Khodorkovsky was also brave to the point of foolhardiness in 2003. His close business partner, Platon Lebedev, was arrested in July and there was no doubt who was next on the list. Another partner, Leonid Nevzlin, did the sensible thing and moved to Israel that summer. Instead of leaving or shutting up, Khodorkovsky spoke up even more, publicly condemning the state and corporate corruption that was holding Russia back. The consequences were swift.
Khodorkovsky was indicted on multiple charges of fraud and tax evasion, the usual Kremlin recipe. His trial was all the proof one needed to demonstrate that in the Putin regime, no proof was needed. Ironically, Yukos had paid more taxes per barrel than any other oil company. I’m not going to claim to be an expert on all the financial and legal chicanery that went on during the 1990s a few dozen people into billionaires in record time. But obviously there were few clean hands by the standards of the rest of the world. Khodorkovsky wasn’t much different from all the others at the start. But his vision of the future was so radical that he scared not only Putin but the other oligarchs as well. Had every oligarch been audited and held accountable, it could have been a healthy result for law and order in Russia.
Instead we got a show trial against someone Putin considered a personal enemy. If the ad hoc nature of the trial itself wasn’t enough to confirm this, it’s worth noting that many other people connected to Yukos and the trial itself were also persecuted and prosecuted. Lebedev was convicted and abused in prison despite his serious illnesses. Many other Yukos employees were harassed and indicted. Even Khodorkovsky’s defense lawyer, Karinna Moskalenko, was threatened with disbarment by the prosecutor’s office. This became Putin’s mafioso calling card: if you challenged the power vertical, he wouldn’t just go after you and your assets, but also your employees, friends, family, and anyone who dared to defend you.
In May 2005, Khodorkovsky and Lebedev received nine-year convictions and were shipped off to prison camps. The response from the rest of the world was the typical mush about “concerns” over the independence of the Russian judiciary and “urging” the Russian government to observe certain standards. By that point I’m pretty sure the US State Department had a form letter expressing such concerns so it could just change the names and dates each time. That letter, usually issued quietly by a low-level functionary, would get a lot of use in the coming years as Putin’s abuses in Russia piled up while the leaders of the free world insisted on embracing him warmly on the international stage.
The arrest led to a revealing comment from America’s ambassador, Alexander Vershbow: “We hope there will be a fair trial, by Russian legal standards” (italics added). When a Financial Times article criticized the practices of the Russian attorney general’s office, the Russian minister of finance, Vice Prime Minister Alexei Kudrin, waved it off, saying there were “some irregularities."
For American and Western European ears, I should enumerate some of these “irregularities”: searching the offices of lawyers who had visited their clients in jail; searching the offices of members of parliament; and refusing to allow members of parliament to visit Khodorkovsky in prison, which is a violation of Russian law. No court in the West would have accepted the case for trial because the evidence was obtained by illegal means, but these are “Russian legal standards.” As with two of Putin’s favorite expressions, “managed democracy” and “the dictatorship of law,” it’s a revealing oxymoron.
Along with removing a critic and rival from the scene, Khodorkovsky’s jailing was a warning to the rest of the Russian business world: play by the Kremlin’s rules and don’t get into politics. It was a turning point in Russia where the government officially gave up pursuing lawbreakers and instead became one itself. It changed from rogue elements with connections in high places abusing government power to steal into a state-run initiative of harassment, incarceration, and looting that targeted anyone disloyal to the center.
The Khodorkovsky-Yukos case represented how Putin’s regime established ties between property rights and power. Unless you were in power you couldn’t control your property. This in turn signaled the end of democracy. The elections were doomed to be rigged by those in power because if they lost political authority they would lose their assets. By the time 2004’s presidential election came around, Putin and his cronies had far too much to lose to risk getting kicked out of the Kremlin by something as easily fixed as a vote.
The end of Russian democracy and total centralization of power in the Kremlin were in some ways only side effects of the mundane primary objective of theft. The attack on Yukos was aimed at redistributing property in favor of the oil companies owned by Putin’s cronies. Instead of old-fashioned socialist redistribution it was “take from the rich and give to the richer.” The entire vast nation was turned into an asset vacuum cleaner that used the power of the state to pull everything to Moscow, where it was portioned out to well-connected allies and companies with just enough invested in the government to keep people out of the streets and the country from falling apart. There was always plenty in the budget for propaganda and internal security forces.
The brutally efficient way Yukos was broken up and plundered made the rigged auctions and shell company tricks of the 1990s look amateurish. The Putin regime would soon expand its consolidation operation to the rights of the average citizen. If the Russian people had been robbed in the 1990s, the 2000s showed us that we hadn’t seen anything yet.
In 2009, with Khodorkovsky’s scheduled release on the horizon, Russian prosecutors filed new charges against him, even more absurd than the original ones. He was essentially charged with stealing all the oil he was accused of not paying taxes on the first time. Cases like this are why Russians and other people living under totalitarian regimes do not see the writings of Gogol, Kafka, and Bulgakov as fantasy, or even surrealism. The state doesn’t have to be logical or reasonable, it just has to achieve its ends.
Dictatorships feel the perverse need to fulfill protocol, to have elections and trials even though the conclusions are foregone. The free world often rewards these charades with willing suspension of disbelief. Russia pretends to have elections and a justice system; the free world pretends right along with it, occasionally expressing their token concerns, citing irregularities, and attempting to shame the shameless. The dictators take all these background noises as the pathetic appeasement they are, and go on about their business. In the words of that keen observer of the totalitarian mindset, the Polish writer Stanislaw Jerzy Lec, “Is it progress if a cannibal uses a fork?”
The conclusion of the new trial in November 2010 gave Khodorkovsky the opportunity to present a powerful closing statement on the state and future of Russia. It stands as an indictment of its own, an important document for the moment and for history. I will quote only a few parts of it here, but please find and read the entire document.
I am ashamed for my country.
I think all of us understand perfectly well—the significance of our trial extends far beyond the scope of my fate and Platon’s, and even the fates of all those who have guiltlessly suffered in the course of the sweeping massacre of YUKOS, those I found myself unable to protect, but about whom I remember every day.
Let us ask ourselves: what must be going through the head of the entrepreneur, the high-level organizer of production, or simply any ordinary educated, creative person, looking today at our trial and knowing that its result is absolutely predictable?