Kremlin plays the murder card in Yukos affair end game

By bne IntelliNews August 4, 2008

By Ben Aris in Berlin -

Leonid Nevzlin

The Kremlin played the one trump card it had been holding in reserve in the Yukos affair on Friday August 1, sentencing former Yukos oil company co-owner Leonid Nevzlin in absentia to life imprisonment for murder.

Nevzlin was found guilt at the Moscow City Court hearing of organizing 11 murders and attempted murders, as well as theft and tax evasion. In addition to sentencing him to life imprisonment, the Moscow City Court ordered him to pay more than RUB5.5m in compensation to his alleged victims, reports Interfax.

The charges couldn't come at a worst time for the government's non-existent PR consultants. Already embroiled in the TNK-BP shareholders dispute (despite repeatedly denying it is anything to do with the state) and scarring investors with talk of tax investigations into the New York-listed coal and metals companies Mechel, Russia's image as "safe haven" from the current turmoil on the international capital markets has now been comprehensively smashed.

Prosecutors were blundering around following the court ruling and coming out with eminently quotable expansions on what happens next.

"There exists an agreement with Israel that makes it possible to send the sentence to the authorities in that country and ask either for Nevzlin to be extradited or for the penalty to be executed on Israeli territory," the prosecutor, Alexander Koblyakov, told reporters.

Watching the Yukos affair unfold since Nevzlin's arrest in 2003 has been like watching a poker game played in slow motion with some odd rules.

They way it worked was the Kremlin held the entire deck bar one card and showed Yukos owner Mikhail Khodorkovsky each card before it was played. The Kremlin started with the low numbers in the form of warnings and probes. Then moved up to high numbers with the arrest of Nevzlin, before moving into the picture cards with the tax investigations and eventual bankruptcy.

Khodorkovsky had one wild card to play, which he has been allowed to play over and over again - embarrass the Kremlin in the international arena, through the vehicle of the press, which he has done to great effect.

However, in this whole game the Kremlin has - so far - refrained from playing its final ace: to bring murder charges against the two men.

Lets face it, Khodorkovsky was no angle and actually guilty of many of the charges brought against him. Those that bother to acknowledge this complain instead about the selective use of justice as there are plenty of skeletons in the Yukos cupboard. Moreover, everyone seems to have forgotten about his treatment of US container-king Kenneth Dart, who was an investors into Yukos' main production subsidiaries in the early 1990s and was diluted out of his holdings by the use of the most egregious tactics.

This correspondent was invited to attend the annual general meeting of Yugansneftegaz, one of Yukos' main production subsidiaries, and arrived complete with a notarized power of attorney from Dart that should have allowed entry to the meeting under Russian law. However, on trying to register I was ejected from the building by an armed guard who waved an Uzi in my face. At the meeting Dart's shares were diluted down to nothing by a share issue voted through by the other attendees. Khodorkovsky was the baddest of the bad oligarchs at the time and a martyr these days.

Nefteyugansk other ghost has now risen from the grave. The case against Nevzlin included the famous assassination of Nefteyugansk Mayor Vladimir Petukhov.

The mayor had been resisting Khodorkovsky's efforts to take over the subsidiary there. He was gunned down -- "riddled with bullets" say reports - and found in a ditch near his house on June 26, 1998 - which also happens to be Khodorkovsky's birthday.

There is a well-known story that Khodorkovsky was brought the news as he was celebrating at the Yukos clubhouse off Prokorovka in Moscow. bne has been told by two source who were at the party Khodorkovsky was livid on hearing the news. While this story smacks of urban legend, it is widely known and enough to get you convicted for the crime in today's Russia.

Throughout the Yukos affair this murder charge has lurked in the background, but never been mentioned until now. In an interview with Robert Amsterdam in June, head of the Yukos legal team, Amsterdam said he was well aware of the accusation and had already ample material to counter the charges, however, is withholding comment until after Khodorkovsky's parole hearing in the next weeks.

Regardless of the validity of the murder charges, Nevzlin's sentence represents a scaling up of the assault on Yukos and also dashes the hopes some had that Medvedev would release Khodorkovsky during his first 100 days in office as a balm to smooth over the sore relations with the west.

The case can be taken as a sign that the hoped for softening that the Medvedev administration promised will not be forthcoming. Instead three major scandals are running concurrently: an attack on Mechel, Nevzlin convicted of murder, and TNK-BP under siege by its Russian shareholders. Seems the Kremlin is thinking: if you have bad news, best to get it all out at once.

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