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Wednesday, Jan. 5, 2011

EDITORIAL

'Predictable' verdict in Moscow

Mr. Mikhail Khodorkovsky is a difficult man to like. He is a Russian tycoon, a multibillionaire who got rich during the fire sale of Russian national assets during the kleptocratic years of the Yeltsin era. But being unlikable does not make him a criminal, and neither does daring to challenge Russian strongman Mr. Vladimir Putin, then president, by funding opposition political parties. Those appear to be Mr. Khodorkovsky's real offenses in the aftermath of his second conviction in late December on charges of money laundering and theft. Mr. Khodorkovsky's trial has been viewed as a test of Russia's commitment to the rule of law. If that is the standard, then the country has failed.

Mr. Khodorkovsky was a child of perestroika, using the newfound economic space created by Soviet President Mikhail Gorbachev to get rich. He parlayed bank holdings into majority stakes of large Russian resource companies. He turned Yukos, an oil company, into a petroleum conglomerate that could rival any of the Western seven sisters.

Mr. Khodorkovsky was not content to just be a businessman. Instead, he called for greater transparency in business and political practices in Russia, alarming both his competition and the real power in the country. Shortly after, he was arrested in 2003 and charged, along with Mr. Platon Lebedev, a business partner, with tax evasion and fraud.

The two were convicted in 2005 of failure to pay $30 billion in taxes, an astronomical — some would say ludicrous — sum and was given an eight years' imprisonment, and Yukos was sold off in pieces to pay the arrears. Most observers agree that the charges were trumped up and Mr. Khodorkovsky's real crimes were his allegations of corruption and challenging Mr. Putin by financing an opposition party.

Mr. Khodorkovsky had been scheduled to be released this year and the prospect of him regaining his freedom allegedly prompted the filing of new charges. This time, he and Mr. Lebedev were charged with money laundering and theft. According to prosecutors, the two men stole some $27 billion in oil, virtually all that their company Yukos produced between 1998-2000, and all the oil it exported between 2000-2003, and then laundering the proceeds. More likely, the charges were leveled to keep Mr. Khodorkovsky in jail during 2012 when Russia holds its next presidential election. Prosecutors have been asking for an additional six-year sentence.

The Dec. 27 verdict was widely viewed as an indication of Russia's future. Unlike Mr. Putin, who has made his distaste for Mr. Khodorkovsky well known — early last month the prime minister said the former oligarch had blood on his hands and "a thief must go to jail" — President Dmitry Medvedev has warned against politicizing the courts. He is thought to favor a more independent judiciary and a country that divorces law from politics. That divergence in views had turned the trial into a symbol of who held the stronger hand in Russian politics: Acquittal would indicate that Mr. Medvedev was ascendant. To no one's surprise, the victor appears to be Mr. Putin.

This political competition also helps explain Mr. Medvedev's visit to the Northern Territories at the beginning of November. The move may have infuriated Japanese and effectively blocked any progress in bilateral negotiations over the islands, but it played well to a Russian domestic audience that expects its leadership to spare no expense in protecting its sovereignty — and its territory in particular. In the runup to 2012, every candidate has to be wary of attacks from the right.

The verdict has triggered protests worldwide. U.S. Secretary of State Hillary Clinton said it "raises serious questions about selective prosecution — and about the rule of law being overshadowed by political considerations." German Foreign Minister Guido Westerwelle agreed, noting that "The circumstances of the proceedings are highly alarming and a step backward for the country on its road toward modernization."

Mr. Khodorkovsky's hands may well be dirty; it is hard to imagine anyone succeeding in the cut-throat world of Russian business without crossing some lines. In fact, what seems to distinguish Mr. Khodorkovsky from his peers is his willingness to challenge the political authorities. Other oligarchs have either made their peace with the regime or gone into exile. Only he has remained in Russia, and spoken up.

A sentence of six more years in prison for Mr. Khodorkovsky and Mr. Lebedev was announced Dec. 30 after the judge finished reading aloud the 250-page verdict in keeping with Russian tradition. Mr. Khodorkovsky will be deprived of any chance to influence the outcome of the 2012 presidential election. A light verdict — including a suspended sentence — could have signaled a shift in the balance of power in Moscow. Mr. Khodorkovsky's lawyers have said that they will appeal the verdict, although that is likely to be fruitless if political dynamics prevail over legal issues.

In November Mr. Khodorkovsky said a guilty verdict was "predictable." Sadly, he was right. Worse, that prescience was not based on any inside knowledge of the facts in the case. Rather, it was the political logic that dictated this result.



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