INTERVIEW: Breakfast with Amsterdam

By bne IntelliNews April 29, 2008

Ben Aris in Berlin -

Sitting in the corner booth of the restaurant of the Hotel di Roma in Berlin, Robert Amsterdam is ordering breakfast, except it's now 10 o'clock at night. "Can you do that?" he asks the obsequious waiter who's English is not as good as it should be for this luxury five-star hotel just off Gendarmenmarkt. "Can I have scrambled eggs, coffee, toast and some bacon. Don't forget the bacon." The waiter repeats the order and forgets the bacon.

Amsterdam is the head of the legal team that's fighting to win the release of Yukos owner Mikhail Khodorkovsky and is in Berlin to consult with German lawmakers, who are increasingly concerned by a resurgent Russia. Since Khodorkovsky was arrested on the airstrip of the Novosibirsk airport in October 2003, Amsterdam has been globe trotting, telling his story to anyone who will listen. And Amsterdam has found an interested audience pretty much anywhere he goes - a distinction that has made him persona non grata in Russia.

"It must be the first time in Russian history that someone was arrested on a plane flying to Siberia," says Amsterdam, who comes across as a jolly but highly intelligent man completely on top of a brief that's as much about politics as about the law. "He could have got out to the West if he wanted to, but chose to go to jail instead," says the Russian-born lawyer, who was raised in the US.

The "Siberia One"

Following Putin's decision to step down and pass the baton to his friend and ally Russian president-elect Dmitry Medvedev, speculation has been swirling in Moscow that Khodorkovsky will be released during the first 100 days of Medvedev's administration. However, the signals are mixed; the wife of the mayor of Yugansk, who was gunned down in a gangland style slaying in the mid-1990s, recently went on record to accuse Khodorkovsky of the murder. Yugansk was home to Yukos' key oil producing subsidiary and many observers have long said this murder could be the trump card against Khodorkovsky that the Kremlin has held in reserve.

Amsterdam argues that these opposite signals are signs of the depth and viciousness of the internal power struggle currently underway in the Kremlin as a result of the change of regime. Putin has smoothly handed on the office of the presidency to Medvedev, but this doesn't mean he is going to inherit the power of that office without a fight. "There has been clan fighting in the Kremlin since the mid-1990s. All eyes are now on Medvedev and to see if he can bring some unity to the government, but he is going to have to act fast if he is to take control," says Amsterdam, who's blackberry buzzes almost constantly on the table between us.

Russia is at a crossroads once again and many observers were pleasantly surprised by Putin's decision to anoint Medvedev, whose fellow first deputy prime minister, Sergei Ivanov, was in many ways the more obvious choice. Ivanov is the hard man and would have little trouble stamping his authority on the Kremlin, while a question mark hangs over the bookish Medvedev. Seen as the liberal choice, Medvedev boldly drew a line in the sand two weeks before the Duma election in a speech in Krasnoyarsk, laying out a liberal reformist agenda that was beyond the best expectations of most investors and analysts. "What's on the table for Medvedev?" Amsterdam asks rhetorically as the coffee arrives. "Legitimacy. The Krasnoyarsk speech was a point of departure and his presidency is going to be measured by what he said in this speech."

Amsterdam argues that the Kremlin is going through a similar process that the oligarchs underwent in the latter part of the 1990s. Once the carve-up of Russia's industrial jewels amongst these leading businessmen was completed, the focus changed to hanging on to what they'd got. Over the last five years, all the oligarchs have been cleaning up their act, paying their taxes and IPO'ing their assets where possible, as a London listing is amongst the best political insurance a Russian company can buy.

Medvedev's job, says Amsterdam, is to convince the ruling security services clan, the so-called Siloviki, who have massively enriched themselves at the state's expense, to do the same. The problem is many of them seem to still be in acquisition mode. "There are still tremendous structural problems in the economy: the high corruption, the opacity, the amount of assets that is now held in 'ZAO Kremlin' holding company," says Amsterdam. "Russia badly needs the rule of law. Those in power need to legitimise what they have stolen. They also need this legitimacy if they want to buy assets in the west. There is about to be a fire sale of assets in the West, but Russia can only participate if it adopts some real change."

It is not clear which way Russia is going to go under Medvedev. Analysts leapt on the Krasnoyarsk speech as a justification for hailing the Putin-Medvedev double act as a "dream team" outcome to the elections. However, within weeks the Duma signed off on the first reading of the so-called strategic sectors law. This piece of legislation has been years in the making and although the analysts notes that followed the Duma's vote on the first of three readings in April played up the clarity its passage brings, they glossed over the fact that the number of sectors included as "strategic" has been hugely expanded. The original bill named 11 sectors as off limits to foreign investors. The draft that reached the Duma at the start of this year listed 39 after the internal security service FSB had tinkered with it. But the final form listed 42 sectors, including internet and telecommunication companies.

Since the vote, the Kremlin has been back peddling frantically, trying to soften the telecom sector restrictions as a step too far, but the whole story suggests that the FSB clique has a much firmer hold on the reigns of power than the analysts care to admit. It also flies in the face of much that Medvedev was talking about in Krasnoyarsk. "The strategic bill runs counter to everything that would allow Russia to make strategic purchases of assets in the west," says Amsterdam. "For the liberalising wing in the Kremlin, it was the last thing they wanted to see."

Still, Amsterdam is not downbeat - the jury is still out on what will happen next. Ironically, Amsterdam's best hope is with the man that jailed his employer and he surprisingly speaks of Putin with respect. "You have to take your hat off to Putin. He is a slow moving, careful thinker and extremely competent. He is the Ronald Reagan of Russia - he can do no wrong," says Amsterdam. "Throughout history, Russian foreign policy has been a reflection of its internal politics. There is clearly an internal fight going on, but Medvedev has the opportunity to make a fresh start. We should not condemn him out of hand. Russia is not the only guilty party here. Washington too missed a huge chance [to remake relations] immediately after 9/11 when Putin reached out to the US."

These words are a little strange coming from the lawyer who is defending the man many people hail as a martyr to Putin's authoritarian drift. "We shouldn't play the sport of roughing up Putin just because we can, as it only plays into the hands of the Siloviki," says Amsterdam.

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INTERVIEW: Breakfast with Amsterdam

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