Wednesday, 12 October 2011

Michael Cherney

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Michael Cherney
Born January 16, 1952 (1952-01-16) (age 59)
Tashkent, Uzbek SSR
Nationality Israeli
Occupation Businessman

Michael Cherney (Hebrew: מיכאל צ'רנוי‎, also Mikhail Chernoy, Mikhail Chorny or Mikhail Chernoi; born January 16, 1952) is a Uzbekistan-born Israeli entrepreneur and industrialist. He is known for his significant role in the 1990s Aluminium in Russia, and his business ventures in Israel. He is also the founder of the Michael Cherney Foundation and main sponsor of The Intelligence Summit.[1]

1 Biography
2 Business interests
2.1 TWG and founding of Russian Aluminum Industry
2.2 SuAl and Partnership with Oleg Deripaska
2.3 BulgarTabac
3 The Intelligence Summit
4 Legal investigations
4.1 Invalid passport
4.2 Alleged illegal payments to Avigdor Lieberman
4.3 Bezeq affair
4.4 Mobiltel deal
4.5 Spanish allegations and attempted arrest in the United Kingdom
4.6 Yaakov Weinroth
4.7 English High Court judgment
4.8 Swiss Compensation for Baseless Allegations
5 Attempted murder
6 Lawsuit against Oleg Deripaska
6.1 Illegal wiretaps
7 Personal life
8 References
9 External links

[edit] BiographyCherney grew up in Tashkent Uzbek SSR in a family whose father was a book-keeper and an engineer, the oldest of three sons. At the age of fourteen, Cherney started working, as he joined his father on moonlighting jobs. After high school, he was drafted into the Soviet Army and attended a technical college. Later, his athletic pursuits – boxing and football – led to employment in sports administration.[citation needed]

In the early 1990s Cherney immigrated to Israel but kept close ties to Bulgaria, where he had bought a leading newspaper, a top soccer team, and Bulgaria's only mobile phone company Mobiltel. In August 2000 Bulgarian authorities denounced what they said were his ties to foreign criminal rackets and expelled him, saying he could not return to Bulgaria for 10 years.[2]

Furthermore, the United States have "denied Cherney a visa since 1999 because of alleged ties to the Russian mafia, according to the St. Petersburg Times."[1].

Cherney is wanted on an Interpol international arrest warrant on allegations of money laundering and organised crime, but in June 2010 the Jerusalem Post reported that Cherney is preparing an application to contest it before the European Union Court of Human Rights.[3][4]

[edit] Business interests[edit] TWG and founding of Russian Aluminum IndustryCherney, together with his brother Lev Cherney and UK metals traders David and Simon Reuben, founded Trans-World Group (TWG) – the first and largest private company in Russia which produced aluminum and sold it on Western markets.[5] Business weel reports that the brothers "were known for their rough style of doing business".[6]

In 1994, TWG was drawn into a government inquiry into the theft of more than $100 million from Russia's central bank by a number of separate criminal groups during the early 1990s. In an article on TWG, Fortune Magazine reported: “That a theft occurred is not in dispute, nor is the fact that the Cherneys ended up with a piece of the stolen money and used it to partially fund Trans World's startup phase in 1992… The inquiry's objective was to determine whether the Cherneys knew the funds were indeed stolen”.[7]

In an attempt to clean up its reputation and refute allegations of questionable business practices, the Reuben brothers hired Mayer Brown & Platt, a US based law firm. Terrence Burke, an investigator employed by the law firm and former acting head of the DEA, recommended that the Reubens sever their ties with Cherney after the FBI told him that “it believed Michael himself was an organised crime figure”. As a result Michael was paid $400m “just to go away” whilst his brother Lev remained with the company.[7]

In August 2001 a Fortune Article notes that "the prosecutor's office in Düsseldorf notified the Reuben brothers that it had terminated its probe into alleged money laundering, saying "I hereby confirm expressly that there is no remaining suspicion of money laundering or any other criminal actions." However, the same article states that the Kroll report "doesn't discuss an essential part of the story", nor does it "explore the complex business and financial relationships in Russia between the Reubens and Lev and Michael Chernoy."[8]

[edit] SuAl and Partnership with Oleg DeripaskaAccording to the Financial Times, in 1994, Oleg Deripaska, then an independent metals trader, won the backing of Cherney and TWG to become general manager of Sayansk aluminium plant in Siberia, which lead to formation of SibAl and a partnership between Cherney and Oleg Deripaska in this company.[9][10]

[edit] BulgarTabacIn 2002, 80% of the capital in the Bulgarian State-owned tobacco company, Bulgartabac, was placed on the market. Cherney put together a three-partner consortium to bid for Bulgartabac. He planned to purchase Bulgartabac by establishing the Metatabac Consortium, which was created in April 2002. Ownership was structured between three groups: the Russian firm Soyuzcontracttabac, which owned 35%, MCG Holdings, a firm owned by Cherney, which owned 35%, and another 30% held by a Cypriot company named Metacontact Ltd.[citation needed]

[edit] The Intelligence SummitCherney is the founder and primary sponsor of the Intelligence Summit[1]. In February 2006, The New York Sun reported that John Deutch and James Woolsey had resigned from the Intelligence Summit's board of advisers after receiving information that the conference's primary sponsor, Cherney, had "alleged ties to the Russian mafia".[11][12]

[edit] Legal investigations[edit] Invalid passportOn 21st May 1994 Mr Cherney and his future wife were detained by immigration officers on arrival in Heathrow from Geneva. It was discovered that they had attempted to enter the UK on false Polish passports and they were deported back to Switzerland.[13]

The following day they were arrested by the Swiss police on the grounds that they had made use of false identities. Both were searched and found to be in possession of two allegedly invalid Polish driving licences. Mr Cherney gave a statement to the police in which he admitted using a Polish passport in an attempt to enter the UK (which had been successful previously).[13] On 25th October 1994 the Swiss authorities confirmed that they would not be pressing any charges against Mr. Cherney. On 20th November 1996 the Swiss Federal Aliens Office confirmed that he was no longer subject to a prohibition order and that there was nothing to prevent his coming into Switzerland.[13]

[edit] Alleged illegal payments to Avigdor LiebermanCherney is a close friend of Avigdor Lieberman who allegedly received millions of shekels from various entrepreneurs, including Mr Cherney, while serving as member of Knesset; under Israeli law, MKs are not allowed to receive any payment beyond their salary. One claim is that Cherney paid a company called Path to the East large amounts of money between the years 1999 and 2006, and that these sums were then allegedly passed on to Lieberman as a bribe. Other allegations concern a company called M.L.1, founded by Lieberman's daughter Michal when she was 21.[14] These allegations concern money transferred to M.L.1 from unknown sources outside Israel; the money was later allegedly used for paying salaries to Avigdor and Michal Lieberman.[15]

In April 2007, Israeli police questioned Avigdor Lieberman, Israel’s Deputy Prime Minister, on suspicions of illegally financing his 2001 electoral campaign. According to the police, in May 2001, three months after Lieberman was appointed Minister of Infrastructure in Ariel Sharon's Cabinet, approximately $500,000 was transferred to the bank accounts of Lieberman associates through Cyprus. This money could be traced back to Cherney. Cherney's attorney, Yaakov Weinroth, said the money was transferred by his client “for a totally transparent, legal wine deal”.[16]

In May 2011, Haaretz reported that the Israeli Attorney General had issued a draft indictment against Avigdor Lieberman for fraud and money laundering, including allegations against Cherny.[17] A second Haaretz article detailing the draft indictment reported that a company owned by Cherney had paid $500,000 to a company owned by Avigdor Lieberman in May 2001.[18] It added that: "Prosecutors say Lieberman then used his government posts to try to restore Chernoy's Israeli passport, which he had been stripped of in 1999, and to assist him in other personal matters."[19]

[edit] Bezeq affairIn 2001 Cherney was accused of concealing an attempt to purchase the Israeli state-owned telecom company Bezeq, a charge he denies. In this affair, Cherney allegedly arranged to have Israeli businessman Gad Zeevi purchase 20% of the Israeli telecom in December 1999 from Cable and Wireless for 630 million dollar, of which 500 million came from new bank loans backed by Cherney.[2] The court case dragged on for nine years and finally in 2009 the Tel-Aviv District Judge Oded Mudrik suggested to the Prosecution to settle with Cherney since the Judge did not see any criminal intent or wrongdoing in Cherney's loan to Zeevi.[20][21]

[edit] Mobiltel dealIn 2002 Cherney was involved in the selling-on of the Bulgarian mobile provider Mobiltel. Cherney bought the company together with Austrian business men Martin Schlaff, former minster of the Austrian People's Party Josef Taus, and financial expert Herbert Cordt. The 768 million Euro deal was financed by BAWAG P.S.K.. In 2005 Mobiltel was sold for 1,6 billion Euros to Mobilkom Austria Group with a huge profit of 830 million Euros.[22] Critics found it hard to understand "why the state bought an asset for such a high price from someone who was effectively a go-between who stood to pocket a fat profit, rather than directly from the original owner of the company".[23]

[edit] Spanish allegations and attempted arrest in the United KingdomAccording to sources cited in the Spanish daily El Mundo, Spanish authorities sought Cherney in connection to ‘Operation Avispa’, a 2005 investigation that had resulted in the arrest of several prominent Russian mafia figures. The investigators believe that Cherney managed several Spanish businesses, registered in Alicante and Levante, used by the mafia for money laundering of 4 million euros.[24][25]

In May 2009, Spain's Supreme Court issued a detention order against Cherney. Along with his business partners Oleg Deripaska (head of RusAl) and Iskander Makhmudov (head of UGMK), Cherney is suspected of laundering money.[26] The Spanish authorities claim they succeeded in tracing the organization's complicated money laundering track, including Deripaska's, Makhmudov's and Cherney's alleged participation. As a result, Interpol issued an international arrest warrant against Cherney.[27][3][28]

[edit] Yaakov WeinrothIn December 2009 an indictment was issued by prosecutors in Tel Aviv against Yehoshua Vita, a former senior Tax Authority official, and Yaakov Weinroth, Mr. Cherney’s attorney.[29][30]

According to the indictment Weinroth made a number of payments to Vita, and in exchange Vita provided favours for Weinroth’s clients, including Cherney and Arkady Gaydamak. Vita was charged with accepting bribes from Weinroth, who in turn was charged with money laundering and making illegal payments to Vita. During a hearing at the Tel Aviv District Court in January 2010, it was alleged that Vita allowed tax breaks on $2 billion for Cherney, and $1 billion for Arkady Gaydamak.[31]

[edit] English High Court judgmentOn May 1st, 2008 Mr Justice Christopher Clarke in the English High Court defended Mr Cherney's reputation in a judgment.[13]

Clarke J wrote: "Mr Cherney has produced a substantial body of evidence in support of his innocence consisting of an affidavit from Dr Vladimir Ovchnisky, who was assistant to the First Deputy of the Minister of the Interior between 1992 and 1995; assistant to the Minister of the Interior of Russia from 1995 to October 1997; and from October 1997 to July 1999 Chief of the National Central Bureau of Interpol of the Russian Federation, and an author of books on organised crime, two of which are used as textbooks for schools of enforcement agencies. In it he states “with absolute certainty” that Mr Cherney has no criminal record, has never been declared as wanted in or out of Russia, and that law enforcement agencies “do not have any legally valid information proving his implication in organized crime”.

Mr Justice Clarke referred to an affidavit from Colonel Glushenkov, who was from 1992 to 2000 the Senior Investigator for Cases of Extraordinary Importance for the Office of Investigating Organised Criminal Activities. In the course of an investigation into alleged fraud he examined Mr Cherney’s business activities and confirmed the legitimacy of Mr Cherney’s business with aluminium companies and found no indication of the commission of any crime. An affidavit of Mr Yuri Skuratov, who was between October 1995 and April 1999 the Attorney General of the Russian Federation. He states that throughout that period he did not receive any information to the effect that Mr Cherney had been convicted for crimes committed in the USSR or the Russian Federation nor were there any criminal proceedings instituted against him by law enforcement agencies in Russia. Several letters between 2000 and 2004 from relevant authorities attesting to the absence of any criminal cases against him.

[edit] Swiss Compensation for Baseless AllegationsOn May 13, 2010 the Swiss Court awarded Cherney a compensation of 30,000 Swiss francs for unfounded suspicions of his links to the "Russian Mafia". The Swiss court ruled that Cherney be financially compensated for moral damages to him and his family caused by the investigation which dragged from 1996 till 2007. After the Swiss court's 2008 ruling that Cherney was not linked to organized crime, he decided to sue for moral damages. According to a Swiss law, this compensation could not exceed the amount of 10,000 francs. Exceptions are made in cases where courts discern "special circumstances". According to the court's latest verdict, this was the case with Cherney, especially since the investigation had unduly dragged out for eleven years. [32]

[edit] Attempted murderIn 1995 two purported Israeli hit men were prosecuted for what the police said was a $100,000 contract for Cherney's murder. According to the New York Times, "The apparent murder plot was linked at the time to a wave of killings in the aluminum industry in the former Soviet Union, the center of a complex web of global dealings by Mr. Chernoy and his younger brother". The Times also quoted anonymous Israeli police sources linking Cherney to the Russian underworld and international money-laundering schemes, which was not a crime in Israel until 2000. Cherney denied the charges.[2]

[edit] Lawsuit against Oleg DeripaskaOn November 24, 2006, Cherney filed a suit against Oleg Deripaska, a Russian billionaire who owns the huge Russian aluminum company, RusAl, in the Commercial Court of London's High Court. Cherney sought a Court declaration affirming that Deripaska holds 20% of the RusAl shares on behalf of Cherney or damages for breach of Deripaska's agreement to dispose of the shares and to account to Cherney for the proceeds. The claims are based on a written agreement between the two businessmen that was signed in a London hotel room in March 2001. Deripaska denies that Cherney owns shares and said in an affidavit that his relationship with Cherney was one of a businessman being extorted by a crime boss. After the 2001 meeting, Deripaska paid Cherney $250 million.[33]

As of December 2006 RusAl was in the final stages of negotiating a takeover of domestic rival SuAl and the aluminum assets of Glencore, a major Swiss commodities trader, which could create a new company valued at up to $30 billion. According to this estimate, Cherney's 20 percent stake in RusAl could be worth as much as $3 billion.[34] On July 3, 2008, a British judge ruled that Cherney had the right to sue Deripaska for $4 billion (£2 billion). High Court Justice Christopher Clarke ruled that Cherney might be assassinated or held on trumped-up charges if he tried to bring the case in Russia.[35]

At a June 2011 case management conference, the judge deferred a decision on whether Cherney would be allowed to give evidence by video link from Israel rather than appear in person as an outstanding Interpol arrest warrant means he would be detained if he traveled to the UK.[36][3] In late July 2011, the High Court ruled that Cherney may give evidence at the trial by video link from Israel and set trial for April 2012.[37]

[edit] Illegal wiretapsOn January 13, 2010 a Tel Aviv Court handed down its first verdict in the case of illegal eavesdropping on Cherney. Aviv Mor, a private investigator was found guilty of illegally gathering information of personal nature - in particular, tapping the phones of Cherney and sentenced to a plea bargained result which handed down a 14-month sentence to Mor. Part of the sentence will be in the form of community service and the rest will be a suspended sentence. The District attorney's office stated in court that the cases of other suspects in the illegal data collection case "are at an advanced stage and close to indictment ." In February 2008 Cheney filed a suit in a Tel Aviv court that alleged the illegal spying was commissioned by a Russian citizen, Alexei Drobashenko who at the time was the head of the External Relations department at Basic Element, a financial and industrial group that belongs to Oleg Deripaska. Cherney claimed that it was this Russian oligarch , acting through Drobashenko, who had hired Eskin, Pridan and Mor. In his claim Mr. Cherney accused a group of 10 plotters, including Oleg Deripaska, Alexei Drobashenko and the already sentenced Aviv Mor, of illegal wiretapping, hacking the computers of his charity fund, publishing slanderous articles, and harassing him with insulting graffities and leaflets.[38]

[edit] Personal lifeCherney owned 20 percent of the Bulgarian football club PFC Levski Sofia until he sold his shares in June 2009 following a Managing Board decision to raise capitalization.[39]

[edit] References1.^ a b c Meg Laughlin, "Intelligence conference draws criticism," St. Petersburg Times (6 March 2007) p. 1A.
2.^ a b c Intrigue Derails A Public Offering; Israel Halts Sale of Phone Company - William A. Orme Jr., New York Times, 3 April, 2001
3.^ a b c Wanted: CHERNEY, Michael Interpol
4.^ British High Court to decide: Can Cherney testify by video?, Jerusalem Post, 23 June 2011
5.^ Bell, Simon (3 June 2007). "First oligarch claims his due". The Guardian (London). Retrieved 12 May 2010.
6.^ "Grabbing a corner on Russian aluminum," Julia Flynn and Patricia Kranz, Business Week (16 September 1996)
7.^ a b Capitalism In A Cold Climate - Richard Behar, Fortune Magazine, 12 June, 2000
8.^ David and Simon Reuben: Update and Clarification Fortune Magazine (12 July 2004)
9.^ Rusal: A lingering heat Financial Times
10.^ Russian tycoon loses legal fight over Rusal Financial Times
11.^ Furor Erupts Over Recordings of Saddam Eli Lake, New York Sun (16 February 2006).
12.^ Outside View: Fearing oligarchs -- Part 2 Sergei Markov, UPI (3 May 2007).
13.^ a b c d Cherney v Deripaska, 2008 EWHC 1530 (Comm), BAILII (3 July 2008)
14.^ Who's the boss? Haaretz Uri Blau, 7 April 2007
15.^ The Small Fund and the Screenplay Written by Israel Beitenu Leader Avigdor Lieberman Haaretz, 6 March 2009 (in Hebrew)
16.^ $500,000 funneled to Lieberman associates - Gidi Weitz and Uri Blau, Haaretz, 25 April, 2007
17.^ AG plans to charge Lieberman with fraud and money laundering Haaretz, 14 May, 2011
18.^ Draft charges: Lieberman made millions in illegal business deals Haaretz, 31 May, 2011
19.^ Draft charges: Lieberman made millions in illegal business deals Haaretz, 31 May, 2011
20.^ Intrigue Derails A Public Offering; Israel Halts Sale of Phone Company - William A. Orme Jr., New York Times, 3 April, 2001
22.^ Schlaff, Elsner, Birdie und Telekom
23.^ The Schlaff Saga / A witness, but not a suspect, Haaretz (7 September 2010)
24.^ Cherney Faces Travel Problems St. Petersburg Times, (19. January 2010)
25.^ Reino Unido elude detener a un mafioso ruso reclamado por España - Fernando Lázaro, El Mundo, 6 July, 2009
26.^ El pulso de los oligarcas rusos en la Audiencia Nacional Carlos Segovia, El Mundo, 21 March 2010
27.^ Michael Cherney wanted by Interpol Ynetnews, (18 January 2010)
28.^ 09MADRID869 - WikiLeaks US diplomatic cable from US Embassy in Madrid (31 August 2009), released 7 December 2010
29.^ Indictments Filed Against Senior Attorney, Tax Official - Israel National News, 31 December, 2009
30.^ Top lawyer charged with accepting bribe, money laundering - Jerusalem Post, 31 December, 2009
31.^ Yaakov Weinroth, Ex-top tax official deny graft charges - Haaretz, 22 January, 2010
32.^ Cherney open to compromise in Rusal, Reuters (1 June 2010)
33.^ Russian Oligarch’s Long Road to a Hong Kong I.P.O., The New York Times, 22 January 2010
34.^ MSNBC report on lawsuit against Deripaska
35.^ High Court allows Cherney lawsuit against Deripaska to proceed in the UK
36.^ British High Court to decide: Can Cherney testify by video?, Jerusalem Post, 23 June 2011
37.^ Cheston, Paul (July 28, 2011). "The 'gangster', a billionaire friend of Mandelson and a £2.3bn row". London Evening Standard. Retrieved August 8, 2011.
38.^ "Detective Hired by Deripaska's Employee to Wiretap Cherney Sentenced in Tel-Aviv". Ajaz world magazine. Retrieved February 11th, 2010.
39.^ "Batkov Buys Out Cherney’s Shares in Levski". 2009-06-22. Retrieved 2011-06-28.
[edit] External linksMichael Cherney / Mikhail Chernoy website
Name Cherney, Michael
Alternative names
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Date of birth 16 January 1952
Place of birth Tashkent, Uzbek SSR
Date of death
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Michael Cherney Israel Russia

Blog Archive
► 2011 (3)
► June (1) British High Court to Decide: Can Michael Cherney ...
► May (1) Michael Cherney Foundation Reinforces A United Jer...
► February (1) Anti Mafia Witness Jalol Khaydarov Meets Russia Al...
▼ 2008 (7)
► August (1)
Michael Cherney Seeks Justice For Money Owed by Ol...
▼ June (6)
News from the Michael Cherney Foundation: Educatio...
Michael Cherney Foundation News: Help to a Father ...
News from the Michael Cherney Foundation: Helping ...
Michael Cherney Foundation News: "In the Hot Clima...
Michael Cherney: News from the International Busin...
Welcome to the Michael Cherney Blog
About Me

Michael Cherney
View my complete profile
Sunday, June 1, 2008
Welcome to the Michael Cherney Blog
Hello and Shalom - Welcome to the Michael Cherney Blog

It is a personal pleasure to welcome you to my Internet blog.

I have traveled a long way from building industries in Russia to helping the victims of terror attacks here in Israel to now .... having a Web 2.0 presence on the Net.

You may have heard my name is connection to the rumors about "Russian Mafia".
If you want to know the truth, please read an investigative report by the former U.S. Federal Prosecutor, Attn. John Loftus which unveils how competitors and corrupt officials have manipulated the law enforcement to take revenge on me:

Or read the Judgment of the Court in Switzerland which totally exonerates me from any ties to the organized crime. It was widely quoted in the media and can be accessed for example at:

You may also be interested in knowing more about the high profile law suit which I have filed against my partner Oleg Deripaska.

You can read my Witness Statement at:

If you are interested to know about my charities, please, visit The Michael Cherney Foundation which I have created to help terror victims and to defend Judeo-Christian values in the information war against radical Islam:

Some of the latest media reports about me and my business are available at:

If you are interested to know more about Russia business, was on terror or just about my humble person, I encourage you to click on the links above and to make your own educated judgment.

If we can communicate, we can understand. If we can understand we can then transcend cross cultural divides and dismantle the old myths and stale libels.
Mikhail Borisovich Khodorkovsky (Russian: Михаи́л Бори́сович Ходорко́вский, IPA: [mʲɪxɐˈil xədɐˈrkofskʲɪj]; born 26 June 1963 in Moscow) is a Russian prisoner, considered by some - such as Amnesty International - to have been imprisoned for political reasons,[Amnesty International 1] jailed until 2016 and a former Russian oligarch[1][2] and businessman. In 2004, Khodorkovsky was the wealthiest man in Russia, and was 16th on Forbes list of billionaires, although much of his wealth evaporated because of the collapse in the value of his holding in the Russian petroleum company Yukos.[citation needed]

On 25 October 2003, Khodorkovsky was arrested at Novosibirsk airport by the Russian prosecutor general's office on charges of fraud.[citation needed] Shortly thereafter, on 31 October, the government under Vladimir Putin froze shares of Yukos because of tax charges. The Russian Government took further actions against Yukos, leading to a collapse in the share price. It purported to sell a major asset of Yukos in December 2004.[citation needed]

On 31 May 2005, Khodorkovsky was found guilty of fraud and sentenced to nine years in prison. The sentence was later reduced to 8 years. In 2003, prior to his arrest, Khodorkovsky funded several Russian parties, including Yabloko, the Communist Party of the Russian Federation, and even, allegedly, the pro-Kremlin United Russia.[citation needed]

In October 2005 he was moved into prison camp number 13 in the city of Krasnokamensk, Zabaykalsky Krai.[citation needed]

In March 2006, Forbes magazine surmised that Khodorkovsky's personal fortune had declined to a fraction of its former level, stating that he "still has somewhere below $500 m."[3]

On 31 March 2009, a new trial of Khodorkovsky and Platon Lebedev began in Moscow for fresh charges on embezzlement and money laundering.[4] On 27 December 2010, a judge found both men guilty of the charges laid against them in 2009. In October, prosecutors asked for a 14 year sentence but indicated that it should include time already served. This would mean that Khodorkovsky and his partner could remain in jail until 2017; however, Khodorkovsky's defense have vowed to appeal the sentence.[5] Suggesting that the legal process was only 'gloss', a US diplomat has described his trial as 'lipstick on a political pig'.[6]

On 30 December 2010, Khodorkovsky and Lebedev were sentenced to 14 years of imprisonment in the second trial. This term includes the sentence from the first trial.[7][8]

Khodorkovsky appealed his convictions to the European Court of Human Rights. On 31 May 2011 the court ruled that Khodorkovsky failed to prove that his prosecution was politically motivated. The court ruled, however, that Russia committed serious violations of Khodorkovsky's rights during his arrest and pretrial detention.[9]

1 Early years and entrepreneurship in Soviet Union
2 Political ambitions
3 Relationship to Vladmir Putin
4 Merging with Sibneft
5 Prosecution
6 Impact of arrest
7 Criminal charges
7.1 Judicial controversy
8 Third party support
9 In prison
10 Political transformation
11 Release date
12 Outcome of Second Trial
13 Final Words from Second Trial
14 See also
15 References
16 External links

[edit] Early years and entrepreneurship in Soviet UnionEarly life
Khodorkovsky grew up in an ordinary Soviet family in a two-room apartment in Moscow. He has a Jewish father and a Christian mother. The young Khodorkovsky was ambitious. He received excellent grades. He then attempted and succeeded in building a career as a communist functionary. He became deputy head of Komsomol (the Communist Youth League) at his university, the Mendeleev Moscow Institute of Chemistry and Technology, where he graduated in chemical engineering in 1986.[10] The Komsomol career was one of the ways to get into the ranks of communist apparatchiks and to achieve the highest possible living standard.[11]

After perestroika started, Khodorkovsky used his connections within the communist structures to gain a foothold in the developing free market. He used the help of some powerful people to start his business activities under the cover of Komsomol. Friendship with another Komsomol leader, Alexey Golubovich, helped him greatly in his further success, since Golubovich's parents held top positions in the State Bank of the USSR.[11] He acquired Yukos for $300 million.[12]

Café and trading
With partners from Komsomol, and technically operating under its authority, Khodorkovsky opened his first business in 1986, a private café; an enterprise made possible by Soviet leader Mikhail Gorbachev's programme of perestroika and glasnost. In 1987 they opened a "Center for Scientific and Technical Creativity of the Youth" (which eventually allowed him to found the bank Menatep[13]). In addition to importing and reselling computers, the "scientific" center was involved in trading a wide range of other products.

By 1988, he had built an import-export business with a turnover of 80 million rubles a year (about $10 million USD).

In 1992 he was appointed chairman of the Investment Promotion Fund of the fuel and power industry. He was appointed Deputy Minister of Fuel and Energy of Russia in March 1993 .

Armed with cash from his business operations, Khodorkovsky and his partners used their international connections to obtain a banking licence to create Bank Menatep in 1989. As one of Russia's first privately owned banks, Menatep expanded quickly, by using most of the deposits raised to finance Khodorkovsky's successful import-export operations.

Bank Menatep was also successful in forcing the government to award them the right to manage funds allocated for the victims of the Chernobyl nuclear accident.

In a prophetic statement of the time, Khodorkovsky is quoted as saying:[11]

Many years later I talked with people and asked them, why didn't you start doing the same thing? Why didn't you go into it? Because any head of an institute had more possibilities than I had, by an order of magnitude. They explained that they had all gone through the period when the same system was allowed. And then, at best, people were unable to succeed in their career and, at worst, found themselves in jail. They were all sure that would be the case this time, and that is why they did not go into it. And I" —Khodorkovsky lets out a big, broad laugh at the memory— "I did not remember this! I was too young! And I went for it.
Khodorkovsky's connections with Komsomol and CPSU structures would prove critical in his success.

[edit] Political ambitionsKhodorkovsky also became a philanthropist, whose efforts include the provision of internet-training centres for teachers, a forum for the discussion by journalists of reform and democracy, and the establishment of foundations which finance archaeological digs, cultural exchanges, summer camps for children and a boarding school for orphans.[14][15] Khodorkovsky's critics saw this as political posturing, in light of his funding of several political parties ahead of the elections for the State Duma to be held in late 2003.

He is openly critical of what he refers to as 'managed democracy' within Russia. Careful normally not to criticise the elected leadership, he says the military and security services exercise too much authority. He told The Times:

"It is the Singapore model, it is a term that people understand in Russia these days. It means that theoretically you have a free press, but in practice there is self-censorship. Theoretically you have courts; in practice the courts adopt decisions dictated from above. Theoretically there are civil rights enshrined in the constitution; in practice you are not able to exercise some of these rights."
Khordorkovsky promoted social programs through Yukos in regions where the company operated. One such program that was popular in Angarsk, "New Civilization" promoted student government for young adults. The scout program incorporated aspects of student government. Participants from throughout the country spent their holidays organizing student governed bodies at summer camps.[16]

[edit] Relationship to Vladmir PutinIn February, 2003, at a televised meeting at the Kremlin, Khodorkovsky argued with Putin, challenging him on questions of government corruption, and implying that top state officials were pocketing millions in bribes. Privately, Putin told Lord John Browne, the former head of BP, “I have eaten more dirt than I need to from that man.”[17]

[edit] Merging with SibneftIn April 2003, Khodorkovsky announced that Yukos would merge with Sibneft, creating an oil company with reserves equal to those of Western petroleum multinationals. Khodorkovsky had been reported to be negotiating with ExxonMobil and ChevronTexaco about them taking a large stake in Yukos. Sibneft was created in 1995, at the suggestion of Boris Berezovsky, comprising some of the most valuable assets of a state-owned oil company. In a controversial auction process, Berezovsky acquired 50% of the company at what most agree was a very low price.[citation needed]

When Berezovsky had a confrontation with Putin, and felt compelled to leave Russia for London (where he was granted asylum) he assigned his shares in Sibneft to Roman Abramovich. Abramovich subsequently agreed to the merger.

With 19.5 billion barrels (3 km³) of oil and gas, the merged entity would have owned the second-largest oil and gas reserves in the world after ExxonMobil and would have been the fourth largest in the world in terms of production, pumping 2.3 million barrels (370,000 m³) of crude a day. However, the merger had been recalled by the shareholders of Sibneft after the arrest of Khodorkovsky.

[edit] ProsecutionIn early July 2003, Platon Lebedev, a Khodorkovsky partner and second largest shareholder in Yukos, was arrested on suspicion of illegally acquiring a stake in a state-owned fertilizer firm, Apatit, in 1994.[citation needed] The arrest was followed by investigations into taxation returns filed by Yukos, and a delay to the antitrust commission's approval for its merger with Sibneft.[citation needed]

Khodorkovsky was himself arrested in October 2003, charged with fraud and tax evasion. The Russian Prosecutor General's Office claims Khodorkovsky and his associates cost the state more than $1 billion in lost revenues.[citation needed]

Subsequent to Khodorkovsky's arrest, Leonid Nevzlin gained a controlling stake in Yukos when Khodorkovsky handed him a 60% share in the holding company that controlled the firm.[18] Nevzlin is himself now wanted in Russia and has since fled to Israel.[citation needed]

On 31 March 2009, a new trial of Khodorkovsky and Lebedev began in Moscow for fresh charges on embezzlement and money laundering. The two men face up to 22 more years in prison.[19] Khodorkovsky refused to enter a plea, claiming that he did not understand the charges.[20]

According to the sentence in the second trial,[21] the companies that extracted oil (such as Yuganskneftegaz and Tomskneft, in which Yukos held major stake, but did not have 100% ownership), would sell all their oil to different shell companies below market rates, and the shell companies would re-sell it to the eventual buyer at market rates. Shell companies, unlike oil-extracting companies, would be owned 100% by Khodorkovsky, Lebedev et al. Those shell companies had very few employees, conducted no other activity than reselling the oil, and some of them had offices in office buildings owned by Yukos. As a result, Khodorkovsky and Lebedev were convicted of embezzlement from the oil companies and some of the oil companies' minority shareholders acted as witnesses for the prosecution during the trial.

In May 2010, Mikhail Kasyanov, who became an opposition figure after serving as Putin's prime minister from 2000 to 2004, told the court that Putin, while president, had been angered by Khodorkovsky's support of the Communist Party together with liberal Yabloko and the Union of Right Forces.[22]

[edit] Impact of arrestInitially news of Khodorkovsky's arrest had a significant effect on the share price of Yukos. The Moscow stock market was closed for the first time ever for an hour in order to assure stable trading as prices collapsed. Russia's currency, the ruble, was also hit as some foreign investors questioned the stability of the Russian market. Media reaction in Moscow was almost universally negative in blanket coverage, some of the more enthusiastic pro-business press discussed the end of capitalism, while even the government-owned press criticised the "absurd" method of Khodorkovsky's arrest.

Yukos moved quickly to replace Khodorkovsky with Russian born U.S. citizen Simon Kukes. Simon Kukes, who became the CEO of Yukos, was already an experienced oil executive.

The U.S. State Department said the arrest "raised a number of concerns over the arbitrary use of the judicial system" and was likely to be very damaging to foreign investment in Russia, as it appeared there were "selective" prosecutions occurring against Yukos officials but not against others.

A week after the arrest, the Prosecutor-General froze Khodorkovsky's shares in Yukos to prevent Khodorkovsky from selling his shares although he retains all the shares' voting rights and to receive dividends.

Khodorkovsky's arrest alarmed foreign investors and policymakers alike.

In 2003 Khodorkovsky's shares in Yukos passed to Jacob Rothschild under a deal they concluded prior to Khodorkovsky's arrest.[23][24]

[edit] Criminal chargesThe criminal charges against Khodorkovsky read as follows:

In 1994, while chairman of the board of the Menatep commercial bank in Moscow, M. B. Khodorkovsky created an organized group of individuals with the intention of taking control of the shares in Russian companies during the privatisation process through deceit and in the process of committing this crime managed the activities of this company.
Khodorkovsky was charged with acting illegally in the privatisation process of the former state-owned mining and fertiliser company Apatit. It is alleged that the CEO of Bank Menatep and large shareholder in Yukos Platon Lebedev assisted Khodorkovsky. Lebedev was arrested and charged in July 2003.

According to the prosecution, all four companies that participated in the privatization tender for 20% of Apatit's stock in 1994 were shell companies controlled by Khodorkovsky and Lebedev, registered to create an illusion of competitive bidding that was required by the law. One of the shell companies that won that tender (AOZT Volna) was supposed to invest about US$280 million in Apatit during the next year, according to their winning bid. The investment was not made and Apatit sued to return their 20% of stock. At this point, Khodorkovsky et al. had transferred the required sum into Apatit's account at Khodorkovsky's bank Menatep and sent the financial documents to the court, so Apatit's lawsuit was thrown out. The very next day the money was transferred back from Apatit's account to Volna's account. After that the stock was sold off by Volna in small installments to several smaller shell companies, which were, in turn, owned by more Khodorkovsky-owned companies in a complicated web of relationships. Literally dozens of companies were registered for these purposes in Cyprus, Isle of Man, British Virgin Islands, Turks & Caicos and other offshore havens. Volna actually settled the Apatit lawsuit in 2002 by paying $15 million to the privatization authorities, even though it did not own Apatit stock anymore at the time. However, according to the prosecution, that $15 million sum was based on the incorrect valuation which was too low. Allegedly, at the time Apatit was selling off the fertilizers it was producing to multiple Khodorkovsky-owned shell companies below market value, and, therefore, Apatit formally did not have much profit, lowering its valuation. Those shell companies then resold the fertilizer at the market value, generating pure profit for Khodorkovsky, Lebedev and others.

In addition, prosecutors conducted an extensive investigation into Yukos for offences that went beyond the financial and tax-related charges. Reportedly there were three cases of murder and one of attempted murder linked to Yukos, if not Khodorkovsky himself.

One area of interest to the Prosecutor-General included the 1998 assassination of the mayor of Nefteyugansk in the Tyumen region, Vladimir Petukhov. Nefteyugansk was the main centre of oil production within the Yukos empire. Suspicions arose in Nefteyugansk because Petukhov had publicly and frequently campaigned about Yukos' non-payment of local taxes.

President Putin himself commented on this aspect of the investigation while questioned about the investigation into Yukos in September 2003. President Putin said:

The case is about Yukos and the possible links of individuals to murders in the course of the merging and expansion of this company...the privatizations are the least of the reasons for such a case, how can I interfere with prosecutors' work?
The verdict of the trial, repeating the prosecutors' indictments almost verbatim, was 662 pages long. As is customary in Russian trials, the judges read the verdict aloud, beginning on 16 May 2005 and finishing on 31 May. Khodorkovsky's lawyers alleged that it was read as slowly as possible to minimize public attention*.[25]

Khodorkovsky was defended by Karinna Moskalenko, who now faces being disbarred by the Russian government for her alleged negligence in defending him. Khodorkovsky denies being dissatisfied with her conduct.

Prosecutors stated that they operated independently of the government appointed by President Putin. The Prosecutor-General Vladimir Ustinov was appointed by former President Yeltsin and was not seen as being particularly close to Putin, who once tried to remove him. However, he was politically ambitious and prosecuting Russia's most prominent and successful tycoon was perceived as a boost to his political career and intended candidacy for the Duma.

[edit] Judicial controversyOn 14 February 2011, Natalya Vasilyeva, an assistant to the judge who convicted Khodorkovsky, Viktor Danilkin, said that the judge did not write the verdict, and had read it against his will.[26] Essentially, Natalya Vasilyeva said the judge's verdict was "brought from the Moscow City Court".[27] In her statement she also noted that "everyone in the judicial community understands perfectly that this is a rigged case, a fixed trial".[27] On 24 February Ms. Vasilyeva underwent a polygraph test, which indicated that she likely believes that Mr. Danilkin acted under pressure.[28] Judge Danilkin responded that "the assertion by Natalya Vasilyeva was nothing more than slander".[29]

[edit] Third party supportKhodorkovsky has received a high level of independent third party support from groups and individuals who believe the process, charges, and two trials against him are politically motivated.[30] On 29 Nov. 2004, The Council of Europe Parliamentary Assembly (PACE) Committee on Legal Affairs and Human Rights published a report which concluded "the Assembly considers that the circumstances of the arrest and prosecution of leading Yukos executives suggest that the interest of the State’s action in these cases goes beyond the mere pursuit of criminal justice, to include such elements as to weaken an outspoken political opponent, to intimidate other wealthy individuals and to regain control of strategic economic assets."[31]

In June 2009 the Council of Europe published a report which criticized the Russian government's handling of the Yukos case, entitled "Allegations of Politically Motivated Abuses of the Criminal Justice System in Council of Europe Member States"[32]

"The Yukos affair epitomises this authoritarian abuse of the system. I wish to recall here the excellent work done by Sabine Leutheusser-Schnarrenberger, rapporteur of the Committee on Legal Affairs and Human Rights, in her two reports2 on this subject. I do not intend to comment on the ins and outs of this case which saw Yukos, a privately owned oil company, made bankrupt and broken up for the benefit of the state owned company Rosneft. The assets were bought at auction by a rather obscure financial group, Baikalfinansgroup, for almost €7 billion. It is still not known who is behind this financial group. A number of experts believe that the state-owned company Gazprom had a hand in the matter. The former heads of Yukos, Mikhail Khodorkovsky and Platon Lebedev, were sentenced to eight years’ imprisonment for fraud and tax evasion. Vasiliy Aleksanyan, former vice-chairman of the company, who is suffering from Aids, was released on bail in January 2009 after being held in inhuman conditions condemned by the European Court of Human Rights.3 Lastly, Svetlana Bakhmina, deputy head of Yukos’s legal department, who was sentenced in 2005 to six and a half years’ imprisonment for tax fraud, saw her application for early release turned down in October 2008, even though she had served half of her sentence, had expressed “remorse” and was seven months pregnant. Thanks to the support of thousands of people around the world and the personal intervention of the United States President, George W. Bush, she was released in April 2009 after giving birth to a girl on 28 November 2008."

Statements of support for Khodorkovsky and criticism of the state's persecution have been passed by the Italian Parliament, the German Bundestag, and the U.S. House of Representatives, among many other official bodies.[33]

In June 2010, Holocaust survivor and human rights activist Elie Wiesel began a campaign to raise awareness of the Khodorkovsky trial and advocate for his release.[34]

In November 2010, Amnesty International Germany began a petition campaign demanding that President Medvedev get an independent review of all criminal charges against Khodorkovsky, to coincide with the 60th anniversary of the European Convention on Human Rights.[35] On 24 May 2011, Amnesty International criticized Lebedev and Khodorkovsky's second trial, named them prisoners of conscience, and called for their release on the expiry of their initial sentences.[36]

[[Elena Bonner, widow of Andrei Sakharov, has continued to defend Khodorkhovsky. "I think that any person comes a political prisoner if the law is applied to him selectively, and this is an absolutely clear case,. This is a glaringly lawless action. [37]

[edit] In prisonOn 30 May 2005, Mikhail Khodorkovsky was sentenced to 9 years in a medium security prison. At the time, he was detained in Moscow prison Matrosskaya Tishina.

On 1 August 2005, a political essay written by Khodorkovsky in his prison cell, titled "Left Turn", was published in Vedomosti, calling for a turn to more social responsible state. He stated that: "The next Russian administration will have to include the Communist Party of the Russian Federation and the Motherland Party, or the historical successors to these parties. The left-wing liberals, including Yabloko, and right-wing Ryzhkov, Khakamada and others should decide whether to join the broad social-democratic coalition or to remain grumpy and without relevance on the political sidelines. In my opinion, they have to join because only the broadest composition of a coalition in which liberal-socialist (social-democratic) views will play the key role can save us from the emergence, in the process of this turn to the left turn, from a new ultra-authoritarian regime. The new Russian authorities will have to address a left-wing agenda and meet an irrepressible demand by the people for justice. This will mean in the first instance the problems of legalizing privatization and restoring paternalistic programs and approaches in several areas."[38]

On 19 August 2005, Khodorkovsky announced that he was on a hunger strike in protest at his friend and associate Platon Lebedev's placement in the punishment cell of the jail. According to Khodorkovsky, Lebedev had Diabetes mellitus and heart conditions, and keeping him in the punishment cell would be equivalent to murder.

On 31 August 2005, he announced that he would run for parliament.[39] This initiative was based on the legal loophole: a convicted felon cannot vote or stand for a parliament, but if his case is lodged with the Court of Appeal he still has all the electoral rights. This "loophole," or alternatively, ordinary provision of appellate procedure, is a common practice in US federal and state court. Usually it requires around a year to get somebody's appeal through the Appeal Court, so it should have been enough time for Khodorkovsky to be elected. To imprison a member of Russian parliament, the parliament should vote for stripping his or her immunity. Thus, he had a hope to escape from his prosecution. But the plans were flawed, as the Court of Appeal unusually took only a couple of weeks to process Khodorkovsky's appeal, reduce his sentence by one year and invalidate any of his electoral plans until the end of his sentence.

As reported on 20 October 2005, Khodorkovsky was delivered to the labor camp YaG-14/10 (Исправительное учреждение общего режима ЯГ-14/10) of the town of Krasnokamensk near Chita.[40] The labor camp is attached to a uranium mining and processing plant and during Soviet times had a reputation as a place from which nobody returned alive.[citation needed] According to news reports, currently the prisoners are not used in uranium mining and have much better chances of survival than in the past. The second part of Khodorkovsky essay/thesis "Left Turn" was published in Kommersant on 11 November 2005, in which he expounded his social democratic manifesto.[41]

On 13 April 2006, Khodorkovsky was attacked by a prison mate while he was asleep. It was speculated that a prison mate tried to disfigure his face but not to kill him. Jail sources told reporters that a fellow prisoner Alexander Kuchma attacked him after a heated conversation. Western media immediately accused the Russian authorities of trying to play down the incident. In January 2009, the same prisoner filed a lawsuit for 500,000 rubles (~$15,000) against Khodorkovsky, accusing him of homosexual harassment.[42]

On 5 February 2007, new charges of embezzlement and money laundering were brought against both Khodorkovsky and Platon Lebedev.[43] Khodorkovsky's supporters point out that the charges come just months before Khodorkovsky and Lebedev were to become eligible for parole, as well as just a year before the next Russian presidential election.[citation needed]

On 28 January 2008, Khodorkovsky started a hunger strike[44] to help his associate Vasily Aleksanyan, who is ill and was held in jail and who was denied the necessary medical treatment. Aleksanyan was transferred from a pre-trial prison to an oncological hospital on 8 February 2008,[45] after which Khodorkovsky called off his strike.[46]

While Khodorkovsky was imprisoned, Arvo Pärt, the Estonian composer, wrote his latest symphony, Symphony no. 4, and dedicated it to Mikhail. The symphony was premiered on 10 January 2009 in Los Angeles at Walt Disney Concert Hall conducted by Esa-Pekka Salonen.

In prison, Khodorkovsky announced that he would research for, and prepare, a PhD dissertation on the topic of Russian oil policy.[citation needed] The third part of Khodorkovsky's essay/thesis "Left Turn" with the subheading "Global Perestroika" was published in Vedomosti on 7 November 2008, in which he stated: "Barack Obama's victory in the US presidential elections is not simply the latest change of power in one individual country, albeit a superpower. We are standing on the threshold of a change in the paradigm of world development. The era whose foundations were laid by Ronald Reagan and Margaret Thatcher three decades ago is ending. Unconditionally including myself in that part of society that has liberal views, I see: ahead – is a Turn to the Left."[47][48]

In May 2010 Khodorkovsky went on a three-day hunger-strike to protest what he said was a violation of the recent law against imprisonment of person accused of financial crimes. The law was pushed by President Medvedev after the death of Sergei Magnitsky who died in pre-trial detention in a Moscow prison in 2008.[49]

[edit] Political transformationAfter six years in prison, observers have argued that Khodorkovsky has been transformed from an oligarch into a martyr: "He speaks with the authority of a chief executive of what was once Russia’s largest oil company. He explains how Yukos and Russia’s oil industry functioned, but he goes beyond business matters. What he is defending is not his long-lost business, but his human rights. The transformation of Mr. Khodorkovsky from a ruthless oligarch, operating in a virtually lawless climate, into a political prisoner and freedom fighter is one of the more intriguing tales in post-communist Russia."[50]

The political transformation of Khodorkovsky is cited in many of his writings from prison. On 26 October 2009, he published a response to Dmitri Medvedev's "Forward, Russia!" article in Vedomosti, arguing that "authoritarianism in its current Russian form does not meet many key humanitarian requirements customary for any country that wishes to consider itself modern and European."[51]

On 28 January 2010, Khodorkovsky authored an opinion article in the New York Times and International Herald Tribune, which argued that "Russia must make a historic choice. Either we turn back from the dead end toward which we have been heading in recent years – and we do it soon – or else we continue in this direction and Russia in its current form simply ceases to exist."[52]

On 3 March 2010, Khodorkovsky wrote an article in Nezavisimaya Gazeta about the "conveyor belt" of Russian justice. In this article, he warns that "siloviki conveyor belt, which has undermined justice is truly the gravedigger of modern Russian statehood. Because it turns many thousands of the country's most active, sensible and independent citizens against this statehood – with enviable regularity."[53]

[edit] Release dateAccording to his official site, Khodorkovsky would have been eligible for early release, but an alleged conspiracy involving jail guards and a cell mate resulted in a statement that Mikhail had violated one of the prison rules. The statement was false,[citation needed] but it was sufficient to make Khodorkovsky lose his rights, once the statement was logged in his file.[54]

It is predicted that he might be released by the middle of 2011,[55] although Khodorkovsky has been found guilty (27 December 2010) of fresh charges of embezzlement and money laundering, which could lead to a new sentence of up to 22 years. He alleged that both cases were instigated by Igor Sechin. “The second as well as the first case were organized by Igor Sechin,” the tycoon claimed in an interview with The Sunday Times from a remand prison in the Siberian city of Chita, 4,000 miles (6,400 km) east of Moscow.[54]

On 22 August 2008, he was denied parole by Judge Igor Faliliyev, at the Ingodinsky regional court in Chita, Siberia. The basis for this was in part because Khodorkovsky "refused to attend jail sewing classes".[56]

In the second trial, the prosecutors have asked the judge for a 14-year sentence, which is just one year less than the maximum. The judge Danilkin handed down the verdict on 30 December 2010 where he upheld the prosecutors' claims. Taking into account the time already served, Khodorkovsky will be released in 2017.[7][8] U.S. President Barack Obama, the U.S. State Department, German Chancellor Angela Merkel, and British Foreign Minister William Hague condemned or expressed concern over Khodorkovsky's extended sentence. The White House said it brought Russia's legal system into question.[57][58][59]

On 15 February Vyacheslav Lebedev, chairman of Russia's Supreme Court, suggested reviving an old Soviet practice under which a maximum sentence for a person charged with different crimes should not exceed the sentence attached to the most serious charge: in Mr. Khodorkovsky's case, nine years.[27] Since he has been in jail since October 2003, this would mean releasing him in October 2012 – a few months after the next presidential election.[27]

[edit] Outcome of Second TrialKhodorkovsky became eligible for parole after having served half of his original sentence, however, in February 2007, state prosecutors began to prepare new charges of embezzlement, leading up to a second trial which began in March 2009. Prosecutors filed new charges against Khodorkovsky, alleging that he stole 350 million tons of oil, charges which Kommersant described as "Compared with the previous version, only stylistic inaccuracy has been improved, and some of the paragraphs have been swapped."[60] Others pointed out that the new charges were impossible given that he was previously convicted on tax evasion of the same allegedly stolen oil. According to Khodorkovsky's lawyer Karinna Moskalenko, "The position of the prosecutors is also self-contradictory. (...) Khodorkovsky is now serving a sentence for tax evasion, and if they are asserting that he stole all the oil his company produced, what did he go to prison for the first time if there was nothing to be taxed?"[61]

During a visit to Moscow in July 2009, President Barack Obama said: "it does seem odd to me that these new charges, which appear to be a repackaging of the old charges, should be surfacing now, years after these two individuals have been in prison and as they become eligible for parole."[62]

The verdict was originally scheduled for 15 December, but was delayed without explanation until the 27th.[63] Just a few days before the verdict was read by the judge before the court, Vladimir Putin made public comments with regard to his opinion of Khodorkovsky's guilty, saying "a thief should sit in jail."[64] On 27 December 2010 Judge Viktor Danilkin handed down a guilty verdict, convicting Khodorkovsky and Lebedev of stealing the full 350 million tons of oil, instead of the reduced 218 million tons as requested by the prosecutors. The judge sentenced them to 13.5 years in prison, later reduced to 12 years, one year less than the maximum sentence, which, when combined with time already served, will keep them in jail until 2017.

On 24 May 2011, Khodorkovsky's appeal hearing was held, and Judge Danilkin rejected the challenge.[65] Following the rejection of the appeal, the human rights group Amnesty International declared Khodorkovsky and Lebedev as "prisoners of conscience," remarking in a statement that "Whatever the rights and wrongs of Mikhail Khodorkovsky and Platon Lebedev’s first convictions there can no longer be any doubt that their second trial was deeply flawed and politically motivated."[66]

In June 2011, Khodorkovsky was sent to prison colony No. 9 of Segezha, in the northern region of Karelia near the Finnish border.[67]

[edit] Final Words from Second TrialOn 2 November 2010, Mikhail Khodorkovsky delivered his final words to the court in the closing of the second trial. The speech, which has received significant media coverage, included the following passages:[68]

I am ashamed for my country.
Your honour, I think we all perfectly understand the significance of our trial extends far beyond the fates of Platon [Lebedev] and myself. And even beyond the fates of all those who have innocently suffered in the course of the reprisals against YUKOS that have taken place on such a huge scale, those I found myself unable to protect, but about whom I have not forgotten. I remember every day.
Let’s ask ourselves, what does the entrepreneur, the top class organizer of production, or simply an educated, creative individual, think today looking at our trial and knowing that the result is absolutely predictable?
The obvious conclusion a thinking person would come to is chilling in its simplicity: the bureaucratic and law enforcement machine can do whatever it wants. There is no right of private property. No person who conflicts with the “system” has any rights whatsoever.
Even when enshrined in law, rights are not protected by the courts. Because the courts are either also afraid, or are part of the “system”. Does it come as a surprise that thinking people do not strive to realize themselves here in Russia?
He continued:

I am far from being an ideal person, but I am a person with an idea. For me, as for anybody, it is hard to live in prison, and I do not want to die here.
But if I have to, I will have no hesitation. What I believe in is worth dying for. I think I have shown this.
In response to Khodorkovsky's speech, New York Times columnist Joe Nocera wrote,[69] "I have never been so moved by the words of a businessman. (...) It should make no difference that he was once rich and once an oligarch. What matters is that Mikhail Khodorkovsky is fighting for political freedom and the rule of law, putting his life on the line for ideals we claim to hold dear."

Washington Post columnist Jackson Diehl argued[70] that "Khodorkovsky delivered what is likely to stand as a historic indictment of the Putin-Medvedev regime. (...) Because he is an entrepreneur and not a poet, Khodorkovsky was regarded skeptically for many years by the sort of people who usually defend Russian dissidents. That's no longer true: Elie Wiesel is campaigning for him; Nobel-winning novelist Mario Vargas Llosa and French philosopher André Glucksmann have taken up his case. The U.S. Senate, prompted by Maryland Democrat Ben Cardin and Mississippi Republican Roger Wicker, passed a resolution saying Khodorkovsy and Lebedev 'are prisoners who have been denied basic due process rights under international law for political reasons.'"

Three weeks after the trial ended, Khodorkovsky managed to make his voice heard again, something he did, embarrassingly for the Kremlin, just as Dmitri Medvedev was giving the keynote speech at the World Economic Forum in Davos, Switzerland, asking for more foreign investment for Russia. A "dependent court is in no way better than a bandit’s club", stated Khodorkovsky. "Both tools are equally unacceptable for settling grievances in a civilized society." His lawyers had "invited four newspapers, including the IHT, to submit written questions to him after the second trial. The questions were given to him on 31 Dec., and the replies were delivered" in late January 2011. “I call on people to believe in the sincerity of President Medvedev’s attempts," Khodorkovsky added, "but not to accept desires and simulations in the place of clearly defined obligations and working institutions.”[71][72]

[edit] See alsoLeonid Nevzlin (one of the key figures in the Yukos oil firm headed by Mikhail Khodorkovsky)
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39.^ Khodorkovsky to stand for Dumas, CNN, 31 August 2005. Retrieved 6 June 2008.
41.^ "Left Turn – 2", Khodorkovsky Center, 11 November 2005
42.^ "Gay claim by Khodorkovsky's ex-cellmate adjourned to Feb. 25 | Russia | RIA Novosti". 16 January 2009. Retrieved 28 December 2010.
43.^ New fraud charges in Yukos case, BBC News, 5 February 2007. Retrieved 6 June 2008.
44.^ "Михаил Ходорковский объявил голодовку в знак солидарности с Василием Алексаняном // Прессцентр Михаила Ходорковского и Платона Лебедева". Retrieved 28 December 2010.
45.^ Echo of Moscow, Бывший вице-президент "ЮКОСа" Алексанян переведен из СИЗО в специализированную клинику (Former Yukos vice-president transferred from pre-trial prison to hospital), 8.02.08 (Russian)
46.^ Statement M.[dead link] Khodorkovsky, 11 Feb 2008
47.^ Khodorkovsky, Mikhail (7 November 2008). "Новый социализм: Левый поворот – 3. Глобальная perestroika" (in Russian). Vedomosti, 211(2233). Retrieved 19 April 2010.
48.^ "A Turn to the Left – 3: Global Perestroika", Khodorkovsky Center, 7 November 2008 (English translation)
49.^ "Khodorkovsky hunger strike lasts three days". Russia Time. 22 May 2010.
50.^ [4], The Economist, 22 April 2010
51.^ Khodorkovsky's Opinion Editorial in Vedomosti: Generation M, Khodorkovsky Center
52.^ Khodorkovsky, Mikhail B. (29 January 2010). "A Time and a Place for Russia". The New York Times. Retrieved 12 May 2010.
53.^ Khodorkovsky: Conveyor Belt of Russian Justice Legalizes Abuse – Khodorkovsky Center
54.^ a b Statements: 'I’m constantly reminded that I’m in jail until further notice' – Press Centre for Defence Attorneys of Mikhail Khodorkovsky and Platon Lebedev, 18 May 2008
55.^ Platon Lebedev. "Khodorkovsky Regressive Counter". Retrieved 28 December 2010.
56.^ Haynes, Deborah (23 August 2008). "In brief: Clark Rockefeller; Kashmir; Somalia; Karadzic; Iraq". The Times (London). Retrieved 26 October 2008.
57.^ "Obama, Clinton blast Khodorkovsky ruling". UPI. 27 December 2010. Retrieved 19 August 2011.
58.^ " U.S., Europe condemn Russia for tough Mikhail Khodorkovsky sentence", Dmitry Zaks. Vancouver Sun. 31 December 2010. Accessed 12 February 2011
59.^ "William Hague expresses concern at Mikhail Khodorkovsky sentence", Roland Oliphant. The Telegraph. 30 December 2010. Accessed 12 February 2011
60.^ "Style Improved in Khodorkovsky Case". Kommersant Moscow. 1 July 2008. Retrieved 19 August 2011.
61.^ Loiko, Sergei L. (23 October 2010). "Russia seeks 14-year sentence for Khodorkovsky". Los Angeles Times. Retrieved 19 August 2011.
62.^ [5][dead link]
63.^ Belton, Catherine (15 December 2010). "Court verdict on Khodorkovsky delayed". Financial Times.,s01=1.html. Retrieved 19 August 2011.
64.^ Barry, Ellen (16 December 2010). "Vladimir Putin Defends Central Control in Russia". The New York Times (Russia). Retrieved 19 August 2011.
65.^ Elder, Miriam (24 May 2011). "Khodorkovsky appeal rejected". GlobalPost. Retrieved 19 August 2011.
66.^ "Russian businessmen declared prisoners of conscience after convictions are upheld". Amnesty International. 24 May 2011. Retrieved 19 August 2011.
67.^ Kramer, Andrew E. (20 June 2011). "Mikhail Khodorkovsky Sent to Penal Colony Near Finland". The New York Times.
68.^ "Mikhail Khodorkovsky: final trial speech". openDemocracy. 14 December 2010. Retrieved 28 December 2010.
69.^ Nocera, Joe (5 November 2010). "Mikhail Khodorkovsky's Plea for Russia – Talking Business". The New York Times.
70.^ Post Store (8 November 2010). "Russia on trial". The Washington Post. Retrieved 28 December 2010.
71.^ A Prisoner in Russia by Mikhail B. Khodorkovsky, International Herald Tribune, 27 January 2011
72.^ Comments by Imprisoned Russian Tycoon Challenge Medvedev by Andrew E. Kramer, International Herald Tribune, 27 January 2011
[edit] External links Wikimedia Commons has media related to: Mikhail Khodorkovsky

Khodorkovsky & Lebedev Communications Center (English)
Khodorkovsky's official Russian website
Guilty of Being Right, City Journal online, 12-28-2010
Independent Institute Ivan Eland discusses the international fallout from Khodorkovsky's arrest
Updated Blog on Khodorkovsky Affair
Council on Foreign Relations Interview with Marshall I. Goldman on Khodorkovsky
Centre for Eastern Studies report: "The Yukos Affair: its Motives and Implications" (in Polish and English)
Khodorkovsky Legal Updates
New York Times Magazine article on Khodorkovsky
Keith Gessen on Khodorkovsky in the London Review of Books
Foreign Policy article on second trial
Julia Ioffe: "Unlikely Martyr". Tablet Magazine article on Khodorkovsky, 31 May 2011
Michael Khodorkovsky Publications
Khodorkovsky Related Legal Cases
Michael Khodorkovsky Statements
Complete text transcript and audio (Russian) of Khodorkovsky's Closing Statement at Khamovnichesky Court
Dialogues – Lyudmila Ulitskaya and Mikhail Khodorkovsky English translation of the correspondence between Mikhail Khodorkovsky and the Russian writer Lyudmila Ulitskaya
Khodorovsky film stolen (for the second time) before Berlin premiere February 2011
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Name Khodorkovsky, Mikhail
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Date of birth 26 June 1963
Place of birth Moscow, Soviet Union
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