Russian oil tycoon Mikhail Khodorkovsky was sentenced Tuesday to nine years in prison on fraud, embezzlement and tax evasion charges following a 10-month trial shadowed by claims that the Kremlin orchestrated the case to crush a potentially dangerous political opponent.
The guilty verdict against the man who was once Russia's richest citizen drew new criticism here and abroad as evidence that rule of law has yet to take root in the post-communist state.
"Here, you're innocent until proven guilty," President Bush said in Washington, "and it appeared to us, at least people in my administration, that it looked like he had been judged guilty prior to having a fair trial." Bush said he had expressed his concern to President Vladimir Putin and that it would "be interesting to see" how an appeal proceeded.
The prosecution has been popular with the Russian public: Many people believe that the wealth of Khodorkovsky and other business magnates known as oligarchs was stolen in shady deals involving the sell-off of state industries in the 1990s following the collapse of the Soviet Union. Human rights groups and many business leaders say it highlights the arbitrary exercise of power in Putin's Russia, pointing out that many of the transactions at the heart of the case had been organized and approved at the time by the Russian government.
Attorneys for Khodorkovsky, 41, promised to make the conviction the centerpiece of a campaign to improve the quality of democracy in Russia.
"I believe this trial, as we all do, is an obscenity," Robert Amsterdam, a Canadian representing Khodorkovsky, said Sunday at a news conference. "It is emblematic of what Putinism is all about. Putinism is about the destruction of political space."
Khodorkovsky's business partner and co-defendant, Platon Lebedev, was also found guilty and sentenced to nine years in prison. In addition, the two men were fined the equivalent of about $615 million.
The convictions followed the 12-day reading of a 1,000-page verdict by a three-judge panel in Moscow City Court.
"I think it is a testament to Basmanny justice," said Khodorkovsky, speaking from behind the bars of a courtroom cage where he has been confined during the proceeding. For government opponents, Basmanny Court in Moscow, where his case began, became a symbol of the corruption of the justice system.
"Not one normal sane person would understand what has been read out here," Lebedev said.
Later, in a statement released by another of his attorneys, Anton Drel, Khodorkovsky said: "The judicial system became a speechless appendage and a blind instrument of the state."
Attorneys for the two men promised to appeal.
Critics of the government say the prosecution and a parallel legal action against Yukos, the oil giant owned by the defendants, provided the opportunity for the state to dismantle the company. Its Yuganskneftegaz unit, which pumps 1 million barrels a day from some of the country's richest oil fields, was auctioned off in a circuitous deal that effectively returned it to state hands.
Yukos, once valued at close to $40 billion, is now worth about $2 billion. Many of its senior executives have fled the country and others have been imprisoned in a series of cases that critics contend are politically motivated.
The cases have unnerved many foreign and Russian investors. Capital flight jumped three-fold last year, to $8 billion, according to government figures.
Russian prosecutors say that Khodorkovsky and his associates cast themselves as victims through a sophisticated public relations campaign, and that the courts had finally brought to heel a pair of unscrupulous businessmen who bilked the state of billions of dollars.
Natalia Vishnyakova, a spokeswoman for the prosecutor general's office, called the verdict "fair and objective." She said it matched "the actual circumstances of the case and the gravity of the crimes committed by the defendants."
In an interview with French television this month, Putin mocked the sympathy the defendants have elicited abroad. "A criminal case against one of our oil companies attracts the attention of the entire world," he said. "Of course, those so-called poor people need to be defended: They made between $6 billion and $7 billion within five years in personal fortunes. This shows that they are talented people and can defend themselves."
After Tuesday's verdict, Yukos filed suit in Russian court to challenge the sale of the Yuganskneftegaz unit. The company has never been successful in the Russian courts.
Aspects of the Khodorkovsky and Yukos cases have been reviewed by courts in Switzerland, Liechtenstein and Britain when Russian prosecutors sought various forms of legal assistance. In each case, the Russian requests were rejected. A British court, considering an extradition request for two Yukos executives, asserted that the Khodorkovsky trial was politically motivated and that no one associated with Yukos could receive a fair trial in Moscow.
A report by the Council of Europe, a 46-nation human rights group, said the trial appeared to be motivated by the state's desire "to weaken an outspoken political opponent, to intimidate other wealthy individuals and to regain control over 'strategic' economic assets."
U.S. Commerce Secretary Carlos M. Gutierrez, who was in Moscow for a business meeting Tuesday, spoke of harm to Russia's economy. "Anytime the business community sees something that impacts business and doesn't really understand why," he said, "then that's a setback, because then businesses will not want to invest."
Tuesday's verdict does not end Khodorkovsky's legal woes: The prosecutor general's office said it may charge him with money laundering, for which he could be sentenced to 15 years in prison.
Although Khodorkovsky acquired his wealth at the helm of an oil giant, much of the case focused on charges related to the sale more than 10 years ago of a stake in Apatit, a comparatively small state-owned fertilizer company.
Prosecutors alleged that a 1994 bid for a 20 percent stake in Apatit was rigged and that the winner, a Khodorkovsky-controlled company called Volna, failed to follow an investment plan that had been agreed to. By the time the state sought to regain control of the company, Volna had sold its shares, making a huge profit at no cost, prosecutors alleged.
Khodorkovsky's attorneys argued that Volna "substantially complied" with the investment plan, and where it did not, there were solid business reasons not to. Its actions did not constitute a criminal act, they argued.
Charges related to the sell-off of Apatit were litigated previously in civil court. The prosecutor general's office signed off on a settlement in April 2003, but two months later reversed itself and arrested Lebedev. Khodorkovsky was arrested that October when masked commandos stormed his private plane at an airport in Siberia.
Critics of the government contend that the investigation was triggered by political challenges to Putin. The case was opened after Khodorkovsky and Putin clashed publicly in a meeting the president held with business leaders. It also came shortly after Khodorkovsky began financing a number of political parties and nongovernmental organizations, some of which were hostile to the Kremlin.
A Kremlin official said in March that the case was a warning to the business community. "If it hadn't been Yukos, it would have been some other company required to answer for its tax-evasion schemes," Igor Shuvalov, a presidential aide, said in a speech. "No one wants another Yukos affair, but if this is required in order to make companies pay their taxes. The government will do it even at the cost of damaging its own image."
Prosecutors had charged that Khodorkovsky and Lebedev were part of an "organized group," essentially a criminal conspiracy, which had the effect of extending the statue of limitations on charges that otherwise would have expired.
Khodorkovsky's attorneys said the prosecution provided no evidence that a criminal group existed beyond asserting that Group Menatep Ltd., a holding company with the major block of shares in Yukos, was such a conspiracy. They noted that the only evidence submitted to the court was the fact that Menatep had a Web site, a phone list, and a memo discussing the diversification of investments.
"General Motors is a criminal group under those criteria," said A. John Pappalardo, a former U.S. attorney retained by Khodorkovsky.