Going For The Moguls

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Yukos dismisses as absurd the idea that Khodorkovsky was out to take over the Duma, but admits that he funds SPS and Yabloko as a private individual. The firm denies that Khodorkovsky has financed the Communist Party. The scheme, if it existed, was farfetched, given the modest showing of SPS and Yabloko in recent years and the Communists' tendency to self-destruct. But if the alleged plan had worked, Khodorkovsky would have become extremely powerful. Anyway, it came at a delicate time for Kremlin strategists: their party, Unity, is showing signs of coming apart at the seams.

Khodorkovsky's apparent venture into open politics is perplexing. A former official in the Soviet Communist Party youth organization, Komsomol, he had until recently the reputation of a secretive, careful operator who accumulated a fortune by deal making, not confrontation. Putin, meanwhile, has a proven track record of destroying business magnates who cross him. The media tycoon Vladimir Gusinsky opposed the war in Chechnya and failed to back Putin in the presidential elections. He was briefly imprisoned (though not convicted of any offenses), lost his empire and now lives overseas. The billionaire Boris Berezovsky, who helped Putin get elected but broke with him soon after, is now in restless exile in London. No one has a clear explanation for this change in Khodorkovsky's behavior, though many believe that the answer lies in a combination of massive wealth and growing ennui. "I think he is just bored," says one Duma member. "And as he is very rich, perhaps he thinks he is smarter than anyone else." Whatever Khodorkovsky's motivation, the Kremlin moved fast to teach him a lesson.
[an error occurred while processing this directive]In entering the political arena, Khodorkovsky broke two unwritten rules in today's Russia: businessmen can make money as long as they stay out of politics, and they are welcome to fund political parties as long as the parties are pro-Kremlin. Now some fear the attack on Khodorkovsky means that it's open season on oligarchs. Last week, prosecutors restarted an investigation into allegations that aluminum magnate Oleg Deripaska had illegally acquired assets in a major insurance company. Deripaska denies any wrongdoing. This is a separate and complex case, but the fact that Deripaska is related by marriage to the Yeltsin family added to the mood of factionalism run amok.

Two key Kremlin officials, Viktor Ivanov and Igor Sechin, have been repeatedly singled out in the Russian press as playing a crucial role in the Khodorkovsky affair. Many observers feel they are a cover for Putin himself. "I don't see these folks as independent actors," says Michael McFaul, a professor at Stanford University and specialist in Russian politics. Pavlovsky maintains that the faction, not the President, is pushing this particular crusade. After crushing independent TV networks, the Petersburg group is falling victim to its own propaganda. "These are people who control TV news, who order programs and who have started believing what they see on television," Pavlovsky says.

Putin's public silence has complicated the crisis, which has now gathered so much momentum that it will be hard to stop. But when it does finally wind down, Putin will be left with a series of unpleasant problems. Despite Khodorkovsky's dramatic predictions, the financial fallout for Yukos and the Russian economy as a whole may not be catastrophic. But Russia's image has taken a battering: doing business here once again looks risky. The delicate balance in Putin's Kremlin has been destroyed. And the hard-liners' attack on Yukos has produced precisely the result they were trying to avoid, Pavlovsky notes dryly: Khodorkovsky is now a major political figure.