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Vladimir Milov “On Khodorkovsky”

Categories: Eastern & Central Europe, Russia, Citizen Media, Economics & Business, Elections, Environment, Governance, History, Law, Politics, RuNet Echo
Mikhail at his first press conference after being freed from prison, 22 December 2013, Berlin, Germany, photo by Mitya Aleshkovskiy, CC 3.0. [1]

Mikhail Khodorkovsky at his first press conference after being freed from prison, 22 December 2013, Berlin, Germany, photo by Mitya Aleshkovskiy, CC 3.0.

Vladimir Milov [2] is an energy sector expert. In 2002, he served as Deputy Energy Minister of the Russian Federation. Today, Milov heads the opposition political party “Democratic Choice [3],” which the Russian Justice Ministry officially registered in September 2012. The following text first appeared in Russian [4] on Echo of Moscow’s blog on December 23, 2013, three days after Vladimir Putin pardoned and released Mikhail Khodorkovsky from prison. With Milov’s permission, RuNet Echo’s Kevin Rothrock has translated the text in its entirety and published it here on Global Voices.

The discussion about Mikhail Khodorkovsky’s press conference yesterday most of all resembles the talk about some of the latest not-so-great albums by musical giants like David Bowie and U2. The fans, as always, are loving it. For everyone else, this clearly wasn’t everything they’d expected from a star of such caliber. Any dialogue between the two sides is impossible. The musicians really are masters and the songs really are quite good, but there’s no longer any trace of that old drive—though better not mention this to the fans. (It could get you trampled.)

There’s no reason to expect drive from Khodorkovsky, who spent the last ten years in prison. He’s not only very tired, but obviously also bound by certain obligations—possibly by the terms of his release, and definitely by the conditions of others from Yukos still under arrest, who remain in Russia as hostages. That Khodorkovsky unequivocally called freeing these people a priority is absolutely proper and we can only support him. The same goes for the fact that Khodorkovsky petitioned for a pardon, and it’s completely irrelevant under what circumstances—no matter the moralizing on Twitter.

But I see that many can’t shake the feeling that “something is amiss.” Sure, prison. Okay, he’s tired. He’s bound by obligations—makes sense. And yet… Set free was a man about whom for the last ten years there has been nothing but conversations about how, just as soon as he got out of jail, he would suddenly be leading the country. It was a vision blurred by everything from posters to demotivators proposing that Khodorkovsky change places with Putin.

Even under these conditions, Khodorkovsky could have taken five minutes to say something about his vision for Russia’s future. Something about how we might break out of our national depression, and about his own “vision of the future.” Something to reassure his anxious followers, telling them: “Guys, though I’m not going into politics, now a powerful guy's got your back who will tell you how to ‘get things done.’”

None of this happened. Instead, we witnessed a press conference that was mostly “about Khodorkovsky” and not about Russia. We heard the usual eclecticism—something about how private business should be a priority, but business needs to be “socially responsible.” (Haven't we heard this somewhere before?) We listened to the usual words about civil society, but here and there hints of statism slipped in (Khodorkovsky’s announcement that he’d “go to war for the North Caucasus” was outside the press conference, but it was quite indicative). I’m getting letters and calls from people who, after fifteen years of Putinism, have had their fill of this eclecticism, and they’re asking me: “What is all this? Maybe they broke him in prison? Where’s the Russian Nelson Mandela?”

As for me, while watching him during yesterday’s press conference, I remembered the Khodorkovsky whom I occasionally encountered at work in 2002 and 2003. He’s the same “strategist” as before: build a pipeline here, build a pipeline there. Develop Eastern Siberia. Build a pipeline to China. Ban production-sharing agreements and replace them with a national tax regime. Flatten the tax on oil extraction. Increase extraction from 400 to 500 million tons. That is all there is to the “strategy.”

Any of this seem familiar?

This is why I’ve marveled all these years at how intensely people have made Khodorkovsky out to be some promising alternative to the authorities now in power. And it’s understandable why they’ve done this: between 2000 and 2003, Khodorkovsky skillfully co-opted a significant part of the intelligentsia through [his organization] “Open Russia,” and intellectuals decided that if Khodorkovsky carts them around the country to read their lectures, he must think like they do.

For me anyway, the battle between Putin and Khodorkovsky was always a battle between two groups with comparable goals and styles, and both hoped to subjugate the country entirely, employing methods that were far from gentle. (I had to deal with this firsthand, so I know what I’m talking about here.) Yukos, for instance, was stuffed with former KGB agents. Suffice it to say that the company’s first vice president was Viktor Ivanenko, the first chief in the Russian KGB under Yeltsin, who from 2000 to 2004 lead the so-called “Parliamentarianism Development Trust,” which—how should I say this…—managed “targeted work with Duma MPs,” present and future. They bought off MPs openly and wholesale, and Yukos funding was hardly limited to opposition parties: Khodorkovsky’s partner and onetime Yukos co-owner, Vladimir Dubov, ran for a Duma seat in 2003 on United Russia’s ticket. (Yukos didn’t delegate any of its other high-caliber people to the opposition parties.) Khodorkovsky’s other associates—like Nevzlin, Brudno, and Dubov—were (to put it lightly) not exactly luminaries of liberalism and free civil society, and God forbid you ran afoul of any of these people. The laws Yukos needed were plowed through the Duma without considering the nation’s interests.

We now know that the evisceration of production-sharing agreements (carried out under a completely mutual agreement between Putin and Khodorkovsky) froze the development of new [oil extraction] projects in Russia and drained the budget with tax breaks handed out left and right (more details about this here [5]). And let’s not forget how Yukos responded to ecologists protesting against attempts to build an oil pipeline alongside Lake Baikal (only not from the north, like Putin wanted, but from the south, through Tunkinsky National Park). And we won't even discuss what kind of PR campaigns Yukos ordered against the ecologists.

Also, the fight for power between former chekists from Petersburg and former Komsomol members from Menatep didn’t begin in 2003, as popular legend now claims. For instance, Dozhd published an excerpt [6] from Putin’s first-ever speech in the Duma in 1998 (when he was still Director of the FSB), where he immediately attacks Yukos.

And take a look at the biography [7] of Gazprom’s deputy head and chief of “Gazprom Export,” Aleksandr Medvedev, and you’ll see that from 1997 to 1998 he worked (wait for it) at the same East Oil Company (VNK) that Yukos purchased in 1998, after which Medvedev was promptly fired. The issue was that Medvedev and his partner, Andrei Akimov, the current head of Gazprombank and a member of Gazprom’s board of directors, were at that time joint managing directors of the Austrian company IMAG, and they wanted (wait for it) to buy VNK for themselves. But Khodorkovsky grabbed all this business out from under their noses. And therein, my friends, lie the roots of the conflict between the two groups, dating back as far as 1998 (and maybe even earlier).

Of course, there is a difference between Petersburg chekists and Menatep Komsomol members. If the former had no experience creating value and operating in a free market (and presented themselves purely as some parasite scrounging off others), then Yukos certainly was one of the more successful market enterprises. But there’s no reason to overestimate this point. Taking basic measures to run out Soviet-era directors in the oil and gas industry, adopting ordinary Western standards of operation, bringing in the Western service companies Schlumberger and Halliburton with their advanced technologies for intensified oil extraction, and beginning to publish IFRS financial statements—all this is great, but it hardly earns Yukos the medal of honor.

Lukoil did far more to develop untapped regions like Timan-Pechora and the North Caspian, while Yukos mainly increased production only in Western Siberia, in already explored and developed territories. And the famous pipeline to Murmansk (a never-built, missed opportunity that Russian oil scrapped in favor of the super-expensive and unprofitable ESPO pipeline) was thought up by Alekperov when he was still First Deputy Minister of Oil Industry in the USSR.

Therefore, regardless of some decent progress in the early 2000s, it can't be said that Yukos was ever a “super efficient” company. And it never represented any promising political alternative to Putin. Reduce personnel, hire Halliburton to raise debit wells, and increase capitalization by raising transparency and selling shares at higher prices. Tell me, is this the grand national strategy we've waited for? Is this really going to lead Russia bravely into tomorrow?

Things got even worse after Khodorkovsky's arrest. It makes sense why people considered him a political alternative to Putin. Until his arrest in 2003, Khodorkovsky headed a powerful and wealthy group that battled Putin for power. But his comrades threw down their weapons and fled as soon as the arrests started. A month before the 2003 Duma elections, Yukos shut down its funding of opposition parties, though the race was still up for grabs. Had they fought for a few dozen seats, the history of Russia might have gone differently!!! The 2004 presidential election was handled shamefully, even though, with a little strategic foresight, it wouldn't have been difficult to anticipate the arrests and prepare alternative candidates for Khodorkovsky. And in the ten years since, no “Khodorkovsky Party” ever emerged. Instead, we've merely read contradictory texts written in prison that carry the aroma of that same charming eclecticism so evident in Khodorkovsky's interviews and speeches since his release.

Compare this with Nelson Mandela, who upon leaving prison immediately headed the country's largest political organization, the African National Congress, which throughout Mandela's years in jail remained active and ready to win elections. Clearly, Khodorkovsky endured trials that you wouldn't wish on your worst enemy. I watched him in meeting rooms in 2002, dressed to the nines, absolutely sure of himself, and cooly uttering something along the lines of “You don't know how bad I feel about that sorrel of yours breakin’ his leg, but Bolivar, he's plenty tired, and he can't carry double.” Back then, I could never have imagined how things would turn out. I couldn't have imagined that I, more or less one of Khodorkovsky's adversaries in the early 2000s, would come to his defense and speak publicly in support of him. For example, my 2007 publication on the “Mistakes of the Prosecutor General [8]” in The New Times is the first article I know of that criticized the second case against Khodorkovsky and Lebedev on detailed economic grounds. (This was when they tried to get him on the “stolen oil” charges.)

Nevertheless, I, unlike many in the liberal camp (and especially unlike those who were still children in 2002-2003), have always remembered the real Khodorkovsky, and was in no hurry to be charmed. Yesterday and today, I've seen that many of those who were charmed are beginning to reconsider. And that, colleagues, is how it should be. We saw the real Khodorkovsky, the way he's always been. It's a shame that he hasn't been on the Russian political scene all these years. He might have been a contender. But maybe not. Perhaps he'd have struck a deal, as Unity did with its once bitter rivals Primakov and Luzhkov in 2001, creating a super-monopoly in the political arena. Khodorkovsky also dreamed of super-monopolies. Recall the aborted merger of Yukos and Sibneft, and the fact that Yukos’ people entered the Duma on the tickets of all kinds of different parties—not just liberal parties, but also the Communist Party and United Russia.

Generally speaking, don't rush to idolize. Look at the world as it is—it's not black and white. Also, good luck to Khodorkovsky in all his endeavors and sincere congratulations on his new freedom.

Original text in Russian by Vladimir Milov. Translation into English by Kevin Rothrock.