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Here is the webcast of the Council of Europe press conference: Video webcast.

Council of Europe Raps Russia Over Yukos Case, Demands Khodorkovsky Release

The Council of Europe passed a resolution on Tuesday questioning the legitimacy of the arrest and prosecution by Russian authorities of Mikhail Khodorkovsky and other managers of the disintegrating Russian oil giant >Yukos, Radio Free Europe reports.

The resolution questions the fairness, impartiality, and objectivity of the authorities, who, it said, appeared to have acted excessively, disregarding fundamental rights of defense.

The many apparent flaws in the legal process, plus the political and economic background to the case, encouraged the view that legal action taken by Russian authorities went beyond norms of justice. Rather, the aim of the state appeared to weaken and intimidate political opponents and regain a strategic resource.

Khodorkovsky, who had financed opposition parties, was arrested in October 2003 and has been held in costody ever since. He is accused of fraud and failure to pay millions in taxes, and faces up to 10 years’ imprisonment if convicted.

Even before the report was passed Russia said it was disappointed with it, and would present a “dissenting opinion” at a PACE session this week.

The head of the Russian delegation and the State Duma Committee for International Affairs, Konstantin Kosachev, has said that the scope of the situation surrounding the embattled oil major “has not been fully reflected in the document”. The report contains references to lawyers and non-governmental organizations only.

Due to this, the content of the main report on Yukos “has disappointed Russia’s delegation”. Russia was expecting a more balanced assessment of the Yukos case, Kosachev pointed out.

Article

Council of Europe Raps Russia Over Yukos Case, Demands Khodorkovsky Release

The Council of Europe passed a resolution on Tuesday questioning the legitimacy of the arrest and prosecution by Russian authorities of Mikhail Khodorkovsky and other managers of the disintegrating Russian oil giant >Yukos, Radio Free Europe reports.

The resolution questions the fairness, impartiality, and objectivity of the authorities, who, it said, appeared to have acted excessively, disregarding fundamental rights of defense.

The many apparent flaws in the legal process, plus the political and economic background to the case, encouraged the view that legal action taken by Russian authorities went beyond norms of justice. Rather, the aim of the state appeared to weaken and intimidate political opponents and regain a strategic resource.

Khodorkovsky, who had financed opposition parties, was arrested in October 2003 and has been held in costody ever since. He is accused of fraud and failure to pay millions in taxes, and faces up to 10 years’ imprisonment if convicted.

Even before the report was passed Russia said it was disappointed with it, and would present a “dissenting opinion” at a PACE session this week.

The head of the Russian delegation and the State Duma Committee for International Affairs, Konstantin Kosachev, has said that the scope of the situation surrounding the embattled oil major “has not been fully reflected in the document”. The report contains references to lawyers and non-governmental organizations only.

Due to this, the content of the main report on Yukos “has disappointed Russia’s delegation”. Russia was expecting a more balanced assessment of the Yukos case, Kosachev pointed out.

Article

Live webcast 26 Jan 05

On January 26, the Council of Europe in Strasbourg will hold a press conference to discuss the circumstances surrounding the arrest and prosecution of leading Yukos executives.

Participants include: Rapporteur of the Parliamentary Assembly Sabine Leutheusser-Schnarrenberger (Germany, LDR), Malcolm Bruce (United Kingdom, LDR) and Matyas Eörsi (Hungary, LDR).

Watch the webcast live at 10:00am CET on the Council of Europe website: http://www.coe.int/t/f/multimedia/video/CP-janv05.ram. It is necessary to download Real Player, in order to view the webcast.

MBK's Wife Speaks...

The wife of Mikhail Khodorkovsky, the jailed Russian oil tycoon, has described for the first time the chilling moment when she learned that her husband had been arrested - and revealed the pain that his imprisonment has caused to their children.

So distressed are the couple's twin sons Ilya and Gleb, aged five, and teenage daughter Anastasiya, at being able to see their father only through a glass security screen that Inna Khodorkovsky, 35, now takes them to visit only rarely.

"It's especially hard for Nastya. She's already practically an adult, 13 years old. She understands the situation and it's very painful for her"

"As for the five-year-olds, it's very difficult to explain what is happening. They don't understand why they can't see their daddy."

The remarkably intimate interview was given to a Russian news magazine almost 15 months after her husband – at the time, the richest of Russian's "oligarch" billionaire businessmen – was seized by armed police from his private jet in Siberia.

Mrs Khodorkovsky said she still had complete faith in the man she calls "Misha", now 40, whom she first met and fell in love with while they were members of the Communist Party's youth wing.

He faces charges of tax evasion, fraud and money-laundering, which his supporters say were concocted by President Vladimir Putin's government to punish him for financing opposition political parties.

"Misha is ready to face any destiny," she said. "The main thing is that he knows he's not guilty. I can only hope that this will force our society to take a better look at itself and finally to realise what is happening."

His arrest in October 2003 came as a shock, she said, after a period when he had been exceptionally busy working to expand Yukos, the oil company he then controlled, in Siberia. "I practically did not see Misha, he was on business trip after business trip," she said.

One night a vice-president of Yukos visited the family home to ask Mrs Khodorkovsky to pack a bag of warm clothes for her husband to take on a trip to Siberia. "It wasn't until later that we learned he wasn't going to need them," she said. Next morning she heard that Mr Khodorkovsky's private jet had been seized by Russian special forces and she spent an anxious morning glued to the television awaiting a call from him.

"Then we heard, 'He has been brought to Moscow.' We were in shock, what did they mean, 'He has been brought?' Why couldn't he arrive on his own? Without thinking about it, I dialled his mobile telephone number. Suddenly, it was incredible, he answered. I said, 'Where are you?' He said, 'In Moscow.' I started to ask him questions… then the phone went dead."

Someone warned that the authorities would search the family home on the outskirts of Moscow, so she took the children to stay with their grandparents. "I can hardly remember the time after his arrest. I didn't understand where to go, what to do, how I could help Misha. It was difficult to think, everything had been turned around. My life has been divided in two for me: the time before his arrest and the time after."

Her first visit to her husband in prison, many weeks after his arrest, was traumatic. "When I saw him behind the glass, I completely lost control," she said. "I only remember someone behind me saying over and over, 'Don't cry, don't cry.' "

It was far removed from the days when the couple first met sorting through membership lists of the youth organisation, Komsomol. She was ill with flu and he stayed up with her until two o'clock one morning to help finish the job - revealing himself as "a kind, spiritually generous, noble, decent and fair person, with an excellent sense of humour".

After they married she focused on raising their children while he built his empire - a tireless worker, she said, more interested in the complexities of business than in earning his fortune, estimated at $15 billion by Forbes magazine last year. "The more confusing and hopeless the situation, the more passion and interest he had in solving it. Money was a by-product, not an end in itself."

Since his arrest, Mr Khodorkovsky has watched the company he built into Russia's largest oil producer being dismantled by the government. His wife may visit him once a month, watched by escorts and video cameras. She delivers twice-weekly packages of fruit, vegetables and medicine to the prison, but not all gets through. "He never complains, but I can see how hard it is for him," she said.

Inna Khodorkovsky is un-daunted, however, and promised that her husband could always count on his family. "I know that he will never cave in, that he will hold on to his principles and beliefs. And as long as he doesn't break, neither will we."

Article

Statement by Mikhail Khodorkovsky in Meshansky court 12 January 2005

I rarely make statements during these proceedings because I find it senseless. But sometimes it is impossible to remain silent. Before the New Year Mrs. Vishnyakova, the official representative of the general prosecutor’s office, made a statement about billions of mythical dollars allegedly stolen by Yukos. I kept silent.
But today in the “Argumenty I Fakty” newspaper Mr. Biryukov, who in addition to deputy general prosecutor is as I understand it also the supervising prosecutor for our case, though I may speak incorrectly from the procedural point of view, made the same mistake. Throughout these proceedings we have continually come under attack from unsubstantiated claims made by the general prosecutor’s office. I would just like to remind everyone of past statements by Mr. Biryukov and other investigators regarding 238 million dollars allegedly stolen from the state in connection with the Apatit shares. Even the prosecution has forgotten these charges by now (I mean stealing this much from the state in Apatit shares). I don’t want to dwell on all of the incorrect claims made by the general prosecutor’s office and other violations that my lawyers have mentioned before, including in our view, the unlawful treatment of witnesses – interrogations immediately before the court hearings, suggestive interrogations at the general prosecutor’s office, sometimes with questions that were not included in the record, and interrogations after the investigation finished. If the prosecution needs to be reminded of the facts, they are ready to be presented. But I think that all those involved remember them and I do not want to waste time on that.
During preparation for these and other proceedings which I believe are being prepared behind the court’s back, and which the prosecution’s representatives have mentioned, all documents detrimental to the prosecution’s case have been seized. One hundred and fifty searches were executed only at Yukos and documents were seized from the lawyers’ offices as well. However, not all documents. The lawyers were actually surprised by the carelessness of what and was not seized. That is nothing to be surprised about. The task is, in my opinion, not only to dig up dirt but also to block the defense’s access to documents in order to work exclusively with the witnesses. Business documents are stubborn things. And now many of them are missing. They are hidden in places which are inaccessible to us, maybe they are not included in inventories or are simply not admitted to the proceedings by the court at the prosecution’s request. For example, documents on transferring payments and repayment, which are relevant to the case, are not fully admitted to the proceedings at the prosecution’s request. It is ridiculous, but Lebedev was not even allowed to put his tax and employment records in the case materials at the prosecution’s request. I react calmly to these and other peculiarities of the proceedings though in many countries this would be enough bring a case to a screeching halt and initiate proceedings against the prosecution who permitted such violations. I react calmly because, frankly speaking, and I hope that I will not offend anyone, my trust in the Russian justice system has been undermined by the court decisions in the Yukos case which easily found all inventions of the tax authorities and the prosecution lawful and justified. For instance, the Yukos accounts were frozen because, I am quoting the ruling by memory, the chief accountant stole money from Yukos and was keeping it on the accounts of Yukos enterprises. It is not a joke, people were not paid their salaries for November in time because of that. Another example – according to the court ruling, within four years Yukos evaded taxes in an amount that exceeded its profit for those years. After such decisions why should one pay attention to trifles?
After all, our prosecution which celebrates its 284th anniversary today has extensive experience. It was the prosecution, not the “cheka” or NKVD in the late 1930s who led all public and notorious proceedings. And later, in the 1960s and 1970s, achievements were generally acknowledged as well.
Here we reach the main aim of my speech today – about the natural constraint that should exist even in fabricated proceedings in light of the changes that have taken place in the world. Claiming that Yukos, a consolidated company, sold oil at understated prices and stole billions of dollars, the prosecution not only influences the court in these proceedings, which is not so important, but also “sets up” the country. Yukos is the company that has consolidated accounts according to international standards, affirmed by international auditors and examined by analysts from dozens of countries. These accounts show all earnings and not only that, but also expenditures – for investment, acquisition of assets such as Sibneft, Arcticgas and Rospan shares. That means the money was not only received by the company but was also spent by the company. It is unlikely that the prosecuting officials did not understand that. Unlike my colleague and partner Platon Lebedev, I consider prosecution officials sane and qualified. I even think that they have a conscience, only something happens to it during these proceedings.
You don’t have to believe what I’m telling you about the oil prices. Actual calculation shows that the supervising prosecutor’s statement regarding Yukos making $49 in profits per ton of oil after selling it for $150 sounds illogical. Add Transneft’s $22 rate to more than $50 of paid taxes and dues and it equals more than $70. And there are expenses for production, and aside from this, the company’s profits were high. All the accounts are on the website. Billions of dollars may appear from nowhere and go nowhere in Baikal Finance Group’s accounts, but even that is unlikely. Yukos’s departments suppressed the theft of much smaller sums. I would like to give one more example. Everyone remembers the $5 billion that the general prosecutor’s office allegedly discovered in my personal accounts in Switzerland. At that time, I said in court that it was not true. I do not have personal accounts abroad and even more importantly, I do not have such amounts of money. These were Yukos shares at market value in the pension fund. Even in his article Mr. Biryukov does not deny this on the whole. By the way, the pension fund’s remaining balance should be returned to the shareholders after fulfillment of all obligations to veterans after 2010. This is again public information. Yukos’s destruction played an evil joke not only on the veterans but also on the general prosecutor’s office. Where are those $5 billion now? In the same place where my notorious $15 billion are, according to Forbes. They are buried under the company’s wreckage. Shares now cost zero or close to zero.
I stopped worrying about my property or even my future long ago. I think I can be found guilty of anything, and as I already said, even of setting fire to the Manezh building. But seizing and taking the company’s employees into custody, not to mention women who have small children, is too much even for today’s Russia. And inventing billions of dollars that do not exist is merely dangerous. The officials may believe this money exists and demand that these billions are added to the state budget. But they just do not exist. Because the shareholders’ income from Yukos consists of dividends, it is obtained publicly and legally. But what is worse is that they will have to deal with international auditors, the company’s international legal advisers, and Yukos’s Western financiers who are unable to remain silent in reply to such accusations. And they will have to solve problems not in Basmanny Court, but at a regular court in different countries. And then we will feel sorry for the country and certain individuals will be upset.
If the court and prosecution has any doubts about anything that I have said today, I am ready to provide a detailed argument any day by referencing documents and peoples’ names. But that is not my aim. I don’t want to leave the prosecution with only the option of making loud accusations and arrests, and as a consequence destroy many people’s lives in pursuit of a ghost. I congratulate many conscientious prosecuting officials on this holiday and I believe that the problems existing today in the general prosecutor’s office will surely be overcome after establishing truly independent justice in the country. It will be difficult, but everyone will benefit from it – courts, prosecution and society, because I hope that for all people the most important thing is not recognition, but dignity. That’s it.

(from MBK Press Center 1.12.2004)

Yukos plans $20bn damages claim

By Doug Cameron in Houston
Published: January 7 2005 02:00 | Last updated: January 7 2005 02:00

Yukos yesterday said it planned to launch a $20bn claim for damages against the Russian government and others involved in the forced auction last month of its main operating subsidiary, Yuganskneftegas (YNG).


The Russian oil group last month filed for bankruptcy protection in the US in a last-ditch bid to block the sale of YNG, which was seized by the government to settle back taxes allegedly owed by Yukos. However, the US bankruptcy judge yesterday said that on February 16 she would hear a motion filed by Deutsche Bank to dismiss the bankruptcy motion.

The German bank led a consortium of lenders that had planned to fund a bid for YNG by Gazpromneft, a unit of the Russian gas group Gazprom, in which the state has a 40 per cent stake.

Gazpromneft did not bid after failing to overturn the injunction.

YNG was acquired by Baikal Finance, an unknown group that subsequently sold the asset to Rosneft, the Russian oil company scheduled to merge with Gazprom this year.

Further motions to dismiss the bankruptcy filing could also follow from other lenders, as well as Gazpromneft, ahead of the February hearing. "When [the judge] hears it, we are very confident that it will be dismissed," said Michael Goldberg, counsel for Gazpromneft. "This is nothing more than an attempt to manufacture jurisdiction."

Yukos yesterday said Rosneft would be added to the damages claim, alongside Gazprom, Gazpromneft, Baikal Finance and the Russian Federation.

It had yet to decide whether it would serve notice for damages on any of the banks involved in the Gazpromneft syndicate.

Yukos, whose chief financial officer Bruce Misamore is operating from Houston, also said an additional $20m had been transferred to the US from a non-Russian subsidiary to cover the costs of its bankruptcy filing.

This is in addition to the $7m transferred last month and which hitherto had been Yukos's only US assets, together with one employee, Mr Misamore.

Deutsche Bank argued in its filing that the US risked becoming a jurisdiction of convenience since Yukos had so few assets in the country.

Other banks in the Gazpromneft syndicate which included BNP Paribas, JP Morgan, ABN Amro, Dresdner Kleinwort Wasserstein and Calyon also suggested yesterday that they might file motions to dismiss Yukos's bankruptcy claim.

(Financial Times, 1.7.2005)

Putin aide pays for Yukos attack

From Jeremy Page in Moscow

PRESIDENT PUTIN of Russia has dismissed his economic adviser as the country’s representative to the G8 group of nations for publicly criticising the Kremlin’s handling of the Yukos oil affair and the election in Ukraine.
Andrei Illarionov broke ranks last month to call the forced sale of Yukos’s main production unit to Rosneft, the oil giant owned by the State, “the swindle of the year”. His comments came at a time when the Kremlin was attempting to reassert central control over politics, the media and industry.

He also said that the victory of Viktor Yushchenko, Ukraine’s opposition leader, over his Moscow-backed rival, Viktor Yanukovych, in the presidential election should make Russia abandon its “imperial” policies towards former Soviet states.

Mr Illarionov, 43, has clashed with the Kremlin before, especially over its decision to ratify the Kyoto Protocol, but his criticism of the Yukos break-up and the botched attempt to influence voting in Ukraine was especially harsh — and bold.

A brief Kremlin statement yesterday said that Mr Illarionov had been replaced by one of Mr Putin’s most trusted aides, Igor Shuvalov, as Russia’s representative to the G8. Mr Shuvalov, 38, will also organise Russia’s year-long chairmanship of the group next year. “Presidential adviser Andrei Illarionov has been relieved of these responsibilities,” the statement said.

The Kremlin gave no reason for the change, but analysts saw the move as the latest step in a four-year campaign to silence, or at least sideline, Mr Putin’s critics in parlia- ment, government, media and business. Mr Illarionov was generally tolerated as a devil’s advocate within the Kremlin, but had gone too far in directly criticising Mr Putin over two of the most sensitive issues of the past year, analysts said.

“After Illarionov’s last statement, many people expected some action or other from the President,” said Aleksandr Shokhin, a former minister and chief debt negotiator who is now a leading member of the Russian industrialists’ union. “But the President will not take the initiative to remove Illarionov from his post as adviser, partly so as not to give the impression that he is against pluralism of opinions,” he told the radio station, Ekho Moskvy.

President Putin has described the sale of Yukos’s main production unit — Yuganskneftegas — as a legitimate business deal and only one other senior figure, German Gref, the Economic Development and Trade Minister, has dared to contradict him.

Mr Putin also publicly endorsed Mr Yanukovych, Ukraine’s pro-Russian Prime Minister, and was humiliated when his victory was overturned by the Supreme Court because of electoral fraud after widespread opposition protests.

Mr Shuvalov, a lawyer, is expected to be a far more compliant representative at the G8. He was one of the President’s deputy chiefs of staff until the presidential administration was restructured last year and is now Mr Putin’s personal aide responsible for drawing up and implementing domestic policy.

He has defended the crackdown on Yukos, which was once Russia’s best-run company but was dismantled by the State last year to cover a £14 billion back tax claim.

That was seen as an attempt by former KGB officers in the Kremlin to punish the company’s founder and main shareholder, Mikhail Khodorkovsky, for funding opposition parties and hinting at running for the presidency. Mr Khodorkovsky is on trial for tax evasion and fraud and faces up to ten years in prison if convicted. Mr Illarionov said that the legal assault on Yukos was being carried out by “monstrously unqualified and unprofessional people. . . (with) a desire to expropriate private property” and had “inflicted a colossal damage to the country”.

Sergei Lavrov, the Foreign Minister, insisted yesterday that the Yukos case was being handled in compliance with international law.


(The Times, 1.4.2005)

Yukos handled according to law says Lavrov

Moscow, Russia, Jan. 4 (UPI) -- The "Yukos affair" is being handled in compliance with Russian and international law, Russian Foreign Minister Sergei Lavrov says.

"We have our own laws, and there are international law principles. We have been tackling all problems dealing with the Yukos's company's tax debt in line with our laws, avoiding any violations of international law," Lavrov said in an interview published in Germany's Handelsblatt newspaper, Interfax news agency reported Monday.

"Assessments from Washington that they [in the United States] do not like all this and that this situation will have a negative impact on Russia's investment attractiveness are not confirmed by the information we have," the report quoted Lavrov as saying.

The giant Yukos oil corporation has been dismembered and its core operating unit Yuganskneftegaz, also known as Yugansk, has come under the control of the Rosneft oil company which is dependent upon the Kremlin.

Yukos' founder, chief shareholder and former chief executive officer, Mikhail Khodorkovsky, has been in jail in Moscow for more than 14 months and is on trial on charges of massive fraud and tax evasion.

UPI via The Washington Times, 1.04.2005)

Yukos Accuses Germany of Aiding Kremlin Over Key Asset Sale

Yukos, Russia’s embattled oil group, has accused Germany of complicity in the appropriation of its main operating unit Yuganskneftegaz.

The Independent reported on Monday that Robert Amsterdam, the lawyer who represents the main shareholder of Yukos, Menatep, and its imprisoned former chief executive Mikhail Khodorkovsky, alleged that Deutsche Bank was acting as a “proxy” for the German government over the Yugansk sale. The Kremlin forced Yukos to sell the Yugansk unit to cover its mounting tax debt.

Yukos filed for bankruptcy protection in the US last month, which meant that Western banks pulled out of a deal to finance a planned $10 billion bid by the Russian state-controlled energy group Gazprom for Yugansk. Last week Deutsche Bank, one of the banks that had lined up to back Gazprom, put a motion before the US courts to dismiss the bankruptcy protection which greatly complicated the Kremlin’s plans for Yugansk.

Amsterdam insisted Deutsche Bank was acting on behalf of the German state and attributed the move to the close relationship between the Russian president Vladimir Putin and Gerhard Schroder, the German leader. He said Germany was using its good name in international financial circles to help Russia.“This is a case of reputation laundering. Schroder is behind this. It is a big scandal,” Mr Amsterdam said.

The German Chancellor is known to be close to Mr Putin. Earlier this year Mr Putin reportedly helped Mr Schroder adopt a Russian orphan from St Petersburg, the Russian leader’s hometown. as their new boss.

(Mosnews, 1.3.2005)

Yukos Case Fuels Legal Fears

Interrogations, Arrests Spotlight Vulnerability of Defense Counsel
By GUY CHAZAN
Staff Reporter of THE WALL STREET JOURNAL

MOSCOW -- The Kremlin's assault on OAO Yukos has been widely viewed as an exceptional case, a result of the head-on collision between the oil giant's ambitious owner and Russian President Vladimir Putin. But legal experts say the measures taken by prosecutors and courts have exposed and exacerbated weaknesses that have long plagued Russia's judicial system -- in particular the vulnerability of defense lawyers representing enemies of the Kremlin.

In recent months, the arrests and interrogations of Yukos lawyers have fueled fears that those who defend politically unpopular clients could themselves become targets. Two senior Yukos legal officers fled Russia this fall to escape criminal prosecution, while a lower-ranking colleague who stayed, Svetlana Bakhmina, was arrested last month. Another Yukos legal consultant, Elena Agranovskaya, was detained a day later. Prosecutors also have launched sweeping searches and interrogations of other Yukos lawyers and middle managers.

"The Yukos case is part of the general picture," says Andrei Borovkov, a prominent trial lawyer.

Russian attorneys have long complained that the court system here puts them at a disadvantage compared with prosecutors. A lawyer can be denied access to his client, especially in an investigation's early stages, and often isn't present if the client confesses; judges routinely turn down defense requests to exclude evidence obtained illegally. The bias also is reflected in the small number of acquittals handed down by Russian courts, Mr. Borovkov says.

More worrying still is the tendency of prosecutors to call in lawyers for questioning on cases they are working on -- a move that is forbidden under Russian law. "It's absolutely unacceptable to question lawyers as witnesses in their clients' cases," says Genri Reznik, head of the Moscow Chamber of Lawyers. "It's a clear violation of an attorney's rights." While attorneys can't be coerced into providing information, the prospect of arrest is so intimidating that they often comply with the summons for questioning.

Last year, Igor Trunov, who represented families of victims of the October 2002 Moscow theater attack by Chechen gunmen, was summoned by prosecutors.
He went, but refused to answer questions. Mr. Borovkov says he himself received a summons in 2001 while defending a top executive of Russian airline OAO Aeroflot who was accused of embezzlement. The manager was a close friend of fallen tycoon Boris Berezovsky, a fierce opponent of Mr. Putin who now lives in self-imposed exile in Britain. Mr. Borovkov ignored the summons.

Even so, lawyers say the pressure brought to bear on lawyers in the Yukos case is unprecedented.

"Even in Soviet times, you never had lawyers being imprisoned for allegedly aiding and abetting criminals," says Karina Moskalenko, a defense attorney for Mikhail Khodorkovsky, the Yukos founder who is on trial for fraud and tax evasion. "They're trying to intimidate lawyers, so they don't defend people the authorities don't like."

Ms. Bakhmina, deputy head of Yukos's legal department, was arrested Dec. 7 on charges of membership in an "organized group" that stole property worth 18 billion rubles ($648 million) from Yukos subsidiary Tomskneft.

Her detention sowed panic among company employees. "If they can arrest her, they can arrest anyone," says one manager. "She never had anything to do with the big deals and strategic decisions." Legal observers say that in jail, Ms. Bakhmina is more vulnerable to pressure to testify against Yukos executives in breach of attorney-client privilege.

The day after Ms. Bakhmina was arrested, Yukos legal consultant Elena Agranovskaya was detained on charges of money laundering and tax evasion.
She was released 10 days later. Ms. Bakhmina has been remanded in custody until Feb. 7. Meanwhile, arrest warrants have been issued for two other senior Yukos lawyers, Dmitry Gololobov and Kirill Glukhovskoi, who both have fled abroad. All four of the accused say they are innocent.

Yukos lawyers have complained of official pressure since the early days of the case. In October 2003, just before Mr. Khodorkovsky's arrest, armed guards searched the offices of his lawyer, Anton Drel, seizing his computer and cellphone and cracking open his file cabinets. A month later, guards seized a document from another Khodorkovsky counsel, Olga Artyukhova, after she visited him in jail.

But the detention of Ms. Bakhmina represents an escalation. Like attorneys anywhere in the world, lawyers in Russia don't have immunity from criminal prosecution. But, Mr. Reznik says, it is unusual to lock up suspects in a white-collar crime. "It violates the presumption of innocence," he says.

Yukos described the latest arrests as part of a campaign of "total persecution" of the company's staff, designed to "paralyze" Yukos and deprive it of legal protection from the "forcible expropriation" of its assets. In a rare riposte, Russia's Prosecutor General's office said all those implicated in the Yukos affair were guilty of "dirty theft."

"The law was trampled on over a long time, crudely and cynically," the office said in a statement. "The time has come to reap what they have sown."

(The Wall Street Journal, 1.3.2005)