Khodorkovsky says investors fear Russian corruption

Reuters News
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Posted: Jun 15, 2011 8:54 AM
Khodorkovsky says investors fear Russian corruption

By Alissa de Carbonnel

MOSCOW (Reuters) - Widespread corruption and weak rule of law are scaring off investors and increasing the risk of social unrest, jailed ex-tycoon Mikhail Khodorkovsky said in remarks published on Wednesday.

In an interview with Western newspapers ahead of an economic forum in St. Petersburg, Khodorkovsky said Moscow's pitch to investors could fail and it could face mass street protests if the government does not reform the courts and increase freedoms.

Once Russia's richest man and head of its biggest oil company, the now defunct Yukos, Khodorkovsky was jailed in 2003 after criticizing the Kremlin under then President Vladimir Putin. He is serving a 13-year sentence for two convictions on charges of economic crimes and is due to be released in 2016.

"As for the rule of law, I know only too well that it does not exist in Russia -- the judiciary is not independent at all," Khodorkovsky wrote from jail in the interview posted on the website www.khodorkovsky.ru.

Khodorkovsky, one of the tycoons who made fortunes following the 1991 Soviet collapse, denies his guilt and says he has been prosecuted over business practices that were both legal and widely used, such as the pricing policies that prosecutors based theft charges upon in his second trial.

The United States and European governments have said he appeared to be the victim of selective justice and abuse of the legal system.

Khodorkovsky said corruption was at a historic high and cited Russia's ranking by corruption perceptions monitor Transparency International, which says it is seen as more corrupt than Nigeria.

Western governments should not hesitate to criticize Russia's shortcomings in the sphere of human rights, he said, adding that it was only a matter of time before a new generation "got its teeth into" the political system if it did not change.

"My country's main task is not to miss the historic 'window of opportunity' for peaceful liberalization," he wrote, citing uprisings sweeping North Africa and the Middle East.

Last week, Khodorkovsky's lawyers said he had been sent from Moscow to a prison camp in an undisclosed location in what they called an attempt to thwart his parole request.

They said his family and lawyers were not told where was sent. The interview was conducted in writing through lawyers while Khodorkovsky was still in a Moscow jail.

The Interfax news agency cited an unidentified prison agency official saying Khodorkovsky had been taken to a jail in the Vologda region northeast of Moscow and would later be sent on to a prison in Karelia, a sparsely populated region on the Finnish border between St. Petersburg and the Arctic Circle.

President Dmitry Medvedev said last month it would not be dangerous to release Khodorkovsky, part of his repeated calls for a sweeping reform of the judicial system.

Khodorkovsky questioned whether Medvedev had the power to bring about promised change and said Putin, now prime minister, was blocking his protege's reform efforts.

"Can the President carry out his vision?" he asked. "Everyone knows ... who the most corrupt Russian leaders are -- the ones who reduce Medvedev's reformist ambitions to broken promises."

Putin has taken a tougher stance toward Khodorkovsky, who built up a fortune buying up state assets cheaply after the 1991 collapse of the Soviet Union, saying he had blood on his hands and likening him to American gangster Al Capone.

Khodorkovsky says he was jailed on the orders of senior officials who wanted to carve up his oil company and take revenge for his challenges to Putin's authority. The government has denied any political interference.

His former business empire, which once produced more oil than OPEC member Qatar, was split up and sold after his arrest, and state-controlled oil firm Rosneft bought the largest production assets, making it Russia's biggest producer.

(Editing by Steve Gutterman and Philippa Fletcher)