Daily Archives: August 28, 2007

Khodorkovsky Wins Big in Switzerland

The Times of London reports:

Switzerland’s highest court said that Russian legal proceedings against Mikhail Khodorkovsky, the jailed former chief executive of Yukos, were politically motivated and blocked the release to the Russian authorities of bank documents relating to the bankrupt oil company.

The Swiss federal tribunal, in a landmark ruling, found that Khodorkovsky and Platon Lebedev, his associate, were victims of political persecution and it rejected a request for assistance by Russian authorities in their pursuit of tax claims against Yukos.

The tribunal in Lausanne accepted arguments by lawyers representing the two men that the criminal proceedings were discriminatory and politically motivated.

In refusing to release the documents, the court referred to “concrete facts that lead to the inference that the appellant is under pursuit for hidden motives, notably in relation to his political opinions”. Moscow had opened the criminal case against Khodorkovsky to “sideline declared or potential political adversaries”, the court stated.

The Swiss ruling is the first time that a leading nonRussian tribunal has opined on merits of the Khodorkovsky case. The Yukos chief, who was once Russia’s richest man, was a vocal critic of President Putin. Khodorkovsky was convicted of tax fraud in 2004 and sentenced to eight years’ imprisonment in Siberia.

Swiss authorities ordered the release yesterday of about SwFr300 million (£124 million) held in bank accounts linked to the former Yukos owners. The case arose in 2003 when Russian authorities sought legal help from Switzerland in their pursuit of alleged fraud and money laundering in relation to Menatep, the holding company through which Khodorkovsky and his associates controlled Yukos. The oil company was bankrupted and dismembered by Russian authorities in pursuit of massive tax claims. The assets of Yukos were sold to Rosneft after several rigged auctions.

The Moscow Times reports that the Kremlin is hopping mad:

The prosecutor general on Monday slammed a Swiss court’s decision to lift a freeze on funds related to bankrupt oil firm Yukos as an unfriendly move toward the country. “We consider this decision politically motivated. [LR: Now THAT is the pot calling the kettle black if you’ve ever heard it!] This is a move of nonrespect toward our country and an attack on its sovereignty,” Yury Chaika told a news conference. He said his deputy would fly to Switzerland for consultations this week.

Swiss judicial authorities said last week that they had lifted a freeze on all funds related to Yukos, worth some 200 million to 300 million Swiss francs ($166 million to $249 million). The move followed a ruling by Switzerland’s highest court blocking a Swiss government bid to give Russia documents linked to bank accounts held by former Yukos owners, including Mikhail Khodorkovsky and Platon Lebedev, and several companies. The landmark ruling by the Lausanne-based Federal Tribunal, or Supreme Court, halted Swiss cooperation with Russia in a criminal case that the five judges said seemed aimed at ousting “political rivals.”

The Swiss ruling concluded “that the [Russian] penal procedure in the case at hand is being maneuvered by the powers that be with the intention to rein in the class of rich ‘oligarchs’ and sideline potential or declared political adversaries.”

Lawyers for Khodorkovsky and Lebedev welcomed the decision, saying it was the first time the top Swiss court had invoked political persecution and human rights violations as grounds for not helping foreign authorities pursue a criminal matter. Khodorkovsky and Lebedev are each serving eight-year prison terms in Siberia on charges of fraud and tax evasion. The Swiss court said the two should not have been sent to prison camps in Siberia because Russian law provided for the place of detention to be close to their home or place of trial. Russia this month sold the last big asset of Yukos. State-controlled Rosneft, now the country’s largest oil firm, bought refineries and other assets from Yukos at a state-forced auction earlier this year.

Way to go Bob Amsterdam and the brilliant Khodorkovsky legal team! Take it to ’em! We’re behind you all the way!

Amsterdam’s blog has all the details, here.

Berezovsky in the Times of London

Writing in the Times of London, exiled Russian “oligarch” Boris Berezovsky says that the West should “call Putin’s bluff.” Those who don’t care for Berezovsky, and don’t care to see him have such a lofty platform, have Vladimir Putin’s ham-handed neo-Soviet attacks on Britain to thank. And they should ask themselves who is a higher-profile critic of the neo-Soviet Union; if they don’t care for BB, they should ask themselves why Russia isn’t civilized enough to have presented other options.

Putin and Putin’s Russia are being widely discussed in the West. Opinions have split: some say it’s better to be friends, others insist that a hardline approach is more fitting.

Despite the collapse of the Soviet Union, Russia still plays a key role in world politics. Discord between Vladimir Putin’s Russia and the West is seen everywhere: energy resources and their transport, military security, Kosovo, eastern Europe, Ukraine, the Caucasus, central Asia, the Middle East . . . there is hardly an area left where the interests of Putin’s Russia coincide with those of the West.

The last myth, of co-operation in the fight against international terrorism, was put to rest on November 1, 2006, when London became the target of a radioactive attack using polonium-210, with the Kremlin front and centre behind that assault.

Putin’s regime will inevitably collapse. The USSR collapsed because the centralised political system and the planned economy were uncompetitive. By taking Russia back to the top-down power structure, Putin dooms it to suffer the same consequences as the Soviet Union. However, while the Soviet break-up meant liberation for the people of Ukraine, the Baltic states, the Caucasus, central Asia and others, breaking up Russia would mean a collapse of a unique civilisation that is integral to global civilisation. Will Putin’s regime collapse as a result of Russia failing, or will there be internal powers capable of defeating the regime and stopping the break-up? There is no third option.

Putin’s regime is authoritarian. Under the current system, free elections are impossible. Only pressure on the Kremlin will make it possible to re-establish a constitutional form of government. John Locke, the English philosopher, said: “If a government violates the law, overthrowing it is not just a right, but an obligation of responsible members of society.” I am calling for deliberate pressure aimed at reinstating a form of government that would correspond to the letter and the spirit of the Russian federation constitution which states that “Man, his rights and freedoms are the supreme value. The recognition, observance and protection of the rights and freedoms of man and citizen shall be the obligation of the state.” By abrogating citizens’ rights and freedoms, Putin’s regime has made itself unlawful. The United Nations Declaration of Human Rights — to which Russia is a signatory — states that “it is essential, if man is not to be compelled to have recourse, as a last resort, to rebellion against tyranny and oppression, that human rights should be protected by the rule of law”. Everyone fears the bloodiness of revolutions. However, the bloodless revolutions of the late 20th and early 21st century in eastern Europe and in the former Soviet Union teach us a different lesson.

First, the West should acknowledge that Putin’s government is unconstitutional. Events in Russia and the murder of Alexander Litvinenko justify this. Next, deliberate pressure on the institutions of power. This has many forms, including rebellion as the final means. There is one fundamental limitation: such pressure must minimise the provoking of violent action by the state that will cause victims. Ukrainian and Georgian examples show that it can be achieved. Only the people can be the legitimate force to depose an illegitimate government, because democracy is the basis of Russia’s constitutional policy.

Over the past 20 years or so, our people have demonstrated great “flexibility” in their political leanings. Our people trust not the individual, but the position. Instead of giving weight to Putin’s high popularity ratings, a simple question must be asked: who will voluntarily risk their lives to come out on the streets to defend Putin? My answer is — a lot fewer people than those who will voluntarily risk their lives to come out on the streets against him.

Putin’s problem is that until now the corrupt pro-Kremlin elite has been his real source of support. He had a deal with them: they give him power, the “love” of the people and personal wellbeing and, in exchange, he legalises their business and capital in Russia and in the West. But this elite keeps its capital in western, not Russian, banks, so if anything happens it won’t be so easy for Putin to take it from them.

When the West realised that the Kremlin was behind the Litvinenko murder, Putin lost the ability to guarantee protection of this elite’s interests in the West. What’s more, closeness to Putin has become dangerous for them.

Now the question of a third presidential term. Since insecurity is the essence of Putin’s mentality, deceit comes naturally to him. The Kremlin cooked up a story about his third term. The idea behind the deceit is simple: a puppet successor, a constitutional assembly, an amendment to the constitution (presidential authority is set at two seven-year terms), then the successor asks to resign and Putin returns. This plan may have been viable before the Livinenko murder. It won’t work now. The elite do not want Putin to top a chain of command suspected of crimes in its own country and of international terrorism; and any successor covering up Putin’s government’s crimes will himself become an accomplice. And as an accomplice he won’t be able to stay long enough for Putin to return — so Putin can’t hand power to anyone, not even a puppet.

It’s clear that Russia would still be trudging along in the Communist-KGB USSR that Putin loves so much were it not for the West and its decisive leaders, above all Ronald Reagan and Margaret Thatcher. There is nothing shameful in using the levers that the West has in order to put Russia back on the path of democratic reform.

A necessary condition for success is for the West to unify its position. Putin’s Russia depends on the West to an incomparably greater extent than did the Soviet Union. All Russian elites are attached to the West by their umbilical cords. The West should direct its efforts at countering those at the source of support for Putin’s regime — the corrupt elite.

The first step should be a comprehensive audit of this elite’s bank accounts, starting with those closest to the Kremlin. Western leaders have all the tools necessary for conducting this audit, which include the agreement on fighting high-level corruption signed in 2006 by the G8 leaders during the summit in St Petersburg. I am certain most of them won’t pass such an audit.

By itself, Russia’s monopoly over Eurasia’s energy resources is not enough as an instrument of political pressure, because it also needs a transport network to deliver them to the consumer.

Old Europe’s lack of understanding of the intense reaction of Poland, the Czech Republic, Estonia and other countries toward Putin’s aggressive actions stems from the deep intellectual degradation of the West’s political elites — beginning with their leader, the United States. This was behind western procrastination in integrating Ukraine, Moldova and Georgia into Europe and pushing away Belarus. The West must offer support to those countries on the front lines of resisting the creeping aggression of Putin’s Russia.

Its non-participation in the process of democratic reforms initiated by Boris Yeltsin — and its open encouragement of Putin’s criminal regime — took the world back to the past.

Nuclear blackmail by Iran, the disastrous war in Iraq, the crisis in Palestine and the Middle East in general are a direct consequence of the West miscalculating Russia’s role in the modern world. Bringing Russia back to the democratic community is certainly realistic — what’s more, it is the main duty of all responsible western politicians.

The Rifle on the Wall

KGB defector Oleg Gordievsky speaks to the Independent:

‘If there is a rifle hanging on the wall in the first act, in the third act, the rifle will be fired.” KGB defector Oleg Gordievsky is musing on the words of the Russian dramatist Chekhov, as he considers Vladimir Putin’s latest strategic moves, which he fears could lead inevitably to all-out military conflict.

“When Putin came to power, it was clear what was going to happen,” says Mr Gordievsky of his former KGB colleague. “I warned John Scarlett [Gordievsky’s former handler in Moscow who now heads MI6], I warned the Foreign Office, I warned journalists. Now they believe me,” he thunders.

Not content with hanging up a rifle on the wall, the Russian president has lined up a whole array of weaponry, including nuclear-capable strategic bombers while ratcheting up his rhetoric, prompting talk of a “new Cold War”.

“The old one never stopped,” said Dan Plesch a senior British arms control analyst who shares the concern of the highest-ranking KGB officer to defect to the UK that we are sleepwalking to disaster. One false move, and “there is a very significant danger of global nuclear war”, according to Mr Plesch.

In a week in which the world has been distracted by the bare muscular torso of the 54-year-old Russian leader on his Siberian holiday – compared with the air-brushed “love handles” of President Nicolas Sarkozy of France – one thing stands out in the series of images on the Kremlin website. This is a president who wears military fatigues, not jeans, in his spare time.

The Russian bear is back with a vengeance. But seen from Moscow, the Kremlin is simply reacting to a series of provocations by the United States and Nato as the Western alliance creeps towards Russian borders, threatening the security of the state.

The “new Cold War” has its origins in a speech made by Mr Putin last February at a security conference in Munich, in front of an audience of Western defence ministers and parliamentarians, in which he listed Moscow’s grievances and accused the Bush administration of trying to establish a “unipolar” world.

“One single centre of power. One single centre of force. One single centre of decision-making. This is the world of one master, one sovereign,” the President complained.

The speech went down a storm back home, where Russian newspapers congratulated the President for telling the West where to get off. But it kicked up a different kind of storm in the West, already worried about oil-rich Russia using energy as a weapon to bully its neighbours and concerned about the country’s return to more authoritarian rule under Mr Putin.

Since the Munich speech, in which the Russian leader criticized American plans to base part of an anti-missile defence shield in Poland and the Czech Republic – both former Warsaw Pact nations – the chill wind has got chillier. The West and Russia are at loggerheads over a host of political issues, including Iran’s nuclear ambitions, Iraq, the future of Kosovo and, in particular, Nato expansion – which is a Kremlin obsession.

British-Russian relations are at their worst in decades after the radiation poisoning of the former KGB agent, Alexander Litvinenko, in central London last November, and Russia’s refusal to extradite the former KGB man who is suspected of the murder.

In May, Mr Putin fired off another volley against American unilateralism, obliquely comparing US policies to those of the Third Reich in a speech commemorating the 62nd anniversary of the fall of Nazi Germany.

In the same speech, he attacked Estonia, a new European Union member, for relocating a monument to the Red Army, which he said was “sowing discord and new distrust between states and people”. When Estonian government websites fell victim to an unprecedented cyber attack, Nato was called in as the finger of suspicion fell on the Kremlin.

Things have got steadily worse: an EU-Russia summit held amid tensions between Russia and Poland and Estonia ended acrimoniously as the European leaders criticised the arrest of a group of Russian opposition activists led by Garry Kasparov. They were detained on their way to a protest rally near the summit in Samara. Then came Russia’s threat to turn of gas supplies to Belarus, in what became almost a replay of the stand-off in 2006 when supplies to Ukraine were shut down, ostensibly to punish the former Soviet republic for its Orange Revolution.

But the military developments have clearly raised the most dangerous tensions between Russia and the West. In retaliation for the US anti-missile shield plans, Mr Putin announced that Russia would retarget its own missiles towards Europe to counter the proposed installations in its former satellite states that are now EU members and fervently pro-US. Alarm bells rang in Western capitals when on 14 July, Russia formally declared it was suspending participation in the Treaty on Conventional Armed Forces (CFE) in Europe, one of the pillars of East-West disarmament, dating from 1990.

On 6 August, according to the pro-Western Georgian government, a Russian warplane flew over the Caucasus mountains and fired a missile, which crashed into a Georgian potato field. Although the missile did not explode, the Georgians accused the Russians of violating their airspace and took their case to the UN security council. Georgia last week accused the Russians of a second violation. And on Friday, Georgia said its forces had fired on a Russian jet, which crashed into a forest.

Then, on 17 August, President Putin announced that 20 strategic bombers had been sent far over the Atlantic, Pacific and Arctic oceans – in a concrete demonstration of Moscow’s muscular new posture. On the same day, Britain’s Ministry of Defence announced that two RAF jets had shadowed a Russian bomber that approached British air space.

“What he is doing is not real yet, but could become real any day. Europe should be prepared,” said Mr Gordievsky. Yet while European analysts warn that the tense situation could deteriorate into an armed conflict in the time it would take President Putin to remove his shirt, they also point out that Russia should not be the only one blamed for the “new Cold War.”

Mr Putin, in announcing the resumption of round-the-clock flights by long-range bombers with a nuclear capability, pointed out that other nations – in other words, the US – had continued their missions since the end of the Cold War.

“Washington failed to live up to its commitments to Russia,” said Mr Plesch, director of the Centre for International Studies and Diplomacy at the School of Oriental and African Studies in London. The Bush administration pulled out of the anti-ballistic missile treaty, jeopardised the nuclear non-proliferation treaty, and the CFE treaty was never ratified by Nato. “The Americans are still flying round Russia,” he said, adding that flights by American strategic bombers had remained at the same level since the Cold War.

Mr Plesch argues that Russia is right to feel threatened by the American anti-missile shield, which, according to the Bush administration, would target incoming missiles from North Korea or Iran. “Now the Americans believe they have a first strike against Russia with conventional weapons,” he said.

According to the Prague-based Czech analyst Petr Kratochvil, Mr Putin’s harsh rhetoric is part of a strategy directed towards his domestic audience in the approach to next year’s presidential election, which is expected to be won by a close ally of the President, who is himself constitutionally barred from running for a third term.

In Mr Kratochvil’s view, although relations with the West are “much worse than five years ago”, armed conflict is not likely for the simple reason that Russia cannot compete as a superpower with America, either economically or militarily.

Mr Putin’s nostalgia for the Soviet era – he has described the collapse of the Soviet Union as “the greatest geopolitical catastrophe” of the last century – is raised “because it resonates with the public”, according to Mr Kratochvil. “I don’t think he believes it himself. He’s trying to make it less painful for people as Russia becomes a regional power.”

So what’s to be done? Despite the tensions, there is a sense on both sides of the Atlantic that the US and Russia are looking for a way out. The US Secretary of State, Condoleezza Rice, herself a Soviet scholar, and Russia’s hawkish First Deputy Prime Minister and former Defence Minister, Sergei Ivanov, have rejected suggestions of a new Cold War. And despite all the bluster, Russia is still cooperating with Nato, having broken off all cooperation in 1999 during the Kosovo crisis.

During a hearing of the US House Armed Forces Subcommittee on Strategic Forces in Washington last month, the committee chairwoman, Ellen Tauscher, said they were looking for solutions. She added that the US was now “at a critical juncture regarding our strategic posture”.

Mr Plesch said it was time to revive the ideal of Presidents Reagan and Gorbachev at their doomed Reykjavik summit, at which they pledged to eliminate the US and Soviet nuclear arsenals. He is not alone. None other than Henry Kissinger has signed up to the goal of nuclear disarmament.

“If you say ‘save the whale’ or ‘do this to stop global warming’, everyone agrees. But if you say general and complete disarmament, people look at you as if you’ve completely lost the plot,” Mr Plesch said.

But amid the attempts to move back to a disarmament agenda, there is a key ingredient missing. “Trust but verify,” President Reagan used to say to President Gorbachev after they signed a landmark agreement eliminating both sides’ intermediate-range missiles. What will complicate the efforts to end the “new Cold War” is that trust has now disappeared in the relationship between the West and President Putin’s Russia.

Who is to Blame

We’ve been running a poll for some time now asking readers who is most to blame for the rise of dictatorship in Russia. Nearly 1,400 votes have now been cast in the poll, so it’s appropriate to take a look at some preliminary results. 20 different possible causes were offered to choose from in the poll; here they are ranked according to which the readers think is most likely (the choice is followed by the percentage selecting it and then the total number of votes received):

(1) The People of Russia 32% (446)

(2) The KGB 14% (199)

(3) Western Governments 7% (97)

(4) Russian “Oligarchs” 6% (80)

(5) Communism 4% (62)

(6) Fate 4% (53)

(7) TIE: Boris Yeltsin 3% (46)The USA 3% (46)

(9) Capitalism 3% (44)

(10) NATO 3% (36)

(11) Western Apologists for Russia 3% (36)

(12) TIE: Western Critics of Russia 2% (34)Bad Luck 2% (34)

(14) Western Media 2% (33)

(15) George Bush Jr. 2% (31)

(16) Bill Clinton 2% (30)

(17) The USSR 2% (27)

(18) Russian Media 2% (26)

(19) George Bush Sr. 2% (22)

(20) Mikhail Gorbachev 1% (13)