As the Ingodinsky district court in Chita decided whether or not to grant Mikhail Khodorkovsky’s request for parole, he gave a wide-ranging interview to the Vedomosti daily, outlining his views on the present and plans for the future

Irina Reznik, Vedomosti, 22 August 2008

On 21 August the Ingodinsky district court in Chita was unable to reach a decision, whether or not to grant Mikhail Khodorkovsky release on parole. The Judge promised to make a decision today. The escort guard did not permit journalists to approach the prisoner, either then or subsequently. However, he did answer questions sent to him by the daily newspaper in writing.

If you knew for certain that you would be pardoned, would you apply? Many former Yukos employees, unwillingly involved in the Yukos affair, believe that if you were pardoned the cases against many of them would be dropped and some would be freed from imprisonment. Are they mistaken?

I shall do all in my power to ease the fate of the innocent victims of the Yukos affair.

In July this year the Prosecutor General's office brought new charges against you and Platon Lebedev. In essence, they alleged that you stole all the oil produced by Yukos subsidiaries, passing it off as crude oil direct from the well, and legalising the proceeds thereby causing the company losses of 850 billion roubles. What do you make of this new accusation? Many say the charge is absurd and, in the meanwhile, the new Russian president has promised to “fight against legal nihilism”.

Many of my opponents consider that I believe myself to be the victim of a selection application of the law, i.e. everyone committed such violations but only Khodorkovsky is being punished. That is not true. My supporters often say that the laws in Russia permit anyone to be put in prison. That also is not accurate.

I consider that our Criminal and Criminal-Procedural Codes may not be ideal but they are entirely civilised and acceptable in a democratic country. Likewise I am convinced that people who break the law are not so numerous in Russia, at least no more than in the world’s other developed countries. Our problem is the way the law is applied, our judicial practice. The proportion of acquittals in ordinary Russian courts is one hundred times lower than for the world as a whole. There one case in 5-10 leads to an acquittal; in Russia, it is one in 500-1,000. It’s interesting to note that in trials by jury and before our arbitration courts the acquittal and conviction rates are, on the whole, similar to those elsewhere.

That is the angle from which it makes sense to examine my former sentence and the new charges against me. Our laws, in other words, correspond to common sense and business practice and if the accusation and the sentence do not meet those standards then the fault lies elsewhere, not in the law.

What do you think of the charges that were specifically made against you?

If we recall the first accusation, that I was guilty of tax evasion, even in that case the charge did not fit the requirements of the law, which forbids the distortion of accounting, not the avoidance of taxes in itself. The accounts in fact fully reflected the tax breaks offered within the tax haven. Whether it was lawful or not to make use of those tax breaks is the subject of a quite different discussion, that should be held before an arbitration tribunal. You can evaluate the new charges for yourselves, from a common-sense viewpoint.

What do I think of them? I don’t think much of them, but personally I would not raise, yet again, the issue of the legality of the tax demands made on Yukos. That’s all over and done with as far as I’m concerned. For reasons I cannot understand, however, the team of investigators is raising and exaggerating all over again.

This is where my common sense reaches its limit. Who in the Investigative Committee is digging up the subject of the Yukos bankruptcy once again, and why they want to do so, I do not understand.

If people really believe that you can steal all the oil an oil-producing company extracts and processes during six years’ work then they should not be reading your newspaper. And, of course, they don’t read Vedomosti: they’re busy watching variety shows on television or The Simpsons.

You say you do not recognise your guilt, yet by petitioning for release on parole you are in practice indicating agreement with the sentence passed on you. That ensures the assets of Yukos will quite legally remain the possession of Rosneft, Gazprom and others. Once you are free, in other words, you will not contest that situation. Are you ready for that?

As concerns my personal readiness to accept that those assets “legally” remain with Rosneft and Gazprom, I can say that oil is part of my past and I do not like looking backwards, I consider it unproductive. In court I have already stated that I do not intend to return to the oil business and fight for a re-examination of unjust decisions concerning Yukos. I also spoke about my attitude to my prison sentence, which remains unchanged.

It is considered one of the signs of your reformed character (a condition for release on parole) is to make compensation for losses running into tens of thousands of dollars. Is it realistic for you to provide such compensation?

Ever since Yukos assets passed into the hands of State-owned companies I don’t think any basis remains for considering compensation on my part. Everyone realises that but the people who organised the Yukos case are afraid to see me free again, and are therefore doing all they can to keep me in prison. Reforming the judicial system will take more than one day. As soon as the courts become independent and objective in Russia, however, these claims and charges will be withdrawn by those who are now making such accusations.

Do you follow events in the Russian business world — deals by major companies, important corporate events? Where do you get your information?

I use the media to keep informed about what goes on in Russia and abroad though it’s not easy. Strange as it may seem, I can still understand events that take place and sometimes predict them. The view of the world I get from the press is, in other words, on the whole sufficient. Of the Russian business press I read the dailies Vedomosti and Kommersant and weeklies Expert, SmartMoney and Kommersant-Money, and I do not feel very isolated from my accustomed sources of information, for which many thanks to those journalists.

What do you think about the conflict between the shareholders of TNK-BP? Does it mean that joint ventures between Russian and Western companies are not possible?

The conflict at TNK-BP confirms the general opinion that it is impossible to foresee everything in a contract, particularly in a strategic, long-term contract, and in conditions of poorly established business practice. There must be a constant balance of interests that is itself supported by the balance of opportunities. It’s another matter whether the sides have correctly assessed the changes in long term trends. That, however, is already a business decision.

At approximately the same time that TNK-BP was being set up, Yukos and Chevron were holding negotiations about a merger. If that deal had gone through, would you have been able to avoid a similar conflict?

The refusal to conclude the deal with Chevron was a strategic decision that arose out of the struggle between various forces within the presidential administration. Whether it was right or not, is not for me to judge. I am one of the interested parties. I had my own position, which I argued and supported, but the final decision was not mine to make.

There are several dramatic corporate conflicts going on all at once in Russia today: TNK-BP, Norilsk Nickel and the major problems affecting the Mechel metals and mining company. After Prime Minister Putin’s public criticism the capitalisation of Mechel dropped considerably. Do you agree that all this is having a negative effect on the attitude of investors to Russia?

Corporate conflicts are an everyday affair. What has a bad effect on the investment climate is the lack of predictability in the methods for resolving such conflicts and an instability in Russian business practice. And also a lack of reliable procedures in our courts and arbitration tribunals. What goes on is hard to understand and takes place behind closed doors — there lies the problem, and the key to an improvement in the investment environment.

How do you assess the world financial crisis and its consequences?

I’m very optimistic. The crisis is quite manageable. It is timely and will point the world economy in the right direction. We all need a more even distribution of the world’s wealth as a whole and of the level of consumption, in particular. We all need to reduce the energy consumption component in the world’s GNP. We must all think about changes in consumption paradigms and criteria for evaluating quality of life and shift them more towards the conservation of resources and nature. Finally, we all need massive investment to make the transition from our present hydrocarbon-based energy systems. The time has come. The present crisis, thankfully, is not a devastating fire or typhoon. It’s a wake-up call. Of course, we want to go on dozing but it’s time for work.

I do not expect either the US or the European markets to display fast growth rates. The changes there will be not quantitative but qualitative. It will be structure of the economy that changes, not its size. Steel and coal output are no longer indicators of success. I’m afraid that we in Russia are still in the thrall of an old paradigm, just like our Chinese neighbours. Only they have no choice. We do.

Looking back at the events of five years ago, and knowing that you face the threat of a new term of imprisonment, do you believe you acted rightly in not leaving the country before your arrest?

I regret it and, at the same time, I could not have behaved otherwise. Like any ordinary person I have many different feelings. I greatly regret that during these years I have been separated from my family and children. I have a great deal to make up to them. But I couldn’t abandon my arrested friend. Perhaps he curses me for that — I don’t know.

CHITA