Liberalization on Trial

What the fate of Mikhail Khodorkovsky means for the future of Russia

Mikhail Khodorkovsky, the former Russian oil tycoon now facing a second trial in Moscow, could have stepped off the pages of an Ayn Rand novel. He is a persecuted businessman who has become his country's most potent symbol of political oppression and resistance—in a society where the pursuit of material wealth has been long viewed as morally suspect and where the dissidents of yesteryear were poets, artists, and scientists. Today, many pro-democracy Russians believe that Khodorkovsky's fortunes are inextricably tied to the fate of freedom in Russia—and today's political and economic uncertainty could mean some unexpected twists for both.

Khodorkovsky's arrest on October 25, 2003, when he was CEO of the Yukos oil company and the wealthiest man in Russia, signaled a sharp turn toward repression under the presidency of Vladimir Putin. While Khodorkovsky was charged with tax evasion, his real crime was to have challenged Putin's rule. Khodorkovsky, 40 years old at the time of his arrest, broke the agreement between Putin and Russia's big business under which the tycoons were to stay out of politics and the state would leave them alone: he gave money to several opposition parties. There was talk that he might run for president in 2004 as a rival to Putin, or at least seek a seat in the Russian parliament.

The tax fraud charges against Khodorkovsky were notoriously convoluted. Whether he was technically guilty is almost beside the point: given what a mess Russia's laws and regulations are, 90 percent of the adult population is probably guilty of something illegal. (Ironically, before his arrest, Khodorkovsky had been promoting such Western-style business norms as corporate transparency and philanthropy.) Amnesty International sees a "significant political context" in the case. Most Russians agree: in a 2006 poll, only 19 percent thought Khodorkovsky was in prison because he had not paid taxes, while 48 percent said he was being punished for not being cooperative with the Kremlin.

As Russian journalist Yulia Latynina writes in the online journal EJ.ru, Khodorkovsky found himself on a collision course with those in the Kremlin for whom power meant "not the ability to govern a free and strong Russia, but the ability to grab any person's property and jail anyone at will, even if it makes Russia poorer and weaker." He was targeted not only to get rid of an enemy but to intimidate others strong and wealthy enough to challenge the state. And the strategy worked—at least for a while.

Yet the jailed tycoon, who wrote articles on political issues from a Siberian penal colony, remained a thorn in the state's side. The relentless persecution directed against him and his associates, widely seen as a personal vendetta by Putin, made the government look petty and abusive even in the eyes of many Russians who aren't particularly friendly to the rich. Svetlana Bakhmina, a former Yukos corporate lawyer jailed on dubious charges of embezzlement, was denied parole on technicalities last year while pregnant with her third child (conceived while on furlough). An Internet petition to President Dmitry Medvedev seeking Bakhmina's release, which now has close to 100,000 signatures, became a vehicle for grassroots protest in an apathetic and intimidated society.

Khodorkovsky's new trial, which opened last week, is based on charges far more sweeping and more absurd than the first one. He and co-defendant Platon Lebedev are accused of stealing all of the oil pumped by Yukos from 1998 to 2003. (Khodorkovsky claims that the quantity stated in the indictment exceeds the entire amount of oil produced in Russia in that period.) If these charges stand, virtually every other Russian tycoon, including staunch Putin allies, should be in the dock, too.

But 2009 is not 2003. When Khodorkovsky was arrested, Putin's power was in its ascendancy. Today, while Prime Minister Putin still wields tremendous influence, it may be finally on the wane, battered by the economic crisis and by Medvedev's growing self-assertion. While Medvedev is no "democrat," he is identified with a more liberal, pro-Western, pro-business Kremlin faction; he has sharply criticized government officials for "terrorizing business" and spoken of the need for judicial independence.

That Khodorkovsky's second trial is taking place at all is evidence of Putin's continued power. Yet this case has also drawn public criticism that would have seemed almost unthinkable only a year ago. High-ranking members of Russia's usually docile parliament have condemned the new prosecution as unjust and vindictive. The head of the Russian Union of Industrialists and Entrepreneurs, Alexander Shokhin, has spoken out against it on state television.

The outcome of the case, which could drag on for months, is far from certain. But it is increasingly clear that the verdict in this trial will be a verdict on whether Putin wins or loses—and whether Russia's recent moves toward liberalization are continued or squashed.

Contributing Editor Cathy Young blogs at http://cathyyoung.wordpress.com. This column originally appeared at RealClearPolitics.

Editor's Note: We invite comments and request that they be civil and on-topic. We do not moderate or assume any responsibility for comments, which are owned by the readers who post them. Comments do not represent the views of Reason.com or Reason Foundation. We reserve the right to delete any comment for any reason at any time. Report abuses.

  • Warty||

    Russian tycoon is more or less synonymous with mobster, correct?

  • ||

    Fuck the Russians. It seems that Russian culture prefers totalinarians over self-rule.

  • affenkopf||

    Fuck the Russians. It seems that Russian culture prefers totalinarians over self-rule.

    So what's the difference between Russians and Americans?

  • ||

    So what's the difference between Russians and Americans?

    Apparently, based on the ad to the right, they have hotter mail-order brides.

  • Ska||

    And that mail order brides have better dentists than tycoons.

  • ||

    More stories about Russians means more Mail Order Brider advertisements!

  • threeof clubs ||

    Wasn't Mikhail Khodorkovsky along with the other oligarchs incredibly corrupt?

  • charlie||

    Wasn't Mikhail Khodorkovsky along with the other oligarchs incredibly corrupt?

    Shhhhh. Musn't undermind Cathy Young's argument that the prosecution of a corrupt oligarch who enriched himself largely off the Soviet treasury is an attack on freedom and the "free market".

    (Her article is appreciated, though, in that it helps define what Reason writers mean when they say "free market" -- phony privatization and corporatism, not unlike the "private prisons" pushed for by the Reason Foundation).

  • Michael P.||

    Shhhhh. Musn't undermind Cathy Young's argument that the prosecution of a corrupt oligarch who enriched himself largely off the Soviet treasury is an attack on freedom and the "free market".

    Suck it, commie.

  • Scarpe Nike||

    is good

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