The Russia Conundrum

But the importance of the Yukos case was not just the great financial interests at stake, the vast fortunes lost and gained; not just the personal dramas, the years wasted in the jails and prison camps, the loss of health and happiness and even, on occasions, lives – it was the pivotal role it played in the battle between the liberals and the new hardliners in Russia. It was the test case that demonstrated the annihilation of the former and the apotheosis of the latter. From Yukos onwards, the country would increasingly turn its back on the Yeltsin years of liberalisation and opening to the West; it would see the inexorable rise of nationalist, conservative forces who believe that economic freedoms and individual rights must be subservient to the interests of the state, that America and Western Europe are natural enemies, not natural collaborators. In February 2004, four months after my arrest, Putin announced that he was firing his Prime Minister Mikhail Kasyanov and the whole of his government. He said he wanted a clean break with the old administration in advance of the following month’s presidential elections.

CHAPTER 10

THE TRIAL

For a thousand years, Russia has vacillated between two distinct models of society and governance. Geographically split between Europe and Asia, the Russian mentality has been torn between East and West, between the European template of liberal, market-oriented openness and the ‘Eastern’ model of coercive autocracy, which places the wielders of power above the law, allowing them to rule by divine right or ‘by the dictatorship of the people’, but almost always by brute force. Educated Russians – the intelligentsia – have traditionally looked to the West, but the forms of governance that the nation imbibed in the early years of her history, what Russians refer to as the silnaya ruka, the iron fist of centralised power, have remained a powerful presence.

The intelligentsia of the nineteenth century were repelled by the authoritarian nature of tsarist autocracy. The writer Pyotr Chaadayev attributed Russia’s failure to emulate Western democratic principles to the baleful legacy of the Mongol occupation, which lasted from 1237 to 1480. Chaadayev’s arguments for a decisive turn towards Western values of law and social justice coalesced into a powerful school of so-called Westernisers. But an equally vigorous movement emerged, in stark disagreement with Chaadayev’s solution and proposing instead a return to the supreme ‘Russian values’ of Orthodoxy, collectivism and nationalism. These were the so-called Slavophiles, nationalist conservatives who supported tsarism and autocracy.

The Slavophiles saw Russia’s strength in its unique historical mission and communal institutions that gave Russia an advantage over the decadent, individualistic West. Dostoyevsky summed it up in the 1870s: ‘Our land may be destitute and chaotic … but it stands as one man. All eighty million of its inhabitants share a spiritual unity which does not, and cannot, exist anywhere in Europe.’ The Slavophiles were anti-Western in the sense that they rejected European social values and lamented Peter the Great’s attempts to introduce them. They believed in the old social model of an autocratic, Orthodox society in which everyone knew their place and did not challenge the power of autocracy. The Slavophiles proclaimed Russia’s moral superiority and need to avoid contamination by the West, reviving the old myths of ‘Holy Rus’ and Russia’s divine mission to save the world. The crusading conviction that Russia’s destiny was to teach the rest of humanity how to live would characterise Slavophile teachings in the nineteenth century and surface again in the messianic communism of the twentieth.

In 2003, we clearly saw the pendulum swing precipitously from one historic model to the other, an epochal political pivot from the Westerniser ideal of openness, participatory government and social guarantees to the Slavophile glorification of Russian nationalism, isolationism and quasi-feudal authoritarianism. The Yukos managers who took control after my resignation came up with a jolt against the new despotism that had taken hold in Putin’s Kremlin. Despite knowing that the demands for tax arrears against the company were bogus, they engaged with the authorities and made constructive offers to resolve the standoff, spending months trying to negotiate with the Kremlin. But the charges of tax evasion, which had begun at $1 billion, mysteriously escalated to $3.5 billion and then, ludicrously, to $5 billion or even $20 billion. When Yukos agreed to pay $1 billion, then $2 billion, then $20 billion and more, the prosecutor simply thought of a higher number. It was clear that Putin had no intention of resolving the dispute.