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)