved Yukos’s use of such mechanisms for reducing the company’s overall tax burden. Yet, the prosecution now sought to class this usage as a crime. The tax authorities reopened Yukos’s tax returns from previous years that had already been signed off and accepted. They ruled that the use of regional tax shelters was illegal – despite the Russian Audit Chamber having declared them legal just a few months earlier. A representative of the tax authorities specifically confirmed that, at the time of the supposed infringements, the tax reduction methods in question were widely used and considered legal, while the legislation was only changed thereafter, with new rules entering into force shortly before my trial began. Other oil companies operating in Russia used the same methods to reduce their overall tax burden, but only Yukos was subjected to a tax reassessment and prosecution. The Organisation for Economic Co-operation and Development (OECD) concluded that the proceedings against Yukos were therefore ‘a case of highly selective law enforcement’ which demonstrated how ‘Russia’s courts are subservient to the executive … and its prosecutors highly politicised’.
We knew full well that the court would find Lebedev and myself guilty on all counts, so the nine-year prison sentences we were handed in May 2005 came as no surprise. We appealed, because there was no reason not to appeal, but we didn’t hold out great hope. In September 2005, in a one-day hearing, the court rejected the arguments put forward in our application, while reducing our sentences from nine to eight years in a show of simulated magnanimity. The fact that the judges could review hundreds of bound volumes of evidence from a case that had lasted a year in the space of just a few hours might have surprised outside observers; but it was entirely understandable to Russians. The appeal was rushed through, ensuring a conviction in time to prevent me filing papers to register as a candidate in the forthcoming parliamentary elections, which would have placed me firmly in the public eye during the campaign. When I politely pointed out to the appeal judge that I was by law permitted to address the court and to be represented by my own lawyer, I saw the panic in his eyes, before he denied my requests with a witty legal quip, ‘You’re not in Strasbourg here!’
Counting the prison time we had served since our arrests in 2003, Platon and I were scheduled for release in 2011 – but this evidently did not suit Vladimir Putin. In 2009 he ordered us to go on trial again. This time, we were accused of embezzling the entire oil production of Yukos over a period of six years leading up to 2003, around 350 million metric tons of oil worth over $25.4 billion, and of laundering all the proceeds from the sale of this oil to the tune of over $21.4 billion. We were found guilty once more and ordered to remain in prison until 2016. We appealed to the European Court of Human Rights and won favourable rulings that had no effect whatsoever on the Russian authorities.