Policy Memos

Khodorkovsky's Gamble: From Business to Politics in the YUKOS Conflict

Policy Memo:

308

Publication Date:

11-2003

Author(s):

Description:

Political battles in Russia have a reputation for being as obscure as they are vicious; thus Churchill’s famous comparison of Politburo rivals to bulldogs fighting under a carpet. Churchill’s saying now seems an apt description of the murky legal and political struggles over YUKOS, Russia’s most valuable oil company. The YUKOS affair has unfolded in two waves. The first wave began in summer 2003. On July 2, Platon Lebedev, the company’s billionaire vice president, was arrested. As of early November, he remained in pretrial detention. Lebedev was accused of fraud in a 1994 privatization auction, failing to carry out court orders to surrender the shares gained in the auction, and tax evasion. After Lebedev’s arrest, it quickly emerged that two weeks earlier a top YUKOS security official was taken into custody on suspicion of ordering a double murder in late 2002. Investigations into four additional attempted or successful murders of persons with business conflicts with YUKOS, all dating from 1998, were renewed at the same time. That Russia’s Procuracy (charged with investigating and prosecuting criminal cases) should have opened so many unrelated cases at one time left little doubt that YUKOS’s owners, especially multibillionaire Mikhail Khodorkovsky, had come under deliberate attack. After slackening in August and September, the Procuracy attack was renewed with a vengeance in October, in a new wave of searches and charges. On October 25, Khodorkovsky himself was arrested in spectacular fashion, seized from his private airplane on a Siberian runway by Federal Security Police. [...]