FT.com / World - Khodorkovsky still defiant

By Neil Buckley in Chita, Siberia

Published: February 6 2008 22:06 | Last updated: February 6 2008 22:06

Mikhail Khodorkovsky, the jailed Russian oligarch, voiced doubts on Wednesday that Dmitry Medvedev, Russia’s likely next president, would be able to undo damage to the rule of law inflicted during the Putin era.

In his first face-to-face interview since his arrest in 2003 on fraud charges, Russia’s one-time richest man spoke to the Financial Times about his incarceration, his concerns for his own future and his long-term optimism for Russia.

Speaking in a courtoom in Chita, a Siberian city 6,500km east of Moscow where he is now being held, Mr Khodorkovsky stood inside the metal cage in which Russian defendants are kept in court.

Leaning against the bars, he looked gaunt and drawn on the ninth day of a hunger strike in support of an imprisoned manager of Yukos, the oil company he created.

He answered questions during a 40-minute break in a hearing related to new fraud charges against him.

Mr Khodorkovsky argues that President Vladimir Putin’s regime has used the law to target political enemies, especially business owners like himself. Asked if he thought Mr Medvedev, Mr Putin’s chosen successor as Russian president, could reverse the process, the 44-year-old former oligarch said: “It will be so difficult for him, I can’t even imagine . . . Tradition, and the state of people’s minds, and the lack of forces able to [support] any movement towards the rule of law, everything’s against him. So . . . may God grant him the strength to do it. All we can do is hope.”

The Kremlin insists that it has imposed order after the chaotic 1990s when Mr Khodorkovsky and others made fortunes through acquiring state assets. But Mr Khodorkovsky said that Russia’s biggest problem was the lack of the rule of law which he said was worse than in China. “Laws can be better and they can be worse. But people must abide by laws, and not use them for their own ends.”

However, he said he did not share concerns of some civil society and opposition leaders that democratic freedoms would continue to be eroded in Russia. “People can leave freely, the internet works.” It was just “not possible” that Russia could return to the darkest days of its Soviet past.

He said he believed China’s success with authoritarian capitalism was not a model for Russia. “I’m convinced that Russia is a European country, it’s a country with democratic traditions which more than once have been broken off during its history, but nonetheless there are traditions.”

The businessman was arrested in October 2003 and sentenced in June 2005 to eight years on fraud and tax evasion charges. His energy company, Yukos, which he built into Russia’s biggest after acquiring it in a controversial privatisation in 1995, was sold piecemeal to pay off $28bn back tax charges – with its assets largely gobbled up by Rosneft, the state-owned oil company.

He served the first part of his sentence in a prison colony in Krasnokamensk, a bleak uranium-mining town near the Chinese border, where the man who was once worth $13bn spent his days sewing shirts and gloves. He was moved to the regional capital last year after new charges were brought against him of embezzling more than $30bn in Yukos’ oil sales.

He now spends each day wading through documents for the new trial. If convicted, he now faces up to 22 years in jail.

He is contemptuous of the various legal assaults on Yukos. “The accusations are not connected with a real crime, but with a desire – the desire to take away people’s conscience, the desire to convince a witness to give evidence. It’s all about their various, conflicting desires.”

The Kremlin says all charges brought against Mr Khodorkovsky are legally justified and that he is no political prisoner but a convicted criminal.

But Mr Khodorkovsky’s supporters see him as the victim of a politically motivated response to his own political activities.

Mr Khodorkovsky said he planned to continue his hunger strike until his demands were met for Vasily Aleksanyan, a seriously ill former Yukos vice-president on trial on separate embezzlement charges, to be moved from his Moscow prison to a civilian hospital.

Mr Khodorkovsky said he now accepted calmly the dismemberment of Yukos. “I used up all my nerves in 2004, when a company that was working well was seized and handed over to Rosneft,” he said. “Rosneft today is basically Yukos with a bit added on.”

The former tycoon declined to comment on the conditions in which he was being held, calling them “standard” for Russia. Though he has been held in isolation since declaring his hunger strike.

FT.com / World - Unbowed in face of ‘absurd’ charges

By Neil Buckley

Published: February 6 2008 22:03 | Last updated: February 6 2008 22:03

Gaunt, a little jaundiced, his hair greyer and sparser than when he was last seen in Moscow at his sentencing three years ago, Mikhail Khodorkovsky stood defiantly in a Siberian courtroom on Wednesday despite being on the ninth day of a hunger strike.

He had been brought from a pre-trial detention centre in Chita, a city 6,500km east of Moscow, to a nearby court for a hearing relating to embezzlement charges brought against him last year.

During a long break, Mr Khodorkovsky answered questions from the Financial Times and a scattering of his supporters, speaking through the beige-painted bars of the cage in which Russian courts house criminal defendants.

His voice fading occasionally, prompting him to gulp water from a bottle, Mr Khodorkovsky spoke of his concerns for himself, his family and Russia.

Asked about his health after several days on a “dry” hunger strike before he decided to accept water, he twice insisted he was ­normalno, the shrugging Russian equivalent of OK.

Mr Khodorkovsky said he planned to continue his hunger strike until his demands were met for Vasily Aleksanyan, one of his former senior managers at the Yukos energy group who is now on trial on separate embezzlement charges, to be moved from his Moscow prison to a civilian hospital.

Mr Aleksanyan has been diagnosed with Aids, cancer of the lymph glands, ­suspected tuberculosis, and is nearly blind. He has accused prosecutors of ­trying to force him to give false testimony against Mr Khodorkovsky in return for medical treatment.

“What other way was there?” Mr Khodorkovsky said on Wednesday of his decision to stop accepting food last week in support of Mr Aleksanyan. “My health is OK. I’m fully ready for a long bureaucratic procedure while they check Aleksanyan’s health.”

Mr Khodorkovsky was initially on a “dry” hunger strike but decided at the weekend to start accepting water after Mr Aleksanyan said his prison conditions had been improved.

A Moscow court on Wednesday suspended Mr Aleksanyan’s trial but said he would not be released from prison. The court said he should receive treatment in the prison hospital, but Mr Aleksanyan’s lawyers say the prison is unable to provide adequate conditions for the treatment he needs. Even the head of the prison wrote to the court saying he needed to be moved for special treatment.

Looking generally relaxed in the Chita court, the former business oligarch said the $28bn (€19bn, £14bn) embezzlement charges against him were so absurd it was difficult to mount an effective defence.

“I’m being accused of stealing all the oil produced by Yukos over six years. It will be interesting to see how they intend to prove that,” he said.

He admitted that when he arrived in Krasnokamensk prison after his sentencing he had been an object of curiosity. But he said inmates and local people had treated him better than ­Muscovites.

“Here the word ‘conscience’ has not yet disappeared,” he said. “Of course, to a certain extent, I am a being from another world, an alien [to other prisoners],” he said. “[I told them] ‘So you didn’t have a political prisoner here before? Well, now you have one. They were around before. Get used to that situation.’ ”

Mr Khodorkovsky was refused an application when in Krasnokamensk to teach mathematics to other inmates but, along with other prisoners, sewed shirts and gloves.

His arrival did seem to raise other prisoners’ awareness of their rights.

“I don’t think that I was responsible. But people understood that they could defend their rights by legal means. Previously, when there was a problem, there were protests etc. But when I came to the colony, the situation changed, in that commissions started to arrive constantly, and the prosecutor came.

“And the first time the prosecutor came, one person went to see him, and only to talk about his case, not about his imprisonment. And everyone looked at him like he was nuts.

“The second time the prosecutor came, there was a whole queue waiting for him, 40 people. So to a significant degree, life started to change.”

Since his transfer to Chita, a city of stolid Soviet-era architecture on the trans­Siberian railway where morning temperatures this week have been about -28°C, he has been reading 200 pages of documents a day to prepare for his new trial.

The former tycoon declined to comment on ­suggestions that he had embraced the Russian Orthodox faith.

“That’s a complicated question. I have thought a lot about this. And I’d rather keep it to myself.”

Mr Khodorkovsky said he worried most about his parents. “What’s important is how my parents feel, the rest is not important.”

The former head of the stricken oil group argued that Dmitry Medvedev, Vladimir Putin’s likely successor as president following elections next month, would face huge challenges restoring the rule of law in Russia. But he said that, despite the erosion of democracy, he was broadly optimistic about the country’s future.

“It’s a question of my ­personality. I can’t provide a lot of arguments for and against but, on the whole, I’m optimistic.”

Mr Khodorkovsky said China’s success with authoritarian capitalism was not a model for Russia. “Here in Chita ... if you ask people ‘Are you more like a Chinese person, or more like a European?’ Here I think people’s understanding is fairly unambiguous. We’re a European country. That’s how we developed. And the way forward for us is the European way.”

FT.com / Home UK / UK - Transcript of Khodorkovsky interview highlights

Published: February 6 2008 22:03 | Last updated: February 6 2008 22:03

Partial transcript of the FT’s interview with Mikhail Khodorkovsky, conducted by Neil Buckley in Chita regional court, Chita, Siberia. 6 February 2008

Financial Times: How long will you continue your hunger strike?

Mikhail Khodorkovsky: I said I would continue my hunger strike until the question is settled about an independent inspection into the conditions [of Vasily Aleksanyan] and whether he can be treated in the detention centre. And according to the results of that commission, some kind of action should be taken.

That’s what I’m saying. As far as I know, Russia’s human rights ombudsman Lukin he announced the same demands to the prosecutor

FT: You went from a dry hunger strike to accepting water because Aleksanyan’s conditions had been improved?


MK: He said that they had been, and we can only judge by what he said. Only by what he told the media, that the conditions of his imprisonment had radically improved.

FT: How is your health?

MK: I’m OK. I think I’m fully ready for a long bureaucratic procedure while they check the health of Aleksanyan. But as long as our bureaucrats drag out that procedure, I’m ready to continue.

FT: Why did you decide there was no other option than a hunger strike?

MK: What other way was there? Aleksanyan himself announced that the director of the investigative group had demanded false evidence from him against me, and made a direct link between him giving this false evidence in exchange for allowing him treatment. Alexanyan refused, and they are not providing treatment. He announced this in the supreme court of Russia. What can I do in that situation?

FT: What conditions are you held in? How many people in your cell?

MK: Under Russian law, if a person announces a hunger strike he’s held in isolation. Before that, there were two or three other people in the cell. I don’t really have any problem with the conditions of my imprisonment. For our country, they’re the norm.

FT: But the reputation of this detention centre is very poor.

MK: I can’t really get into discussions about that. But my conditions are standard, they meet the usual norms for Russia.

FT: What does your family think about your hunger strike?

MK: What’s important is how my parents feel, the rest is not important. I’ve been thinking most of all about my parents. My wife understands me, so she doesn’t question what I’m doing. She’s already been through a lot.

FT: Are you able to continue familiarising yourself with the material for the new trial?

MK: I’m still able to read 200 pages a day. The only really problem I have is with speaking, when my throat is dry.

FT: Some people say fear is returning to Russia, that things could go back to the Soviet era…

MK: I hope that that won’t happen. We need to be ready for the best…I don’t think it will happen. People can leave freely, the internet works. It’s just not possible.

FT: But the Federation Council will examine a law on internet this week?

MK: That’s just not possible. Everyone clearly understands that innovation is important, we won’t be able to survive without innovative technology.

FT: But does the government understand that?

MK: The government understands it very well. Even the oil industry can’t work properly without innovation. There can be situations where it’s very difficult to develop an oil well. Without innovation you can’t do it.

FT: But in China, there’s less democracy than here, but economy is developing.

MK: There are two important differences. First, I read an article by [Andrei] Illarionov [former economic adviser to Vladimir Putin]. Very interesting. He said three countries are considered examples of how authoritarian political regimes can develop their economies – China, South Korea and Singapore. How do these 3 countries differ from Russia? It’s very interesting. Singapore is number one by the state of its judiciary. South Korea is at a very high level, and even China is better than Russia. That’s the basic difference. The presence of the rule of law. If there is the rule of law, the level of authoritarianism of the executive branch is limited.

Another reason why we can’t take China as an example is because we’re a country where competition of ideas is important. The west is accustomed to competition in the political sphere, competition between parties. In China there is also an important kind of pluralism, but it is territorial. There is a Beijing party organisation, a Shanghai party organisation, which wield very serious economic and political power, and in the competition between the three possible systems, they are able to work out some kind of consensus opinion among the elite. So there is a kind of pluralism. It’s just different from the west and the west doesn’t understand it.

For Russia, the Chinese route is impossible because for us territorial pluralism could lead to the collapse of the country, and we can’t afford that. So accordingly, only a more standard form of pluralism is possible for us.

And to take the city state of Singapore as an example for Russia is not possible.

FT: So Russia’s biggest problem is the lack of an independent legal system?

MK: The lack of the rule of law, as a whole. Laws can be better and they can be worse. But people must abide by laws, and not use them for their own ends.

FT: Do you think Medvedev believes in the rule of law? When he becomes president is some kind of change possible?


MK: It’s very difficult for me to predict, because it will be so difficult for him. I can’t even imagine. Honestly speaking, if you asked me how to get Russia out of this situation, I would be utterly lost. Tradition, and the state of people’s minds, and the lack of forces able to [support] any movement towards the rule of law, everything’s against him. So…may God grant him the strength to do it. All we can do is hope.”

FT: But you still have an optimistic view on the future of Russia?

MK :Broadly, yes. But that’s a question of my personality. I can’t provide a lot of arguments for and against, but on the whole I’m optimistic.

FT: Has your view on the future of Russia changed during your imprisonment?

MK: You know, I ended up in prison at a fairly mature age to be able to seriously change one’s views. I’m convinced that Russia is a European country, it’s a country with democratic traditions which more than once have been broken off during its history, but nonetheless there are traditions. People are educated, they’re absolutely normal. You wouldn’t believe the extent to which I was able to speak in the same language - I’m a Muscovite, with a relatively high level, by our standards, of education - the extent to which I was able to speak the same language to people who live deep in the Chita region, who have only school-level education. We’re people of one culture, one understanding of the world. …Here in Chita, to say Russia is an Asian country, I think for many people that would be, well, I wouldn’t say an insult, but if you ask people are you more like a Chinese person, or more like a European, here I think the people’s understanding is fairly unambiguous. We’re a European country. That’s how we developed. And the way forward for us is the European way.

FT: How do other prisoners treat you?

MK: I, of course, to a certain extent am a being from another world, an alien, and in the camps it’s the tradition to rank people on a kind of scale. I said to them, So didn’t have a political prisoner before? Well now you have one. They were around before. Get used to that situation. Bring in new ranks.

FT: Was it true you were given the nickname “clever”?

MK: No, that wasn’t the case...Young people have nicknames, but not the older ones. For me, for example, it’s usual to refer to people by their name and patronymic, or by the patronymic, so people referred to me as Borisovich. It’s not unique, it’s a relatively accepted situation.

FT: Perhaps how they referred to you between themselves?

MK: Maybe, but it’s not important.

FT: What’s your attitude to what happened to Father Sergei [former priest at Krasnokamensk, defrocked after declaring Khodorkovsky a political prisoner]?


MK: When I first heard about it, I was upset. But in his second interview, with Moskovsky Komsomolets, he told the truth. I didn’t look closely at the first one. Perhaps he overstated things. But in the second one he got it right. He came to me, said Mikhail Borisovich, this will probably be the last time we will see each other. And I said that can’t be true, I know [patriarch] Aleksy fairly well. He’s the kind of person who couldn’t do that. And he said, you know Aleksy, and I know our church system. And he turned out right. He knows our church system better than I do. That upset me, but you have to say he went into all this with his eyes open. I very much respect him for that, and thank him. But a person has his beliefs, he was in prison with Kovalyov. He’s a man with convictions.

FT: Do you consider yourself an Orthodox person, a believer?

MK:That’s a complicated question. I have thought a lot about this. And I’d rather keep it to myself.

FT: People say that you raised the level of people’s legal awareness in the prison…


MK: I don’t know to what extent I was responsible for that. I don’t think that I was responsible. But people understood that they could defend their rights by legal means. Previously, when there was a problem, there were protests etc. But when I came to the colony, the situation changed in that commissions started to arrive constantly, and the prosecutor came. And the first time the prosecutor came, one person went to see him, and only to talk about his case, not about his imprisonment. And everyone looked at him like he was nuts. The second time the prosecutor came, there was a whole queue waiting for him 40 people. So to a significant degree, life started to change.

FT: What can you say about the new case against you?

MK: I have already said everything in my original statement. But I’m being accused of stealing all the oil produced by Yukos over six years. It will be interesting to see how they intend to prove that. It will be curious.

There have been various verdicts against Yukos. And the judges contradict each other on all sorts of questions, even in spite of the fact that the cases have all been supported by the federal prosecutor. So even they can’t make sense of it all, because they’re so confused about what they want. The accusations are connected not with a crime, but with a desire, the desire to take away people’s conscience, the desire to convince a witness to give evidence. It’s all about their various, conflicting desires. So the verdicts start to contradict one another.

FT: What’s your attitude to the auctions of Yukos assets that took place last year?

MK: I reacted to all that fairly calmly. Because I used up all my nerves in 2004, when a company that was working well was seized and handed over to Rosneft. Rosneft today is basically Yukos with a bit added on. To a large extent, it’s the same people. The production capacity is 75 per cent the same. Rosneft is Yukos after three years of peredelok.

FT: But now its market capitalisation is something like $80bn.

MK:Yes. But for me, to a significant extent, it’s more important that people didn’t lose their jobs, that they didn’t have to move to other cities and so on. That would be a catastrophe. I was always concerned that production would stop. A few times we came close to that, but fortunately, thanks to the efforts of the people who were themselves often under the threat of arrest, we preserved production. And people didn’t lose their job

FT.com / World - Khodorkovsky ‘laundered $23bn’

By Catherine Belton in Moscow

Published: February 9 2007 13:55 | Last updated: February 9 2007 15:01

Russian prosecutors on Friday said Mikhail Khodorkovsky, the jailed Yukos oil tycoon, laundered more than $23bn (€18bn, £12bn), in Yukos oil sales, disclosing the first details of charges that could keep the Kremlin opponent in jail for a further 10 years.

The prosecutors made their first full statement on fresh charges brought against Mr Khodorkovsky and his business partner Platon Lebedev earlier this week.

They said Mr Khodorkovsky and Mr Lebedev had illegally acquired more than $25bn worth of oil from Yukos subsidiaries from 1998 to 2003, passing the crude off as “well fluid” and then selling it on to consumers at prices three or four times higher. The pair are also accused of laundering the proceeds.

The prosecutors said they were also charging the two former tycoons with siphoning off shares in Eastern Oil Company in 1998 that should have belonged to the state.

Defence lawyers for Mr Khodorkovsky have said the new charges are part of a political effort to keep him behind bars beyond presidential elections in 2008 and to prevent him from funding opposition parties.

But Marina Gridneva, a spokeswoman for the prosecutors’ office, said on Friday: “There is nothing political about this. This is a purely criminal case.”

Mr Khodorkovsky maintains his innocence, in part through a website documenting his trial.

BBC NEWS | Europe | Medical plea fails in Yukos case

A court in Russia has ruled that a jailed former top manager of the disbanded oil group Yukos cannot be transferred to a clinic for treatment.

Vasily Aleksanyan, 36, is reported to be suffering from Aids.

He was jailed in 2006 after being found guilty of embezzlement. He was deputy to the Yukos founder, Mikhail Khodorkovsky, who is also in prison.

Mr Khodorkovsky says he is on hunger strike in support of Mr Aleksanyan.

He says officials are punishing Mr Aleksanyan for refusing to sign false confessions.

'Moral choice'

In a letter posted on his supporters' website on Wednesday, Mr Khodorkovsky said Mr Aleksanyan had been refused medication and deliberately placed in poor conditions.

He said he had no choice but to "abandon the legal framework" and start a hunger strike.

"I am facing an impossible moral choice: admit to crimes I haven't committed and save the life of a man, but destroy the fate of innocents who will be charged as my accomplices," he said.

Mr Aleksanyan says he has developed serious health complications and is nearly blind.

Russia's human rights ombudsman Vladimir Lukin has called for an independent medical examination of Mr Aleksanyan.

Mr Khodorkovsky, the founder of Yukos and once Russia's richest man, is serving an eight-year sentence at a prison camp in Siberia.

His supporters have always said that his arrest was punishment for his support of pro-Western opposition political parties.

Mr Khodorkovsky's international lawyer Robert Amsterdam said Russia was "flouting not only international law but the norms of morality".

RussiaToday : News : Freedom denied for dying ex-Yukos executive

Russia’s Federal Bureau for the Enforcement of Punishment is threatening legal action against the lawyer of former Yukos executive Vasily Aleksanyan. It claims her accusations that he is not receiving proper medical treatment are obstructing the course of justice.

The former Yukos executive says he's living in poor conditions and can't attend court hearings because he's suffering from AIDS and cancer.

"Am I Jack the Ripper? Have I blown up a train or killed two hundred people? How can you justify what is going on here? There is no justification for doing this," Aleksanyan said.

Nevertheless, a Moscow court rejected Aleksanyan’s request to be transferred to a medical centre, saying there was no evidence presented to prove it’s necessary.

Aleksanyan will have to remain in detention for the rest of his trial on charges of embezzlement, money laundering and tax evasion.

The Russian Prison Service says it's Aleksanyan who is refusing treatment.

In fact some specialists say Aleksanyan is in much better living conditions than tens of thousands of other HIV-infected prisoners in Russia.

“More than 400,000 Russians are infected and 40,000 of them are in prison, and to my mind Aleksanyan is living in much better conditions compared to other HIV-infected prisoners,” said Vadim Pokrovsky, AIDS specialist.

Aleksanyan’s supporters

In Moscow, around 70 human rights activists are taking part in a picket to draw attention to Aleksanyan's fate.

Jailed Yukos shareholder, Platon Lebedev, has announced he's ready to make further confessions if this will help Aleksanyan get better treatment from the authorities.

Former Yukos CEO, Mikhail Khodorkovsky has been on hunger strike for three days, demanding better care for his former colleague. Then Khodorkovsky has stopped his dry hunger strike saying he will now only drink water.

Meantime authorities say Khodorkovsky could be force-fed if he refuses to eat.

The former Yukos CEO is serving his eight-year sentence in Siberia for fraud and tax evasion.

The Moscow Times : Aleksanyan Says He Is Receiving Care

Former Yukos executive Vasily Aleksanyan, who claims he was denied treatment for AIDS while in detention for not testifying against Mikhail Khodorkovsky and Platon Lebedev, said Thursday he was now receiving "unprecedented attention and care" in detention.

Aleksanyan, who is awaiting trial for embezzlement and tax evasion, also revealed to reporters at the Simonovsky District Court that he had been diagnosed with terminal lymphoma.

Aleksanyan is currently being held at the Matrosskaya Tishina detention facility in eastern Moscow, and he told reporters at the courthouse that his conditions were improved Wednesday.

"My cell was cleaned," said Aleksanyan, who appeared exhausted. "I returned from yesterday's hearing and thought I was in the wrong place."

The court is to rule Friday on a possible release and transfer to a clinic.

Human rights ombudsman Vladimir Lukin called Thursday for Aleksanyan to be provided with an independent medical examination.

Aleksanyan also thanked Khodorkovsky, the former Yukos CEO currently serving an eight-year prison term in Siberia, for going on a hunger strike Wednesday to protest prosecutors' handling of Aleksanyan.

"I am grateful for his support, although I'd rather he not put his life at risk, as he has four children," Aleksanyan said.

Aleksanyan has claimed that he has been deliberately denied medical treatment for AIDS while in detention as punishment for refusing to testify against his former bosses -- Khodorkovsky and Lebedev, who is also serving out an eight-year prison term.

By Svetlana Osadchuk and Natalya Krainova
Staff Writers

The Mocow Times : Aleksanyan Gets Support of Old Boss

Jailed former Yukos CEO Mikhail Khodorkovsky said Wednesday that he had started a hunger strike to protest prosecutors' handling of Vasily Aleksanyan, a former Yukos executive who claims he has been denied medical treatment for AIDS while in detention.

A preliminary hearing in Aleksanyan's case, meanwhile, was cut short Wednesday after the suspect began feeling unwell, Aleksanyan's lawyer said.

In an appeal to Prosecutor General Yury Chaika, Khodorkovsky said he had no choice but to go on a hunger strike to protest the authorities' treatment of Aleksanyan.

"I hope that the department you head will make the decision to guarantee Aleksanyan life and medical assistance," Khodorkovsky wrote in a letter that was posted on his web site, Khodorkovsky.ru.

One of Khodorkovsky's lawyers, Robert Amsterdam, said the hunger strike was understandable.

"Everyone has been totally shocked by this case," Amsterdam said by telephone from Canada. "Mr. Chaika and the executive power need to understand their personal liability in this case. They are giving orders in a system so that is so corrupt that officials can threaten suspects with murder to elicit false testimony."

Aleksanyan, who is facing embezzlement and tax evasion charges, claims he has been deliberately denied medical treatment for AIDS while in detention as punishment for refusing to testify against his former bosses, Khodorkovsky and Platon Lebedev.

Khodorkovsky and Lebedev are each serving out eight-year prison terms after being convicted of fraud and tax evasion in 2005.

The Federal Prison Service claims that Aleksanyan has merely refused treatment.

The Strasbourg-based European Court of Human Rights has issued three requests for Aleksanyan, 36, to be transferred to a special hospital -- requests that have been refused by Russian courts.

Russia is a signatory to the European Convention on Human Rights.

At Wednesday's hearing at the Simonovsky District Court, doctors were called in to examine Aleksanyan after he "suddenly felt unwell," his lawyer, Yelena Lvova, said.

"His temperature rose to 39 degrees, and doctors said he was in no condition to continue the hearing," Lvova said.

The hearing was to continue Thursday, though Lvova said she would "try to postpone the trial" until her client is feeling better.

The judge on Wednesday was to set a trial date and rule whether Aleksanyan would remain in custody, a Moscow City Court spokeswoman said.

Human rights ombudsman Vladimir Lukin sent a letter to Chaika on Wednesday requesting that the prosecutor general "take measures" to secure the necessary treatment for Aleksanyan, Lukin's assistant said.

By David Nowak
Staff Writer

Yukos official 'could die in prison'

By Catherine Belton in Moscow

Lawyers acting for a jailed senior Yukos official say their client could die in prison after Russian officials three times failed to act on a ruling by the European Court of Human Rights that he receive immediate medical treatment at a specialised clinic.

Vasily Aleksanyan, the former vice-president of the bankrupt Russian oil company, is suffering from a life-threatening illness for which prison doctors prescribed urgent medication and therapy 14 months ago, his lawyers said.

But Mr Aleksanyan has yet to receive any treatment or be transferred to a specialist civilian clinic where investigators and the ECHR have said the treatment, which has potentially lethal side effects, should be administered. Instead he has been transferred to a prison hospital, where he contracted tuberculosis two months ago. He has gone blind and is unable to read the fraud and embezzlement charges against him.

"His condition is so bad that he could die at any moment. He could die from a cold," said Yelena Lvova, a defence lawyer for Mr Aleksanyan, who was arrested in March 2006 as part of a case against Mikhail Khodorkovsky, Yukos's owner. Ms Lvova said she did not have Mr Alexanyan's permission to disclose the exact nature of his illness.

"The way the Russian government is behaving right now can only be described as shockingly repulsive," said Drew Holiner, Mr Aleksanyan's lawyer in the ECHR case.

"If he dies in prison the ECHR is going to find Russia is responsible for that."

The federal prison service said a Russian court would have to issue a ruling before Mr Aleksanyan could be transferred to a specialist clinic. Russia's prosecutors' office declined to comment on the case. The investigations committee at the prosecutor-general's office was not able to comment.

Mr Aleksanyan's condition is likely also to raise concern about other former Yukos officials jailed in Russia's prisons, which are notorious for cramped and insanitary conditions and for rampant tuberculosis. Mr Khodorkovsky, the country's former richest man, who was arrested in October 2003 in a Kremlin campaign said by critics to be politically motivated, is reported by his lawyers to be "more or less" in good health.

Defence lawyers said Russia's ignoring of the ECHR rulings on Mr Aleksanyan was a sign of the Kremlin's increasing impunity in violating basic human rights.

"The higher the oil price goes, the greater the silence in the west over violations of human rights in Russia, and the worse things get here. We're like a voice crying in the desert," said Yury Shmidt, a lead defence lawyer for Mr Khodorkovsky.

The rulings of the ECHR have not been published because of sensitive information contained in the case.

The Moscow Times : Ex-Yukos Executive Tells of Blackmail

By Christian Lowe
Reuters

A gravely ill former Yukos executive has accused his jailers of trying to blackmail him into testifying against old associates by denying him the medical treatment he needs to stay alive.

The European Court of Human Rights in Strasbourg made the highly unusual step of issuing three requests for Vasily Aleksanyan, 36, to be transferred to a specialist hospital, but authorities have not complied.

Aleksanyan's case is politically charged because he is a former vice president of the now-defunct Yukos oil firm, whose main shareholder, Mikhail Khodorkovsky, is serving an eight-year sentence in a Siberian prison after falling foul of the Kremlin.

Investigators deny any unlawful treatment of Aleksanyan, who is awaiting trial on charges of fraud and tax evasion. They say he has made his own health worse by rejecting the treatment offered in the prison sanatorium.

At a Supreme Court hearing on Wednesday where his lawyers challenged his detention, prosecutor Vladimir Khomutovsky said Aleksanyan had HIV/AIDS. His lawyers said they did not have their client's consent to disclose his illness.

In an open letter he passed out of the Matrosskaya Tishina prison in Moscow, Aleksanyan said he was now nearly blind, had a constant fever and was in urgent need of a course of drug treatment that was only available outside prison.


"The prognosis is death," said his lawyer, Yelena Lvova, when asked what would happen if Aleksanyan, in detention since April 2006, was not transferred to a civilian hospital soon.

Kremlin critics say Yukos and its executives became the targets of an official vendetta because they challenged President Vladimir Putin's power. Khodorkovsky is expected to stand trial soon on a set of new charges.

The investigators handling Aleksanyan's case said in a written statement that "in accordance with current legislation, the defendant has been offered comprehensive medical treatment, which he has declined."

"The investigation of this criminal case is being conducted in exact accordance with the demands of criminal procedural law," the Investigative Committee, a semi-autonomous agency under the auspices of the Prosecutor General's Office, said in the statement.

Aleksanyan took part in Wednesday's hearing by video link from his prison, where he could be seen in a small metal cage. He appeared thin and tired, and sat hunched over. He struggled to get to his feet to address the court.

When the judge adjourned the hearing until Jan. 22, Aleksanyan said, "I hope I will survive for another week."

In the open letter, Aleksanyan accused the authorities of deliberately driving him to a condition where he was "close to death" by denying him treatment.

"Attempts have not ceased to make me give false evidence and provide testimony incriminating other Yukos bosses, in exchange for giving me bail on health grounds, that is, in effect, in exchange for life."

The Federal Prison Service did not respond to a request for comment.

Aleksanyan has a brother who works as a translator in the Reuters Moscow office.

The Arrest That Proved a Turning Point

By Catherine Belton
Staff Writer

Former business partners of Mikhail Khodorkovsky will remember the day of his arrest three years ago Wednesday as a turning point toward state control.

But Khodorkovsky himself will spend the third anniversary of his Oct. 25 arrest meeting with lawyers and packing goods at his Chita region prison camp.

The nation's former richest man will spend the day as usual with a wake-up call at 6 a.m. from his bunk in the bleak barracks of prison camp Yag 14/10 in the uranium-mining town of Krasnokamensk. He will pack goods for most of the day and then talk for four hours with his Moscow lawyer, Anton Drel.

Drel, who also met with Khodorkovsky on Tuesday, said his client's physical condition looked to be worsening. "I did not see any serious change in his character over these three years," Drel said by telephone from Krasnokamensk. "But I can't say he looked good. He looks worse and worse. He is very pale."

As Khodorkovsky appears to be weakening, the man he once challenged, President Vladimir Putin, is at the height of his powers. Putin will go live on television Wednesday to field questions in a phone-in show.

The Kremlin's legal attack has routed Khodorkovsky's Menatep business empire and sent his business partners either to jail or scurrying into exile in Israel or London in fear of arrest. His empire, once worth more than $30 billion, lies in ruins with Yuganskneftegaz, Yukos' former main production unit, now in state hands. The rest of the company will go under the hammer in bankruptcy proceedings.

The Kremlin has sought to portray the onslaught as a justified attack on a corrupt empire over financial crimes, while critics claim it is political retribution for the challenge Khodorkovsky posed to Putin's hold on power.

Khodorkovsky's dawn arrest at gunpoint on a Novosibirsk runway led to a huge shift in the way the country was run. In the wake of Khodorkovsky's arrest, Putin radically sped up his drive to consolidate power and clamp down on opposition. At the same time, the state has renationalized swathes of the economy, and enabled other key industries to be consolidated into national champions headed by Kremlin-friendly tycoons.

"The arrest let the genie out of the bottle. The state has taken control of everything," said Alexander Temerko, a former Yukos vice president and a Khodorkovsky ally for nearly 20 years. "The level of political and economic freedom has been radically curtailed."

"The arrest was a turning point for the expansion of the state. As a result, we have moved from having a market economy to having a half planned economy based on the state," said Vladimir Ryzhkov, one of the few independent deputies remaining in the State Duma. "After the Yukos affair and the arrest of Khodorkovsky, the country has ... turned to a system of state capitalism.

After state oil firm Rosneft took over Yuganskneftegaz via a bargain auction in December 2004, Gazprom followed suit a year later to take over Roman Abramovich's Sibneft. As the holdings of the state in the oil sector have climbed from 4 percent of output to more than one-third, the state has moved to bring other sectors of the economy under its control, such as carmaker AvtoVAZ and VSMPO-Avisma, the world's biggest titanium producer. Now foreign oil ventures, including the Shell-led Sakhalin-2 venture, face pressure to hand over more control of projects to state energy companies.

Khodorkovsky's arrest came three weeks after he signed a protocol of understanding with ExxonMobil to sell a significant chunk of his shares in Yukos, Temerko said.

"It was also a turning point in the behavior of business, Ryzhkov said. "If before business could support the opposition because this was the norm in the 90s, after the arrest business came to understand that the condition for staying in business is absolute loyalty to the Kremlin."

"The arrest also created an atmosphere of fear. Now anything is possible," he said. "Everyone is frightened."

International lawyers, now representing Khodorkovsky from the safer vantage point of the United States, said Tuesday that they had documented a "campaign of intimidation," beatings, jailings and other threats aimed at silencing Khodorkovsky's Russian lawyers. They said efforts to have Khodorkovsky's lawyers disbarred last year and the jailing of other members of his legal team were in breach of the Constitution, the European Convention on Human Rights and the rule of law.

"While Khodorkovsky sits in prison he relies more than ever on his lawyers to get the message out," Sanford Saunders, a defense lawyer for Greenburg Traurig, said by telephone from Washington. "Article 48 of the Russian Constitution guarantees people the right to counsel. It is sacrosanct to any country that adheres to the rule of law. The Russian government is completely disregarding it.

"When his lawyers can't speak freely without fearing for their lives, it really does become impossible for him," said Charles Krause, a spokesman for Khodorkovsky.

While Krause has been denied a visa to enter Russia since the beginning of the year, Khodorkovsky's international defense lawyer, Robert Amsterdam, was expelled from the country last year.

Khodorkovsky's Russian lawyers have fared far worse, they said.

Mikhail Zhidkov, a lawyer representing Alexei Pichugin, the Yukos security chief convicted of organizing a series of contract killings and attempted murders, was attacked and beaten in October 2005, the U.S. defense lawyers said, while many representing Khodorkovsky faced attempts to have them disbarred following the collapse of his appeal last year.

Khodorkovsky was sentenced to eight years in a prison camp in May 2005 after a trio of judges found him guilty of large-scale tax evasion and fraud.

While other defense lawyers such as Drel and Karina Moskalenko have had their offices searched, others from Khodorkovsky's legal team have been jailed or forced to flee the country in fear of arrest.

Yukos lead counsel Vasily Aleksanyan was arrested earlier this year, just days after he agreed to head the company's Moscow office in a bid to prevent it breaking away from the company's London-based managers. Svetlana Bakhmina, a mid-ranking Yukos lawyer and mother of two children, was jailed in December 2004. Others, such as Pavel Ivlev and Dmitry Gololobov, have fled.

"This is an effort to go after anyone providing legal assistance to Khodorkovsky," John Pappalardo, another U.S.-based lawyer, said by telephone from Washington. "This is part of an effort to make this go away. It is insufficient to put Khodorkovsky in Chita and [Khodorkovsky business partner Platon] Lebedev above the Arctic Circle."

The Moscow Times: Court Declares Yukos Bankrupt

By Valeria Korchagina
Staff Writer

The Moscow Arbitration Court ordered the bankruptcy and liquidation of Yukos on Tuesday, putting the last nail in the coffin of the country's one-time biggest oil major.

The ruling brought to an end the 1,139-day saga that started with the arrest of Yukos security chief Alexei Pichugin on murder charges on June 19, 2003. The arrest was the start of a legal onslaught that destroyed Yukos and sent its CEO and majority shareholder, Mikhail Khodorkovsky, to jail.

Tuesday's ruling also begins the official carve-up of the fallen oil giant as state-controlled energy firms Rosneft and Gazprom vie for what remains of Khodorkovsky's former empire.

Moscow Arbitration Court Judge Pavel Markov ruled Tuesday evening that Yukos' remaining assets were to be sold off within a year. He also appointed Eduard Rebgun, until Tuesday the court-appointed temporary manager, to oversee the sell-off.

"It is the death sentence for the company," Yukos lawyer Drew Holiner told reporters after the hearing.

Yukos is likely to appeal the decision, he said.

Holiner also lamented that Rebgun, in his new capacity of liquidation manager, would unlikely be able to ensure that the assets fetched the best price.

"The liquidation manager's task is to sell assets as fast as possible to pay off the debt. He will not have the opportunity to wait for favorable market conditions," Holiner said, Interfax reported.


Yukos has one month to appeal.

The decision was widely expected, given that since 2003 Yukos has not had much luck in persuading Russian courts to take its side.

"This is not the end, this is the funeral," Yevgeny Yasin, the founder of the Higher School of Economics and a long-time supporter of Khodorkovsky's, told Ekho Moskvy radio on Tuesday. Khodorkovsky is serving an eight-year jail sentence in Siberia after he was found guilty on tax evasion and fraud charges last year. He has maintained throughout that the authorities' attacks on him and his company were political.

Khodorkovsky's lawyer Anton Drel said Tuesday that he could not immediately reach his client for comment.

In a sign that the bankruptcy was seen as inevitable, Moody's Investors Service earlier Tuesday withdrew the Ca issuer and corporate family ratings of Yukos.

The ruling was delivered after trading closed on RTS, the dollar-denominated trading floor where Yukos shares are still listed.

Stephen Theede, Yukos CEO since 2004, resigned his post in mid-July ahead of the creditors' meeting that recommended the company be declared bankrupt, and called the proceedings a sham.

Yukos lawyers on Tuesday tried to postpone the ruling, citing a variety of technical and legal reasons. Among the arguments employed in favor of a delay were: that not enough time had passed since the July 25 creditors' meeting recommended bankruptcy; that another court had yet to rule on a tax demand; and that the European Court of Justice had yet to hear Yukos' complaint in which the company objects to the state's entire back tax legal onslaught.

Rebgun rejected all the company's arguments, as did Markov, Interfax reported.

"All claims that have been included into the creditors' claims list have been approved by the courts," a representative of the creditors said during the hearing, adding that since no date had been set for a hearing in the European Court of Justice, the delay could "stretch out up to a year," Interfax reported.

Representatives of Rosneft also followed suit, arguing against any delay in the bankruptcy proceedings.

Burdened by billions of dollars in back tax claims, Yukos has put up a long but not particularly successful rear-guard fight. It has tried to dispute claims totaling more than $30 billion in Russian courts and attempted to fight back by seeking justice abroad.

Yukos has proposed a number of restructuring plans, including most recently at the July 25 creditors' meeting, where the company promised to pay off $18.2 billion of outstanding debts within 18 months.

Creditors rejected the plan, however, and instead voted to bankrupt and dismantle the oil firm. While Yukos management valued the company at $38 billion, Rebgun told the meeting that the company's assets were worth $17.7 billion, or less than the firm's liabilities, and called for the company to be liquidated.

Claims against Yukos backed by Russian courts total 491 billion rubles ($18.2 billion).

The Federal Tax Service tops the creditors' list, claiming 354 billion rubles ($13.1 billion). Next in line is Yuganskneftegaz, Yukos' former main production unit that is now owned by Rosneft, claiming 109 billion rubles ($4 billion).

Further down the list are two Yukos subsidiaries Tomskneft and Samaraneftegaz, claiming 12.3 billion rubles ($460 million) and 1.85 billion rubles ($69 million), respectively.

Tomskneft and Samaraneftgaz are also among the choicest assets likely to be sought by Rosneft, which would overtake LUKoil as Russia's biggest oil firm if it acquired them.

Among other Yukos assets, Gazprom had been seeking to buy Yukos' 20 percent stake in Gazprom Neft, formerly Sibneft, for which Yukos was asking $4 billion.

Al Breach, head of research at UBS investment bank, said Tuesday's ruling was "a very finite end to what has been an unhappy story."

Beyond the ruling, however, the way the Yukos assets sales are handled is still important, Breach said.

A worrisome sign is the valuation of Yukos assets at $17.7 billion, or some 40 percent less than most observers consider their real value, he said.

Breach also noted that, while the Yukos case in general had helped the state to introduce better tax discipline, it had hurt the judicial process and the rule of law.

"So it does matter how the sales are done now," he said.

Telegraph: Yukos bankruptcy tips balance in favour of state control of oil

By Nick Allen in Moscow

The Moscow Court of Arbitration declared the Yukos oil company bankrupt yesterday, driving the final nail into the coffin of the business empire built up by now jailed tycoon Mikhail Khodorkovsky.

Official receivers had earlier concluded that the once leading oil company was £9.8bn in debt while having a market value of £9.5bn.

Its American chief executive officer Steven Theede tendered his resignation last month in protest at what he called farcical proceedings and a gross undervaluation of the company, which he claimed was worth more than double the official estimate.

Yukos lawyers said that they would appeal against the decision of the court.

The company was largely dismembered by the state when it could not meet demands for billions in back taxes and fines that were imposed after Mr Khodorkovsky was arrested in 2003 on tax fraud charges.

The main inheritor of Yukos' assets, the Russian state oil company Rosneft, took over the outstanding debt from the banks.

Together with Yukos's other main creditors, Rosneft recently rejected a plan to save the company and called for it to be declared bankrupt.

The oil major's demise is widely seen as Kremlin retribution for Mr Khodorkovsky's business and political ambitions.

Formerly Russia's richest man, he was jailed last year for tax evasion and fraud.

Rosneft later bought Yukos' main production unit Yuganskneftegaz from a shadowy shell company after it was sold at compulsory auction in order to cover the tax debts.

Russian President Vladimir Putin's former economics adviser, Andrei Illarionov, at the time called the acquisition the "scam of the year."

The removal of Yukos tips the balance in favour of state control of the Russian oil sector.

Radio Free Europe: 'They Are Trying To Break Him'

Inna Khodorkovskaya tells RFE/RL about the impact of prison on her husband, the former tycoon Mikhail Khodorkovsky, and the pressures she faces from the authorities.

PRAGUE, July 31, 2006 (RFE/RL) -- Since Mikhail Khodorkovsky was imprisoned three years ago, his wife and their three children have lived in a house in the leafy Moscow suburb of Zhukovka.

The building and the land around it is -- or rather was -- owned by an affiliate of Yukos, the oil company that once made Khodorkovsky one of the richest and most influential men in Russia, Khodorkovskaya explained in a July 25 interview with RFE/RL's Russian Service.

But on May 2 this year, Khodorkovskaya says, a Moscow court impounded the family home, saying it was part of the ongoing investigation into tax evasion at Yukos.

Khodorkovskaya suspects it will not be long before she and the wives of other Yukos executives living in Zhukovka are forced out.

It is part, she says, of the relentless pressure that the authorities are piling on her husband and other Yukos officials.

A Man Much Changed

Khodorkovsky is now incarcerated in a prison camp deep in Siberia. Inna is permitted to visit once every three months. But getting there is a major effort in itself: a nine-hour flight, followed by a 15-hour train journey, followed by a 40-minute car ride.

She is allowed to stay with her husband for three days in a prison hostel that some Russian papers suggest borders on the luxurious. In fact, she insists, they share a simple room furnished with a bed, a chair and a cupboard.

Khodorkovskaya finds her husband much changed -- a consequence, she says, of the psychological, and sometimes physical pressure he is subjected to.
"They raise the pressure, then they reduce it and then they raise it again. So there's no straight upward line, they're just trying to drain him."

"They're trying to break him, nothing more, nothing less," she says of the prison authorities. "These are methods that have probably long been worked on and refined. I would say that it works on the principle of amplitude. They raise the pressure, then they reduce it and then they raise it again. So there's no straight upward line, they're just trying to drain him."

His biggest difficulty, she says, is the isolation and the mental vacuum caused by his inactivity. But he is finding other ways to fill the gap.

"He reads a lot of religious literature. He's not a religious fanatic, he's not completely mad about religion," she says. "His interest is analytical. He doesn't push faith away, but he has begun to experience it in a new way. If before he approached the subject from a sort of historical point of view, now he feels closer to it."

A 'Political Prisoner'

The penal colony where Mikhail Khodorkovsky is serving his sentence Khodorkovskaya says she has no doubt that her husband is a political prisoner, sentenced to satisfy the ambitions of the men who now rule the Kremlin.

Khodorkovsky himself -- and many independent critics -- describe his trial as a staged farce and a warning to Russia's immensely wealthy oligarchs to stay out of politics.

The Kremlin disagrees. Khodorkovsky, it says, is a criminal who defrauded the state of a massive sum in taxes.
"Of course, no one suggested that things would get quite so bad, but right to the end he intended to stay here [in Russia]. And I did too."

Inna Khodorkovskaya says she and her husband had feared the state would come after him. Nonetheless, the couple had chosen to stay in Russia.

"It was our joint decision. We talked about whether to stay or go, but the decision was simple. What is there, out there? Of course, no one suggested that things would get quite so bad, but right to the end he intended to stay here. And I did too."

In that respect, she says, nothing has changed. If the authorities force her out of her home, she will stay in Russia. The critical issue now is how to bring up her family in the absence of a father.

But Khodorkovskaya betrays little bitterness.

Both she and her husband have been changed by the experience of the last few years, she says. But they will emerge stronger, she believes.

"There are moments when something serious happens in your life and your values change. And, naturally, recent events... my values have grown stronger, I would say. That's to say, my values have really crystallized," she says. "I can't say that they have changed fundamentally. But his probably have because he used to be in politics. Now he sees what's happening there from a slightly different perspective. Naturally, he has changed greatly.”

Lebedev's press center: “Outside I Play the So-Called “Justice” Game With My Lawyers”

July 24, 2006

In an interview with Russian newspaper Novaya Gazeta, Platon Lebedev comments on his life in prison.

How did you spend the winter in Kharp? How was the Polar night?

I had felt boots sent to me from Moscow, size 50. The Federal Penitentiary Service did not provide these. The polar night is very long but it is not eternal, so you don’t have to think about it too much.

Do mosquitoes disturb you? How do you deal with them?

I am afraid of traditional methods – I slap my forehead. In the camp we have “Raptor” [mosquito repellent lotion], and we can use lotions outside, but not liquid, as they are afraid I will drink it. They say there will be black flies as well, which are even worse. I will compare and let you know.

What disturbs you most of all?

The idiocy of judges and other decisions-makers in this country.

Do you like your job?

In these conditions producing traps seems a decent job for your mind. However, they do not offer any job to suit my specialization.

Do you get any information from the outside world? Do you watch TV, read newspapers?

There is a TV in the camp, but they usually watch programmes that are not interesting for me… I regularly get Kommersant, Vedomosti, Nezavisimaya Gazeta and Novaya Gazeta newspapers, although they come with a delay.

With whom do you talk about the world events?

With my lawyers.

With whom do you drink tea?

In the camp I drink tea without any excessive company.

Do you play anything in the camp?

I don’t play any games in here, but outside the camp I play the so-called “justice” game together with my lawyers.

Do you discuss the world events with the administration of the penal colony?

It is not common here.

Are you on duty in the camp like everyone else?

Why should I be any different from everyone else, apart from in shoe size?