Khodorkovsky arrest is about a man who knows where all the money has gone; who knows who have been the beneficiaries of the greatest money-laundering scheme in the history of the world. If such a man decides to go into politics he is a danger.
When I was in Siberia late one winter's day I began to grumble about how difficult it was to move railcars along the BAM because of the cold and the snow. I was told that that there was a day coming soon which marked the end of winter and signalled the beginning of the spring thaw. However, it's anticipated arrival was not entirely an unalloyed pleasure as the thaw held its own discomforts. On March 19 they celebrate the Day of Darya The Martyr Gavnoplovkiy (when the shit rises). In the second half of March, as the thaw begins, the rivulets wash to the surface or up into ice holes pieces of excrement from the previous year which had been covered by the winter's snow. The white of the snow is darkened, for a while, by the floating residue of earlier deposits.
I was reminded of this when I considered the furore over the prosecution and jailing of Mikhail Borisovich Khodorkovsky. In the thaw of the pre-election climate there are many specks of excrement surfacing across the Russian landscape including, but certainly not exclusively, those left by Khodorkovsky. The truth is that during the freeze which buried these specks there were many who were leaving their deposits across Russia, including almost all of those who are now Khodorkovsky's accusers.
The reason why there are so many theories about why this attack on Khodorkovsky is taking place is because the Russian public doesn't really understand why Khodorkovsky was so important in turning Russia into a successful capitalist state. The answer doesn’t lie with Yukos; the answer lies in Menatep.
Menatep (Khodorkovsky's bank) was the vehicle through which almost all the transfers of serious money in and out of Russia took place from 1992 to 1998. When we started 'tolling' aluminium and others started tolling copper and nickel we did not send the proceeds of our sales back to Russia. On the advice of Russian Prime Minister Silayev, Deputy Prime Minister Oleg Soskovets, presidential aide Aleksandr Korzhakov and Speaker Ruslan Kasbulatov we were told to make all our payments to Menatep Bank. Sometimes it might be Menatep Cyprus, sometimes Menatep Gibraltar, Menatep Finance Geneva, Menatep Inc. New York, etc. When we sold the metals we had tolled a small fee was paid to the smelters. A payment was sent them through their designated bank, often Citibank in NY. The bulk of the money was sent to Menatep marked "for onward transfer to ….Company or …. Account at … Bank". We did not know the recipient at the end of the chain. It wasn't our business. We paid what we had agreed and that was all. Only Menatep know exactly to whom these payments were going after we deposited the funds. These were not trivial sums; our payments alone often amounted to US$60 million a month. Menatep monitored the cash flow and directed the funds to the accounts of the highest powers in the land – the Presidency, the Government and the Chekists who staffed the parallel infrastructure. Menatep had been set up by these people and Khodorkovsky chosen to be at its head; not the other way round.
There was virtually no aspect of what Menatep was doing which wasn't controlled by, monitored by and directed by these same leaders. This included providing government-sanctioned services to organised crime. From its early days the young men at Menatep have provided financial services to the Solntsevo, Lyubarsky, Uralmash and Izmailova families. Through his connections with Semyon Mogilevich Menatep began moving currencies and investments to and through Hungary and then to the U.S. Menatep handled the foreign exchange business of Grigory Luchansky in Nordex and moved large sums into the U.S.
In addition to its foreign currency and money laundering business Menatep also provided investment services. In the submissions before a U.S. judge in the "Avisma Case" Menatep was the perpetrator of a gigantic con in which tens of millions of dollars were diverted from the company. Khodorkovsky and fugitive banker Alexander Konenyikin started the Antigua-registered European Union Bank which was described in a House Banking and Financial Services Committee as a "KGB money-laundering operation with stolen funds that were passed through Khodorkovsky of Menatep Bank as a KGB-controlled front firm" According to the investigators the entire operation was coordinated at SVR headquarters and was personally supervised by Aleksandr Korzakov. Through Korzakhov and his friendships with Mikhail Stepashin and Yuri Primakov, Khodorkovsky was given access to the Bulgarian and the Hungarian services to replicate his work for them. The main person in charge of security operations in Khodorkovsky's companies has been Mikhail Yosifovich Shestopalov former head of the Division for Combatting Thefts of Socialist Property and Speculation of the Ministry of Internal Affairs. The head of Menatep's and Yuko's information and analysis section was Karabinov, former head of the KGB Centre for Public Relations (the man who ran the "Miss KGB" contest).
The point of this is not to attack Khodorkovsky. It is to make clear that virtually everything he did was directed, supervised and monitored by the very people who are now attacking him. There were Chekists at every level of Menatep and Yukos. There were no mysteries. The politruks and the pakhans supervised everything. He was a predurok in a controlled system. Everyone knew what was happening. When we made our payments we had a good idea who was being looked after; if only to avoid mistakes. Because of Menatep we had no direct ties, except when we had to provide credit cards top key individuals. One might reflect that Vladimir Putin's first job when he left the KGB was to supervise metals sales for Sobchak.
So there is no point in extrapolating from the fall of Khodorkovsky a great animus against 'oligarchs' or 'privatisation'. That isn’t what this is about. This is about a man who knows where all the money has gone; who knows who have been the beneficiaries of the greatest money-laundering scheme in the history of the world. If such a man decides to go into politics he is a danger.
It is a little disingenuous for his accusers to attack him for following their orders but, despite the fact that he is probably guilty, they will no doubt continue. Khodorkovsky was the man who held the most important 'obschak' in the country. He is too dangerous to be let loose.
Sometimes in late March the thaw ends. An intense period of four or five weeks of winter returns, with deep cold and heavy snows. That seems to be the forecast for this season.
Dr. Gary K. Busch
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