Posted on 12/28/2004 8:48:55 PM PST by NormsRevenge
MOSCOW – In his harshest criticism of the Kremlin to date, jailed tycoon Mikhail Khodorkovsky accused the Russian government of stealing his Yukos oil empire and warned in a letter published Tuesday that an ongoing crackdown on post-Soviet freedoms will ruin the country.
Writing from prison, where he has been for more than 14 months, Khodorkovsky said the sale of Yukos' main production unit into state hands this month "was the most senseless and destructive event in the economic sphere since President Vladimir Putin has taken helm."
"Using selective justice, introducing new legal norms and applying them retroactively," the state has undermined trust in the legal system, said Khodorkovsky, who is charged with fraud and tax evasion.
"Such methods damage the nation's reputation and hurt the economy, but those who initiated that don't care."
Putin has cast the 18-month crackdown on Khodorkovsky and Yukos as an effort to fight corruption and shady bookkeeping. But most observers see it as a vendetta for Khodorkovsky's perceived political ambitions, including his funding of opposition parties.
The culmination of the legal assault came Dec. 19, when Yukos unit Yuganskneftegaz, which produced 60 percent of the parent company's output, was sold at government auction to a shell company registered to the address of a bar in a provincial Russian town. The sale price was half of what Yukos and foreign auditors say it was worth.
State-run oil company Rosneft, whose board of directors is now headed by Putin's deputy chief of staff, covertly purchased the shell company. Both Rosneft and Yuganskneftegaz are being folded into gas giant Gazprom, creating a state-run company whose combined reserves will be six times that of Exxon Mobil.
Putin defended the auction as an effort by the state to defend its interests, but his own economic adviser, Andrei Illarionov, blasted the move Tuesday, calling it the "fraud of the year."
Khodorkovsky warned that Putin's efforts to strengthen government controls would trigger the nation's collapse. Putin is overhauling how local legislatures and governors are chosen and in recent years has muzzled the press, particularly television news broadcasters.
Khodorkovsky's latest letter contrasted sharply with those published earlier this year in which he apologized for his actions and praised Putin.
"I didn't just manage my property – it managed me in turn," he wrote in his latest letter. "I was forbidding myself to say many things, because that could hurt my property."
Khodorkovsky accused the state of "shameless" trampling on legal norms to wrest away Yukos. He called the government's $28 billion back tax claim, against which the Yukos unit was sold, a "bad joke," saying it exceeded the company's earnings.
The Yukos founder is seen as either a political prisoner targeted by trumped-up charges for funding opposition parties or a crooked tycoon who bought Yukos for a song in rigged auctions of the 1990s before funneling its revenues through offshore schemes and pocketing billions of dollars.
"The Yukos case isn't a conflict between business and state, but a politically and commercially motivated attack launched by one business, represented by officials, against another," Khodorkovsky wrote.
Khodorkovsky, who was No. 16 on Forbes' 2004 list of the world's richest people with an estimated $15 billion fortune, said his personal wealth "will soon come to zero." But he said losing it was not "unbearably painful."
Khodorkovsky also dismissed the criminal charges against him but said he was told authorities wanted to put him in prison for at least five years, fearing he will take revenge.
He denied such intentions, saying he would rather "breathe fresh spring air, play with children ... and read good books."
Khodorkovsky has twin 5-year-old sons.
The liberals will be delighted that the USSR isn't dead.
And who is to argue with him?
Poor Mikhail! Pooty stole all fifteen of his billions.
I guess the oil-for-food racket didn't payoff well enough for Putin. ;-)
For some reason I have no sympathy for Mikhail Khodorkovsky...The government stole back what he stole from the government.
I spent the lingering, smouldering days of the 9/11 aftermath with this guy. I didn't think he was a crook, I thought he was pretty serious about running a good oil company. He told me all of the basics because I didn't know any of them. He carried his own luggage, too, and had a charming humility. He even wore the same suit day after day, which was sort of interesting for a guy that rich. He had the most beautiful glasses, I would kill for a pair of those. He also told me he hated bin Laden like you wouldn't believe and was fascinated with a zapf dingbats coding on one of the 9/11 wordings, in those days I think we all were.
"will ruin the country" will?? what's it like now, paradise?
Yes, but of course. Ying and Yang ya know.
This creates a counter-balance to US hegemony.
Ping
DAMNNN when did Illya become JR Ewing Norm
I should read Interfax wire more often
Sigh. Who is John Galt?
http://education.yahoo.com/reference/encyclopedia/entry?id=18301
Galt, John
1779—1839, Scottish novelist. He went to Canada as secretary for the Canada Company, founding there in 1827 the town of Guelph and encouraging Canadian immigration. He wrote poems, blank-verse tragedies, and travel books, but he is known chiefly for his novels of Scottish country life, notably The Ayrshire Legatees (1821), Annals of the Parish (1821), and The Entail (1823). While traveling on the Continent as a young man, he made the acquaintance of Lord Byron, of whom he wrote a biography that appeared in 1830.
See his autobiography (1833); biography by I. A. Gordon (1973).
That has to be the most depressing and demoralizing post of all time!
John Galt is DEAD!
Well, his spirit lives on in those few of us who understand and appreciate what FREEDOM is.
Nonetheless, thanks for the chuckle.
Galt's travel books are diverting, but they were primarily traveling diaries, useful for gathering local color, but not for glimpsing the actual locales of the day. I prefer the Victorian Baedeker Guides, which provide maps and info on hotels, ferries, museums, and the like. They are also much cheaper (Baedekers were double the current price before Internet sales brought them down),
Thanks, though. I didn't know Galt was Scottish. ;)
Interesting personal account. Thanks.
"For some reason I have no sympathy for Mikhail Khodorkovsky...The government stole back what he stole from the government."
Nonsense. Khodorkovsky turned a state run company that was losing millions of dollars a year and owed billions into a company grossing over 5 billion a year. This quote from the article is exactly right.
"But most observers see it as a vendetta for Khodorkovsky's perceived political ambitions, including his funding of opposition parties."
During this same time period, the price of oil went from $9 per barrel to over $50. Also, when Putin took office, Russia has $12 Billion in foreign reserves. Now they have $120 Billion. Rising oil prices saved Russia after the collapse of the Ruble in August 1998, and also helped Yukos too.
"But most observers see it as a vendetta for Khodorkovsky's perceived political ambitions, including his funding of opposition parties."
I agree with you on that. Many people believe that is Khodorkovsky had stayed out of politics, he's still be running Yukos today.
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That's why their industrial sector is growing betwen 6-8% yearly with the main import being machinery for new factories, it is also why the IT sector is growing even faster. Sorry, you can wish it but short of the facists in the EU or China invading, they're not going to die off for you.
He had the most beautiful glasses, I would kill for a pair of those. He also told me he hated bin Laden like you wouldn't believe and was fascinated with a zapf dingbats coding on one of the 9/11 wordings, in those days I think we all were.
And that absolutely proves beyond a doubt that he is not a criminal. Yup, works for me. And Scott Peterson is innocent too.
If that's what you believe then you should have no problems with Enrons and Worldco's execs walking free too.
I was not aware I needed to use the sarcasm tag.
MOSCOW, Aug. 27 (UPI) -- Russian investigators have raided the accounting division of embattled Yukos oil and seized boxes of bookkeeping records for 2003 and 2004.
The Prosecutor General's office said the search was part of an extended probe into the alleged embezzlement of $1.06 billion in 2001, the Interfax news agency reported Friday.
The alleged billion dollar scam was operated through a front company called Fargoil in the central Russian region of Mordovia, Interfax said.
Meanwhile, prosecutors in the Moscow trial of Yukos' chief shareholder and former chief executive Mikhail Khodorkovsky questioned two financial officials Friday, Interfax said.
Yelena Tyapkova, an accountant in the OAO Apatit company, and Konstantin Graudin, a senior specialist in the Menatep bank's investment department, testified as prosecution witnesses in the trial of Yukos chief shareholder and former chief executive Mikhail Khodorkovsky and his longtime associates Platon Lebedev and Andrei Krainov, the former general director of the Volna company, Interfax said.
The prosecution is trying to amass prove the defendants conducted gross improprieties in their conduct of Yukos business.
Khodorkovsky bought property litterly for pennies on the dollar through Yeltsin's corruption. He and the rest, by the way, were close friends with Al Gore, part of the Friends of Gore club. He further "failed" to pay taxes for 13 years. This guy is a crook, period.
Oil and gas that Europe and Asia (China) desperately need.
Just this week Russia and China played war games together.
Putin has begun his power play.
This time, however, it's not with AK 47s and missles it's with energy...
You were being sarcastic? Oops, in that case, sorry. :) I just can't believe how many people defend these criminals.
Why should they be dying off FOR ME? They are doing their dying for their own reasons, and population there naturally shrinks on its own accord, without my requests or input in that process. Fine with me.
NO, that's not what I prooffered as proof. I thought he was a serious oil guy because that was what he was interested in and hwat he talked about. He was also sorry for the bad stuff he did which he was honest about and very serious about doing what things he could to clean up Russia. That's my proof, not the detail about his eyeglasses!
Russians can worry "30-40 yrs" later. For now, it is Khodorkovsky who has to relearn how to be "resource-poor".
I'm sure he was a serious oil man, still doesn't make him an innocent.
"...what he stole from the government."
Evidence?
What does John Galt have to do with this thread?
It doesn't make him uninnocent either. But it does eliminate the possibility that it was all just stolen and he didn't know anything at all about it or care about it for anything other than money and what he could squeeze out of it. A lot of crooks have fortunes like that and Mikhail was not in that category. That possibility doesn't eliminated all crook possibilities but that possibility is eliminated - there are no honest people at all in that category except heirs to fortunes. We already know that Khodo was self-made.
Putin now controls all of Russia's oil and gas.===
NAturally. Putin is president of Russia.
Hodorkovsky made 16 blns under Eltsin by stealing state property. Now it taken back.
you do realize that Yukos was bought for 800 million dollars and noone wanted to buy it... IT was a peace of crap. After securing the loans to buy it and getting additional funding redeveloping it and making it one of the best oil companies naturally it was taken back ...
Govt is a bad owner of things period everything rots under its managment even here in US. But in Russia especially. Putin is not bad but some things which occur under his guidence are not good overall he isn't bad. Everyone has his bad points and good points. This is his bad point stifling of business (i m not talking about big business but small business) overall is causing major harm.
Did you ever hear of "loans for shares?"
It was worth less because his puppet Yeltsin priced it at less. I love how you guys defend these criminals overseas but have no problem condemning the same kinds of actions here. Croni Capitalism is not capitalism. Monopolies, especially illegal ones, do not make working economies. They make certain sleezy globalists very wealthy and maybe some of that trickles down to their supporters.
The natural resources which Khodorkovsky "bought" (he himself did not have money before the "purchase") for a token sum are worth many billions of dollars:
"In 1995, Khodorkovsky bought Yukos, the second biggest oil company in Russia, and the fourth largest in the world, thus becoming a billionaire almost overnight. In oil reserves (11.4 billion barrels) Yukos is close to British Petroleum (about 12 billion barrels), which is worth some $180 billion. Khodorkovsky bought 78 percent of Yukos shares for $170 million and even this money was believed to be budget funds operated by Menatep Bank. Menatep Bank, which belonged to Khodorkovsky, had been entrusted with holding the auction to sell Yukos. There is therefore no big suprise that Khodorkovsky proved to be the winner."
( KWR Advisor: Russian Tycoons Face the Heat)
The case of Khodorkovsky is a perfect illustration how the freetraders understand the free market, the role of government and the democracy (the "democracy" means that the government is willing to massacre the Parliament if the later resists the looting)
_____________________________________________
Putin defended the auction as an effort by the state to defend its interests, but his own economic adviser, Andrei Illarionov, blasted the move Tuesday, calling it the "fraud of the year."
Very interesting.
>>State-run oil company Rosneft, whose board of directors is now headed by Putin's deputy chief of staff, covertly purchased the shell company. Both Rosneft and Yuganskneftegaz are being folded into gas giant Gazprom, creating a state-run company whose combined reserves will be six times that of Exxon Mobil.<<
When I read this, el Presidente Vincinte Fox's name jumped out at me. I wonder why?
Who provided the seed money for this guy?
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It worked for Putin didn't it?
I was seeing it as government officials making sure they have control over who gets rich and just who has the power over the little guy.
Effectiveness and production numbers of the oil economy in Russia is the last thing Pukin is concerned with. IMO he was concerned that Mikhail Khodorkovsky might just gain too much power.
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Or lose what he percieves to be his powerbase influence in the status quo.
If the Russian Mafia is as notorious and cutthroat as I've heard, Pukey Baby's got a lot of cabbage on his plate.
December 21:
MOSCOW STANDS FIRM ON YUKOS SALE, AMID U.S. CONCERNS. State Duma Speaker Boris Gryzlov has said that Russia should disregard U.S. State Department criticism of the Yuganskneftegaz auction, calling the sale "an internal matter" and insisting it was carried out "in compliance with the existing law," RIA Novosti reports. State Department spokesman Richard Boucher said on December 20th that the Yuganskneftegaz auction had eroded "Russia's reputation as a place to do business" and "confidence in Russia's legal and judicial institutions."
Meanwhile, White House spokesman Scott McClellan also criticized the sale, Reuters reports. "We are disappointed that Russia went ahead with the auction of the Yukos subsidiary," he said, adding that President George W. Bush could raise the issue with President Putin when the two leaders meet in the Slovak Republic on February 24th.
- Jonas Bernstein
Copyright (c) 2004, American Foreign Policy Council
Is Putin in worse hot water with his own people or with us?
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