Court convicts former Russian oil baron, lawyer says
By Maria Ermakova
Bloomberg News Service
MOSCOW — Mikhail Khodorkovsky, once Russia's richest man, was convicted by a Moscow court of fraud and tax evasion, his lawyers said, in a case they called a politically motivated attack that devastated OAO Yukos Oil Co.
Khodorkovsky and his partner, Platon Lebedev, were found guilty on all the counts read out yesterday at Moscow's Meshchansky District Court, said Yury Shmidt, a lawyer for Khodorkovsky. During the 11- month trial, prosecutors said Khodorkovsky and Lebedev ran an organized group that defrauded the government of $1 billion during the purchase of state assets in the 1990s. Khodorkovsky, 41, and Lebedev, 45, denied the charges.
The former Yukos chief executive, who faces up to 10 years in jail, funded politicians who opposed President Vladimir Putin. U.S. and European Union officials expressed concern about Putin's commitment to democracy after the authorities arrested Khodorkovsky and filed $28 billion in tax claims against Yukos, once Russia's largest oil producer.
"Obviously he was picked for this prosecution for political reasons," Jack Matlock Jr., ambassador to the Soviet Union under President Reagan, said from Princeton, N.J. "It appears he got too deeply involved in politics and Putin saw this as a challenge."
Yukos is struggling to stay in business after the government in December seized and sold OAO Yuganskneftegaz, Yukos' biggest oil production unit, to recover some of the tax bills.
Investors pulled $9.5 billion out of Russia last year as the cases against Yukos and Khodorkovsky fed concerns Putin wasn't guaranteeing the rule of law.
"This is a warning shot to the oligarchs to toe the Kremlin line and stay out of politics," said Michael Sito, who started Moscow-based fund manager Sito Capital in July.
The court may take a week to give its verdict on all the charges, defense lawyers said. Court officials declined to comment.
A crowd estimated by defense lawyers at more than 1,000 gathered outside the court, including chess legend Garry Kasparov, a Khodorkovsky supporter.
Khodorkovsky and Lebedev were convicted on three counts of fraud, one count of income tax evasion and two counts of failing to comply with court orders, Shmidt said.
Throughout Russia, 99 percent of criminal defendants were convicted last year, according to statistics from the country's Supreme Court.
Last week, prosecutors said they will file new charges against Khodorkovsky, alleging he and Lebedev laundered billions of rubles, a spokeswoman for the office said in a phone interview.
The prosecutor general's office today declined to say when new charges would be brought. Khodorkovsky said any new claims will further damage Russia's investment climate. "I really hope these unscrupulous officials won't be allowed to further wreck Russia's reputation as a lawful state," Khodorkovsky said in a statement posted on a Web site run by his lawyers.
Putin has repeatedly said that the cases against Yukos are investigations into alleged crimes that have nothing to do with politics. Last week he condemned international criticism of the case and compared the actions against Yukos with the U.S. investigations into Enron Corp. and WorldCom Inc.
