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Lawyers for Oil Giant Yukos Say Case is 'Political' - 2004-06-24

Lawyers representing the jailed Russian oil tycoon, Mikhail Khodorkovsky Thursday told an audience in Washington Thursday that the charges against their client are entirely political and have no basis in law. The proceedings against Russia's richest man have caused its share price to plummet.

Yukos has been Russia's biggest oil exporter, biggest taxpayer, and most western-oriented corporation. But the proceedings against its founder and major shareholder have badly blemished its reputation among foreign investors. Oligarch Mikhail Khodorkovsky and an associate, Platon Lebedev, are charged with fraud and tax evasion, charges their lawyers say are groundless.

Energy lawyer Sanford Saunders says it is absurd for the Kremlin to assert that the case is simply about corporate crime, like that of the failed Enron company in the United States.

"This is Enron only if you ignore the facts," he said. "They both happen to be in the energy industry. But the similarity stops there. Let's focus on Yukos and Group Menatep [Khodorkovsky's holding company]. These are real companies that these gentlemen built and provided value to the people who invested with them."

Attorney Robert Amsterdam says President Vladimir Putin last October had Mr. Khodorkovsky arrested because he was financing opposition parties and had political ambitions seen as a threat to the Russian leader. Mr. Amsterdam says the case shows that there is no rule of law in Russia and exposes the president's drive towards unbridled power.

"It [the trial] is a test of exactly how far this new government can go to further its own interest to steal one of the most important companies Russia has ever developed, to dislocate 100,000 employees," Mr. Amsterdam said.

While it is unofficially acknowledged in Russia that the Yukos case is political, there is little public sympathy for Mr. Khodorkovsky, who is widely viewed as an opportunist who used his money and connections to fraudulently gain control of a valuable state asset.

There are signs of possible compromise in Moscow. Yukos Thursday has named a former Soviet central bank chief to its management board and there is talk that Mr. Khodorkovsky may cede control of the company to avoid a 10-year term in prison.