BOOK REVIEW
The rise and fall of
Mikhail Khodorkovsky
A good read with all the qualities of a well-written political thriller.
F ebruary 19, 2003. A resounding
and ominous clash took place
in the Kremlin, between two of
Russia’s most powerful men – Vladimir
Putin, the Russian president, and Mikhail
Khodorkovsky, the richest man in Russia.
The setting was innocent enough. Putin
had invited leading Russian businessmen
to discuss the subject of corruption with
him and his senior officials.
It was the first of a series of public
meetings set up to give people the
impression that both the host and his
prominent guests were concerned about
corruption and bad business ethics. Of
course it was shown on national television
and reported in the national press.
Standard procedure to publicise political
stunts without committing oneself to
anything concrete. A charade parading
platitudes seemingly off-the-cuff. Those
taking part as well as those watching
knew that.
British journalist, writer, and
broadcaster Martin Sixsmith sets this
key scene, and spells out the detailed
background and the significance of the
clash in a Russian context in his brilliant
new book Putin’s oil: The Yukos affair and
the struggle for Russia.
It is a good read with all the qualities
of a well-written political thriller. That
is a bonus, however, for the real treat
Sixsmith’s book offers is the way he
untangles the Yukos affair involving very
complex and covert moves, Russian and
international politics, hosts of crucial
players, victims, subsidiaries, holding
companies, and alleged murders.
Sixsmith is well-versed in
contemporary Russian history, politics,
and culture from first-hand experience
as a student, a journalist, and a regular
visitor for three decades. He is the ideal
guide with a lot of contacts, informal and
formal. He really goes out of his way to
26 ISSUE 5 Independent World report
By Dixie Eriksson
turn every stone to throw light upon this
ongoing and enigmatic duel between two
gifted men. Both of whom, in the final
analysis, may be losers.
Sixsmith also retells the story of the
birth of the oligarchs in the turbulent
days of Yeltsin’s Russia, when the frail
young democracy and the economy
headed towards bankruptcy more than
once. Bewildering times of rampant
corruption.
The daring, the ruthless, and the
business-minded were there to get their
pick when the stagnant communist
command economy was to be dismounted
and transformed almost overnight into
a liberal market economy. An operation
impossible led by the stumbling president,
Boris Yeltsin, egged on by economists and
experts from abroad.
It was a transition without precedence
in scale and complexity, difficult in
the best of days, and with the best of
intentions. It is now obvious that the hasty
privatisation was a deeply flawed process
beyond control and leaving a bitter
after-taste and sullying the oligarchs’
reputation. The majority of them being
Jewish activated anti-Semitic prejudices,
never in short supply in Russia.
In those days, Khodorskovsy was a
ruthless operator, always on the look-
out for a quick profit. Through political
wheeling and dealing with Yeltsin, he
managed to lay his hand on a strategic
asset like Yukos oil, and set to become the
richest man in Russia.
Putin’s oil is an intensely contemporary
and vivid book. King Oil is a cash cow
with political clout, and in the news all
the time. Mikhail Khodorkovsky has,
according to French newspaper Le Figaro,
recently begun a new hunger strike in
gaol and tries to play Medvedev, the
current president, against Putin – to no
avail so far.
Back to February 19, 2003. As
Putin declared war on corruption, the
businessmen around the table praised the
president in rotund and empty phrases for
his initiative. Small wonder really. All the
oligarchs present had taken advantage of
corrupt practices like greenmailing, and
corrupt civil servants and politicians,
when they started hoarding their large
fortunes in the dying days of the Soviet
empire.
Nothing of substance was expected
and nothing was delivered at the
Kremlin meeting. But when it was Mikail
Khodorkovsky’s turn to speak it was
obvious that he would not play according
to the rules. He was loaded with slides
presenting actual statistics on corruption
challenging the official version of the
story, unwanted and far too revealing.
His fervour for liberalism, for honesty
and transparency in business was
obvious. Even though he as usual was shy
and ill at ease in formal public situations.
The president’s scrutinising cold eyes and
expressionless poker face did not help
much either. Still a KGB-man to his very
fingertips.
Khodorkovsky had spent the preceding
three years working like a madman to
turn Yukos into an open western-style
operation to attract western investors.
He had also acquired the oil company
Sibneft, owned by fellow oligarch Roman
Abramovich. At the same time, he was
plotting to open an oil-pipeline to China.
He was number one in oil in Russia,
but his ambition was to become number
one in the world.
According to Sixsmith, Khodorkovsky
had undergone a conversion removing
himself from his earlier ruthless robber
baron days and ways. The first oligarch
to engage in philanthropy in grand style,
through his Open Russia Foundation.
President Putin did not like anything of
that. Khodorkovsky and Yukos sat on large
Russian oil reserves stolen from mother
Russia, according to Putin. Transparency
and western control of Russian oil are not
his cup of tea. Furthermore, he did not like
what he heard from his informers, that
Khodordovsky had tried to buy political
muscle in the parliament, the Duma,
through bribery and party financing.
The odious oligarch had also hinted at
going into politics. Despite the fact that
Putin had made it very clear, when taking
office in 2000, that the oligarchs would
be left in peace as long as they did not
meddle with politics and did not challenge
or criticise the president. It is important
to remember that Putin had promised to
destroy the oligarchs as a class, echoing
Stalin’s promise to destroy the rich
peasants, the kulaks, as a class. Sinister
words with high public resonance.
However, Khodordovsky went on
bravely and did not stop until he had
accused the president of Russia of
personal involvement in corruption, in
connection with a business deal involving
the state oil company Rosneft. Then
and there, Khodorkovsky’s and Yukos’
fate was probably sealed. At least that is
Sixsmith’s opinion, “It was a brave or a
very foolish move, and it was to have far-
reaching consequences.”
The reader immediately learns
what happened because Sixsmith starts
his tale with Khodorkovsky’s arrest in
October 2003. Then moves back in time
to describe, in minute detail, how the
authorities clamped down on Yukos and
its management almost immediately after
the showdown in February.
Probably the so called Siloviki clique
– the cronies from KGB and its successor
organisation the FSB, whom Putin had
recruited into Kremlin – tried to scare
Khodorkovsky to go into exile, leaving
Yukos up for grabs for the state. These
hard-liners come out in Sixsmith’s
portraiture as patriotic and by all signs
a greedy lot who want to humiliate and
get rid of all the liberals from positions
of power in Russia. They also feel that
Russian oil should be re-nationalised.
They believe that the black gold would
give Russia political clout, and this has
come true.
But Khodorkovsky decided to stay
on and fight for justice with disastrous
results not only for him, his family and
Yukos, but also for some of his employees.
He is still in gaol. The surrounding world
could only watch Russian justice at its
worst playing a cat-and-mouse game
with the defendant and Yukos. An act of
hubris, or did he believe that his money
and his western contacts in high places
made him less vulnerable? Or, did he
believe in Russian justice?
Khodorskovsky has been accused of
and sentenced harshly for tax evasion,
fraud and other crimes. But it is painfully
obvious that the trials are political, in
that Khodorkovsky has been singled out
among the oligarchs as a scapegoat. It is
also very clear that the judicial system
is a sham. Even Khodorkovsky’s lawyers
have been brutally harassed.
In fact, the modern Russian justice
system have so much in common
with the communist show trials of
the thirties. Trials seem to be looked
upon as hermeneutic circles where
the guilt is already established beyond
doubt. The court proceedings are for
public consumption, a warning, and an
opportunity for the autocrats in power
to humiliate the accused, who are always
supposed to plead guilty and beg for
mercy.
The tax liabilities of Yukos were
clearly blown out of proportion and the
alleged crimes belonged to the distant
past, well past the statue of limitations. As
in most show trials. Khodorkovsky and his
colleague Lebedev and the management of
the company were defined as an organised
Putin’s oil
The Yukos affair and the struggle for Russia
By Martin Sixsmith
Continuum, 2010
Independent World report
criminal group.
In the second trial, the accusations
reached the Kafkaesque quality of trials
in any totalitarian state. Khodorkovsky
and his gang were accused of stealing
all oil produced and all proceeds earned
by Yukos. The Russia of the Silovikis is a
strange sort of democracy which is slowly
withering, as important institutions like
a free press become more and more state-
controlled.
The Yukos affair is, according to
Sixsmith, a very Russian conflict. On one
level, a fight between liberals with western
ideals and the patriotic-conservative-
autocratic forces who want to restore
Russia’s greatness. Going further back
in Russian history one can find the same
antagonism dressed in slightly different
costumes between those who want
Russia to link up with Europe and those
who claim that mother Russia’s true and
sacred destiny is to be found elsewhere in
spiritual and moral terms. Westernisers vs.
Slavophiles, as Sixsmith puts it.
Khodorkovsky has undergone yet
another conversion in his prison cell.
Sixsmith describes him as an archetypal
Russian figure of the intelligentsia, the
wronged prophet echoing themes from
Tolstoy and other Russian classics in
his writing. Deprived of his worldly
possessions and status he has found
religion in the Russian Orthodox
Christianity. His arch-enemy Putin is
ironically also a member of the same
church.
Khodorkovsky is a psychological
enigma. Sixsmith delves into his self-
destructive behaviour. It is very difficult
to fully understand how this cool-
headed man with a sharp and analytical
intellect could take on and challenge
Putin in such a naive way. The cost has
been excruciatingly high for him and his
family, not to mention those working
for him, some of whom are virtually
destroyed. What happens next with him
is impossible to predict. Putin is still in
power with a tarnished reputation as a
democrat but more powerful than ever
thanks to Yukos Oil. �
Dixie Eriksson is Editorial Adviser,
Independent World Report.
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