Posted on 08/07/2003 7:23:08 AM PDT by DPB101
Advertisements for Russia's biggest oil company, Yukos, show a rocket blasting off. But these days an exploding rocket might be more appropriate.
Yukos and the company's chairman, 40-year-old billionaire Mikhail Khodorkovsky -- by Forbes's account Russia's richest man -- are the subjects of a legal crackdown that seems to have the backing of the Kremlin. The campaign targeting Khodorkovsky and the company has Western analysts worried that Russia is backsliding into the kind of Byzantine power struggles of the 1990s that plagued the budding democracy.
It all started July 2 when Platon Lebedev, a close associate of Khodorkovsky and the head of Menatep, a company that controls about 60 percent of Yukos, was arrested on fraud charges over his involvement in the privatization of a fertilizer company in 1994.
From there, the legal problems for Yukos and its related enterprises blossomed to include murder charge against the company's security director, Alexei Pichugin, allegations that Lebedev falsely registered a company in a city where it in fact did not do business for tax benefits, and police raids on the oil company's Moscow offices.
Yukos and Khodorkovsky have denied the charges, saying they are politically motivated by business competitors and a faction inside the Kremlin.
President Vladimir Putin has said little about the affair, but a senior Kremlin official who did not want to be identified said last week that Putin does not support the legal attacks and realizes the situation is hurting Russia's image.
In Russia where the courts are easily corruptible and influenced, business competitors and government officials often use the system to go after someone they don't like.
Analysts say Khodorkovsky has become a target because he has become so powerful. Yukos has a merger pending with Russian rival Sibneft, which would create the world's fourth largest publicly traded oil company. The oil magnate has been contributing money to opposition political parties and was reportedly contemplating a run for the presidency.
"He's just a giant figure, a hundred Bill Gates," said Russia-watcher Michael McFaul, a professor at Stanford University. "I think that this is their way of finally striking out and showing him that we don't like your autonomy and we're going to show you that the state is stronger."
Many analysts say Western government officials, especially in the United States, felt Putin was firmly committed to reforming the country, by bringing in foreign investment, creating rule of law and tackling tough economic reforms. Now, they're not so sure.
"There was an assumption that Russia had kind of made it, that Russia is over the hump," said McFaul. "This story begins to challenge that assumption."
Khodorkovsky is one of the so-called oligarchs, a small group of Russian businessmen who gained control of Russia's main industries through murky privatization deals in the mid-1990s.
Yet Khodorkovsky reinvented Yukos by bringing in outside analysts, replacing Soviet-era technology with Western equipment and making the company's finances and dealings more transparent. Yukos was the first major Russian oil company to issue quarterly financial statements that meet U.S. standards.
The changes came at a time when Putin, elected in 2000, was bringing stability to the country after years of chaos under former president Boris Yeltsin.
Khodorkovsky has vocally promoted oil exports to the United States and a new pipeline to the Russian Far North.
Putin doesn't necessarily oppose these things; he'd just rather be the one promoting them, analysts say. Khodorkovsky was perceived as stepping into the political arena and trying to shape Russian foreign policy.
Political analysts such as McFaul and others say the campaign against Khodorkovsky seems to be led by a group of Russian officials from St. Petersburg with close ties to Putin. Many of them enjoy positions of power within the security services and the prosecutor's office or as Kremlin advisers.
The reason the Yukos chief was singled out was his growing independence and Western ties, said Mark Ournov of the Moscow-based Foundation for Analytical Programs.
"Those behind this campaign see the dominance of private capital in certain industries, especially if this capital has close ties with the West, as a national security threat," said Ournov.
Since the crackdown on Yukos, the company has lost about $7 billion in value. Worried investors fear the legal battles could slow the company's growth or halt the Sibneft merger.
There has also been widespread speculation and worries that the attack on Yukos may lead to a complete redistribution of the industrial privatizations done during the Yeltsin era.
Coming just a few months before parliamentary elections, some analysts speculate that the attack is designed as a vote-winning tool. Taking money away from any of the oligarchs, who are reviled by the public, would probably play well with many Russian voters.
"The real aim of the initiators of the campaign was to stage fireworks for the public, thus boosting the president's popularity rating," said Gleb Pavlovsky, a Russian political analyst.
Whatever the reason, the incident is a strong reminder that Russia is a young democracy where things like rule of law and independent courts are still in their infancy.
Lilia Shevtsova, a senior analyst in the Moscow office of the Carnegie Endowment for International Peace, says more battles like these can be expected in the future as the oligarchs and government bureaucrats, who feel the state should control business, duke it out.
"They will constantly fight each other. They will constantly fight for control, for money, because there are no independent institutions," said Shevtsova.
For the love of oligarchs (A must read of Reality!!!)
Russian Journal ^ | 04 August 03 | Ajay Goyal
Posted on 08/04/2003 1:10 PM EDT by RussianConservative
Russians hate their oligarchs. The dozen or so people connected with the regime of former President Boris Yeltsin who divided all the natural resources, industry and wealth of Russia among themselves have not done anything to earn the love and respect of their fellow citizens. Many remain criminally disposed, laundering money abroad at every available opportunity, while others have already abandoned Russia and adopted new homelands. And, while they may be despised locally, they are doted upon abroad.
Ordinary Russians hate them for a variety of reasons, but the primary one is . . . http://www.freerepublic.com/focus/f-news/957975/posts
Hopefully, it will!
Nice catch, DPB101. A most illuminating post!
Remember when Lieberman threatened to filibuster drilling in Alaska? Never made any sense to me. Many of the jobs created would have been in Pennsylvania and West Virginia--two states critical to the Democrat party. The Teamsters even came out against Democrat obstructionism on ANWR. Since caribou don't vote and caribou certainly have no money, it does make one wonder why Lieberman was so adamant on the subject.
KGB vrs the Oligarchs.
Expect more Chechen trouble as the Oligarchs use them to get at Putin.
So if the oligarchs underwrite the Chechen terror bombings, then the Janus Clintonus underwrites the Iraqaeda in its coming metroterror.
For the NYT, war is peace, freedom is slavery, ignorance is strength and the oligarchs are so many Horace Greelys.
How ironic: the NYT et al now cry that Putin is the new Stalin--but these are the same useful idiots who put on kneepads for the original Uncle Joe.
Menatep is ground zero for money laundering, with dangling axons to Clintonistas.
Oligarchs have scaly lachrymal ducts for crying alligator tears.
Your favorite newspaper today:
Boris Berezovsky To Return to RussiaThe Russian oligarch is determined to run for the Duma
Dmitry Chirkin
PravadaOligarch in disgrace Boris Berezovsky has recently reminded of his existence again. In a telephone interview to the Echo of Moscow radio station, Berezovsky touched upon three basic issues of the Russian political life: the relations between the power and the business (regarding the oil giant Yukos), the regulation of the Chechen problem, elections to the Duma.
"There are thousands of people and a huge business behind Mikhail Khodorkovsky, but the power is attempting to destroy it," said Berezovsky. The oligarch believes, the Russian power will continue ruining his business irregardless of Yukos CEO's intention to stay in Russia or leave abroad: "President Putin chose the authoritarian method to rule the state, he has no choice now, he must control the large business now," Berezovsky said.
Having criticized the Russian leadership, which pursues honest businessmen like himself," Boris Berezovsky started talking about Chechnya. The businessman believes, "the Chechen conflict does not have a military solution." "In Russia, they like to refer to Israel's successful experience in the field of the anti-terrorist struggle. I think that Israel has lost the war with the terror," said the oligarch.
He is certain, "most powerful Israeli special services and the army cannot guarantee the security of their state, which is a little spot on the map on the world in comparison with Russia." "How can Russia be defended, if thousands of Chechens are ready to sacrifice their lives in the struggle against the federal center? One has to come to agreements with the Chechens. In addition, negotiations are not to be conducted with Kadyrov, but with the people, who stand against Russia's policy," Berezovsky said.
There is not much information about Boris Berezovsky's role in Chechnya in 1996-1999, although it is enough to jail him for some ten years. Nothing like that is going to happen, though: the destabilizing situation in the rebellious republic brings very good profit to a certain group of people. Boris Berezovsky was, and probably still is, one of them. Oil, arms and human trafficking - these are very lucrative businesses.
On the other hand, the situation is changing now: politics is taking the advantage of business. Act of terrorism undermine the Kremlin's authority, which is good for Boris Berezovsky. The oligarch stated, he would most likely participate in the coming elections to the Russian State Duma. He considers an opportunity of his participation in the elections both by party list or by one-mandate district. The oligarch added, he would run on a one-mandate district, if his presence in the Liberal Russia party would be politically detrimental. "If I am elected to the Duma, I will return to Russia," Berezovsky said.
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