Monday, December 27, 2010

Russian Justice - Putin Style

The Economist had an excellent article in their Dec 9 issue. .  Read the comments too. I got to 80 out of about 160.  The pro-Russian comments start coming out after about 40th letter. some are hilarious.

No surprise that Khodorkovsky was found guilty today.  It would have been a brave judge indeed who would have found him innocent.  Khodorkovsky was at one time the richest man in Russia, owner of Yukos Oil, which he acquired much the same way as the other oligarchs acquired their assets in the wild west free-for-all that was 1990's Russia under Yeltsen.  His mistake was opposing Putin vocally and monetarily, speaking out in favour of rule of law and funding real opposition parties.

He was charged with and found guilty of tax fraud seven years ago and has one more year to serve of his sentence.  The amount of the taxes he was accused on not paying was huge, so huge as to defy belief.  Certainly he was guilty of tax fraud.  Russian tax laws are numerous enough, vague enough and contradictory enough that once given the go ahead to take someone out, the Tax Police have no trouble getting a conviction on any one.  At any rate the Russian people supported his being found guilty because he was one of the oligarchs who stole everything. 

When his sentence was drawing near to the end, there was no way he would be allowed back on the street.  This time he was charged with stealing virtually ALL the oil his company produced and laundering the proceeds.  This of course totally negates the first charge because if he stole all the oil then Yukos would have had no income to pay taxes on.  The methodology of Stalin's show trials of the 1930's continues to be useful.  Khodorkovsky will be no problem to Putin until 2017. If he survives another 7 years in prison.

No question that Khodorkovsky is not a nice person.  Following his tracks backwards would lead one to all sorts of crimes as he put his empire together.  If those were the reasons he were in prison, no one would complain.  But all of his oligarch colleagues who played the game, supported Putin either directly or indirectly by doing nothing are quite safe even though they are just as guilty of the same crimes as Khodorkovsky.

Berezovsky, another oligarch who had a falling out with Putin is "safe" in England, where he continues to infuriate Putin by speaking out against the criminal element that is Russian governance.  The Russians have charged him with tax evasion.  The Brits have rightfully refused to extradite him because they know full well no one cares about his tax evasion but they care about his opposition to Putin.


  1. Sad story, but hardly surprising.

  2. I always thought that with the fall of the Soviet Union that the elites and their friends were given the keys to the store.
    I guess it's true - no honor among thieves.

  3. Part of it was the challenge of untying the Gordian Knot that was Soviet state ownership of EVERYTHING in a fair manner. It is easy to seize everything and to hell with who gets hurt but not so easy to "give it back" 70 years and a huge war among other thing afterward.

    The other problem was finding people to sell the assets to that had any amount of money and to assign a fair market value. Believe me, foreigners were all over those assets as they had cash and tried to buy what they could on the cheap. Americans lost a lot of credibility as from a Russian perspective they tried to take over as much as they could.

    The only Russians who had any cash were people who had been high enough up the Party ladder to have accumulated assets through the rampant corruption of the Brezhnev years. They were also well enough connected to the political scene to grab assets on the cheap.

    It was a wild time of it. Read Casino Moscow.


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