The Quality of Freedom : Khodorkovsky, Putin, and the Yukos Affair

Mikhail Khodorkovsky, the head of the Yukos oil company, was arrested on 25 October 2003. This event proved a turning point for post-communist Russia and for Vladimir Putin's presidency. By that time Khodorkovsky had become one of the world's richest and most powerful men, while Yukos had been transformed into a vertically-integrated oil company that was set to go global. On all counts, this looked like a success story for Russia, but it was precisely at this moment that the authorities struck, and Khodorkovsky was later sentenced to eight years in jail. This book explains why all of this occurred. It provides some theoretical discussion as well as detailed analysis of the rise and fall of Yukos, and with it the development of the Russian oil industry. It also examines the relationship between the state and big business during Russia's traumatic shift from the Soviet planned economy to the market system, as well as Russia's emergence as an 'energy superpower'. The attack on Khodorkovsky had far-reaching political and economic consequences but it also raised fundamental questions about the quality of freedom in contemporary Russia as well as in the world at large. Contents......Page 6 List of Tables......Page 10 Acknowledgements......Page 11 Preface......Page 13 1. Introduction: Freedom and Property......Page 20 Logics of modernity......Page 21 Dimensions of freedom......Page 24 A new dual state......Page 33 Freedom and property......Page 35 The cultural revolution of property......Page 39 Embedding capitalism and development......Page 43 Liberalism and freedom......Page 46 2. The Birth and Transformation of Yukos......Page 49 Background......Page 50 Menatep: From banking to industry......Page 52 Establishment and privatization of Yukos......Page 59 Yukos: Consolidation and crisis......Page 64 Consolidation and development......Page 65 The oligarchs are born......Page 71 Merger mania......Page 75 The 1998 partial default......Page 78 The loser takes the fall......Page 80 Yukos transformed......Page 81 A revolution in production......Page 82 Corporate transformations......Page 86 Personal issues......Page 89 3. The State and the Oligarchs......Page 93 Pluralist state to regime consolidation......Page 94 Putin’s policy of ‘equidistance’......Page 97 Muddy waters......Page 98 Business and state in the new dispensation......Page 103 Between assaults......Page 105 From equidistance to subordination......Page 107 ‘The State and the Oligarchs’......Page 108 The revenge of the state......Page 111 An interaction model......Page 113 Models of the Yukos affair......Page 114 The ideology of statism......Page 115 The political theory......Page 118 The factional theory......Page 120 A state within a state......Page 127 Independent political entrepreneurship......Page 131 Khodorkovsky’s defection......Page 132 Party politics......Page 134 The reorganization of power......Page 137 Foreign policy aspects......Page 140 Open Russia......Page 142 Philanthropy and patriotism......Page 145 Questions of economic policy......Page 147 Merger of Yukos and Sibneft......Page 148 Policy conflicts: Pipelines and markets......Page 152 Rosneft, Gunvor, and the emergence of an anti-Yukos ‘politburo’......Page 158 Face to face: 19 February 2003......Page 161 Personal relations......Page 163 The assault begins......Page 167 First arrests......Page 168 Khodorkovsky’s response......Page 170 Khodorkovsky’s arrest......Page 176 First reactions......Page 177 Political fallout......Page 180 Murky matters......Page 183 Paris and beyond......Page 184 Avisma, Valmet, and shell companies......Page 187 The attack on Yukos......Page 189 Yukos after Khodorkovsky......Page 190 Tax matters......Page 197 The ‘scam of the year’: The sale of Yuganskneftegaz (YNG)......Page 203 Yukos investigated......Page 207 Pre-trial detention......Page 208 The case against Khodorkovsky and his associates......Page 212 Criminal charges......Page 213 The Apatit case......Page 214 Pichugin: The Tambov cases and Valentina Korneeva......Page 215 Petukhov and the Nefteyugansk case......Page 218 The East Petroleum case (Yevgeny Rybin)......Page 222 The Mitra and Lesnoi case......Page 223 Khodorkovsky’s trial......Page 225 ‘Basmanny justice’......Page 226 Reaction to the trial and verdict......Page 232 Appeals......Page 237 In the penal colony......Page 241 The Krasnokamensk prison colony: From Rokossovsky to Khodorkovsky......Page 242 Life as a prisoner......Page 245 The broader assault......Page 250 The Temerko case......Page 251 The Bakhmina case......Page 253 Vasily Aleksanyan......Page 254 Other cases......Page 256 The end of Yukos......Page 258 Bankruptcy......Page 259 Twisting the knife......Page 264 Civil proceedings......Page 265 The attack continues......Page 267 Further charges......Page 268 International appeals and rulings......Page 273 International commentary......Page 276 Law and power......Page 281 8. From Oligarch to ‘Dissident’......Page 283 Business and the state......Page 284 The crisis of Russian liberalism......Page 287 Features of the crisis......Page 288 Khodorkovsky as political philosopher and commentator......Page 293 Prison and the world: Property and freedom......Page 297 First interview from jail......Page 299 Freedom the Russian way......Page 301 The left turn......Page 303 ‘Freedom does not bring happiness’......Page 304 Realism or fatalism......Page 306 Another left turn......Page 309 Civil society and development......Page 310 Left Turn 2......Page 312 The world in 2020......Page 315 Freedom, the market, and sovereign democracy......Page 316 The ambiguities of Russian liberalism......Page 317 Commentator on Russian politics......Page 319 9. Propaganda and Public Opinion......Page 323 Media and propaganda......Page 324 Public relations......Page 327 Media and martyrdom......Page 330 Public opinion......Page 331 Yukos and orange technologies......Page 333 In the international arena......Page 337 Building national champions......Page 341 Rosneft and the turn to statism......Page 342 Gazprom and planned merger with Rosneft......Page 345 Rosneft goes global......Page 348 The state and the energy sector......Page 351 The energy sector and Russia’s economy......Page 352 The economic consequences of the Yukos affair......Page 353 The dual economy......Page 357 Continuing consolidation......Page 359 Deprivatization......Page 363 Towards a new embedded capitalism......Page 367 Meta-corruption, or an economy of rents......Page 370 A moral economy......Page 372 11. Polity and Power......Page 376 Resources and power: The oil curse?......Page 377 The political system and civil society......Page 384 The debate on freedom in the wake of Khodorkovsky’s arrest......Page 388 An ‘energy superpower’......Page 389 Energy imperialism?......Page 390 Resource nationalism......Page 395 The Yukos case: Right and wrong?......Page 399 Class and state power......Page 406 Fate and freedom......Page 411 Bibliography......Page 416 B......Page 430 C......Page 431 E......Page 432 F......Page 433 H......Page 434 K......Page 435 M......Page 437 N......Page 438 P......Page 439 R......Page 440 S......Page 441 T......Page 442 W......Page 443 Z......Page 444 A Major New Assessment Of The Key Episodes In Russia's Recent Political And Economic History That Sheds Important Light On The Nature Of Power And Freedom In Russia Today. 1. Introduction : Freedom And Property -- 2. The Birth And Transformation Of Yukos -- 3. The State And The Oligarchs -- 4. Why Yukos ? -- 5. The Assault Against Yukos -- 6. Khodorkovsky Goes To Jail -- 7. There Will Be Blood -- 8. From Oligarch To Dissident -- 9. Propaganda And Public Opinion -- 10. Political And Moral Economy -- 11. Polity And Power -- 12. Conclusion : A Question Of Interpretation ? Richard Sakwa. Includes Bibliographical References (p. [397]-410) And Index.