The Russia Conundrum

I wasn’t nervous, but I was concerned about what might be put in my food – I remembered Pichugin’s experience with the psychotropic drugs – so I refused to eat or drink anything that the jailors gave me. I drank water only from the tap, until I got my head around the situation. It took me three weeks. Now, I would say that knowing how to behave if you get arrested or taken hostage is a useful skill to learn. I recommend that anyone engaged in business, politics or social activities in Russia should learn it, because it can happen to you.

It is vital not to torment yourself with hopes of early release or worrying about what you left unfinished while you were free. It is important to say only what you consciously want to say – to speak only for your own benefit and nothing beyond that; it is astounding how things you say inadvertently can be turned against you as soon you are arrested. I can’t remember much of what I asked to be brought from home. I could easily get by without most things, but I had books, pens and notebooks brought in as fast as possible. I was preparing for a long fight and a long time inside.

My arrest triggered ructions at the highest levels of the Kremlin. On 30 October, Alexander Voloshin resigned from his post as Putin’s chief of staff in protest at my detention. He was swiftly replaced by Dmitry Medvedev, then a largely unknown young technocrat, whose first act was to criticise the freezing of Yukos’s assets. Medvedev said on national television that law enforcement agencies were sometimes prone to an ‘administrative frenzy of zeal, with ill-thought-out consequences that affect the economy and cause outrage in national politics’. Medvedev questioned whether the seizure of Yukos’s shares was ‘legally effective’, giving rise to hopes that the dispute might still be settled amicably. It sounded to me like an olive branch and I decided to take it. My overriding goal was to save the company I had built and to protect the people who worked for it. If my resignation could help to achieve these things, it was my bounden duty to do so. I issued a statement from my prison cell.

I had set myself the goal in the years ahead of building an international energy company – a leader of the world economy. But the situation that has developed today forces me to set aside my plans to continue my personal involvement in Yukos’s development. As a manager, I have to do all I can to pull our workforce safely out from under the blows that are being directed at me and my partners. I am leaving the company … We were the first Russian business to consistently implement the principles of financial transparency and socially responsible business behaviour. We introduced international standards of corporate governance. We were able to achieve absolute recognition and trust on the Russian and global markets … Taxes paid by the company to all levels of government will be in excess of $5 billion this year. Over $100 million is spent annually on philanthropic programmes … I shall now devote myself to building in Russia an open and truly democratic society through my continuing work as chairman of Open Russia.… Wherever I may work, I shall give my all for my country, my Russia, in whose great future I firmly believe.

As well as resigning as head of Yukos, I also gave up my stake in the company. I transferred all my shares to my deputy, Leonid Nevzlin, who was by now in Israel, and informed the Kremlin that I would be happy for the whole of my personal fortune to be used to pay off any bill for Yukos tax arrears, if that would help to save the company.

Putin was playing a devious game. He continued to send conciliatory messages via Mikhail Kasyanov and others, suggesting that the whole affair was a mistake and would soon be sorted out. But he was toying with us. At the same time, Igor Sechin was showing no mercy. Sechin and the Siloviki were intent on destroying Yukos for their own reasons. They wanted to put an end to the era of free markets and private ownership, to return to state dominance or, rather, their own control of the economy; to humiliate the remaining liberals in the Kremlin by publicly demonstrating their impotence to stop this happening; and, most importantly, to satisfy their own personal greed. Putin directed the operation personally, using Sechin and Viktor Ivanov to do the dirty work. He crushed Yukos and handed its assets to his cronies as a reward. Yukos was gobbled up by the state oil company, Rosneft, shortly after Sechin was appointed its chairman. Absorbing Yukos made Rosneft a giant in the industry and Sechin had ultimate control over where its profits went.