Oil fight shows Putin's tighter grip
The trial of Russia's richest man began yesterday in a controversial case widely seen as a Kremlin effort to establish further control over vast assets held by a handful of oligarchs - and over Russia's civil society.
Handcuffed to guards while arriving at the cramped courtroom, oil magnate Mikhail Khodorkovsky is facing seven charges listed in an 840-page document that include fraud, tax evasion, and embezzlement. The former CEO of Yukos, the country's largest oil company, was joined in the dock by associate Platon Lebedev. Even the tycoons' lawyer yesterday predicted a guilty verdict.
"I am expecting nothing more than I've seen in the past," said Robert Amsterdam, Mr. Khodorkovsky's lawyer. "This is a country that destroys its finest company while its senior members languish in jail illegally."
Moscow tax authorities are also expected to rule tomorrow against the Yukos oil company on past tax bills of $3.4 billion.
This high-profile case is one of many fresh signs that President Vladimir Putin - inaugurated for a second term just six weeks ago after a landslide election victory - is moving aggressively to tighten his authoritarian grip.
Despite Mr. Putin's frequent promises to create a "free society of free people," the Kremlin-dominated State Duma on Friday rushed through approval of constitutional changes that make it all but impossible to hold a referendum on Putin's rule, or on painful social reforms expected to be in play in coming months that could spark street protests.
"The trend in shrinking the political space that really accelerated in the fall of 2003 seems to be continuing unabated," says Andrew Kuchins, head of the Carnegie Moscow Center. "If you're concerned about the status of democracy and civil society in Russia ... it's hard to point to any heartening signals."
The moves exhibit "so little trust in the people," says Mr. Kuchins. But in the afterglow of the presidential vote, they also seize the "best window of opportunity for the Putin administration to move aggressively on a reform program, and remodel the system as they want it."
The new bill increases the total number of signatures required to initiate a referendum. Currently 100 signatures are needed; the new law requires 4,500 names spread equally across 45 regions. As well, in late May Putin shepherded through a bill that partially limits public rallies.
With no clear sign of how far the Kremlin will push the Yukos case - or whether other oligarchs will be targeted for misdeeds committed while carving their fortunes and assets from the remnants of the Soviet Union in the 1990s - Kremlin moves are spooking investors and Russian liberals alike.
Shares in Yukos hit a two-year low on Tuesday, even as the government refused a Yukos offer to make a deal on the tax bill for 2000. Outstanding bills for other years could raise the stakes to $10 billion and bankrupt the company.
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