PROPERTY AND FREEDOM

The destruction of YUKOS is approaching its completion. I'vedone all I could to prevent the regime's dislike of myself fromaffecting minority shareholders, YUKOS employees, and Russia assuch.

Six months ago, I offered to hand over my own stake in YUKOS aspayment of the tax claims against the company. But the other sidechose a different path: the path of selective application of thelaw, introducing new provisions and constructs, the publicdestruction of the first green shoots of business confidence in thearbitration court and government in general.

It is now clear that more is involved than political interestsalone. Some other interests must have been present right from thestart, since the methods of promoting these interests affect thereputation of the regime and the national economy. Yet it seems thatwhoever initiated all this doesn't care.

The future of YUKOS is no longer the issue. The company isprobably finished. The question now is what lessons the nation andsociety will learn from the YUKOS affair - with its culminationbeing the most senseless and economically destructive incident inall of Vladimir Putin's years as president.

Forbes magazine once estimated my fortune at $15 billion. Yes,the last twelve months have transformed this into somethingapproaching zero, and zero will be reached soon enough. I saw it was coming to this; I only asked that the YUKOS company itself and itsminority shareholders should not suffer. I felt a sense of duty to150,000 employees, their 500,000 family members, and the 30 millionresidents of the towns that depend on YUKOS for jobs.

All along, I have felt for the tens of thousands of YUKOS shareholders who once decided that Khodorkovsky and his team could be trusted. Their decision was sound until very recently.

When my team and I came to YUKOS in 1995, the company was in the red; wage backlogs stretched back six months, and the company owed almost $3 billion to creditors. YUKOS was operating in only nine regions of Russia,producing 40 million tons of oil a year; and production was steadily declining. By 2003, YUKOS was operating in 50 Russian regions. Annual oil output was 80 million tons and rising. YUKOS paid its employees handsomely - 7,000 rubles a month in the European part of Russia andup to 30,000 rubles a month in Siberia.

As this decade opened, YUKOS was Russia's second-largest taxpayer (after Gazprom). Its taxes amounted to almost 5% of federal budget revenues.

I don't wish to dwell on what kind of bold imagination it took to invent back taxes claims against YUKOS. (If we believe thespecialists from the Taxes and Duties Ministry, the tax payments of YUKOS ought to have exceeded its revenues.) Such methods will certainly find their way into in textbooks on taxation, because they prove that oil production in Russia is unprofitable.

It doesn't take a genius to guess that state officials will stop at nothing in their pursuit of property redistribution.

This may sound strange to many, but parting with what belongs to me is not going to hurt me intolerably.

I know already that property - especially major property - initself doesn't make a person free.

It was not just a case of me managing my property. The property was also managing me. I'm in a new capacity now. I'm an ordinary person now (uppermiddle class, from the economic point of view).

What is happening to YUKOS is inseparable from the regime. What will happen to the regime when YUKOS is no more is indeed an important question.

It is common knowledge that every people gets the rulers it deserves. I can only add that any regime reflects the people's concentrated ideas on the nature of political power. That is why it is possible to say that government in Britain, Saudi Arabia, and Zimbabwe belongs to the people. The tradition of accepting government is what the stability of any state depends on. That is why speaking of some Arab monarchies being democratized according to Western standards is just as absurd as speaking of restoring a medieval absolute monarchy in modern Denmark.

From this point of view, the Russian political tradition is synthetic. Russia has always been on the boundary between civilizations (it is there even now), but it is mostly a European country. That is why European political institutions, stipulating separation of powers, are entirely natural for Russia.

But the other side of the matter must not be ignored either. The people in Russia are used to viewing the state as the supreme agency that offers hope and faith.

This agency can not be seen to be for hire - for then people would stop regarding it as supreme. Russian history teaches us, however, that the loss of that special,non-rational respect for the state inevitably and invariably leadsto chaos, rebellion, and revolution.

The destruction of YUKOS shows that the unrestrained bureaucrats care nothing for the interests of the state, eternal and therefore powerful. They only know that the state machinery exists to promote their interests, and that its other functions are abandoned as unnecessary - for a while, or permanently. They feel no respect for the state, which they regard only as a mechanism of promoting their personal objectives.

That is why the YUKOS affair is not a conflict between business and government. It is a politically and commercially motivated attack by one company (represented by state officials) on another company. The state, in this particular case, is a hostage to the interests of certain individuals wielding the powers of state officials.

Following the same logic, the bureaucracy set out to do away with separation of powers. The chosen model implies that every politician will now be equal to a state official. Participation inpolitics will be restricted to promotion of careers within theconfines of the bureaucratic corporation.

Why is this being done? To mobilize the nation? No one who isclose to the halls of power and who really believes in what he is saying will swallow that. Off the record, he is likely to tell the truth: abolishing the separation of powers will make it easier for bureaucrats to collect money from the country and divide it inaccordance with their own needs and interests. As simple as that.

Will this system be effective? Will it bring its architects to their coveted goal? No. Steps aimed at improving manageability may leave Russia absolutely unmanageable.

Yes, I would like to participate in the process of making our country prosperous and free. And yet I'm prepared to endure imprisonment if that is what the authorities decide.

As an ordinary post-Soviet prisoner, I pity the greedy people who have acted so crudely and senselessly towards the minority shareholders of YUKOS. They will now face years of fearing the new generations of people eager to confiscate and redistribute, and fear of true justice. Because only the naive viewers of national television networks can still cling to the belief that what is happening is being done in the public interest.

I pity even more those in the halls of power who earnestly and sincerely believe that they are doing this for the people and the nation. The road to hell is paved with good intentions - that much we know. These people will eventually understand that oppressive methods in politics, and redistribution of property by force, are incompatible with construction of a modern economy. Besides, this entire mechanism will not be content with Khodorkovsky and YUKOS alone. Others, including its architects, will eventually fall victim to it. My oppressors know that there isn't any solid evidence at all in the criminal case against me - but that doesn't matter. I could always be charged with setting fire to the Manezh building, or plotting an economic counter-revolution. I have been told that the authorities want to keep me in jail for as long as possible: fiveyears, say, or longer. They fear that I will seek revenge.

Translated by A. Ignatkin
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NB : I have found no satisfying nor complete translation of Khodorkovsky's paper. This one is no exception, it is very plain and colorless :-(