The Quality of Freedom: Khodorkovsky, Putin and the Yukos Affair 
by Richard Sakwa.
Oxford, 426 pp., £55, May 2009, 978 0 19 921157 9
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Khodorkovsky in court in 2005

Khodorkovsky in court in 2005

In Moscow, the second trial of the former oil and banking tycoons Mikhail Khodorkovsky and Platon Lebedev has now been going on for nearly a year. The trial itself, which is doggedly examining a series of esoteric and possibly imaginary economic crimes while skating over more serious – and also possibly imaginary – suggestions of violent criminality, has not been very interesting. The drama of two very bright men – one of whom, Khodorkovsky, is now a political figure of some significance – facing off against the entire apparatus of an authoritarian state, on the other hand, has been riveting. It was always bound to be.

Mikhail Khodorkovsky graduated from the Mendeleev Institute in Moscow in 1986, with a degree in chemical engineering. At university he’d been deputy head of the Komsomol, in charge of making sure other students came to Party meetings and of excluding them if they had a bad attitude. Kicking someone out of the Komsomol also meant kicking them out of the university; Khodorkovsky had done that too. He was the only child of two Soviet factory workers, one of whom (his father) was Jewish. ‘I realise now that my parents hated the Soviet government,’ he has said, ‘but they shielded me from this, thinking that to do otherwise would be to ruin my life.’ They were right. Their son’s path to success in the Soviet Union was through conformity; they raised him well, and he conformed.

Even if Khodorkovsky had wanted to become a dissident, he would hardly have had time: just as he was getting out of school, Gorbachev was beginning the process that would end up destroying the Soviet Union. Almost immediately, the insane scramble to build Russian capitalism began. Khodorkovsky gathered together some friends, mostly computer programmers and engineers like himself, and began doing what the Russians still call bizness. They imported computers and bad French brandy and took advantage of the various inefficiencies created by the fact that the official dollar-rouble exchange rate differed from the unofficial one by 300 per cent. The late Soviet system had no real banks, and so they started one, called Menatep. They were learning on the job. Some years ago the Moscow Times tracked down a one-time associate of Khodorkovsky’s, a French financier, who described what it was like to work with Menatep in the early days. They were fantastically inventive and fantastically ignorant. The Frenchman recalled a letter they’d composed after a consultation with the accountancy firm Arthur Andersen. ‘Could you tell Mr Arthur Andersen …’ it began. Andersen, the firm’s founder, had died in 1947. ‘They didn’t have a clue,’ the Frenchman said.

They got a clue pretty quickly, however, and homed in on one of their key comparative advantages: of all the early capitalists, Khodorkovsky had the nicest face. Like the others he was shrewd and intelligent, but he was also quiet and polite, with a knack for winning people’s trust. One of the most remarkable boondoggles of the late Soviet years was the conversion of the contents of illiquid corporate accounts into real-life cash. For years state-owned companies had been transferring huge sums of money to one another, because what’s 100,000 roubles on some ledgers between state corporations? Well, nothing, literally nothing, because those roubles didn’t exist. But if you spent your evenings in the late 1980s getting a law degree, as Khodorkovsky did, you might be able to figure out a way to turn those imaginary roubles into actual roubles. It was alchemy, but you needed a licence to perform the alchemy, and to get a licence you needed help from the top. The Washington Post’s David Hoffman, in the best journalistic account of the heroic age of Russian capitalism, The Oligarchs, found an old professor, the head of a giant research institute, who remembered Khodorkovsky and another young man coming to him to ask for some start-up capital. They were such nice young men, the professor recalled. He wanted to help them. ‘Well, maybe I forget now,’ the professor told Hoffman. ‘But it seems to me I gave them 170,000 roubles’ – that is, 170,000 roubles from the institute’s notional coffers. This was an enormous sum of money at the time, and you can be sure the professor was not forgotten by his protégés.

As the ‘transition’ to capitalism continued in the early 1990s, Khodorkovsky grew increasingly powerful without growing correspondingly obnoxious. In a country where the first thing anyone did with money was buy a tight-fitting pin-striped Armani suit and pointy shoes, Khodorkovsky wore jeans and a roll-neck sweater. More important, he kept his ties to power: for a while he served in the first Yeltsin administration as a deputy minister of fuel and energy. But soon he returned to the business world. There were many opportunities during those years for someone who knew where to look, though the real action for a Russian bank in the early 1990s was to take advantage of the runaway inflation. If you had some deposits on your books – Menatep was fortunate to be husbanding the monies of the Federal Pension Fund – you could take your roubles, turn them into dollars, and then turn them back into (many more) roubles in a few months. The losers – the people on the other side of that trade, as they say in the business – were the Russian population, for whom the price of bread went up while salaries and pensions stagnated.

The first seven or eight years of nickel-and-diming the wealth of the nation into their pockets put Menatep and a few other banks in position for the truly big play. This came in 1995, when Vladimir Potanin, a banker with even better connections than Khodorkovsky’s, came up with a plan. The Yeltsin government was rapidly running out of money. It had slashed social programmes, healthcare and military spending, but even so it was falling behind on salaries, particularly in the vital oil, gas and metal mining sectors. Up to this point the government had largely been financing itself by holding the world’s largest yard sale, selling off its many industrial assets; by 1995 all that remained were the oil, gas and metals giants. Unfortunately, the Communists, who weren’t enjoying the yard sale at all, were still powerful enough in the Duma to get legislation through making it illegal to privatise the country’s richest companies. But – this was the ingenious bit – what if the banks, the only more or less properly capitalised institutions in the country, were to ‘lend’ the government the money, with the government putting up shares in the untouchable oil and metals majors as collateral? Perhaps the government would default on the loans (of course the government would default on the loans!), but there was no telling that in advance. Banks would bid for the right to loan the government money, but in order to keep the Communists from yelling and screaming too much, foreigners would be banned from the bidding. This would also have the useful effect of keeping prices at a level that the Russian banks could afford.

Over the course of several weeks in late 1995, the ‘loans-for-shares’ auctions, as they came to be known, fundamentally altered the ownership structure of Russian society, handing controlling packets of the largest oil and metals companies to a group of well-connected private bankers. Potanin got Norilsk Nickel, the world’s largest nickel producer; Boris Berezovsky and his young partner Roman Abramovich bought half the oil company Sibneft for $100 million (when Abramovich sold his shares ten years later, that stake would be worth more than $9 billion); Khodorkovsky, who was Potanin’s closest ally in the loans-for-shares scramble, got Yukos, one of the country’s biggest oil companies, for $350 million. His stake would be worth 20 times that in just two years.

Loans-for-shares became the historical flashpoint for anger at the way the 1990s privatisation was conducted. But the deeper cause of this anger was the lawlessness that allowed a small group of people to become very wealthy while everyone else came to fear for their lives. There was fear of famine, but famine was averted; instead, as they saw their savings evaporate, Russians witnessed a civil war on the streets of their cities. Before Chechnya, before Turkmenistan, there was the war in Moscow, Petersburg and Yeltsin’s hometown of Ekaterinberg. Well-armed gangs were at one another’s throats, and you never knew when, going out for milk, you would find yourself in their way. A lot has been written about the humiliation Russia experienced when it ceased to be a superpower; a lot has also been written about the rapid immiseration of a vast segment of the post-Soviet population. But these things were affected by the daily experience of fear. It was certainly bad to be ruled by the senile bureaucrats of the Communist Party, but for a lot of people it was worse to be ruled by thick-necked thugs in tracksuits and Mercedes. It’s notable that the one work of cinematic art to come out of Russia in the 1990s was Alexei Balabanov’s Brat (Brother), a revenge fantasy in which a young man comes to Petersburg after serving in Chechnya and, somewhat reluctantly, finds himself killing all the mafiosi in town. It’s a Russian Taxi Driver, a film animated by a profound wish to wipe the scum from the streets, born in the collective unconscious of a social class (the emasculated intelligentsia) incapable of doing any such thing.

The connection of the future oligarchs to the crime rife in the cities is complex. The small-time thugs who started out by shaking down old ladies selling homemade pies on street corners did not, for the most part, end up owning the world’s largest oil companies. Nor, for the most part, were the future oligarchs setting up appointments for shoot-outs the following day at noon. By the mid-1990s, the major players all had private security services headed by former KGB generals or (as in Khodorkovsky’s case) police chiefs. But this didn’t mean that, out in the provinces, at the furthest corners of their empires, there weren’t still problems that were solved violently. When the anti-Yukos campaign gathered real steam in late 2003, people began to come forward saying they’d been followed, shot at, attacked or threatened by the Yukos security forces. Some were clearly lying. But after a while it added up. Yet Khodorkovsky’s gentle demeanour, his simple, down-to-earth manners, his roll-neck sweaters – these were not a façade. He was a nice guy. As one of his former cellmates says in I Served Time with Khodorkovsky, a collection of interviews with fellow prisoners which was published in Russian in 2005, the jailed oligarch always took the top bunk, rather than the bottom one, in spite of the prison code. ‘But Mikhail Borisovich, you’re in prison,’ this cellmate, Slava, would plead. ‘Here respected people sleep on the bottom bunk.’ Khodorkovsky wouldn’t listen. In another country he might have been the founder of a successful software company, or a brilliant financier: he might have been the president of Microsoft or Goldman Sachs.

Perhaps the best account of how a nice, educated person might have found himself caught up in bloodshed is Yuli Dubov’s remarkable, as yet untranslated novel, Bolshaya Paika (‘The Big Slice’, 1999). Dubov was (and, in exile in London, remains) a close associate of the most controversial of the oligarchs, Boris Berezovsky, and the book is a fictionalised account of Berezovsky’s rise to power. It begins with the Berezovsky character, Platon Makovsky, and all his mathematician friends back in Soviet times: young, bright, exuberant, though also jealous, truculent, prone to explosions. With the collapse of the USSR and their research institute, they go into business together, their business takes off, and one by one the old friends die. One of them is killed by a rival in Petersburg; another commits suicide; another takes a bullet to the head that is meant for Platon. Platon isn’t directly responsible for any of these deaths, but indirectly he is, through his carelessness, and through the intensity with which he does business, always raising the stakes and setting people against him. Really, it’s the money’s fault. When so much of it is involved, people get hurt.

After winning nominal control of Yukos, Khodorkovsky and his team began the long process of taking charge of the company and making it profitable. While they were doing this, the Russian economy collapsed, taking Menatep with it. In the aftermath of the collapse, in 1998, Khodorkovsky performed some unlovely manoeuvres to mitigate the damage to his holdings: at one point a truckload of important financial documents happened to fall into the Dubna River; at another Khodorkovsky threatened to dilute the value of Yukos shares down to zero if minority shareholders didn’t sell out to him at his price. But he has also said that the crisis forced him to reconsider some of his practices. It certainly had that effect on the country’s political class as a whole, which realised that, like it or not, the Yeltsin administration was no longer functioning. A year later, Vladimir Putin, a little known former KGB agent, was made prime minister, and six months after that he became president. His first order of business would be to deal with the oligarchs to whom Yeltsin had sold his soul.

In retrospect it’s fairly clear that no one, including Putin himself, knew what he was going to do, or what he could do, or how far he could go. Now we know that you can destroy a media empire simply by arresting its owner for a few days, and sending a few busloads of masked men with automatic rifles to its main offices. The media magnate Vladimir Gusinsky had a thousand men in his security force, a reputation in the West as the tribune of Russia’s independent media, and a reputation in Russia – for his repeated refusals to back down on Chechnya, above all – as a stubborn, pugnacious independent. He seemed unassailable. In the event, after being briefly arrested in June 2000, Gusinsky was soon on a plane to Spain, and has not set foot on his native soil since. His former television station, NTV, now mostly broadcasts poorly produced Russian cop shows. Berezovsky, Gusinsky’s sometime partner and sometime rival, was soon on his way to London, where he too has remained.

Khodorkovsky stayed put. He was feeling good – the price of oil, which in 1998 had fallen to its lowest level since 1973, was on its way back up – and he had a lot to do. In July 2000, he attended the famous meeting of top business leaders with Putin, at which Putin offered a deal: if the oligarchs stayed out of politics – something Gusinsky and Berezovsky had notably failed to do – the government would refrain from revisiting questions over loans-for-shares and the other privatisations of the 1990s. It’s unclear what Khodorkovsky took away from the meeting, because in the next three years he seemed to do exactly what Putin had warned against. On the model of George Soros’s Open Society programme, which was being pushed out of Russia, he took over the mantle of financing arts and education with his Open Russia foundation, and on the model of Gusinsky he started doing what he could to finance independent media. Open Russia arranged seminars outside Moscow on writing, reporting and institution-building, in the hope of creating the beginnings of a civil society.

At the same time, Khodorkovsky remained an aggressive businessman, furthering his interests in the Duma and the Kremlin; he also gave money to various political parties, including the Communists. Above all, though, he turned Yukos into a powerful, modern oil giant. He took the company public on the London Stock Exchange and dramatically improved its accounting practices. He brought in Western experts to work the oilfields, improving production techniques. He also worked, both for his own sake and the company’s, on his public image. Khodorkovsky’s Menatep, even more than other Russian banks, had become a pariah in the West after 1998, and between 2000 and 2003 he spent millions on public relations, and it worked. By 2003, Yukos had surpassed Lukoil as Russia’s biggest oil producer; its market capitalisation stood at more than $20 billion. Forbes estimated Khodorkovsky’s personal fortune at around $4 billion, making him Russia’s richest man – and on top of all that Yukos was paying more taxes into the Russian treasury than just about anyone else.

He seemed to be moving in the direction Russia wanted to be moving: back into the club of advanced nations, rather than the club of basket-case states that lost wars to tiny mountain republics and periodically defaulted on their foreign debts. But somehow Khodorkovsky took it all too far, or too seriously. As Richard Sakwa describes in voluminous detail in his book on the Yukos affair, Khodorkovsky began trying to break the government monopoly on oil pipelines, planning an independent Yukos pipeline to China; and he also began negotiating a huge share swap, in essence a merger, with either ExxonMobil or ChevronTexaco. He began, in short, to believe his own press. ‘Khodorkovsky,’ one very sceptical American financier told me, ‘was the only one of the oligarchs who forgot that he was an oligarch, that is, a crook. He decided that because he’d stopped stealing from the company that he was a great businessman, a builder of value! The other oligarchs, when they saw the fuzz, knew they should run. But Khodorkovsky forgot.’

In mid-June 2003, investigators arrested Alexei Pichugin, a former KGB major who had become the deputy head of the Yukos security department, and charged him with organising the murders of a number of Yukos opponents. A week after Pichugin’s arrest, Yukos’s headquarters in Moscow were searched. And a week after that, Platon Lebedev, now head of Menatep Group (Khodorkovsky had stepped down in order to become CEO of Yukos), was arrested in the hospital where he was being treated for a heart condition.

Pichugin was eventually charged with organising five killings, all of people who were somehow in conflict with Yukos/ Menatep: an outspoken mayor of an oil town, a woman with a little tea shop in Moscow in a building that Menatep wanted, the bodyguard of a business rival whose car was blown up (the business rival wasn’t in it), and a man (and his wife) who supposedly helped Pichugin plan the killings but had become too loose-lipped. The order for the killings allegedly came to Pichugin from Leonid Nevzlin, a senior Yukos executive and one of Khodorkovsky’s longtime partners. On television shows about the affair he came to be referred to as ‘the serial killer Nevzlin’.

Was any of this true? It’s impossible to tell. Pichugin has consistently denied all the charges. Under questioning, he was apparently given a psychotropic drug, and still denied the charges. His two trials did little to clarify things – the one before a jury was closed to the press, and the one open to the press wasn’t before a jury. Pichugin was found guilty at the jury trial, at which point the prosecutors appealed because they thought the verdict wasn’t harsh enough. They wanted a new trial, and got one. Witnesses changed their testimony, recanted, added new details. Some of the key witnesses were professional criminals. In the end, Pichugin was sentenced to life imprisonment. The thing is that the Russian legal system is in such a state that the outcome would have been the same whether he was innocent or guilty. The most I can say is that there are several Russian journalists I respect who think the case was trumped up, and no Russian journalist I respect who doesn’t.

But someone killed all those people, shot up their cars, and threw grenades inside just for good measure. Someone – or many people, acting separately – spilled a lot of blood during the 1990s, and we don’t know who it was. While this was happening, someone also privatised Russia’s immense oil wealth, avoided taxes, thereby bankrupting the government, which, since it had to finance a war in Chechnya, and also the lifestyles of its own officials, cut back on hospitals, so that patients, when they arrived at those hospitals, were much more likely to die. It would certainly be simpler if the murderers and the privatisers were one and the same.

This is the line that Putin has taken. Whenever he’s asked about Khodorkovsky – and he is almost always asked about Khodorkovsky when he meets with a foreign delegation or with a delegation of Russian liberals – he says that Khodorkovsky is in prison because he and his people were found guilty of various crimes, ‘up to and including murder’. (In France recently he compared Khodorkovsky to Al Capone – pointing out that Capone, in the end, had been imprisoned for tax evasion rather than his more heinous crimes.) It’s a point often lost in Western accounts of the case: politically, the Khodorkovsky case was sold as the humbling not just of a man who’d become too rich, perhaps illegally, but of a criminal organisation. The Putin regime has always based its legitimacy on its supposed fight against the chaos and institutional collapse of the 1990s, and it was important to connect Khodorkovsky to the very worst of those years.

But in Russia the arrest of Pichugin, say, or Lebedev, isn’t the end, or even necessarily the beginning of the end. It’s more like the end of the beginning. The prosecutor’s office always has a case at the ready, and at any given time a number of such cases are ‘under investigation’. Sometimes they are opened at the instigation of the Kremlin, sometimes at the instigation of a business rival. All of this is in the nature of a negotiation: if he understands the signals, a businessman in this position needs to start negotiating.

In the months after the arrests, however, Khodorkovsky did the opposite of negotiate. In the autumn of 2003 he went on a barnstorming tour of the country, speaking to student groups, checking on his philanthropic work, sharing his thoughts on the anti-Yukos campaign with local media. He went to Berlin and Washington, gave speeches, held meetings – and then came back. In Moscow, outside the police station after questioning by investigators, he announced that he wouldn’t run away. ‘If their intention is to get me to leave the country or put me in jail, then they should put me in jail,’ he said. ‘I’m not going to be a political exile.’

On 20 July, Khodorkovsky had given an interview to the tough-talking television ‘news’ show Moment of Truth. By then it was already clear he was going to be arrested. The video – available on YouTube – is difficult to watch. Khodorkovsky is very calm and pleasant, as always; he speaks softly, as always; and he puts particular emphasis on the normality of things: yes, he admits, he’s had conflicts with the government over tax policy, but that’s ‘normal’. He’s had conflicts over the pipelines – also ‘normal’. He insists that everything is all right.

Watching the interview, it’s impossible to tell whether he really cares nothing for his freedom or whether he just can’t believe he’ll be arrested. He is the richest man in Russia, one of the richest in the world. A week before he had had a meeting with Dick Cheney. That this kind of access, and prominence, can’t guarantee you immunity is hard to believe. Perhaps he really couldn’t believe it until a group of special forces, in ski masks and armed to the teeth, stormed his plane on the tarmac of a Siberian airport in October and arrested him. For the first week after his arrest, his cellmates would later report, he was in a state of shock. He refused food, lay on his cot, and seemed to be thinking ‘very hard about something’.

The shock must have been severe, for a spirit of optimistic, strategic denial seems to have been at the core of Khodorkovsky’s project from the very start. As he told Hoffman, a lot of people inside the Party who saw perfectly well the opportunities available in the mid-1980s declined to take advantage, not because they were dull-witted or foolish, but because they remembered earlier episodes of reform that had subsequently been cut short, with many of the reformers landing in prison. But, Khodorkovsky told Hoffman, laughing at his good luck, ‘I was too young, and I did not remember this.’ This kind of ignorance was most of the time a blessing; eventually it led to his downfall.

Scores of journalists and human rights workers have been killed in Russia since 1991, but, fittingly for the twilight of the age of Russian capitalism, it was two businessmen who found themselves at the centre of a show trial. Khodorkovsky and Lebedev were not charged with the murders attributed to Pichugin and Nevzlin; like Al Capone, they were presented with a list of economic crimes. As with the Pichugin trial, most serious students of the case believe the charges were bogus. Menatep and Yukos had taken advantage of various legal loopholes, especially with regard to taxation (in particular, the use of ‘transfer pricing’, where a domestic company sells its oil to an offshore affiliate at a loss, and the offshore company then sells it for a profit); when the loopholes were closed, they found new ones. This wasn’t very sporting (or maybe it was too sporting), but it wasn’t illegal. That wasn’t the point, however. As we know from Bernard Madoff and his 150-year sentence, criminal cases for economic crimes are very much the product of a particular political conjuncture. The Putin regime had always been eager to find a scapegoat for the 1990s; it needed to send a message to the other oligarchs – especially at the dawn of a giant commodities boom – on the matter of taxation; and also, as it happened, Khodorkovsky had become a real pest with his Open Russia programmes, pipelines to China and putative mergers. Richard Sakwa has even found someone who claims that during a meeting with Putin, Khodorkovsky took a call on his cellphone ‘and continued to talk as if the president of Russia did not exist’. (Is this what Putin had in mind when – as Lord Browne, the former president of BP, recently revealed in his memoirs – he said: ‘I have eaten more dirt than I need to from that man’?) Best of all, perhaps, once the case got going the authorities were able to start landing Yukos with enormous tax bills, in the tens of billions of dollars, effectively bankrupting the company so that it could be taken over by Rosneft, run not by a group of Jews but by Igor Sechin, a cabinet minister, a friend of Putin, and by all appearances himself a former KGB man. As for Khodorkovsky and Lebedev, they would both be sentenced to nine years (later reduced to eight) in penal colonies. The ‘serial killer’ Nevzlin was also tried, in absentia, but he had long since fled to Israel.

And as the government seemed to be reading from an old script, of tsarist or Bolshevik vintage, so too, to everyone’s surprise, did Khodorkovsky. Despite his background in the Komsomol; despite nearly two decades of non-stop work, first in finance and then in oil; despite his quiet, somewhat aloof personal manner, as soon as he ran into trouble Khodorkovsky began, perfectly naturally it seemed, to follow the traditional course of Russian resistance. He refused to run, he refused to sell out his friends, he refused to back down. He tried to save his fortune just before his arrest, by putting his several billion dollars’ worth of Yukos shares in the keeping of Jacob Rothschild in London. (Despite his efforts to protect his interests, Yukos shares eventually declined to $.02 before trading on them stopped in 2006.) Above all, like just about every Russian ever placed in jail, he began to write.

According to his former cellmates, after Khodorkovsky recovered from the shock of his arrest and began eating food again (mostly yoghurt), he got to thinking. The result was an epistle, a kind of historical cri de coeur about what had gone wrong in the 1990s, and why. Published in the business newspaper Vedomosti in 2004, five months after his arrest, ‘The Crisis of Russian Liberalism’ was not a reply to his persecutors but a full-scale assault on his only supporters: post-Soviet Russian liberals. ‘Today Russian liberalism is in crisis,’ he began. ‘Of this there can be very little doubt.’ In some detail and without pulling any punches – at times spilling over into outright nastiness – the essay examined the catastrophe of the liberals in a way that even six years later most other liberals have refused to do. ‘Those whom fate and history chose to be the vessels for liberal values in our country were not up to the task,’ Khodorkovsky wrote:

We need to admit this now in all honesty. Because the time for kidding ourselves is past – and from Cell block No. 4, where I now sit, I can see this better, perhaps, than those residing in more comfortable chambers … We need to analyse our tragic mistakes and admit our guilt. Our moral and historic guilt.

There was immediate argument about the letter’s authorship, with some people claiming that the Kremlin made him write it, or had it written for him by a shady journalist. (I once asked the journalist in question if he’d written the letter, and he said: ‘If I told you I didn’t, you wouldn’t believe me anyway.’) From a strictly literary perspective, the letter is puzzling: accusing liberal activists of trying to make money out of politics, for example, sounds rather odd coming from Russia’s richest man; and some of the vocabulary – the word ‘discourse’, for example – seems oddly high-flown. Sakwa takes the authorship question seriously and concludes that Khodorkovky did write the letter; and in I Served Time with Khodorkovsky, his cellmates describe Khodorkovsky reading ‘Crisis’ aloud to them and trying especially to make sure that the only one of them without a university education, Slava, understood it. ‘You’re the educated one, you write it,’ Slava would say, to which Khodorkovsky would reply: ‘That’s exactly why I want you to understand it.’ The following may not count as evidence, but I heard Khodorkovsky read some of his declarations to the court this past spring and summer, some merely procedural, others more general and philosophical, which he had composed the night before, and it was clear from the pride with which he delivered them that he believed them to be witty, sharp and utterly devastating. (They weren’t bad, especially in the circumstances.) He had, in short, the vanity of the author. In Russia, a CEO is more than a CEO.

Khodorkovsky’s next epistle was called ‘Prison and the World: Property and Freedom’. It was more personal than the first. He began by addressing the case against him, calling it a banal attempt on the part of one Kremlin faction to seize his oil company. He claimed that he, for his part, did not find it so unbearably difficult to part with his riches: property, the very basis of the post-Soviet experiment in freedom, the very guarantor of freedom, was also, he had found, an impediment to freedom. Before he went to prison, he wrote, ‘there were many things I could never say, because speaking openly could have harmed my property.’ This was the ‘tyranny of property’. ‘Now,’ he went on, ‘I appear in a different capacity. I have become an ordinary person (from an economic point of view, a member of the upper middle class) for whom the main thing is not his possessions, but his being. Who struggles not for property, but for himself, for the right to be himself.’

This was his best letter, and there have been several others since, as well as diary entries about prison and long exchanges with some of Russia’s most famous writers (which are published in such places as the Russian Esquire, GQ and the literary journal Znamya). Not quite yet a Gramsci, Khodorkovsky has nonetheless moved to the left, producing three consecutive epistles calling for a ‘left turn’ in Russian politics. He’s offered his opinion on the root causes of the financial crisis, as well as what Russia ought to do (think ahead). More than anything, though, in his letters he has remained visibly alive and engaged. It’s one thing to hear about what’s happening to Khodorkovsky in prison – at one point he was attacked with a knife by his cellmate, clearly an agent provocateur, who then accused him of homosexual advances – but it’s another to read him. Who among the other oligarchs has faced down such a situation? Who among them could have?

Khodorkovksy and Lebedev’s second trial began on 31 March last year, and has been dragging on slowly since then. This time the two men are charged with stealing all the oil produced by Yukos between 1998 and 2003 – approximately 300 million tons – and then of failing to pay approximately $30 billion in taxes on it. No one doubts that the verdict in this case, when it eventually comes, will be delivered from on high, without much reference to the facts. Not only do the charges overlap with some of the previous charges (an ‘odd’ circumstance, as Obama pointed out before his recent visit to Moscow), but some are so absurd as to be almost metaphysical. This is, of course, partly the point. Since his arrest six years ago the state has been trying to explain to Khodorkovsky that it can do with him what it chooses, under any pretext it chooses. His refusal to understand this simple fact has been, for six years, one of the central dramas of Russian political life.

For the Kremlin, this drama has long outlived its usefulness: Yukos is gone; tax collection across the oil and gas sector has improved; and whatever funny thoughts might have taken up residence in the heads of the other oligarchs over the years have been decisively swept out. ‘He was the richest man in Russia!’ a person close to one of Russia’s current richest men recently said to me, as amazed six years later as if it had happened yesterday. ‘And still they arrested him.’ The Kremlin, in other words, has made its point, but the Khodorkovsky affair, like the Second Chechen War, just keeps going.

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Vol. 32 No. 5 · 11 March 2010

I worked for Yukos for four years from June 2001 as one of the Western staff Khodorkovsky brought in to modernise a company that was still more like a Soviet enterprise than an international oil company five years after privatisation. Keith Gessen gets most of the facts right (except that Yukos was never listed in London, only as a US ADR; the predator Rosneft was listed in London), but doesn’t pay enough attention to the prevailing atmosphere of the Yeltsin-era economy (LRB, 25 February). If fear was the staple of personal experience, lack of clarity (neyasnost) was the leitmotif of everything to do with the economy, from heavy industry to the ownership of land and lodgings. The young MBK (as Mikhail Borisovich was known in-house) and all the other future oligarchs had the prescience to see through the murk, and to take advantage of it. That is what capitalists do, and it is never a pretty picture at the capital-formation stage. In the case of Yukos, MBK started with an unwieldy and irrational jumble of rusting oil infrastructure, bought for a fraction of its potential value, and gradually modernised and rationalised it through substantial further investment. To have realised that potential in a transparent sale (which would have had to be to a foreign investor) would have taken time, and that, along with money and credibility, was what the Yeltsin government had run out of.

MBK once told an interviewer that he was three generations of the Rockefeller family in one person. He is an extremely complex person, but the experts who regard Open Russia and all his philanthropic efforts as exercises in image-enhancement are seeing less than the whole picture. I moved to London in mid-2003, and thus missed the balaclava-clad tax police storming in with Uzis to seize computers (during one of the first raids, my colleagues told me, they took the monitors, thinking that was where the data were stored) and the catastrophe that followed. In London, as things began to deteriorate, I was contacted by some surprising people: the president of Magdalen College, Oxford, for example, who told me that MBK had endowed a scholarship fund to bring ten promising Russians to study there every year (being already fully endowed, this programme was apparently unaffected by what happened). This wasn’t the only instance of quiet philanthropy I came across, and if ten students a year won’t change Russia, the thousands of computers and IT-training courses he provided to provincial schools will over time have had a significant impact. It seems to me there must have been ways of improving his image that would have been more cost-effective and had a more immediate and more public effect, if that was all he was interested in. In any case, whatever his motives, they have no bearing on the merits of the judicial travesty that keeps him in Cell Block Four. He is certainly no worse a person than the arch-cynic currently running the country he obstinately refused to abandon.

T.J. Gorton
London N1

Keith Gessen writes that ‘as they saw their savings evaporate, Russians witnessed a civil war on the streets of their cities. Before Chechnya, before Turkmenistan, there was the war in Moscow, Petersburg and Yeltsin’s hometown of Ekaterinberg.’ Turkmenistan may have had a weird leader, but it was spared conflict. Does Gessen mean Tajikistan, which suffered full-scale civil war between 1992 and 1997?

Aidan Foster-Carter

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