The Russia Conundrum

So, right now is a critical moment for Russia. Russian society is about to resolve the question of which path our country is going to follow. Which model of development are we going to choose for our country: the authoritarian one, or the model of a civilized modern state? I very much hope that we will make the right choice. And foreign investment is a great help to us in this. When we meet to celebrate the next ten years in 2013, we will already know the answer to the question of which path Russia took. I very much hope – and this is in all our interests – that Russia will have taken the right path.

I was arrested on 25 October 2003, on a scheduled airport stopover during a business trip to Siberia. On my last day of freedom, I had been asked by a journalist in Tomsk what lay behind the Kremlin’s attack on Yukos and I tried to explain that this was a proxy battle between two factions of powerful men with very different visions for Russia’s future. ‘We are being attacked not because of something we did. It is the very existence of an independent force like Yukos that they see as a threat to them. And by “them” I mean those [politicians] who are still stuck in the old ways of thinking. I don’t want to get into naming names, but I firmly believe this whole affair is the result of a struggle for power taking place between the different factions in Vladimir Putin’s entourage.’

The proceedings against me became a political trial of strength between two ideologies; I was supported by the remaining liberals in the Kremlin, including Kasyanov, Voloshin and the chief economic adviser Andrei Illarionov, who believed in the values of free-market economics. They staked their credibility on exposing the ludicrousness of the trumped-up charges against me and against Yukos, but they were outmanoeuvred by the Siloviki. The politically motivated guilty verdict in my trial, and the prison sentence which I later discovered had been personally decided by Vladimir Putin,⁸ signalled the rout of the Kremlin liberals: to a man, they either resigned or were fired, and – with their departure – what may turn out to be the last chance of a liberal future for Russia was gone. From now on, strategic industries would be controlled by Putin’s cronies; they would be used for their personal enrichment, to challenge the West rather than to strengthen cooperation with it, and certainly not for the good of the Russian people. Putin’s mission to ‘make Russia great’ would lead to a new toughness in international relations; Moscow’s rhetoric would become ever more strident and Russia’s neighbours would be held to ransom by cutting off – or threatening to cut off – oil and gas supplies. The Kremlin would become tougher in its attitude towards domestic opposition; the spectacle of my show trial would deter independent figures from entering the political arena; and ordinary citizens who tried to protest or organise opposition would find themselves on the wrong end of police batons.

The events of October 2003 confirmed the triumph of the Siloviki. Spurred on by Sechin and Viktor Ivanov, Putin would move to reimpose the deadening model of state control that had darkened Russia’s past, subordinating the position of business, subverting democratic freedoms and individual rights. Not only would Yukos be destroyed, but also its charitable foundation Open Russia, along with many other charities and non-governmental organisations that aroused the suspicion of the Kremlin. Civil society would be reduced to a minimum; the press, including, in time, social media, would be brought under state control; a meaningful parliament and gubernatorial elections would be abolished. At the end of Yeltsin’s term in power, business did not depend directly on the Kremlin; after Yeltsin, it became a necessary condition for the normal functioning of any company.

Yukos was chosen as the vehicle by which the Siloviki engineered all these changes. It was chosen because the spoils were so immense, and because it represented everything the Siloviki hated. It was an open, transparent company, operating to Western standards of probity; it had no hidden depths of corruption and it strove for integration into the Western economic system. Like Yukos, I too adhered to Western values. I had founded charitable organisations; I had promoted education and the preservation of Russia’s intellectual potential, including the modernisation and computerisation of the country; I was proposing to strengthen relations with China by building a pipeline from Yukos’s Siberian oilfields; and I was partnering with American companies to expand Russian business in the West. Putin didn’t like any of this. His model was to keep business, the individuals who run it and the whole of the rest of the country on a short leash.