Ben Judah - Fragile Empire - How Russia Fell in and Out of Love With Vladimir Putin

• Slide Five : Independent auditors suggested 30 per cent of the state budget was being lost to corruption.

• Slide Six : 72 per cent of Russians thought it was a waste of time to pursue a complaint through the official justice system as it was corrupt or they could not afford the bribe.

• Slide Seven : Amongst students, low-paid jobs such as tax inspectors were more popular than professions as they were viewed as having huge potential for corruption.

‘Please…’ interrupted Putin. ‘Let us not apply the universal presumption of guilt to our students.’ At this Khodorkovsky then made one final, immense accusation:

‘We need to make corruption something that is universally ashamed of. Let us take for example the purchase by the state oil company Rosneft of the firm Northern Oil… Everyone knows the Northern Oil deal had an ulterior motive. I must tell you that corruption is spreading in this country. You could say that it started right here . And now is the time to end it.’

Khodorkovsky had not just said that in the Kremlin itself – he had said it on camera. This was the greatest mistake made by a man carried away by his own performance and convinced that he had the power to insult anyone, without any consequences. He had underestimated Putin, who glacially defended Rosneft before smiling, like a coiled, poised snake:

‘But some companies like Yukos have got themselves fantastic, excessive reserves of oil. I think the real question is: how did they get them? The ball is in your court . And another matter. I believe that Yukos has got into a few problems with tax affairs. You may claim that you are dealing with those problems. But the question that needs to be addressed is, how did they arrive in the first place?’ 36

Watching the TV at home with his wife, the former KGB general hired by the oligarch to run his security operations burst out, ‘We are finished!’ 37Just days later, the tycoon summoned his men and warned them that tough times lay ahead. He had gone to war.

Khodorkovsky was growing even more brazen as his business plans were becoming ever more grandiose. The tycoon was bragging to Western oil executives about those in his pay in the Duma. He was discussing his own pipeline plans to China; indifferent to the Kremlin view that this was foreign policy and not a matter for businessmen. He wanted to turn Yukos into the biggest conglomerate in the country by far. He wanted to swallow the oil firm Sibneft. He wanted to merge with a Western oil major. With a company so large, so integrated into global capital, he believed he would then be powerful to the point of being untouchable.

As long as Khodorkovsky continued like this, Putin had a rival: Putinism was not going to be secure. His final crime was that Putin came to believe he was preparing to sell a majority stake in Yukos, the crown jewels of Russian hydrocarbons, to the American oil titan ExxonMobil. This would have put him – and the best part of Russia’s oil – out of the Kremlin’s reach. There were those inside the government who felt furious and even betrayed. The way they understood ‘loans for shares’, was that these men had been awarded resources in order to become the loyal capitalist class that Russia lacked. They reasoned to themselves that, at a time when only foreigners could have coughed up the real value of these mega-complexes, it had been reasonable to award them to trustworthy Russian businessmen. And now Khodorkovsky wanted to sell to the Americans. Days before Putin sent the FSB to get him, he told one Western executive, ‘I have eaten more dirt than I need to from that man.’ 38

Yukos executives began to be arrested. In the weeks leading up to Khodorkovsky’s arrest two of the richest oligarchs, Mikhail Friedman and Mikhail Potanin, told him to stop. They warned him he was endangering himself, endangering them and the whole country. He didn’t. So why did Khodorkovsky feel so secure? Berezovsky and Gusinsky were already in exile. Putin had already clamped down on TV. The regime had shown that it reacted to threats by tightening the screws.

Inside the government itself the challenge mounted by Khodorkovsky was causing rifts and strain: many at the very top were opposed to the drastic measures being planned against him, including the prime minister, Mikhail Kasyanov. He had sensed a change in his relationship with Putin for months. ‘The breakdown of our agreement [to divide power] came in 2003. At first the pressure began on business, then the plot to take Yukos took shape with increased pressure being placed on the oil industry as a whole.’

Khodorkovsky thought he was better than Berezovsky or Gusinsky. He thought he had better intelligence. Those close to him say that, at the time, Khodorkovsky felt he was safe as he had sources at the very heart of the Kremlin. These sources had been reliable up to this point. His family and his advisors claim this was none other than Alexander Voloshin, Putin’s chief of staff, the same man who had told Berezovsky not to worry that they had ‘let the black colonels in’.

Khodorkovsky’s son Pavel blames Voloshin for intrigues that led to his father’s arrest: ‘Voloshin was trying to use my father in an internal Kremlin power struggle.’ He claims that Voloshin had suggested Khodorkovsky present the infamous slides on Russian corruption to Putin. ‘I have from several sources,’ insists Pavel, ‘that Voloshin now feels remorse. He did not intend it to lead to an arrest.’

Khodorkovsky was better than other oligarchs. He had a wife and unlike the others was not a shameless womanizer. For fun he did not fly a plane load of women to ‘party’ in a ski chalet, but took all his children to Paris, to walk them round the Louvre, stopping to explain what each artefact was. This makes hearing Pavel talk about ‘my father’ unsettling. What was about to happen was not only a man’s political catastrophe but a personal one.

In public the oligarch was refusing to show fear, but in private his sense of tomorrow had darkened. In 2003 Khodorkovsky went on what would be his last visit to the United States to show his American colours. This was the year US forces stormed into Baghdad. He visited his son Pavel at Babson College, where he was studying. Pavel remembers; ‘My father said to me, “The final thing they will do now is arrest me.” He seemed to know this was coming.’

Yet Khodorkovsky still had time to flee the country, as Berezovsky had done. Why he did not do this is a question he has never fully answered. In his letters from prison he alludes to himself as a martyr, that he chose to be arrested, that he had resisted temptation and been purified by prison.

I could have foreseen things. When I understood things, it was already too late. I had the choice of going onto my knees or going to jail. And maybe I could have gone onto my knees. The temptation was very great. 39

Was he trying to be a martyr? Or is this the self-valediction of an imprisoned egomaniac who cannot admit he made a mistake? To many it seemed he had developed an almost messianic complex. His writings from jail brimmed with biblical references and insinuations that he had been reborn:

Yes, that sweet word ‘freedom’ has many meanings. But its spirit cannot be eradicated nor extirpated. It is the spirit of the titan Prometheus who presented man with fire. It is the spirit of Jesus Christ who spoke as the one who was right and not like the scribes and Pharisees. Hence, the reason for the crisis of Russian liberalism lies not in the ideals of freedom, albeit perceived differently by everyone. This is not about the system, but people, as the last Soviet prime minister Valentin Pavlov used to say. Those who were entrusted by fate and history to guard the liberal values in our country have failed in their task. Today we must sincerely admit that, because the times of slyness are over, and to me, here in a dungeon of remand centre No. 4 this is, perhaps, a bit more obvious than to those in more comfortable conditions. 40