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Russian oil tycoon Khodorkovsky convicted of embezzlement

By Catherine Belton and Isabel Gorst
Monday, December 27, 2010; 4:18 PM

MOSCOW - A Russian judge has convicted Mikhail Khodorkovsky, the jailed Yukos oil tycoon, and his former business partner, Platon Lebedev, of embezzlement and money laundering in a politically charged trial that has provoked condemnation from the United States.

Reading the verdict on Monday, Viktor Danilkin, the judge, told a packed courtroom that Khodorkovsky and Lebedev had "embezzled property belonging to others by using their official positions." The verdict could keep the Kremlin foes in jail for six more years.

Khodorkovsky's lawyer said his team would appeal, decrying the decision as prefabricated and claiming pressure had been applied on the judge.

"If the court were free and independent in issuing its verdict, it would have issued an acquittal," said Vadim Klyuvgant, the chief defense lawyer. "What we heard here confirms the court has faced pressure."

The White House released a statement Monday saying the Obama administration is troubled "by the allegations of serious due process violations, and what appears to be an abusive use of the legal system for improper ends. The apparent selective application of the law to these individuals undermines Russia's reputation as a country committed to deepening the rule of law."

U.S. Secretary of State Hillary Rodham Clinton said in a statement that the verdict "raises serious questions about selective prosecution" and about the rule of law being overshadowed by political considerations.

"This and similar cases have a negative impact on Russia's reputation for fulfilling its international human rights obligations and improving its investment climate," she said.

The 20-month trial has been seen as a key test for pledges made by Dmitry Medvedev, the Russian president, to uphold the rule of law and boost the independence of the judicial system.

Khodorkovsky, once Russia's richest man, is accused of stealing $27 billion of oil, or all of the commodity his company produced between 1998 and 2000, and all the oil it exported between 2000 and 2003, and then laundering the proceeds.

Even critics of Khodorkovsky, who amassed vast wealth in the chaos of the 1990s but then transformed himself from corporate governance pariah to investor darling, say the charges that he stole such quantities of oil are absurd.

The new charges come on top of the eight-year sentence Khodorkovsky and Lebedev received in 2005 for fraud and tax evasion in a seven-year legal onslaught that has defined the Russia of Vladimir Putin, the country's president-turned-prime minister.

(READ: Putin: Khodorkovsky 'should sit in jail')

Khodorkovsky's arrest in 2003 marked a turning point in Putin's presidency that led to the stifling of political opposition and the state takeover of the economy's commanding heights.

Investors said the conviction presented a lost opportunity for the Kremlin as it seeks to convince business that it is improving its investment climate.

Public opinion in Russia has changed since Khodorkovsky's arrest in 2003, said Gennady Gudkov, deputy head of the security committee in the Russian parliament and a key member of the country's establishment.

Then, Khodorkovsky's case was seen by many in the country as an indictment on the chaotic 1990s when a handful of oligarchs had won valuable state assets for a song and then attempted to deploy their wealth to influence policy in their own favor. Things are different now. "People have begun to feel sorry for Khodorkovsky. It is exactly the opposite of what they felt 10 years ago," Gudkov said.

Alexander Rahr, a Russia expert at the German Council on Foreign Relations, said human rights groups were now comparing Khodorkovsky to Soviet-era dissidents such as the nuclear scientist Andrei Sakharov or novelist Alexander Solzhenitsyn.

"I'm very wary about making comparisons with these sorts of people, who fought for freedom," said Rahr. "Khodorkovsky fought only for his business."

- Financial Times

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