After Khordokovsky verdict, taking stock of business and corruption in Russia

Russia lashed out Tuesday at Western leaders who voiced their concern over Monday's conviction of Russian tycoon Mikhail Khodorkovsky.

By Olga Podolskaya, Correspondent, Dan Murphy, Staff writer / December 28, 2010

Mikhail Khodorkovsky, left, and his co-defendant Platon Lebedev, stand in a glass enclosure at a court room in Moscow on Tuesday. The oil tycoon's conviction for stealing oil from his own company will likely keep him in prison for several more years, and has provoked charges of biased prosecution.

Alexander Zemlianichenko Jr./AP

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Moscow and Boston

There will be no new year's present for Mikhail Khodorkovsky, who parlayed Communist Party connections and well-placed friends into Russia's largest post-Soviet fortune before crossing Vladimir Putin seven years ago and ending up in a Siberian labor camp.

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Yesterday, Mr. Khodorkovsky and his business partner, Platon Lebedev – who have both spent the past seven years behind bars on fraud and tax evasion charges – were convicted of embezzling $27 billion from Yukos, the oil company they cobbled together from Soviet-era assets that made their fortunes, and are now facing another six years in jail.

The politically-tinged case against the men has drawn international ire, perhaps nowhere more so than from the US. Secretary of State Hillary Clinton issued a statement yesterday saying the latest conviction brings up "serious questions about selective prosecution – and about the rule of law being overshadowed by political considerations." Germany called the conviction a setback for Russian democracy.

All this had Moscow lashing out in turn today, with the Russian Foreign Ministry saying everyone should "mind his own business, both at home and in the international arena... We are talking about serious allegations of tax evasion... In the US, by the way, they earn life sentences in prison."

That the two men would be convicted again had long been expected in Russia, and that the judiciary isn't exactly independent is hardly news.

But the Khodorkovsky case brings together three of the crucial strings that have guided Russia's political development since the collapse of the Soviet Union in 1991 and, economists say, have hamstrung its economic progress: The rise of the so-called Oligarchs, men like Khodorkovsky who amassed huge fortunes thanks to the chaotic and often-corrupt privatization of Soviet assets; a flourishing culture of corruption that has hampered Russian growth while feeding impunity from prosecution for police, politicians and many businessmen; and a steady retrenchment of the democratic gains made in the 1990s, with those who speak out against the government, from tycoons to NGOs, facing prosecutions.