Could Russian Oil Magnate Khodorkovsky's Conviction Upset East-West Trade Relations?

There are many reasons to believe that the current conviction of Mikhail Khodorkovsky may not be what it appears to be; Khodorkovsky was convicted by a Moscow court of money laundering and theft, along with his business partner, Platon Lebedev.

In an earlier 2005 trial, Khodorkovsky, former owner of YUKO's, which was once Russia's largest oil company, and Lebedev were convicted of tax evasion; there is now plenty of controversy surrounding that conviction. Prior to the 2005 convictions, Khodorkovsky was also Russia's richest person, however, his oil company was bankrupted after the trial because of the tax lien placed by the Russian government. Mr. Khodorkovsky and his partner were ultimately sentenced to eight years for those 2005 crimes, and now a 14-year sentence is proposed for the current convictions.

Political Coincidences?

It is not outlandish to characterize the Russian campaign against YUKO's and Mr. Khodorkovsky as politically motivated. The young maverick Russian former billionaire was stripped of his company in 2005, and his assets sold off to primarily Russian state-owned oil companies.

However, the amount claimed by the Russian government in the tax evasion trial was reduced several times, and in the most recent trial, Mr. Khodorkovsky and his partner were accused of stealing the entire oil output of their company for three years. In both cases, the amounts claimed are more than extravagant and seem quite exaggerated, if not falsified. The effect of the first trial was to dissolve the largest Russian oil company just when oil prices skyrocketed and the global market shifted; a coincidence?

Grave Misgivings

Both British and United States officials, including US Secretary of State Hillary Clinton, have expressed grave misgivings about the conviction, fearing representation of a return to the Kremlin-led oligarchic style of government that characterized the "Stalinist years." They have further stated that the conviction appears to be more politically motivated than a genuine act of justice. The potential harm to trade relations that the officials state are inevitable are also politically based and appears to be a message to the Russian Prime Minister regarding the potential drift of Russian politics "to the right."

It is clear that the conviction, if allowed to stand, will certainly harm trade relations, apparently only because Western officials have stated that it will and indicated that if nothing changes, there will be a change in the Western attitude toward Russia. Mr. Khodorkovsky has been in prison for years on the previous charges, and nobody protested that conviction.

To assert that there is an underlying political motivation is to state the obvious. Mr. Khodorkovsky's transparent, Western style of business and refusal to bow to the Russian "Old-Boy" network made him many enemies; nevertheless, for it to be an issue now is equally politically motivated and not an appeal for justice. This is about oil and the power that it represents; YUKO's was dissolved for that reason, and Russia's recent moves have triggered this public statement and outcry from the West. Even though the back story may never be fully known, the issues are not going away any time soon.