Khodorkovsky vs. the Kremlin

Speaking barely above a whisper, the 40-year-old multibillionaire says: “It’s obvious that the law enforcement bureaucrats have their last chance to restore the position they have held for the past 600 years. If we just bow our heads now, we’ll never have a normal society in this country.” Pouring himself a Diet Pepsi, he crushes the can, talks some more and then crushes the can again.

It was just last April that Khodorkovsky announced the coup of his young career: the impending merger between Yukos and smaller rival Sibneft, which would create the first Russian oil supermajor, a company that could well surpass Exxon Mobil in a few years as the world’s top crude oil producer.

But only three months later, on July 2, Khodorkovsky was plunged into an unnerving crisis: Moscow prosecutors arrested his longtime right-hand man, Platon Lebedev, a billionaire in his own right, on charges of embezzlement stemming from the privatization of a phosphate plant back in 1994. Lebedev has denied the allegations.

Few in Moscow believe that fresh evidence about the nearly decade-old deal suddenly came to light, precipitating Lebedev’s arrest. As is so often the case in Russia, the nub of the matter appears to be political. Custom stipulates that oligarchs like Khodorkovsky are either supposed to support the government or remain strictly neutral in politics.

But with parliamentary elections looming in December, Khodorkovsky has unabashedly bankrolled two opposition parties, both market-oriented: the Union of Right Forces and Grigory Yavlinsky’s liberal Yabloko party.

Khodorkovsky is not coy about his political involvement. “What my opponents consider an unacceptable level of political activity is a completely normal thing for any normal country,” he declared to the journalists called to his office in Yukos’s spanking new Moscow office tower. “I don’t intend to refuse the rights that a normal civil society gives me just because someone doesn’t like it.”

But his detractors -- a surprising number of them within Moscow’s tight-knit Western financial community -- believe that Khodorkovsky is intent on more than just fulfilling his civic duties. They assert that he is behind a very aggressive lobbying effort by the oligarchs to lock in oil company taxes that are half those paid by other global players, such as Exxon. The government’s legal assault on Yukos, say these critics, represents a crude but justified counterattack by the beleaguered Russian state. “You can’t have checks and balances in this country, because the oligarchs write all the checks,” quips James Fenkner, chief of research at investment bank Troika Dialog in Moscow.

The great unknown is President Vladimir Putin. Those who see the Yukos crowd as getting their just deserts assume Putin is behind the prosecutors, in which case, they say, Khodorkovsky has few choices other than surrender. “If Khodorkovsky is actually fighting Putin, he’ll be crushed,” says Roland Nash, chief of research at Renaissance Capital in Moscow.

Those who fear the old secret police more than they do the new plutocrats -- as do most progressive Russians -- cling to the hope that Khodorkovsky’s prosecutors are being overzealous and that Putin, in his own good time, will enforce a compromise. “Our prosecutor’s office is a creative organ, very good at holding its nose in the air and sensing shifts in the wind,” says Alexander Dobrovitsky, a prominent Moscow lawyer who has clashed with Yukos in court but now supports the company.

Khodorkovsky himself indicates that he still has hope for the president, although he acknowledges that Putin hasn’t answered his calls since Lebedev’s arrest. Nevertheless, Russia’s most successful entrepreneur says he is preparing for the worst: Asked whether he’s ready to join Lebedev behind bars, Khodorkovsky replies, “The only way not to be ready is to leave the country.”

So far he’s staying put.