In the courtroom, Mikhail Khodorkovsky’s relatives gasped at his stiff sentence on Tuesday. Russia’s once richest man will spend the next seven years, give or take time for good behavior, laboring in a penal colony.
On Moscow trading floors, there was also a collective sigh — but it was one of relief. The yearlong courtroom spectacle has sent Russian markets spinning and exposed the dirty underside of Kremlin politics. Irrespective of the government running roughshod over the legal system and using the tax police as a political tool, investors just want a break.
“I can’t wait to start talking about something else,” says William Browder, who runs a $1.7 billion fund in Russia.
Sure, there will be appeals. And Khodorkovsky’s lawyers and PR flaks will cash in by keeping the case alive. Their efforts will be aimed at discrediting President Vladimir Putin on the world stage. Look out for a Khodorkovsky filing with the European Court of Human Rights. Khodorkovsky’s chief international lawyer, Robert Amsterdam, has vowed to make sure his client is a topic of discussion everywhere Putin travels.
There were no angels in the Khodorkovsky case.
Investor Browder keeps a catalog of Khodorkovsky’s bad deeds in the 1990s, which diluted minority shares worth hundreds of millions of dollars and transferred ownership to offshore companies. Khodorkovsky came into much of his fortune through rigged auctions that sold state assets at bargain prices. He argues the deals were legal at the time.
But Khodorkovsky was not the only “oligarch” to build a shady fortune overnight. And the government, by leaving a dozen or so other billionaires with spotty tax records alone, has done little to counter accusations that Khodorkovsky’s trial was a campaign to sideline a well-funded political competitor. While he was on trial for fraud and tax evasion, separately the tax authorities dismantled Khodorkovsky’s oil company, Yukos, and sold it to a state-run concern.
Official interference in the case was never subtle. During the 12-day reading of the verdict, well-timed road construction prevented pro-Khodorkovsky demonstrators from gathering outside the court. A lackluster anti-Khodorkovsky crowd, mostly pensioners, readily admitted that municipal employees corralled them.
Inside the courtroom, the drama combined O.J. Simpson defense theatrics and Soviet style.
Khodorkovsky and his co-defendant, Platon Lebedev, doodled in notebooks in a 4X10 ft cage. Sleepy guards stood sentry. The court took inexplicable breaks. A cloud of expensive perfume hovered above the defendants’ relatives, many dripping in diamonds. Khodorkovsky’s wife dressed down.
Judge Irina Kolesnikova, Russia’s answer to Lance Ito, led a beehive coiffed troika of monotone voiced judges who appeared to get their orders from above.
In one moment of impeccable timing that underscored the political nature of the trial, the verdict was delayed on the eve of a visit by world leaders to Moscow.
No one told Khodorkovsky’s lawyers, who arrived at the courtroom expectantly — only to find out that the media knew more than they did.