Streetwise Professor

December 20, 2013

Khodorkovsky Meets Churchill

Filed under: Energy,Politics,Russia — The Professor @ 12:01 pm

In a whirlwind sequence of events, Putin announced that Mikhail Khodorkovsky would be pardoned; he was pardoned; he left his Russian prison camp; and finally, he boarded a plane for Germany, where he landed a few hours ago.

This is obviously a welcome development, but one that raises many questions.

It is yet another embodiment of the Churchillian cliche. For the “whys” of the release itself, and its timing, are mysterious, etc.

There is a clear official narrative.  Khodorkovsky requested pardon based on humanitarian considerations (in November) and it was granted on humanitarian grounds a little more than a month later.

But what lay behind Khodorkovsky’s decision to request a pardon?: he had said in the past he would never do so. His lawyers were unaware that he had made any such request, and were completely nonplussed by Putin’s almost off-hand announcement of the pardon.

Had he finally been broken?  Did the prospect of yet another sham trial and inevitable conviction convince him that he had to concede to Putin, and allow his torturer to appear magnanimous and achieve a political benefit? Or did Putin approach Khodorkovsky and offer the pardon, backed by a threat of horrible future consequences if he did not?  If so, why?  What benefit does Putin expect to gain?

Most of the conjecture behind Putin’s motives in granting the pardon focus on the upcoming Sochi games.  Yes, I know Sochi is a big deal to Putin, and perhaps (as rumor has it) part of the deal is that Merkel will attend the games: but her presence will make all the more conspicuous the absence of Obama, Hollande, and numerous other first-tier national leaders. In some respects, if it appears that Putin had to make such a big concession in order to get one world figure to attend the Olympics, it will make him look weak, almost pitiful.

As I have written before, Putin has always had a visceral, Pavlovian reaction to the mere mention of Khodorkovsky’s name.  He hated the man.  Moreover, Putin and Russia had been the subject of years of criticism for imprisoning him.  But Putin was evidently willing to live with that criticism and the associated political and economic costs for 10 years.  Is the benefit of a somewhat reduced negativity of coverage of Sochi (and there will be many other things that can and will be criticized) enough to overcome the personal hatred and the other benefits that Putin (by revealed preference) clearly obtained by keeping him behind bars?  The Sochi effect seems so transitory, I find it hard to believe that is the main driver.  Again: this pardon will have only a modest impact on the tenor of the coverage of Sochi, and the coverage of Russia during Sochi.  And much of that coverage will be: “Yes, he freed Khodorkovsky, but why was he imprisoned in the first place? Yes he freed Khodorkovsky, but look at how little has really changed in Russia.”

My sense is that for some reason, Putin no longer considers Khodorkovsky the threat he once was.  Perhaps Khodorkovsky’s physical or mental condition.  Or perhaps some deal between the two men.  This would make the cost of releasing him low, and the benefit of the release is likely bigger now than it would have been earlier, or after the Olympics are over.  So Sochi may explain the timing of the pardon, but not the pardon itself.  There are other hidden facts and conditions and understandings that have overcome Putin’s previous implacable determination to keep Khodorkovsky in jail.  Those facts, conditions, and understandings neutralized Khodorkovsky as a threat.

The Russian stock market jumped on the news, but not remarkably so.  A one percent move, an order of magnitude smaller than the price decline that occurred when Khodorkovsky was arrested.  And in my opinion, that one percent move is overdone.  For this announcement reinforces, rather than negates, the singular fact that makes Russia toxic for investors, and for foreign investors in particular: that Russia is a country of the rule of a man not laws.  The sudden and almost cavalier and improvised approach to the pardon makes it clear that Putin can make major decisions on a whim.  Yes, the Tsar can giveth.  But this just reminds that the Tsar can taketh away too.  It is the highly personalized, arbitrary, and a-institutional nature of the Russian system of law and governance that makes it a dangerous place to invest and do business.  The pardon decision only emphasizes that nature.

So Godspeed to Mikhail Khodorkovsky on his release from a decade of torment.  But be cautious about drawing larger conclusions from his pardon.  We don’t know the real story as to why it occurred.  Moreover, it is an illustration of the defects of Putinism rather than a sign that Putinism is actually changing for the better. Life for Khodorkovsky has changed dramatically in the last few hours: life in Russia, hardly at all.

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  1. They were planning additional criminal cases against Khodorkovsky, so one might figure that if he stayed in Rasha (who would want to) he would go right back to jail.

    Exile is a popular tool of the Kremlinites, and has been for centuries, after all.

    In Rasha, you are either an accomplice or a victim

    Khodorkovsky had better watch out what kind of tea he drinks – it might be radioactive, and Putler would “not know anything about it.”

    Comment by elmer — December 20, 2013 @ 12:48 pm

  2. This reminds me that in 1936, Hitler allowed one half-Jewish athlete, Rudi Ball, to compete for Germany in ice hockey, and also ordered the temporary removal of anti-Jewish posters from areas where tourists would be expected to visit.

    Apparently, he completely fooled Avery Brundage, the head of the IOC, who declared that the Games “belong to the athletes and not to the politicians” – whatever that means – and pushed through an anti-boycott vote in the IOC.

    So the NAZIs got their propaganda victory, and once the games were over, it was back to business as usual in Germany.

    Comment by jon livesey — December 20, 2013 @ 3:15 pm

  3. @Professor “Life for Khodorkovsky has changed dramatically in the last few hours: life in Russia, hardly at all.”

    Indeed. This is totally inconsequential for Russia and it comes to emphasize only that she is a totalitarian country as you indicated in your post – and there is not even a newsworthy message here. With that, I am glad for Khodorkovsky. His fight was over. He accomplished what he could over the last 10 years. There is nothing qualitatively that he can do further – even if he makes some noise and sheds light into some details. Nothing changes the situation.

    Comment by MJ — December 20, 2013 @ 11:54 pm

  4. For a 50 year old man who has spent the last 10 years in frozen hell he looks remarkably healthy. Great complexion. Outstanding dentition! Makes one wonder if he was ever actually incarcerated. Anyway, further proof that the Resource Federation is a Fourth Reich colony.

    Comment by So? — December 23, 2013 @ 5:16 am

  5. Just noticed a slight tremor in his Berlin presser. I take it all back.

    Comment by So? — December 23, 2013 @ 5:24 am

  6. In his Berlin press-conference and his interview to Albatz (NYTimes) he said his lawyers knew about his requests for pardon; they were the ones who advised him to do so (see entry @16:42); that he doesn’t place much importance to this act, because his 2nd court case and his incarceration were purely politically-motivated: “the verdict was just a paper, and the pardon request would be just that”; he didn’t have a problem with asking for pardon. The only reason he didn’t before because Medvedev requested he’ll admit guilt – and that he wasn’t prepared to do, as it would put a stain on his co-workers. So this time he was told he doesn’t have to take the blame – so the text of his appeal was just that:” I have been incarcerated for more than 10yrs out of 10yrs 11months’ sentence. I ask for your order to stop my incarceration”. In addition he wrote a personal letter, describing his mother’s poor state of health – and still there was no mention of “guilt” of any kind.
    He also said Merkel and Gensher were the initiators and advocates for his release.

    Naturally, speculation abundant; German sources (through Telegraph) say some time ago Germany released 2 conserved-cell Russian spies – and that it is a classic Soviet “undesired person exchange”. Others point out at sudden stop by Obama administration of adding names to Magnitsky Act (something that had by-partisan support – and it was expected to happen before N. Year.)

    Comment by Tatyana — December 23, 2013 @ 11:15 am

  7. In general, one is advised to give concessions from a position of strength, but not weakness. Keeping Khordokhovsky in jail was obviously complicating things for Putin as he was a prominent poster child. It was in the Kremlin’s interest to get rid of him at some point because there is no obvious replacement for his various opponents to rally around. However, if Putin gave him up in the routine of events, he’d look weak. But he did it right after a very high profile win in Ukraine which is just one of several victories in Russian foreign policy over the West. I think he took this opportunity to clean some house. I think Putin decided Khordokovsky was no longer a threat outside of jail, but was a mild nuisance inside of jail.

    Comment by Chris — December 23, 2013 @ 12:40 pm

  8. Who will they swap Putin for, once he’s outed as a German agent of influence?

    Comment by So? — December 24, 2013 @ 7:26 am

  9. I came across this today:

    Comment by MJ — December 25, 2013 @ 12:22 pm

  10. Along the lines of comment 7, let me suggest something that might seem off the wall – but in the psychotic, bizarro, upside down world of sovok mafia Rasha, where everything is a psychotic chess game, maybe not.

    First – it is not secret that Putler is trying to re-build the sovok empire. In order to do so, he is going after Ukraine.

    Second – the oligarchs in Ukraine, who by they way are joined at the hip with oligarchs in Roosha, are not particularly keen to submit themselves to Putler and his wannabe empire, because they know that Putler would take away everything they have, and they would wind up like Khodorkovsky or worse.

    Third – Putler releases Khodorkovsky as a sort of sign of “good faith” – to the extent that a psychotic KGB agent can be counted on to have good faith – to assuage the fears of the oligarchs in Ukraine about joining the Customs Union.

    After all, Kazakhstan warned Leonid Kozhara, Foreign Minister of Ukraine, about what they might expect from the Rashans after joining the Customs Union – the Rooshans came in and began dictating everything to the Kazakhs.

    So Ukraine has been very, very, very hesitant about joining the Customs Union.

    All due to the self-interest of the sovok mafia oligarchs in Ukraine.

    And remember – where does that $15 billion from Putler’s Crony Fund go? It goes down a black rat hole – to oligarchs. It doesn’t go to the people.

    Where do the gas discounts go? To Ukrainian oligarchs, who run chemical and fertilizer plants, and are huge users of gas.

    Comment by elmer — December 27, 2013 @ 8:59 am

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