TIME

Russian oil magnate Mikhail Khodorkovsky (C) listens to Platon Lebedev (R), another key shareholder in oil group YUKOS, as they stand inside a cage guarded by an interior ministry serviceman at the Meshchansky court / Photo: Reuters

Campaign Against the Oligarchs

A group of Russia’s top businessmen formed close ties with the country’s leadership in the 1990s, gaining significant influence with the Presidential Administration and President Boris Yeltsin himself. When Vladimir Putin assumed office in 2000, the destiny of most of these influential tycoons turned to disfavor.


Vladimir Gusinsky: The Trials of a Media Baron

One of the first to suffer President Putin’s wrath was Vladimir Gusinsky, owner of a media empire famous for financing printed and broadcasting media outlets — among them the popular Ekho Moskvy radio station and the NTV television channel — often openly critical of Russia’s authorities and government policies. In May 2000 the headquarters of Gusinsky’s Media-Most Group were raided by armed and masked federal agents who identified themselves as officers of the tax police. In June 2000 Gusinsky was arrested on charges of stealing state property valued at $10 million. After three days of detention he was released under a travel ban.

Meanwhile, NTV shareholder, the partly state-owned Gazprom gas company, and various state-controlled lending institutions demanded that Media-Most repay loans totaling hundreds of millions of dollars. Gusinsky resolved the conflict by signing a secret protocol with press minister Mikhail Lesin and head of Gazprom’s media arm Alfred Kokh, who dropped all charges against Gusinsky on the condition that he sell his controlling stake in Media-Most to Gazprom. With the criminal case against him closed, Gusinsky left Russia but soon announced that he had been forced to sign the protocol “under the barrel of a gun”, refusing to sell the stake.

Gazprom sued Media-Most for breach of contract, and the Prosecutor General opened a new criminal case, this time related to alleged illegal transfers of assets abroad by Gusinsky and other Media-Most executives.

In December 2000, Gusinsky was arrested in Spain on an Interpol warrant filed by Russian prosecutors. He was later released on bail. Some of his newspapers were shut down, Gazprom became the owner of several media outlets belonging to Most Group, the NTV board was replaced, its key staff leaving the channel. In August 2003, Gusinsky was arrested once again, this time in Greece under a treaty with Russia but released soon afterwards.

In May, 2004 Vladimir Gusinsky won a case against the Russian government in the European Court of Human Rights in Strasbourg, the judges deciding unanimously in favour of the exiled tycoon, and ruling that Russia’s authorities had violated Article 5 and 18 (the said articles dealing with freedom and security) of the European Convention for Human Rights in relation to Gusinsky.


Potanin, et al

In July 2000 another oligarch, the head of the InterRos investment company Vladimir Potanin received a letter from the deputy prosecutor general with demand to pay $140 million to the state as compensation for the cheap purchase of the controlling stake in Norilsk Nickel. The case was soon dropped. At the same time, the head of Lukoil Oil Company Vagit Alekperov was charged with tax fraud.



Boris Berezovsky: The Fall of the Kremlin’s Grey Cardinal

During the Yeltsin-era the name of Boris Berezovsky — media, car and airline tycoon — was virtually synonymous to shady behind-the-scenes influence and covert power. One of the closest members of President Yeltsin’s inner-circle, in the mid-1990s Berezovsky openly entered politics and was appointed secretary of Russia’s National Security Council and head of the Executive Committee of the CIS. He was behind the creation of the pro-Kremlin Unity party that came second (after the Communists) in the 1999 parliamentary elections, as well as being chief negotiator of the peace treaty that ended the first Chechen war in 1996.

On July 8, 2000, Vladimir Putin announced in his address that Russia would no longer tolerate ’’shady groups’’ that divert money abroad, establish their own ’’dubious’’ security services, and block the development of a liberal market economy. Soon after Berezovsky voiced his plans to create an opposition party led by regional governors and other influential figures threatened by Putin’s drive for power. At the end of the year the prosecution declared Berezovsky the main suspect in the misappropriation of large sums from Aeroflot — Russia’s national airline in which he owned large stakes. A similar case against Berezovsky dealt with large-scale fraud in his Logovaz car company.

Berezovsky left Russia at the end of 2000. In March 2003, he was arrested in London but released on bail. In October of the same year he received political asylum in the United Kingdom. His stake in Russia’s major television company ORT (now First Channel) was sold, and his own TV6 channel was closed by a ruling of the Russian Arbitration Court. Still an active critic of President Putin, Boris Berezovsky is now living under the name of Platon Yelenin.



The Yukos Case

The latest and most talked-about case of the Kremlin’s fight against the oligarchs began in July 2003 when one of the major shareholders of Russia’s oil giant Yukos Platon Lebedev was arrested on charges of illegally acquiring a stake in the state-owned fertilizer plant Apatite. On October 25, Yukos CEO Mikhail Khodorkovsky, known for his funding of liberal opposition parties and open criticism of President Putin’s rule, was arrested at gunpoint by a special squad of FSB agents. Khodorkovsky was charged with tax fraud and evasion, with several bail requests denied by the courts.

Once in custody, Mikhail Khodorkovsky resigned as Yukos CEO. Several other core Yukos shareholders, including Khodorkovsky’s close friend and former rector of the Yukos-sponsored Russian State University for the Humanities Leonid Nevzlin, left Russia and were placed on the international wanted list by Russia’s Prosecutor General’s Office. The “Yukos case” received wide publicity and was denounced by various human rights groups as being politically motivated.

In March 2004 Mikhail Khodorkovsky’s open letter titled The Crisis of Liberalism in Russia was published by Russian business daily Vedomosti. In it Khodorkovsky called on Russia’s top businessmen to face up to the fact that most major privatizations in the country were conducted with a disregard for the interests of its people and to ’’recognize the legitimacy of President Vladimir Putin“. Khodorkovsky later stated that the letter was in fact a result of a ”collective authorship“ but that he agreed with its content and admitted responsibility as the person who agreed to put his name under it. Soon afterwards Leonid Nevzlin, now living in Israel, announced his withdrawal from politics and the end of his funding of the liberal opposition in Russia, namely Irina Khakamada, saying that he regarded Khodorkovsky’s letter as a request and even an order to leave the political scene.

After an appeal from Platon Lebedev’s lawyers, the criminal cases of Khodorkovsky and Lebedev were joined into one, with the two Yukos shareholders currently awaiting trial, set for July 12, 2004.

Updated: 23.09.2005 21:36 MSK

SEE ALSO

07.03.2005 13:53 MSK, MOSNEWS.COM

Exiled “Oligarch” Gusinsky Named in Israeli Money Laundering Bank Scandal

28.01.2005 14:01 MSK, MOSNEWS.COM

Russian Senators Want TNK-BP Checked for Tax Evasion

26.01.2005 11:19 MSK, MOSNEWS.COM

Council of Europe Raps Russia Over Yukos Case, Demands Khodorkovsky Release

12.01.2005 15:46 MSK, MOSNEWS.COM

Russian Tycoon Vekselberg to Quit Aluminum Business

20.12.2004 22:27 MSK, MOSNEWS.COM

Head of Russian Oil Company KalmNeft Detained on Fraud Charges

08.12.2004 15:20 MSK, MOSNEWS.COM

Top Russian Mobile Operator VimpelCom Handed $157M Tax Bill

07.12.2004 18:28 MSK, MOSNEWS.COM

Tempted by Revolution

30.11.2004 16:47 MSK, MOSNEWS.COM

Putin Says Oligarchs Still Pressuring Russian Government

25.11.2004 15:33 MSK, MOSNEWS.COM

Moscow Court Declares Gusinsky’s Media-Most Bankrupt

23.11.2004 14:11 MSK, MOSNEWS.COM

Russians See Bureaucrats Profiting From Yukos Affair — Poll

19.11.2004 14:43 MSK, MOSNEWS.COM

European Court Backs Media Tycoon Gusinsky in Legal Battle With Russian Govt.

17.11.2004 17:01 MSK, MOSNEWS.COM

When Silence Isn’t Golden

28.07.2004 10:00 MSK, MOSNEWS.COM

British Sports Car Factory Sold to Son of Russian Banker

02.07.2004 11:20 MSK, MOSNEWS.COM

Putin Finally Met with Businessmen

19.05.2004 17:35 MSK, MOSNEWS.COM

Russia to Appeal Strasbourg Ruling on Gusinsky

19.05.2004 17:08 MSK, MOSNEWS.COM

Berezovsky Not to Sell Media

MosNews

Russian Police Detain Suspected Killers of Reporter Politkovskaya

Russian police have detained two Chechens over suspicion of carrying out a hit on famous reporter and HR activist Anna Politkovskaya, a Russian newspaper reports.

MosNews

British Trade Secretary Tells Russia to “Play by the Rules”

British Trade Secretary Alistair Darling warned Russia on Thursday, Feb. 8, that it should “play by the rules” and ensure “legal certainty” for British investors. Darling spoke at the end of his three-day visit to Moscow.

ADVERTISMENT

ITAMAR AICHNER, NATASHA MOZGOVAYA

Yedioth Ahronoth

Russia’s Israeli Prisoners as Bargaining Chips

Moscow has continuously denied four Israeli nationals convicted in Russia permission to serve their terms at home unless Israel extradites Jewish Russian-born entrepreneur Leonid Nevzlin, once the second-in-command of Yukos and business partner of the jailed Russian tycoon Mikhail Khodorkovsky, Yedioth Ahronoth reports.

MosNews

Litvinenko’s Contacts Say British Media Lying About Murder Charges

In an interview with the Russia Today television the two men at the centre of British accusations over the murder of former Russian security agent Aleksandr Litvinenko have denied the claims they were suspects in the case.

DELIYA MEYLANOVA

MosNews

The Temptation of Vladimir Putin

The �2008 question� increasingly being put to Vladimir Putin is important not only for because it will decide who will lead Russia until 2012, but also because of its symbolic significance. Will the constitution be changed?

SERGEI KARAGANOV

Rossiyskaya Gazeta

West Has Failed to Learn From 9/11 — Russian Pundit

Despite isolated tactical victories in fight against terrorism, the West has failed to learn the lessons of September 11, Russian pundit Sergei Karaganov is convinced.