Strongman, The

conversion and decided (largely because he wanted to attract foreign investors) to adopt squeaky-clean Western standards of accountancy and transparency. Khodorkovsky became the darling of the West because he, more than any other oligarch, seemed to epitomise a new breed of Russian capitalist – not just a money-grabbing shark, but a philanthropist too. He adopted a corporate governance charter at Yukos, and was the first businessman to introduce US-standard accounting practices. He used some of his fortune to set up a lyceum on an eighteenth-century estate outside Moscow to provide education to 130 underprivileged children. His Open Russia Foundation distributed more than $15 million a year to civic projects and charities involved in education, public health, leadership programmes and cultural development.
    And yet there is no name more certain to bring that look of icy contempt into Vladimir Putin’s eyes. Khodorkovsky would end up in jail for economic crimes – tax evasion, fraud, embezzlement. But asked about him at press conferences, Putin would not shrink from throwing in a few other accusations – ‘political’ crimes, even murder.
    To be sure, Khodorkovsky was no saint. John Browne, the chief executive of BP, was not won over when Khodorkovsky visited him in Britain in February 2002, to offer BP a 25 per cent share in Yukos. Browne later described how the soft-spoken Khodorkovsky made him nervous. ‘He began to talk about getting people elected to the Duma, about how he could make sure oil companies did not pay much tax, and about how he had many influential people under his control. For me, he seemed too powerful. It is easy to say this with hindsight, but there was something untoward about his approach.’ 7
    For the reforming Russian government ‘untoward’ was an understatement. According to German Gref, ‘not a single draft went through without Yukos’s say so’. In fact, the bribing of members of the State Duma was commonplace – deputies pocketed fortunes from all sorts of business interests – but the oil companies were most active, and Yukos most of all. When it came to a new oil export duty that would have reduced the oil company’s profits, things got heavy. Gref recalls how he was visited on the eve of the Duma vote by Vasily Shakhnovsky, president of Yukos-Moskva. ‘Mr Gref,’ he said, ‘we very much appreciate what you have done for the development of the market economy, but tomorrow you’re going to introduce a law that contradicts our interests, so we would like you to know that, first of all, this law will not get through. Everybody will vote against it – we have agreed on that with everybody. And the second point: if you insist on it, we will write a collective letter from all oil producers asking for the resignation of you and Mr Kudrin for lack of professionalism. It’s nothing personal, but maybe you could just postpone the discussion of this law, and we can come to some arrangement with you.’ 8
    When Kudrin and Gref arrived in the Duma next morning they discovered a solid bloc, including the large communist faction, had been stitched together, which defeated the bill. Gref later mused on the irony of it all: ‘The communists, supposedly the champions of social policy, voted against a tax on the super-incomes of the oil companies!’
    It was a dramatic blow for the reformers. ‘We didn’t have enough resources in the budget to pay our debts,’ Gref recalled. ‘Oil prices were rising, but that was just making the oil companies richer. We got nothing from it.’ It took another year before Gref managed to pass a diluted version of the law through parliament.
    Even more seditious, from Putin’s point of view, were Khodorkovsky’s political ambitions. He funded several opposition parties, including the liberal Yabloko, the Union of Right Forces, and the Communist Party. In early 2003 he held secret meetings with party leaders and offered to donate tens or even hundreds of thousands of dollars to finance their campaigns in the coming December Duma elections. 9 According to the prime minister, Mikhail Kasyanov, it was the financing of the communists that particularly infuriated Putin. Kasyanov said later he was astonished to discover that while supporting the two Western-oriented parties was ‘approved’, funding the communists – though perfectly legal – apparently required some special secret dispensation from the president. 10
    Khodorkovsky claimed that