Khodorkovsky Conviction Shows Russian System Still Rotten

Mikhail Khodorkovsky (right) stands behind a glass wall in a Moscow courtroom. Alexander Nemenov / AFP-Getty Images

Like many things in modern Russia, today's conviction of jailed oligarch Mikhail Khodorkovsky on fresh charges of embezzlement is somehow both shocking and unsurprising. Unsurprising because vanishingly few in Russia believed that Khodorkovsky would be declared not guilty. Shocking because even though only 13 percent of Russians believe the charges against the jailed oligarch are true, most nonetheless either ignored the trial altogether or agreed with Prime Minister Vladimir Putin that "thieves deserve to be in jail"—apparently regardless of the truth of the charges against them.

Yet, even though no one seriously expected any other outcome, Khodorkovsky's second conviction marks a turning point for Russia. Or, to be more precise, proves that those who believed Russia was at a turning point under Dmitry Medvedev are sadly wrong. In a rousing manifesto early in his presidency called Forward, Russia! Medvedev called for an end to "a primitive economy based on raw materials and endemic corruption." He noted that "this is the first time in our history that we have a chance to prove to ourselves and the world that Russia can develop in a democratic way" and promised that "a transition to the next, higher stage of civilization is possible." In his 2009 State of the Nation speech, Medvedev also correctly identified "legal nihilism"—the misuse of the law by the powerful—as a fundamental obstacle to Russians achieving "a normal life in a modern, prosperous democratic society."

Fine words—inspiring, even. But Khodorkovsky's second trial, begun in 2006, was a time bomb ticking away under Medvedev's credibility. Now it's exploded. Khodorkovsky's first trial, in 2003, was clearly political—the oligarch had been financing political opposition at a time when Putin's priority was to bring Russia's major businesses under Kremlin control. Yet at the same time, many independent legal experts say there was some substance to the original tax-evasion case (even if the subsequent plundering of the Yukos oil company by Kremlin-connected bureaucrats was beyond the pale). In other words, Khodorkovsky was probably as guilty as Russia's other billionaire oligarchs of using political connections to grab state assets, and then avoiding paying tax on his profits by using a network of offshore companies. Putin sympathizers make a realpolitik case that the oligarchs were too powerful, and Khodorkovsky needed to be made an example of. Legal nihilism, if you like, but in the service of a greater national good.

The second set of charges, though, is a completely different matter. According to former prime minister Mikhail Kasyanov, now an opposition leader, in 2006 Kremlin bureaucrats who had benefited from the dismemberment of Yukos became nervous that Khodorkovsky was due to be released in 2012, and ordered new charges brought to keep him in jail longer. The new crimes that the prosecutors came up with bordered on the surreal. Khodorkovsky and his partner, Platon Lebedev, have now been convicted of stealing some $25 billion worth of oil—almost all the oil Yukos produced between 1998 and 2003—and then laundering the proceeds. Not only do the new charges actually contradict the old charges (how can you avoid paying taxes on oil that you've stolen?), but also they were so badly drafted that every day of the yearlong trial both Khodorkovsky and Lebedev spent hours slowly picking technical holes through the prosecution's case.

As we saw from Judge Victor Danilkin's mumbled verdict today, their meticulous defense did them little good. It's not yet clear what the extra sentence will be – though there have been unconfirmed reports in the Moscow press that Danilkin was taken from his home on Saturday by state security employees for a stiff talking-to in order to ensure an even heavier sentence than the 14 years requested by the prosecution. Clearly, 'legal nihilism' is alive and well, and instead of fighting it, the Kremlin is still actively using it, at the highest levels.

But the real meaning of the Khodorkovsky case is that the authorities are weak, and scared. If the first trial of Khodorkovsky was a kind of perverse victory for Putin over the once-powerful oligarchs, the second trial shows that the Kremlin is afraid of showing what it sees as weakness. More, the ham-handedness of the charges themselves, and the heavy police presence and mass arrests at the trial today, betrays a dangerous amateurishness. Totalitarianism is scary. Incompetent totalitarianism is actually scarier.

For evidence of just how totalitarian – and now incompetent – Russia's authorities are, look no further than the desperately eloquent scene in the courtroom during the trial, day in, day out. On one side sat the state prosecutors in their 1980s-style uniforms, surrounded by stacks of paper bulging out of Victorian-style ledgers. They mumbled their evidence in a monotone. At several points in the trial their accusations were so absurd that even the judge burst into laughter (my favorite prosecution malapropism – "The defendant is doing an excellent impression of being a normal person.") On the other side sat the Khodorkovsky defense team, smartly dressed, each with a laptop. In a glass cage behind them, looking more at ease and in a strange way freer than anyone in the room, sat Khodorkovsky and Lebedev, taking turns to follow the documentary evidence on a large Mac screen set up in front of their box while the other made notes. It was as though two Russias were sparring in the courtroom, one mediocre, nervous and browbeaten, the other smart, modern and surprisingly relaxed. As Khodorkovsky himself said last year, a country that plunders its best companies and jails its brightest businessmen and instead puts its trust in the secret police and bureaucrats has its priorities seriously wrong.

The oligarchs were, unarguably, bad for Russia. They used their money to buy political power, and in the process corrupted the Duma, the press and the government. But the bureaucrat-kleptocrats who succeeded them are far worse. Khodorkovsky, in his years of incarceration in a Siberian labor camp, has transformed himself from a symbol of the hated oligarchy into a bellwether for a different sort of Russian rottenness. The oligarchs abused their money, the Kremlin now abuses power to silence opposition and to cover up the mass theft by the bureaucratic class of what has been estimated as a third of Russia's GDP, annually. Medvedev is right that Russia is rotting from within; he's even put his finger on exactly how. But the second conviction of Khodorkovsky shows that Medvedev, with all his brains and talk of reform, hasn't made a whit of difference.