Khodorkovsky Gives His First Testimony

Mikhail Khodorkovsky, the former head of oil major Yukos, testified for the first time in his eight-month trial, saying he was innocent of all charges, including tax evasion, fraud and leading an organized crime group.

The prosecutor general had invented the case against him and not provided proper evidence, Khodorkovsky told a packed and stuffy courtroom in the Meshchansky district court.

"I would like to say that I don't admit my guilt on any of the charges against me," Khodorkovsky said, speaking from the defendants' cage, which he shared with co-defendant Platon Lebedev.

"I categorically object to the criminal-artistic account of normal business activity and the fantasies and conjectures contained in the official accusations against me," he said, speaking in a slow and deliberate voice.

Khodorkovsky and Lebedev, key figures in Yukos' parent company Group Menatep, have been imprisoned since 2003 on a raft of charges.

The trial is seen as part of a messy battle between Menatep -- once one of the country's most powerful business groups -- and the Kremlin. The fight has left Yukos dismembered, government officials publicly contradicting each other and the country's richest man facing a possible jail term for charges he says are politically motivated.

In marked contrast to the highly charged politics of the trial, the day-to-day proceedings in the court seemed dominated not by sensation but by tedium.

The court is hopelessly too small to to accommodate all interested journalists, with Khodorkovsky's friends and family crammed in with a few lucky reporters on a motley assortment of ancient pressed-wood chairs. Defense lawyers shared chocolates with Khodorkovsky's elderly parents, and a uniformed official was reading a paperback until he finally nodded off, the lawyers and journalists having drained the hall of oxygen.

Dressed in blue jeans, a black polo-neck sweater and a brown jacket, Khodorkovsky held onto the cage bars as he faced the three middle-aged female judges. They sat on a tribunal, next to the Russian tricolor and below a double-headed eagle on a red background.

"I am proud of having headed for 15 years a number of successful companies and helped other companies rise from their knees after the fall of the [Soviet] Union," Khodorkovsky said.

The charges against Khodorkovsky and Lebedev, who is scheduled to give testimony on Monday, center around the 1994 privatization of the Apatit fertilizer plant. Khodorkovsky is accused of embezzling state property as part of an organized criminal group, large-scale fraud, corporate and personal tax evasion and falsifying documents.

Khodorkovsky repeated that the charges were invented and that his business practice was not illegal and actually quite normal for the time. Khodorkovsky sought to undermine the prosecution by distancing himself from decisions taken at companies in which he said he wasn't involved.

He said regulatory bodies had conducted hundreds of repeated checks during the period in which the alleged crimes were committed.

Starting work at age 14, Khodorkovsky, 41, said his jobs included being a janitor for seven years. He then proceeded to give a quick overview of his business activities.

Khodorkovsky reminded the judges that Menatep and Yukos had budgets bigger than St. Petersburg's -- and often Moscow's -- and that as an executive he signed over 10,000 documents, often 100 per day.

"So, even though I have a good memory, I can't always remember every point or every piece of paper, even if it is in front of me," he said.

"To conclude, I would like to say again that I am accused of crimes that simply didn't happen, that were simply thought up in the heads of investigators," Khodorkovsky said, ending nearly three hours of testimony. "If there is no concrete evidence of my personal illegal activity, then I don't understand what I must defend myself against -- from inventions and opinions?"

The prosecution had a "clear task," Khodorkovsky said, and he felt sorry for state prosecutor Dmitry Shokhin because he must prove the hypotheses of others.

After a one-hour lunch break, the court reconvened. Dressed in a bright blue prosecutor's uniform with three gold stars on his epaulets, Shokhin looked over his laptop computer to tell the judge he had no questions for Khodorkovsky.

"The state prosecution understands that everything that has been said by Mikhail Borisovich [Khodorkovsky] is untrue and concocted by his lawyers," Shokhin told the judge.

Lebedev, who had been furiously coloring a Japanese crossword puzzle, paused from his activity and laughed at Shokhin's comments.

Lebedev, whose lawyers say he is ailing from cirrhosis of the liver or cancer, looked tired. Dressed in black boots and a matching Reebok tracksuit, he winked and grinned at friends and family in the gallery. The five young guards outside the cage leaned back in their chairs, staring into nowhere.

The presiding judge, Irina Kolesnikova, asked Khodorkovsky to list his relationships with various companies, including Rosprom, Menatep Bank, Menatep Ltd. and Yukos. Khodorkovsky gave a long account of his different positions in the companies, sometimes stopping and correcting dates.

The soft-spoken judge then questioned Khodorkovsky about his relations to people the prosecution claims belong to a group engaged in fraud and embezzlement. Khodorkovsky said he knew some of their names from court materials, which he said he had been studying for the past one and a half years.

Kolesnikova also asked Khodorkovsky about his personal tax affairs. The prosecution says he underpaid value added tax by signing consulting agreements with two firms registered on the Isle of Man.

Khodorkovsky said assistants brought him papers to sign and he signed them. But when asked to name the assistants, Khodorkovsky referred to Article 51 of the Constitution, which guarantees a defendant's right not to incriminate himself.

Lebedev is set to give evidence on Monday before the court enters the last stage of the trial.

With an ironic smirk on his face, Lebedev told Kolesnikova he would be ready.

Genrikh Padva, one of Khodorkovsky's defense lawyers, told The Moscow Times he thought the trial could end in about a month.

"If you tell me when it will all end, I would be very grateful," Padva said.

Moscow's Basmanny court has ordered the arrest of Mikhail Yelfimov, Yukos' acting president for refining and marketing, Vedomosti reported Friday, citing unidentified officials at Yukos and the prosecutors' office.

The court issued the arrest order on Tuesday, the paper reported. Yelfimov is currently in London, Vedomosti said.

(From The Moscow Times, 2.28.2005)