While liberals in the US complain about the return of authoritarianism in US politics to a degree unseen since the McCarthy era, our newfound allies in Russia have signaled that their own return to a police state is nigh unto inevitable. Culminating in the October 25th arrest of oil magnate Mikhail Khodorkovsky, the Russian government has made clear to their political adversaries that their opposition will no longer be tolerated through a series of arrests and threats.
Khodorkovsky, Russia’s richest man, was arrested last month, and charged with fraud and tax evasion, charges which are seen by most analysts as trumped up, merely an an excuse to silence his political views. Khodorkovsky is a noted supporter of Russia’s liberal parties, both financially and politically. With his arrest, Khodorkovsky’s press access is limited, and his funds have been frozen, ready to be seized by the Russian government in case a large fine is levied.
The arrest of Khodorkovsky came after the degree to which he supported the Yabloko and SPS parties, which are the two largest liberal parties was made public. In his support, Khodorkovsky broke the unspoken deal which has governed Russian businesses since President Vladimir Putin’s inauguration in 1999. The deal was simple, they businessmen stay out of the political arena, and the president doesn’t have them hounded and arrested by the FSB, better known by its pre-1992 acronym, the KGB.
Khodorkovsky’s case, however, differs from previous high profile arrests in that he is likely to stand trial. As in the previous cases of the tycoons, Vladimir Gusinsky and Boris Berezovsky, Putin offered Khodorkovsky a way out, leave now, and keep your freedom, and some degree of your previous wealth. Khodorkovsky, however, appears to have passed on such a deal, remaining defiant, saying “I don't regret anything I have done; nor do I regret what has happened today.”
Khodorkovsky instead will stand trial, and remains in prison, having been denied bail, as well as legal appeal for the case to be thrown out due to the political nature of the charges. No previous tycoon has ever stood trial in Russia; they instead opted to accept the exile agreement offered by the Russian president. As result, what happens from here is unprecedented, but Khodorkovsky’s prospects appear extremely grim.
With Russia’s legal system suffering from a great deal of corruption, and an unspoken assumption that the accused are guilty until proven otherwise, the conviction rate in Russian courts is greater than 95%. Furthermore, Khodorkovsky’s US based attorneys have received threats from the Russian government should they choose to enter the country in hopes of defending their client. In a report confirmed by the State department, Sanford Saunders and John Pappalardo of the Greenberg Traurig law firm, were told that they faced “serious problems” if they attempted to defend their client.
Speaking of the situation Sanders said, “They are cloaking this in the rule of law but in effect it is about silencing dissent and trying to show power...They don't like what we are doing and it appears they don't want to let us in.” On similar lines, Khodorkovsky’s Russian based legal firm, the Visa House, was raided and documents pertaining to the trial were seized by the FSB. The Russian government has since denied the threats, and Yevgeniy Khorishko, Press attaché for the Russian embassy elaborated, saying “Those two gentlemen have valid visas ... and they can enter Russia with no problem.”
If, and likely when, Khodorkovsky is convicted, he could face two years in prison, and a fine imposed by the courts. Such fines in tax evasion and fraud cases are without legal limits, and Khodorkovsky’s entire net worth could be seized if the Russian government so chose. Khodorkovsky’s assets were built up over the last 10 years after he bought up state properties at extremely discounted prices following the breakup of the Soviet Union.
The Khodorkovsky arrest however was not the last of the politically motivated actions taken by the FSB. In an incident last week, armed gunmen burst into the Moscow office of George Soros's Open Society Institute and took with them documents and computers belonging to the democracy-building organization. The Open Society Institute, under the direction of Soros, has donated more than $1 Billion into building civil society in Russia over the past decade. The office was raided under the guise of a rent dispute between Soros’s office and the landlord. The Open Society Institute has refuted such claims.
The large amount to which the Russian media has bowed to government pressure in reporting on the goings on further worsened the prospects of an open society Possible political motivations for Khodorkovsky’s arrest have received little more than lip service in the two major Russian newspapers. The Open Society Institute raid has not even received that.
Khodorkovsky’s arrest meanwhile has played incredibly well inside Russia, with more than three quarters of the public supporting it. The sentiment in Russia is largely that Putin is bold enough to not fear taking on business leaders, and that Khodorkovsky is little more than criminal who should be jailed. Given the nature of Khodorkovsky’s wealth, such views are not unexpected. As the majority of the public faced extreme poverty, Khodorkovsky was building up his wealth to the $8 Billion mark.
The timing on the raids and arrests appear to be no accident, with Russian Duma (parliament) elections to be held on December 7th. Due to the immense popularity of the Khodorkovsky arrest, the two parties he most supported are not expected to fare well in the election. Yabloko and SPS supporters, combined, make up merely 10% of the voting public, with all other parties with significant support being more hard-line parties calling for a return to the past.
With their support split fairly evenly between the two, a realistic possibility exists that neither party will receive the 5% of the vote needed to win representation within the Duma. The Duma will then be split between Putin’s United Russia party, which has approximately 35% of the vote, and even more hard-line parties. The two others major parties are the throwback Communist party, with approximately 20% support, and the ultranationalist Liberal Democratic Party, led by the charismatic Vladimir Zhirinovsky.
The prospect of such a Duma is frightening for many US observers, chief among them Senior Republican Senator John McCain, who in light of the recent arrest and raids has called for a reexamination of our tolerance and friendship with the Russian government. Speaking from the Senate floor two weeks ago, McCain said “A creeping coup against the forces of democracy and market capitalism is threatening the foundations of the U.S.-Russia relationship.”
Asked to elaborate, McCain obliged, explaining “I think that Mr. Putin and his KGB friends who have basically taken over the apparatus of government--they have systematically removed independent media. They have expelled those people who disagree with them…It's very disturbing as to what's happened. There's not one truly independent media outlet in Russia today.” Speaking of the prospects for the future, McCain was unwavering, saying “they are headed back in the direction of the Soviet-Czarist kind of government and situation that existed for 400 years.” As for U.S. Russian relations, the senator was equally clear, saying “The United States should not include Russia in the G-8 meetings…I would instruct OPEC and other institutions not to lend money to Russia at this time and start talking about our expectations that Russia would make a transition to a free and open society.”
With such a closure of society, and a newfound emphasis on nationalizing the economy, the prospects for a friendly and open Russia appear grim. Furthermore, the specter of a new Russian military state is ever present, with the country’s recent economic gains on the backs the higher oil prices. Russia has the world’s largest supply of oil in the world yet to be tapped, and the Russian government controls significant quantities of that oil. As a result of these facts, a new military buildup funded by that oil appears likely. As Karl Marx stated a half century before the creation of the USSR, “Nothing has changed in Russia’s policy…Her methods, her tactics, her maneuvers may change, but the pole star—world domination—is immutable.”