Khodorkovsky, Mikhail Borisovich

Khodorkovsky, Mikhail Borisovich
(1963– )
   Oligarch. Once the wealthiest man in Russia, Mikhail Khodorkovsky is currently an inmate of a Siberian prison, where he is serving an eight-year sentence.
   Khodorkovsky was born into a Jewish family in Moscow; his parents were factory workers and he grew up in a communal apartment. As a young man he was active as a Komsomol (Communist Youth League) leader, envisaging a future career of an apparatchik. Through his Komsomol associates, he managed to build up a network of friends who had access to the Soviet government, and particularly to Russia’s banking sector. In the late 1980s, he and several friends from the Medeleeva Chemical Technical Institute started a private business, selling computers and software. In 1989, he established the Menatep Bank to finance his growing trading business (the bank later collapsed during the 1998 ruble crisis). It is rumored that the financial institution operated as a front for diverting state funds from Komsomol, KGB, and other state sources. Khodorkovsky managed to obtain a license to handle accounts of the victims of the Chernobyl nuclear accident, which provided him with an opportunity to evade taxes and import duties. In the immediate post-Soviet period, Menatep provided bridge credit and capital to state enterprises when Boris Yeltsin’s new Russian government was unable to do so. He also set up a market for purchasing state-issued vouchers, allowing him to expand his holdings of various companies across Russia. In 1993, as a result of a controversial privatization gamble under the umbrella of his Rosprom holding company, Khodorkovsky created the Yukos oil company, a conglomerate of a number of former Soviet state-owned oil companies. It became one of the world’s largest private oil companies, producing 20 percent of Russian oil. In 2003, Khodorkovsky attempted a merger of Yukos with Sibneft, hoping to create a supersized oil agglomerate. However, during the same year, Khodorkovsky was arrested on charges of fraud. Shortly thereafter, the Russian government froze shares of Yukos as a result of allegations of tax evasion, resulting in the collapse in Yukos share price and eventually in the sell-off of the company. In 2005, Khodorkovsky was found guilty of fraud and sentenced to 10 years in prison (ultimately reduced to eight).
   In 2003’s parliamentary elections, Khodorkovsky had funded several political parties, including the liberal Yabloko and Union of Right Forces, as well as the Communist Party of the Russian Federation; he had also hinted at a possible run for the presidency in 2008. As a result, Khodorkovsky’s prosecution has been viewed as political. In February 2000, Vladimir Putin had informed the oligarchs that they were to refrain from politics if they wanted to preserve their economic empires. Even before his arrest, Khodorkovsky was viewed as failing to live up to his part of the bargain. While it is doubtful Khodorkovsky managed to gain his capital by obediently following Russian law, it is evident that he was singled out for his political activities. The Kremlin’s involvement in his prosecution has not been proven, but many Russian and Western observers dispute the validity of the investigation process and court proceedings.
   See also Legal system.

Historical Dictionary of the Russian Federation. . 2010.

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