Jailed Russian Oil Tycoon Faces More Charges

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By Peter Finn
Washington Post Foreign Service
Tuesday, February 6, 2007

MOSCOW, Feb. 5 -- Russian prosecutors have leveled new charges against imprisoned oil tycoon Mikhail Khodorkovsky and one of his partners, accusing the fallen businessmen of money laundering and embezzlement in the theft of $20 billion from Yukos, the company they ran.

Khodorkovsky, 43, called the charges "insane and absurd," according to one of his foreign attorneys, Robert Amsterdam. In a conference call with reporters, Amsterdam said the charges are an attempt to keep Khodorkovsky in prison through presidential elections in early 2008 and legitimize the state's seizure of Yukos's remaining assets.

The defendants, already serving eight-year terms, pleaded not guilty at a hearing Monday in Siberia. If convicted of the new charges, they could be sentenced to an additional 15 years in prison.

Khodorkovsky and his partner, Platon Lebedev, were eligible for parole this October. The very slim chance that they might have been released has now vanished, Amsterdam said.

The Russian prosecutor general's office confirmed the charges in a brief statement Monday, but provided no details on the case except to say the alleged financial crimes were "large-scale."

Yukos was forced into bankruptcy and its assets are being sold off to pay creditors and billions of dollars in back taxes. The state-controlled oil company Rosneft snapped up Yukos's richest oil fields, and a court-appointed manager said last month that he expected to liquidate the remaining company assets by the end of the year.

Khodorkovsky's attorneys said the 148-page charging document, which remains sealed, is an attempt to criminalize the standard movement of funds through an integrated corporate structure. They noted that Yukos was audited by a leading international accounting firm, PricewaterhouseCoopers.

"In this case, what you have is an entirely open book," said Sanford Saunders, another of Khodorkovsky's foreign attorneys, in the conference call. "No funds were obtained personally or improperly."

According to press reports in Moscow, the case relates to the alleged sale of oil at below-market prices between subsidiaries of Yukos in 2000-03. Prosecutors apparently allege that billions of dollars in undeclared profits were shifted through these transactions to offshore accounts before being redistributed to other parties.

Khodorkovsky's lawyers said that the internal trades were fully accounted for in Yukos's publicly available audits and that all funds and profits remained within the company to the benefit of shareholders.

Prosecutors allege that some siphoned money was diverted to Khodorkovsky's now-defunct foundation, Open Russia, which spent millions of dollars on programs aimed at strengthening democracy and education in Russia.

Khodorkovsky's defenders say he was targeted because of his political activities, particularly his funding of opposition groups that challenged the policies of President Vladimir Putin.

Khodorkovsky and Lebedev entered their not guilty pleas at a hearing Monday in the Siberian city of Chita, 3,700 miles east of Moscow near the border with China. Masked police guarded the courthouse during the proceedings.

Khodorkovsky's attorneys said they believe any new trial would be held in a detention center in Chita. They said that its distance from Moscow would impose a severe burden on Khodorkovsky's defense team and preclude the kind of news coverage that accompanied his first trial in 2005.

Khodorkovsky and Lebedev were moved to Chita in December, Khodorkovsky from a prison camp in the Chita region and Lebedev from a prison above the Arctic Circle.

One of Khodorkovsky's Russian lawyers, Karina Moskalenko, said in a telephone interview from Chita that she and other attorneys were barred from discussing the content of the charging document.

"What is being concealed is the outrageous madness of the charges," Moskalenko said. "When we read it together with our clients, we said: 'This is mad.' "


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