As the Russian government pushed for a new global charter on energy cooperation with the West, Mikhail Khodorkovsky and Platon Lebedev pleaded innocent in court to absurd and corrupt charges of oil embezzlement and money laundering. The second Yukos 'trial' is increasingly being seen across the world as harming Russia's long-term political and economic stability and further testing Russia's relationship with the West. Commenting on the trial, the New York Times said in April that "A stand for the rule of law would not only give Mr Medvedev credibility in the West, but it could reinvigorate the demoralized ranks of Russians who still yearn for democracy."
In an impassioned statement to the courtroom, Khodorkovsky warned of the harmful impact these charges would have on both Russia's standing in the international arena, and President Medvedev's pledge to tackle "legal nihilism."
He described the new case as symbolic of which way the country should be moving in the next few years; how Russia should be perceived in the world; and the extent of how Russia's "bureaucrats" are allowed to privatize and monetize the state, judicial power and the law-enforcement system.
Khodorkovsky also made clear that international investment and trust in Russia have been undermined as a result of the "frenzied burst" of "tax terrorism" and the state-backed raiding of private property.
Responding to the charges of embezzlement, Khodorkovsky called on the prosecutors to present any evidence that proved 350m tonnes of oil had disappeared, highlighting the fact that no missing oil was either reported or established. In fact, the amount of oil the prosecution claim disappeared is enough to fill a railroad train that would encircle the earth three times.
Ordinary, widespread business practices have crudely been labeled by prosecutors as criminal, demonstrating a willful disregard for the most fundamental aspects of the oil and gas industry and the operation of either a major Russian or an international vertically integrated oil and gas company.
The treatment of Khodorkovsky, together with major western energy companies, has become emblematic of how little property rights and international agreements protecting investors may be respected in Russia.
The prosecution refused to clarify the charges against ex-Yukos chief Khodorkovsky and his business partner Lebedev. No evidence requested by the defense from the prosecution has been added to the case and almost every single defense motion during the trial was systematically denied by the court without providing any reasons With the vast majority of these motions rejected by the judge, the window of opportunity for a fair judgement seems to be closing. Learn more >>
Russia's reputation was further damaged this month by a complaint from several Spanish investors who demanded compensation from the Russian government for the forced bankruptcy of YUKOS. The Moscow Times reports in April that former YUKOS investors are seeking damages of up to $100 billion, claiming that the Russian government violated Article 26 of the Energy Charter Treaty.
International observers become increasingly concerned
In April, several international observers attended the trial including former German Justice Minister Sabine Leutheusser-Schnarrenberger and Hervé Mariton, Deputy of the French National Assembly. In his interviews with Journal du Dimanche and Rosbalt, the French legislator said there was a feeling of "quiet oppression" in the courtroom. He also concluded that Khodorkovsky has "no possibility to defend himself correctly" and that the way he is being treated is "arbitrary and inhuman".
In response to unease regarding the fairness of the trial, seven leading human rights organizations sent an open letter to President Medvedev expressing their deep concerns over the deterioration of respect for rule of law and human rights in Russia, despite the President saying in a recent interview with Novaya Gazeta that there should not be predictability in any judicial proceeding.
Trial outcome raises questions over the future of Russia
It is clear that the trial holds enormous symbolic value for Russia. Many observers see this as a test of whether Russia can hold its head up high in the international arena and become a trusted global partner.
A guilty verdict on the deficient legal and evidentiary grounds provided by the prosecution will leave President Medvedev's pledge to end "legal nihilism" in ruins. This in turn will send a potentially damaging message to foreign investors, governments and international tribunals that the country is not ready to change, leaving Russia's political and economic stability hanging in the balance.
