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US ambassador warns Russians, hands off corporate vandals

Vershbow said Sunday that Washington "was disturbed by the escalation of tensions around Yukos" and concerned that "after these occurrences new doubts will arise among foreign companies that work in the Russian market and also among potential investors,"
Russia's richest man under arrest
Last Updated Sat, 25 Oct 2003 14:29:27

MOSCOW - Special forces dressed in camouflage swooped into a Siberian airport Saturday and arrested Russia's richest man.

Mikhail Khodorkovsky is head of Yukos, the largest oil company in Russia.

The country's Interfax news agency says he has been jailed on charges of tax evasion, fraud, forgery and embezzlement.

Khodorkovsky, who has publicly funded opposition parties, is one of several tycoons under investigation by the government of President Vladimir Putin. Boris Berezovsky and Vladimir Gusinsky have gone into exile, saying they fear criminal prosecution.

Russia's business elite fear the wave of investigations could hurt foreign investment and economic growth of the country.


U.S. ambassador warns of trouble for Russian economy after tycoon's arrest
11:42 PM EST Oct 26
JIM HEINTZ

MOSCOW (AP) - The dramatic arrest and jailing of the head of Russia's largest oil company could seriously impede the country's efforts to restore its economy, the U.S. ambassador and a prominent economist said Sunday.

The comments came a day after Mikhail Khodorkovsky, the billionaire head of the Yukos oil company, was seized by special forces at a Siberian airport, sent back to Moscow, charged with crimes including forgery, fraud and tax evasion and jailed in one of Russia's notoriously overcrowded pre-trial detention units.

Yukos and a range of Russian businessmen and politicians contend the investigation of the oil company is a political vendetta by President Vladimir Putin. Khodorkovsky, whose wealth was estimated by Forbes magazine at $8 billion US, has funded two opposition political parties.

The arrest raises questions about whether "Russian law is being used selectively," U.S. Ambassador Alexander Vershbow was quoted as saying by the news agency Interfax.

Vershbow said Sunday that Washington "was disturbed by the escalation of tensions around Yukos" and concerned that "after these occurrences new doubts will arise among foreign companies that work in the Russian market and also among potential investors," Interfax said.

That concern was echoed by Yevgeny Yasin, a top economist at the state University School of Higher Economics.

"Regarding the more long-term effects, this certainly will affect the dynamics of balance of payments, of capital flight," Yasin said on the Ekho Moskvy radio station.

In the post-Soviet economic chaos of the 1990s, particularly after the plunge of the ruble in 1998, tens of billions of dollars were sent out of the country, either legally or illegally.

Capital flight recently had been showing signs of tapering off as Russia's economy became more robust, but Yasin said it reached $7.7 billion in the third quarter of this year.

Earlier this month, the Russian economy was boosted by the decision of the Moody's rating service to give the country an investment-grade rating.

After Khodorkovsky's arrest, "I think that Moody's will either have to lower that rating or lose a significant part of its credibility," Yasin said.

The Prosecutor General's office said that Khodorkovsky was charged with fraud, forgery, embezzlement and personal and corporate tax evasion among other offenses.

Khodorkovsky and Platon Lebedev, chairman of the holding company that is Yukos' core shareholder, who was arrested in July, together caused damages of $1 billion and harmed the Russian state, the prosecutor's office said, according to news reports.

A statement from Yukos called the charges "absurd" and said the company "does not doubt for a moment that the entire investigation is politically motivated."

Even Communist party leader Gennady Zyuganov, an opponent of the post-Soviet privatizations that brought vast wealth to Khodorkovsky and other so-called "oligarchs," alleged political intentions behind the arrest.

Khodorkovsky and other oligarchs are resented by large numbers of Russians, who did not benefit from the privatization of state property. Both parliamentary and presidential elections will be held in the coming months, and the standing of pro-Kremlin parties among ordinary Russians apparently has been strengthened by the pressure being put on oligarchs by the authorities.

The Yukos investigation began in July with the arrest of Lebedev on charges of theft of state property during the 1994 privatization of a fertilizer plant. Lebedev has remained in jail awaiting trial. This month, prosecutors also filed tax evasion charges against a high Yukos manager, Vasily Shakhnovsky.


further readng :

Khodorkovsky Arrested on 7 Charges
By Catherine Belton Monday, Oct. 27, 2003. Page 1
 http://www.themoscowtimes.com/stories/2003/10/27/001.html


The Elite Demand Some Answers
By Valeria Korchagina Monday, Oct. 27, 2003. Page 1
 http://www.themoscowtimes.com/stories/2003/10/27/002.html

Just for fun :

Severstal to Buy No. 5 U.S. Steel Firm
Monday, Oct. 27, 2003. Page 5
 http://www.themoscowtimes.com/stories/2003/10/27/041.html
dollar vs euro 27.Oct.2003 12:25

dude

EU in talks on Russian oil for euros

... But Russian Prime Minister Mikhail Kasyanov said his government would not force the market's hand. ... Oil is a commodity which is traded for dollars, and ...
asia.news.yahoo.com/031017/3/165qj.html - 26k - Cached - More pages from this site

Russian oil in euros: just wrestling with the US?
... significance and the regime is talking about closer cooperation with LUKoil and other Russian companies."

Under Saddam Hussein, Iraqi oil was traded in euros. ...
www.mail-archive.com/ marxism@lists.panix.com/msg52113.html - 11k - Cached

Putin: Why Not Price Oil in Euros?
... significance and the regime is talking about closer cooperation with LUKoil and other Russian companies.". Under Saddam Hussein, Iraqi oil was traded in euros. ...
www.moscowtimes.ru/stories/2003/10/10/001.html - 27k - Cached - More pages from this site
A-list message, Re: [A-List] Russian oil in euros: just wrestling ...
... be traded in euros by the end of this decade - especially if the US credit bubble unwinds in a disorderly manner... Prev by Date: Re: [A-List] Russian oil in ...
archives.econ.utah.edu/archives/a-list/2003w40/msg00109.htm - 7k - Cached - More pages from this site
Газета.Ru - Russian leaders argue over euro
... Speaking at the Russian-German summit in Yekaterinburg last week, Vladimir Putin agreed to the German ... Oil is a commodity that is traded for dollars, and ...
www.gazeta.ru/2003/10/20/Russianleade.shtml - 51k - Cached
XTRAMSN: Business: Business News: Euro Gets Russian Lift In ...
... Russian President Vladimir Putin said he did not rule out ... is the world's second largest oil exporter after ... quicken if the world's most traded commodity started ...
www.xtramsn.co.nz/business/0,,5086-2735168,00.html - 34k - Cached
Euro & Dollar, Russia - JRL 7-31-03
... Oil has always been traded for dollars ... heard that on some European markets - Germany, for one - settlements on some Russian oil contracts are made in euros. ...
www.cdi.org/russia/johnson/7271-15.cfm - 28k - Cached - More pages from this site
German Sources Say Russia Might Price Its Oil in Euros
... of currencies behind the world's most traded commodity ... for European buyers, trade in gas and oil is subject ... A Russian Energy Ministry official said he could not ...
209.157.64.200/focus/f-news/997785/posts - 37k - Cached - More pages from this site
RUSNET :: CIS Today :: 2003/10/10 :: Putin\'s idea to price oil ...
... when the oil market has comfortably traded in lots ... Dollar denominated oil is very much a post ... Russian oil is becoming increasingly important in Europe as the ...
www.rusnet.nl/news/2003/10/10/businesseconomics_04_2518.shtml - 40k - Cached
Russia not ruling out oil sales in euros: Putin - October 10, ...
... of currencies behind the world's most traded commodity and ... European buyers, trade in gas and oil is subject ... But many Russian oil companies are private and the ...
business-times.asia1.com.sg/story/0,4567,96307,00.html - 40k - Cached - More pages from this site
Should Russia Price Its Oil in Euros?
... Switching some export revenues away from dollars to euros would therefore make sense. ... Any globally traded commodity, whether it is oil or tea, is traded in ...
www.themoscowtimes.com/stories/2003/10/23/006.html - 27k - Cached
Pravda.RU Russian oil stocks still in demand
... Meanwhile, USstock futures are traded below yesterday's closing ... that still support demand for oil stocks More ... Bank On August 15 the Russian Central Bank's bid ...
english.pravda.ru/economics/2002/08/16/34684.html - 64k - Cached - More pages from this site
Alexander's Gas & Oil Connections - Russia raises export tariffs ...
... raises the taxes in step with world oil prices ... higher, according to a statement by the Russian State Customs ... Benchmark North Sea crude traded for about $ 25 per ...
www.gasandoil.com/goc/news/ntr10689.htm - 4k - Cached - More pages from this site
Oil briefs
... Corp, the world's largest publicly traded oil company, booked the ... Daqing city from Siberia, China Oil News reported, citing Russian Prime Minister ...
www.aseanenergy.org/information/news_service/2003/may/4th_edition/news_43.htm - 13k - Cached
Project Censored
... world's supply of oil has been traded in US ... emergence of a possible European-Russian-Chinese alliance ... reserve currency status and/or oil transaction currency ...
www.projectcensored.org/publications/2004/19.html - 19k - Cached
EU Reporter
... Written by Staff Reporter The European Commission backs the idea put forward by Vladimir Putin, the Russian President, oil should be traded in Euros. More... ...
www.eureporter.co.uk/articles/list.cfm?cid=5 - 20k - Cached
Gold -The Weekly Perspective (PDF)
... Gold has traded in a tightening band, again seemingly forming a 'pennant ... the next issue, we look at how the pricing of Russian oil in Euros would impact on ...
www.kitco.com/reports/am/authenticmoney_weeklyperspective_october17_2003.pdf - View as html

so... 27.Oct.2003 12:55

this thing here

... Mikhail Khodorkovsky is arrested because he, as head of yukos oil, may be against trading russian oil, and by extension yukos' oil, in euros? is that where you're heading? wouldn't be surprising, given the importance of: 1. oil, and 2. the international currency it's traded in...

by the way, i agree that the question of ANY nation trading it's oil in $ or euros is a HUGE, HUGE, HUGE issue. enough to warrant arrest, unfortunate car accidents, plane crashes, heart attacks, and other "strange and untimely" deaths, state espionage, government conspiracy, war, etc...

spy vs spy 27.Oct.2003 21:45

dude

Who is the agent for the us multinational energy companies. Putin or the Russian tycoon.

Who met Bush Last. Or who was the tycoon trying to escape where?

Was the tycoon going to sell the company to the US multinationals and got stymied in the process by Putin?

Nothing real is ever so trivial 27.Oct.2003 23:45

Bill

Doubtless the dollar-euro question is part of the mix, but only a minor part. Perhaps, if it became important a symbol of strength, or a minor tactical battle.

The (English-language) Russian press agrees that there is a political (publicly visible power) struggle. The US ambassador's threats make it clear that his masters prefer that corporations control governments rather than vice versa.

The state oil company, Rosneft, is important, too, from a different perspective. Of course, Khodorkovsky covets it. USA covets it, both for oil and for 'influence' in the Russian economy. International kapital wants it, for its own sake, and also for the general principle that governments should not own real power. WB/IMF is horrified that Russia continue to own it -- a governement with a real source of income might escape from the debt-trap. (This is why Iraq will not be allowed to retain any significant oil property.)

I expect that, like Saddam Hussein in 1990, Mikhail Khodorkovsky has been encouraged to push and shove. If he wins, it is only a matter of time before he loses to bigger sharks. If he loses, the worst that can happen is the US ambassador and CIA station chief might be asked to rotate out early.

The other significant news here is that there are home-grown Russian corporations, recognized as peers by USA and by the multination corporate club.