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25 Oct, 2013 12:18

From megalomaniac to martyr: The media metamorphosis of Mikhail Khodorkovsky

Ten years ago, leading agencies broke the news of the arrest of oil tycoon Mikhail Khodorkovsky, the richest man in Russia. The same outlets that had cried foul over the oligarch’s business practices now expressed concern at the authorities’ intervention.

Even to this day the mass media in the west portray Mikhail Khodorkovsky as a dissident and a victim of politics.

But back in the 1990s, the same members of the Fourth Estate presented a different picture of the former oil tycoon - that of a man who used dodgy and elaborate schemes designed to evade taxes and strip his company’s minority shareholders of their profits.

This happened after Western investors started losing money because Mikhail Khodorkovsky diluted the stock, hid the profits and transferred control of his company’s major subsidiaries to offshore havens.

The New York Times called the Yukos Oil Company’s actions “appalling even by Russia's low standards.” The Washington Post wrote that they were “a major affront to foreign investors.”

Why isn't the government stepping in? Why isn't the Securities Commission, or the Central Bank, acting?” it added.

The attitude suddenly reversed when around the year 2000, Khodorkovsky started working to repair his tainted image abroad. He invited international auditors and began pouring millions of dollars into lobbying in London and Washington.

Khodorkovsky and his staff did an equally large-scale and expensive job in Russia, sponsoring political parties, universities and launching NGOs such as the Open Russia Foundation – a nationwide project aimed at upbringing of loyal leaders perceiving the agenda dictated by the Yukos owners.

Former US Secretary of State Henry Kissinger became Open Russia’s honorable trustee, securing the international influence of the organization.

And from the bad boy of Russia’s ‘bandit capitalism’, in the eyes of the West, Khodorkovsky transformed quickly into a man the world could do business with.

The ultimate objective of these costly projects was to secure the process of merging Yukos with one of the US oil majors - Exxon or Chevron - granting the foreign companies full access to Russia’s vast resources together with some tried and tested tax-evading schemes.

According to New York economist Michael Hudson, Khodorkovsky also wanted to turn over Russia’s major source of hard currency to foreign companies who would then arrange for the company to be entirely tax-exempt.

Essentially all of the oil and Russia’s riches would be transferred to Western shareholders; Russia could not afford this,” Hudson concludes.

Now, as the coverage of the story has become more balanced, it appears that Mikhail Khodorkovsky is distancing himself from politics, despite occasionally being depicted as a political martyr.

In his letters and articles written in the prison camp, Khodorkovsky criticized Russia’s current political and economic course, but stopped calling for the replacement of authorities, urging ordinary people to pay more attention to their own fate.

In his latest letter, Khodorkovsky gave the example of the former South African President Nelson Mandela, saying he had managed to overcome the personal grudges and racial prejudices and led the society from civil war to peace and development.

Khodorkovsky also wrote that the opponents of Russia’s current political course must understand the necessity of compromise. Historical experience shows that only when reformers manage to come to accord with conservatives does society manage to overcome crises with minimal losses, he noted.

At the same time the ex-tycoon maintains his innocence and personally blames President Vladimir Putin for his prosecution, claiming Putin used the courts to get rid of a powerful political rival.

Putin has repeatedly rejected that political motives were behind the two Khodorkovsky cases, insisting that the accused had been sentenced for large-scale tax evasion, theft and money laundering.

Khodorkovsky was first found guilty of fraud and tax evasion in 2006 and sentenced to nine years in prison, with the term later reduced to eight years. Also in 2006, he faced new charges of large scale theft of oil and money laundering and in December 2010, he was sentenced to 13.5 years in a penal colony in the second case.

As the second sentence was concurrent with the original one, the time already served was deducted from the new term. In addition, the court agreed with some of the defense arguments during the appeal hearings, further reducing the sentence. Now it is expected that Khodorkovsky will be released in less than one year’s time – on August 25, 2014.

It should be noted that Khodorkovsky’s case was considered not only by Russian courts, but also by the European Court of Human Rights. In July this year the ECHR rejected the businessman’s complaint about the political motivation of his jailing, saying the charges against former head of Yukos had a “healthy core.”

None of the accusations against the applicants [Khodorkovsky and his business partner Platon Lebedev] had concerned their political activities, the applicants were not opposition leaders or public officials, and the acts they stood accused of were not directly related to their participation in political life,” the court stated, admitting, however, that the Russian authorities allowed some procedural violations during the trial.

Even though Khodorkovsky himself prefers not to discuss his future release and plans for life out of prison (according an interview Khodorkovsky’s son Pavel gave recently to the Daily Telegraph) some Russian politicians are already making plans for him.

Of this most notable is the recent revelations from members of the rightist pro-business party Civil Platform, headed by billionaire Mikhail Prokhorov. After one of the party’s closed congresses reports leaked to the press that Civil Platform planned to invite Khodorkovsky for cooperation.

However one senior party member, once a close ally of Khodorkovsky, doubted the possibility of such an alliance, saying that firstly Khodorkovsky is now emphasizing his loss of interest in politics, and secondly there was a slim chance that once Russia’s richest man would agree to play a support role in someone else’s project.

In addition, there are legal barriers for Khodorkovsky’s participation in politics, at least when it comes for personal political career. Russian law deprives those convicted of serious crimes from the right to be elected to legislative bodies of all levels. The Constitutional Court has recently reviewed this norm and ordered it to be changed, but the latest, as-yet-unapproved draft of amendments still suggests that ex-convicts should be banned from running at polls for 10 years since the day of their release.