Posted on 06/13/2005 9:47:34 PM PDT by jb6
MOSCOW — When the U.S. law-enforcement agencies repeatedly attempted to imprison Chicago businessman and celebrity Al Capone for bootlegging, racketeering and murder, the charges never stuck. Exasperated with the U.S. government’s attempts to brandish him a crook, Capone decided it was time to fight back. He got himself a media-relations manager and set up a soup kitchen in Chicago.
Soon enough he was a news celebrity. Newspaper hacks could not get enough of his lifestyle, his women and his one-liners. But nothing he said during his days ruling streets of Chicago compares to the incredulous cry he let out when the prosecutors finally nailed him on tax evasion and accounting fraud. He cried out in court “they can not tax illegal income!” Russian criminals are going to have to learn the lesson American gangsters learnt fifty years ago. The lesson is – yes they can. The government can and does tax illegal incomes and governments around the world do use strong arm, less-than-fair, less-than-judicious means to put powerful crime figures behind bars.
This week, a panel of three female judges — who had been the subject of mockery, contempt and insults for months at the hands of their famous billionaire defendants Mikhail Khodorkovsky, Platon Lebedev and their high-profile lawyers and reporters — sentenced them to nine years each in prison. I am not aware of any similarities between the sentencing of Russia’s chief prisoner and that of Capone, and if there are, the hoards of press reporters that have followed every sigh, sketch and facial expression of Khodorkovsky and et. al. for months, have not reported them. It was left to the three judges to pore through volumes of evidence that found Khodorkovsky guilty on six charges of fraud and tax evasion in exceptionally high proportions. The state prosecutors accused Khodorkovsky of running an “organized crime group,” the euphemism for Russian crime syndicates, also known as the Mafia. One of Khodorkovsky’s Canadian defense lawyers was quoted as saying by the media that by Russian court’s definition, “GM [presumably, General Motors] could also be labeled an organized group.” If Khodorkovsky and his Canadian defense lawyer found the line between Russian organized crime gangs and the U.S. auto corporation fuzzy, the judges and prosecutors had no such difficulty.
Khodorkovsky has had so many shell companies in so many exotic places all over the globe, acquired so much wealth with such extensive fraud and engineered so numerous questionable schemes to avoid paying due taxes that in the process left such trails of incriminating evidence that could’ve been seen from the Moon.
Now, Khodorkovsky’s business partners have threatened to name and shame corrupt government officials in revenge. It’s about time. Dozens of corrupt officials had helped Khodorkovsky acquire his oil and fertilizer plants, turned a blind to his questionable tax records, protected him from prosecution, despite repeated complaints from local authorities and competitors he bulldozed and overran in the process of building his sprawling oil empire. These corrupt officials aided him in his plans to acquire, loot and avoid taxes without fear of legal repercussions. Many of those officials are probably still in office, and many others probably still work for him. The reason these threats of naming the corrupt people are all “bark and no bite” is, perhaps, because the officials and politicians bought by Khodorkovsky have kept their side of the bargain many times over in the last decade. Now, unless he is planning his legal defense on grounds of insanity, Khodorkovsky won’t be biting the hands that fed him, while he kicked bellies of millions of Russians.
The fact that there are two prosecutors, three judges and one court in Russia that were not already corrupted by the oligarchs is already a sign that things are changing for the better, because for nearly a decade when Khodorkovsky and other oligarchs ruled Russia’s political and economic space like feudal lords, such court would not have been found in the land. It would have been bought or scared into total submission. The judicial system that he and his fellow oligarchs had manipulated so effectively in the past to acquire their mammoth wealth, trespass on national interests, foreign investors’ assets and trample on other people’s rights with brazen impunity, finally fell on him in an act of comic justice.
It is too soon to grieve over him because it is far from given that Khodorkovsky will spend nine years in prison. His billions will surely buy many lengthy appeals, miles of adulatory media columns, light years of TV protests, stampedes of lobbyists, generous and, at times, genuine tears, theatrical anger, effusive tributes, and in the end, perhaps some violence. This might bring him freedom from behind the bars, but it will not take away his guilt, because for millions of Russians he has been a symbol of all that went wrong in Russia since Soviet Union imploded and rogues took power and control of their country.
In seeking sympathy of people, the court and Kremlin, Khodorkovsky claimed he should be forgiven because he had not bought a football club. True, he did not buy himself a football club, but his ego was much bigger than the Chelsea stadium, and worse still, his eyes were set on privatizing the Kremlin.
There is more cry of “human rights violation” about his case in the Western media than for million starving, raped, dying and dead victims of ethnic cleansing in Darfur, the western Sudanese region engulfed in a brutal civil war since February 2003. Khodorkovsky — the man, who, according to the court verdict, stole oil companies, fertilizer plants and evaded taxes — is now begging for sympathy. The only social service he has done is exposing the hypocrisy of main stream Western media and its self-appointed avatars of human rights.
It was never in doubt that Russia has lacked the political will to throw the book at robber barons of 1990s. It is now up to each oligarch to draw the lessons he wishes. Demands from Russian President Vladimir Putin have been consistent and clear — pay your taxes and live by the rules of a civilized democratic society. As for Khodorkovsky, he is trapped in a web of his own hubris and lies and should know by now that only truth and real contrition can set him free.
Yeah, and judging by the recent SCOTUS decision, they can also protect and preserve illegal markets. Presumably for prosecution do to tax evasion at a later date.
Hey, it makes as much sense as anything.
But in my bookkeeper's heart, I'm with old Al on this one.
ping
I never understood why he hired a Canadian lawyer - except perhaps to have someone who could spin the media in English.
Khodorkovsky is a big time crook. He and his cohorts ripped off many, many people. The Russian judiciary made the right decision.
ping
These corrupt officials aided him in his plans to acquire, loot and avoid taxes without fear of legal repercussions.
It often amazes me that someone with so much will risk it all, and more, by trying to have even more. Why not pay the taxes and play fair even if he got a corrupt start? Now he has unnecessary problems which may cost him everything. Simple greed and lust for power. A failing of many.
How did Yukos eventually become worth 40 billion? Through mindless management of the resources? Through faith? Through extortion of western oil companies?
This article completely mises the point - http://www.freerepublic.com/focus/f-bloggers/1418307/posts
and read some von Mises...your economics are appalling.
excuse me (typo above), the above article completely misses the point..for a more complete view, read this essay: http://www.freerepublic.com/focus/f-bloggers/1418307/posts
Its not bad economics, as a matter its simple arithmetic. How does a minor communist party functionary get the initial $300 million to buy Yukos? Did he get it out from under his mattress? If not, then from whom??? That $300 mil was not a fair price for Yukos at the outset. So there was massive bribery and corruption. Since the old USSR was a communist country, those nationalized properties belonged to all the people of Russia, and if it was to be privatized and sold, then the fair market price should have been paid to the Russian people. The Russian people are highly educated, and don't want to take kindly to theft.
What was he supposed to do??? That was the game that was laid out...the difference between what Khodorkovsky did and the other "oligarchs" is that he was taking his company on the pathway of western corporate transparency. Letting Exxon-Mobile invest in the company was too great a threat to Putin's hold on power - so he destroyed them. He could destroy any other "oligarch" in the same manner, using the same trumped up charges. Are you blaming Khodorkovsky for the anarchy that existed after the fall of communism? At least he was cleaning up the act and giving the west faith in russian markets.
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