THE KHODORKOVSKY VERDICT: WHAT DOES IT SIGNIFY?

"When Mikhail Khodorkovsky was found guilty of fraud and tax evasion in 2005, many observers were prepared to believe he was guilty as charged. The injustice was that the punishment was selective. Other Russian tycoons, the infamous “oligarchs”, engaged in similar abuses in the 1990s. Only Mr Khodorkovsky, however, who had committed the cardinal sin of openly defying the then president Vladimir Putin, went to jail.

This time is different. It is hard to see the new charges of which Russia’s former richest man has been convicted – essentially that he stole the entire output of his Yukos oil company over several years – as anything but fanciful. Even former ministers under Mr Putin have suggested they strain credibility. At best, the case seems openly political. At worst, it looks like the latest instalment of a long-running vendetta waged by Mr Putin, now prime minister.

Mr Khodorkovsky is no saint. While he may be fairly described – especially after this second conviction – as a political prisoner, to portray him as a modern-day dissident, as do supporters and some human rights groups, is a stretch. He was a ruthlessly ambitious businessman, responsible for some of the worst corporate governance abuses of Russia’s post-Soviet “wild east” era. Even the philanthropy he later engaged in was initially part of an image makeover designed to boost the Yukos share price....

Mr Khodorkovsky’s second conviction reveals little new about Russia’s legal system. It was already well known that the country lacked an independent judiciary, and that a defendant stood little chance of receiving a fair trial in such a politically-charged case. However, in conjunction with a spate of brutal attacks on journalists – which the authorities have shown no inclination to prevent – this judicial travesty is a reminder of the risks run by those who challenge the regime and its acolytes. This gives a hollow ring to President Dmitry Medvedev’s election pledge to battle against Russia’s “legal nihilism”, and his more recent talk of modernisation and democratisation in the country.

What the case does reveal, however, is the fragile nature of political power in today’s Russia. Mr Medvedev, for one, is surely aware how damaging Mr Khodorkovsky’s continued imprisonment is to his country’s image. The only conceivable reason to keep him in jail is the fear – however far-fetched it may seem – that he could otherwise become a powerful political opponent to the Putin-Medvedev “tandem”. This suggests that, for all its control of the political apparatus, for all its robust approval ratings, for all the improvement in living standards that high energy prices have delivered in the past decade, the current leadership feels strangely nervous about its grip on power. This gnawing sense of insecurity is the hallmark of undemocratic regimes the world over. Until Russia replaces its mix of kleptocracy and authoritarianism with a functioning democracy, this fear will remain justified. Those overdue political and legal reforms are unlikely to happen, however, as long as the regime feels it necessary to keep Mr Khodorkovsky behind bars". 1

"The expansion of the state territory, straining beyond measure and exhausting the resources of the people only bolstered the power of the state without elevating the self-confidence of the people...The state swelled up; the people grew lean." 2

The Khodorkovsky trial and now verdict has resulted in many comments and opinions. Many `a la that of the leader in the Financial Times, neither particularly original or thoughtful. To talk for example of it being a new 'Beilis Case', would be the ne plus ultra of idiocy. Both the trial and the verdict were quite predictable. And above all unfortunate & stupid in the Talleyrand sense of "pire qu'un crime, c'est une faute"3. What it seems to reveal to at least me, is that: i) grazhdanin Putin, is determined to retain in full, or as close to full as possible, the system he has created over the past eleven years or so. The sentencing of Khordorkovsky for an additional term in prison is perhaps the biggest symbol of this fact. Indeed, one may even surmise that it was meant, au fond to serve this very purpose; ii) and following from which, is that Putin will resume the Presidency in 2012, displacing his successor and former protege, current President Medvedev. And no doubt endeavor to remain in office for another eight years. If not longer.

All of which is highly unfortunate, if not worse for matushka Russia, as to not put too fine a point on the matter, 'Putinism', as a positive model for Russia, is pretty much exhausted. Do not mis-understand me: for a good number of years, Putin's policies (if not necessarily the man himself: much too demotic and rigid for my taste) served Russia's positive purposes. They served to stop and indeed reverse the
a serious threat that the federation would collapse as an effective state entity. Something which American commentators were quite open in talking about circa 1999 and 2000 4. Unfortunately, the positive phrase of Putinism has passed. Probably it did so sometime between 2005 and 2007. The best example of the fact that Putin's policies have run their positive course is to compare the Russian performance economically since the onset of the global economic crisis with its fellow 'Bric' confreres. Russia's performance being the worst in the past three years of the four countries 5. Proving that the boost provided by the near decade upturn in commodity prices has about played itself out as a positive benefit for the Russian economy. The fact of the matter is that if Russia is to fulfill its economic and other potential going forward, the policies represented by Putin need to be gradually discarded. Not thrown overboard by any means, but, changed none the less. The verity of this point can be seen by the endemic corruption which Putinism has not answer to. Nor does it appear to have any positive answer to the nationality problems in European Russian cities that has recently emerged. As well as the ongoing, if low-level problems in the north Kavkaz region. Indeed, these issues and more make a mockery of Putin's notion that his policies are a return to those of 'practical' statesman of the late-Tsarist era, such as Graf Witte and Pyotr Stolypin. When indeed, for a time, it did seem as if (in the words of the then Reich Kanzler, Bethman-Hollweg), "Russia was the land of the future" 6. To-day one is tempted to say, it is anything but. As the Russian commentator Dmitri Trenin, has noted, at bottom, the real problem with the Putin-Medvedev duumvirate and their alleged policies of modernization, is simply that:

"Corruption is not an evil; it is the organizing principle. The business-bureaucracy nexus cannot be wished away; it can only be broken. Indivisible power cannot be separated into branches by simply appealing to the Constitution, which mandates this separation. Conservatism will only imitate change and compromise the vision. Revolutionary change, of course, is not the answer: Putin and Medvedev are correct regarding this question. What is needed is an effort which will not undermine the state, but replace the current politico-economic system: radical modernization....
The problem is, corruption in Russia has never been such a systemic factor as now. Modernization would seek to do away with it; conservation would seek to perpetuate it: the result would be a gridlock!" 7

In short, one can very well say of Grazhdanin Putin, the words that Leopold Amery pronounced in the House Common debate of May 1940 vis-`a-vis Neville Chamberlain, et. al:

"You have sat too long here for any good you have been doing. Depart I say, and let us have done with you. In the name of God, go.8"

1. Editorial, "Legal nihilism triumphs in Russia," The Financial Times. 28 December 2010, in www.ft.com.

2. V. O. Kliuchevsky, A Course in Russian History, (1911) Volume III, p. 11.

3. Sometimes the saying, is also attributed to Antoine Boulay de la Meurthe, apropos the murder of the Duc d'Enghien.

4. See for this: Anders Aslund, "Russia's Collapse," Foreign Affairs. (September / October 1999), pp. 64-77; Rajan Menon & Graham Fuller, "Russia's Ruinous Chechen War," Foreign Affairs. (March / April 2000), pp. 32-44.

5. Sergei Aleksashenko,"Russia: Optimism goes up in smoke," Carnegie Moscow Center. September 2010, in www.carnegie.ru

6. For Bethman-Hollweg's quote of the 7th of July 1914, see Fritz Stern's essay: "Bethman-Hollweg and the War," in his, Failure of Illiberalism. (1972), p. 91. For Russian economic growth in comparative perspective in the late Tsarist period, see: Cyril Black, et. al. The Modernization of Japan and Russia: a comparative perspective. (1975), pp. 161-176 & passim. On Witte & Stolypin, see: Helene C. d'Encausse, Nicholas II: the interrupted transition. Translated George Holoch. (2002), pp. 46-49,114-115,117-140.

7. Dmitri Trenin, "Russia's Conservative Modernization: A Mission Impossible?" SAIS Review of International Affairs (Winter / Spring 2010), pp. 35-37.

8. Leopold S. Amery, Speech in the House of Commons, 7 May 1940.