October 31, 2003 RUSSIA: KHODORKOVSKY ARREST TIED TO PUTIN'S 'AUTHORITARIANISM'

October 31, 2003

RUSSIA: KHODORKOVSKY ARREST TIED TO PUTIN'S 'AUTHORITARIANISM'

KEY FINDINGS

** Russian dailies fear Khodorkovsky's arrest has eroded the fundamentals of "civil society."

** Western observers decry Putin's "increasingly authoritarian political system."

** Writers agree the "war" between Putin and oligarchs will have a chilling effect on investment.

MAJOR THEMES

'A choice between democracy and totalitarianism'-- Reformist and business papers in Russia viewed the arrest of billionaire "oligarch" Mikhail Khodorkovsy as part of "a campaign to remove the most important and independent players from the Russian political scene" and labeled it "the worst, unnecessary political crisis" in President Putin's tenure. Declaring that "rough methods of resolving conflicts" have become commonplace, reformist Vremya Novostey said Russian authorities "are not going to try to come to terms" with opponents, but just "put them away." Several outlets mused that "a large part" of the Russian public might be pleased by the arrest because "an oligarch in the slammer is the average Russian's idea of social justice." Business daily Vedomosti lamented that Khodorkovsky "was the first to promote transparency" for business "and the state" but his efforts produced only "black envy."

Putin's 'increasingly authoritarian state'-- Western analysts termed Khodorkovsky's arrest "a logical continuation" of policies that Putin "and his intelligence service clan" have followed since taking power. Germany's center-left Sueddeutsche Zeitung held that the "hardliners from the intelligence services" who are Putin's closest aides "want the long-term safeguarding of political power." As long as the oligarchs supported the Kremlin "they were allowed to rake in money" but prosecutors came calling when they demonstrated political ambitions. The "very serious issue" at stake is the rule of law in Russia. Australia's liberal Age stated the arrest exemplified Putin's "de facto Cold War-type" administration and called it part of a pattern of "aggressive and extrajudicial actions" by the Kremlin in Chechnya and elsewhere. An Italian writer added that the resignation of Putin's chief of staff Alexander Voloshin in protest over the arrest "signals the magnitude of Russia's political upheaval."

A 'very detrimental' blow to Russian economy-- Russian writers worried that after the tycoon's arrest "no serious entrepreneur will risk investing in Russia." Western editorialists agreed that the plunge in the Russian stock market after the arrest "was only the first vote of no-confidence" by investors, adding that "an all-out war between the oligarchs and the Kremlin" would be a "serious setback" to Russia's modernization. Too many "blunt, arbitrary assaults" on Russia's civil institutions "will undermine faith in Russia's revival." Canada's leading Globe and Mail noted that only recently have investors shown renewed interest in Russia. Now, they fear Putin and his associates "are reverting to their KGB roots." Another Canadian allowed that Russia's transition has been "difficult," but contended that Putin's first task now should be to "sponsor legislation to set the rules" for the country's new economy.

EDITOR: Steven Wangsness

EDITOR'S NOTE: This analysis is based on 42 reports from 8 countries, October 27-31, 2003. Editorial excerpts from each country are listed from the most recent date.

EUROPE

RUSSIA: "Investors Like Strong, Stable Power"

Andrey Sedov stated in reformist youth-oriented Komsomol'skaya Pravda (10/31): "An oligarch 'providing for' both the Right and Left does not support political allies but rather strives for political power in Russia. This is against the rules. More importantly, the Kremlin is seriously concerned over a nascent alliance between Khodorkovsky's empire and America's MobilExxon. Their merger, according to some analysts, may pose a danger to national security--Russia's energy industry may become heavily dependent on our U.S. partners. By launching a campaign against Yukos, the Kremlin, acting clumsily, is trying to thwart that deal.... It turns out that Khodorkovsky has many advocates within and without. Why? Why would they care? Just imagine for a minute the U.S. police arresting the owner of some Bank of New York and causing the Russian ambassador to the United States and an official of the Putin administration to make a strong statement that doing this to an absolutely honest person is an outrage.... The Khodorkovsky arrest won't scare Western tycoons. Quite the contrary, it makes them even more determined to invest. To a businessman, three things matter most. They are profit, reliability, and security. Doing business in Russia brings higher dividends than in the United States and Europe.... Investors like countries with strong and stable governments. The Russian president not bowing to oligarchs is exactly what they need.... The Russian economy will not crash, not even all oligarchs end up in prison or flee the country, and the shares of their companies become scrap paper. Siberia will continue to pump oil, Magadan mine gold, and the Volga region grow grain. The world prices for gas, oil and metal will hardly plummet either."

"Methods That Make Flesh Creep"

New-communist weekly Slovo editorialized (10/31): "In the ongoing dispute, we are on Putin's side, especially because of the illegitimate origin of the oligarchs' fortunes. Even so, it makes your flesh creep to hear about the methods the police used to capture the leader of the country's biggest company and put him in prison."

"Voter Must Become Arbiter"

Business-oriented Vedomosti editorialized (10/30): "A selective approach to 'criminals' means that others may come next after 'the wolf digests its victim.' This will happen if business does not protect itself. A ban on revising privatization results and a tax amnesty may be part of that protection in the short term. In the longer term, it is essential that no one should depend on someone else's will or mood and that the system should be competitive. The voter must be an arbiter. As things are going, fundamental principles like the inviolability of property, the universal use of law, and the independence of public institutions have become subject to questioning.... Is opposition possible in Russia? It is hard to answer this question because a real opposition must of necessity have at least two qualities that none of the existing opposition forces have. One, it must have leaders. The current leaders know more about cooperating with the authorities and drawing dividends from it than about acting on their own and competing with those behind the throne. Two, opposition must have independent funding. How safe is it for business to try to defend its right to finance (political) parties? Now is the time to think of those questions."

"What's Behind Yukos Story?"

Maksim Sokolov remarked in reformist Izvestiya (10/30): "The only way for the supreme power to explain the Yukos story is to refer to an absolute necessity that made it use so dubious methods. But to do so, it should openly state its supreme will instead of hiding behind [Prosecutor General] Ustinov's back."

"Back In A Black-And-White Country"

Semyon Novoprudskiy commented in reformist Izvestiya (10/29): "The Mikhail Khodorkovsky arrest and Vladimir Putin's reaction to it have gotten all of us back in a black-and-white country, a country that has swung to the Left. There is no longer a political 'center' or 'truth in the middle' in Russia. Ours is again a choice between democracy and totalitarianism, between civil liberties and arbitrariness, between the market economy and the command economy.... As things are going, this is the last chance for the Russian Rightists to salvage democracy and, by extension, themselves.... Nobody says that oligarchic capitalism, with the state respecting the basic civil freedoms, is the best and fairest of social systems. But in a country where small business is weak and very few people are truly involved in the economy, crushing big capital is bound to lead to mass violence. The trouble with the way the authorities have been acting lately is not a threat to the investment climate or Russia's political image, not even the danger of reviewing the results of privatization. It is the utter irresponsibility of the powers that be.... True, all are equal before the law. But a political contract for removing political opponents has nothing to do with the supremacy of the law. Responsible power has a privilege to set rules and do so through the law. But responsible power has no privilege to flout those rules. Power and business must become partners.... If power and business should become enemies, we all would suffer."

"We Have No Civil Society"

Anton Orekh of Radio Echo of Moscow wrote in centrist Nezavisimaya Gazeta (10/29): "Using economic matters to settle political disputes is bad enough. But the fact that nobody cares is even worse. With the hatred of the 'rich and famous' common in this country, the authorities have been using this sentiment for their political ends. This is the way our 'civil society' is. The truth is that we have no civil society."

"Transformation"

Kirill Rogov remarked in business-oriented Vedomosti (10/29): "Similar stories involving Berezovskiy and Gusinskiy marked Vladimir Putin's early presidency. Then the pubic, aware of Putin using economic issues and law-enforcement as a way to reach his political aims, split. Part of it, primarily the business community, accepted his policy, thinking it was necessary to achieve political stability. But the fact that Putin's first term as president is ending on exactly the same note makes all the difference. It turns out that 'political stability' is a beast that, not satisfied with what sacrifices have been made to it, demands more offerings.... There were hopes that Putin was on a historic mission to legalize business and the state. Sadly, the Khodorkovsky case has dashed those hopes. The old 'procuracy'...is still pointing a threatening fat finger at business trying to prove its illegitimacy, while society is responding by pointing to the illegitimacy of the state...with Vladimir Putin no longer seen as an arbiter in this dispute."

"Americans Concerned. Why?"

Oleg Shevtsov contended in reformist youth-oriented Komsomol'skaya Pravda (10/29): "It looks as if our allies overseas have been in earnest in the past few years, concerned over the rule of law in Russia. At least they seem to think that a ruling by a Moscow court to detain Mikhail Khodorkovsky is far more important than death sentences in Texas. Curiously, France, Italy, Japan and other countries regularly send their business shoguns to prison for violating the law. Washington keeps silent when they do. Which is all right, as long as cases like those are an internal matter of a sovereign state. So why try to apply their 'approved (or disapproved) by U.S. administration' stamp to whatever Russia does? To follow that logic, the Russian government might just as well censure Washington for forcibly dividing Bill Gates' property under the Supreme Court's decision or for the scandal over Enron's bankruptcy. It might but, as we see it, sticking our nose in where it does not belong is not nice."

"Shut Up!"

Nikolai Vardul commented in reformist business-oriented Kommersant (10/28): "The signal that the business community and all of society got yesterday was more like a command, 'Dress! Attention! Cut out all blabber! The public, at least much of it, may be pleased--an oligarch in a slammer is the average Russian's idea of social justice. But the economy definitely doesn't like it. Incidentally, Putin, as he was speaking, was addressing government officials as well as businesspeople. Basically, he said that the purge may spread to civil servants."

"Investing In Russia Is Risky"

Reformist youth-oriented Moskovskiy Komsomolets editorialized (10/28): "Clearly, the Yukos case will untie the hands of the hungry-for-money law-enforcement agencies in the provinces. Generals will raid big business, and sergeants small business. Under the circumstances, no serious entrepreneur will risk investing in Russia. There is no way we can do without foreign investments. To bring Russia up at least to the level of Eastern European countries, we need a whopping $600 billion, according to experts. As we focus on petty things like replacing unwanted oligarchs, we neglect big ones. But who cares? With Russia, politics has always prevailed over the economy." reformist youth-oriented Moskovskiy Komsomolets

"This Is No Way To Integrate Into The West"

Liliya Shevtsova observed in reformist weekly Moskovskiye Novosti (10/28): "Evidently, the Western leaders have convinced themselves that a semi-authoritarian regime will sooner or later help Russia find a road to liberal democracy. But the latest events in this country make the West wonder.... President Putin, who is clearly striving for an equal status in the Big Eight, may be receptive to his colleagues' advice. So far, the way his friends--Bush, Blair, and Schroeder--have been acting gives him cause to believe that the omnipotent bureaucracy and police are no obstacle to Russia's integration with the West. His Western colleagues would do Russia a big favor by telling Putin that he can't integrate into the West by sending the owner of one of the most successful companies to prison. The challenge that Russia and its leader are facing today is how to get away from oligarchic capitalism, without falling into the trap of a police free-for-all. The West can make that choice easier or harder."

"A Coup In The Kremlin"

Nikolai Vardul commented in reformist business-oriented Kommersant (10/27): "The Khodorkovsky case is political for obvious reasons. All agree that, if need be, you can find irregularities practically in every business deal that was made six to ten years ago, especially if it had to do with privatization. Aleksandr Voloshin, the head of the presidential administration, visiting in Baku on September 16, spoke about the confusing and contradictory legislation in the mid-1990s. But of all the big companies in Russia that are owned by 'oligarchs,' Yukos, a pioneer of self-cleansing in Russian business, is the only one the authorities have been picking on. Selectivity in applying the law is illegal.... Aleksandr Voloshin has been known to support Mikhail Khodorkovsky. With Khodorkovsky arrested as a political opponent, Mr. Voloshin must be the next one to go into exile, if not to prison."

"The Rubicon Crossed"

Ivan Gordeyev stated in reformist Vremya Novostey (10/27): "The arrest of Khodorkovsky, one of few figures whose names have become something of a cult in Russian business, means that the authorities have decided to cross the Rubicon in their relations with business and society. It is not the accusations leveled at this country's richest man--you may well use them against other, not so rich entrepreneurs. It is not even the oil tycoon's excessive political ambitions, a charge that has not been made official. It is that the authorities are not going to try to come to terms with anyone, not even with this country's biggest and most influential personalities. They will just put them away. Rough methods of resolving conflicts have become natural and justified. Our leading lawyers, as they complain about actions by the General Prosecutor's Office, might just as well save their breath--it is not the prosecutors but the approach that they have chosen. Making excuses and references to the unpopularity of the rich won't help either. Russia's greatest asset, its most active citizens, are likely to see the change of course as authorized by the president."

"It's Not Why. It's Who's Next"

Maksim Glikin stated in centrist Nezavisimaya Gazeta (10/27): "A campaign to remove the most important and independent players from the Russian political and economic scene goes on. The fight against big business did not end with exiling Vladimir Gusinskiy and Boris Berezovskiy. 'Equidistancing' the oligarchs is becoming permanent and increasingly rough. No doubt, Khodorkovsky, just like others before him, has had to pay for his political activity and open support for the left- and right-wing opposition. That does not mean, however, that other prominent members of the Russian business elite may sleep at rest. Who's next? This question is in the minds of ever more of them."

"The Crisis"

Aleksandr Budberg mused in reformist youth-oriented Moskovskiy Komsomolets (10/27): "It's common knowledge that whatever really big political trouble Russia gets into happens in October. Passing the beginning of a half-year of cold and dark without great upheavals is a stroke of good luck. Of course, the Great October Socialist Revolution the Khodorkovsky arrest is not. But there is always the last straw. This arrest is the worst, unnecessary political crisis in Vladimir Putin's presidency. As recently as last Friday we were still moving forward. Now we are at a standstill and will apparently stay so for a long time, trying to find out what has happened and looking for a way out of this mess. The country faces a nasty political crisis, one that is absolutely unnecessary, that it might easily have done without, and that has no simple or quick way out. But through it, we will finally know whether Russia has accepted the great change of the 1990s or perhaps it will get back to the well-trodden road of no freedom and prosperity, the road of envy and stagnation."

"Business Before The Election"

Business-oriented Vedomosti held (10/27): "The actions of those who sell their Russian assets and move to other countries is a perfectly adequate response from the standpoint of the personal safety and future of their children. They understand all too well the unspoken language of signals and respond in the same language. After making their money in Russia, where the concepts of the state-oligarchy community are in effect, they move to countries where there are laws. One defect to this response is that Russia is losing both people and money and a great deal for itself in the future.... To judge from its actions, however, it seems that the security structures' goal is to drive out genuinely strong people. This reinforces the country's status as a Klondike, where you make money only to then run away as far as possible from the lawlessness.... Khodorkovsky was the first to set the example of transparency both for his colleagues and for the state, which did not interpret his step quite the way he had hoped.... As a result, the country got its first legal billionaires, but all this provoked was black envy. And Khodorkovsky's aspiration to start an open political project to compete with the sole main one, made them use force. There are two options for thinking members of the business community: leaving the country or embarking on the hard path of creating a new political entity. They might start by openly stating the kind of country they want, one of 'strength structures' or one of strong people. The attitude toward politics as lobbying industry and group interests must change. There is a need to restore demand for democratic values, pluralism and the presumption of innocence, which have depreciated lately."

BRITAIN: "Putin Should Tread Warily"

The left-of-center Guardian took this view (Internet version, 10/28): "Russia's president Vladimir Putin would like to be seen as a democrat on the world stage.... A pity then that his acts sometimes resemble those of a modern day tsar, ruthlessly determined to quash opponents.... Russia is becoming richer and attracting the interest of foreign investors. Yet too many blunt, arbitrary assaults on the country's institutions and civil society will undermine faith in Russia's revival. Certainly the campaign against the Russian billionaire, Mikhail Khodorkovsky...appears to be motivated by extra-judicial concerns.... The ferocity of the offensive is an indication that Mr. Khodorkovsky had strayed too far into the political realm.... What should not be a surprise, however, is how popular such an act will be. Russia's new money has not trickled down to the masses. The anger directed at a clutch of former managers who became billionaires overnight...lingers in the country's body politic.... This is no mere dispute between factions and interest groups in Moscow.... It is in everyone's interest that Russia's future is a bright one. Mr. Putin has done his country a service by recognizing reform cannot take place without re-establishing the state. But he must not fill the void with bad governance."

"Taming Russia's Ambitious Oligarchs"

The independent Financial Times commented (10/28): "The arrest of Mikhail Khodorkovsky...is the latest development in the dramatic power struggle between Mr. Khodorkovsky and President Vladimir Putin. At one level, it is a battle between two ambitious men. At another, it is a fight over Russia's political and economic future.... The conflict highlights how hard it is to build genuine democracy in Russia. Under Mr. Putin, political control has become concentrated in the Kremlin and the security services. Economic power has also flowed into fewer hands through consolidation.... The space left for independent institutions, including the media and the courts, has shrunk dramatically. Mr. Khodorkovsky casts himself as the defender of liberal freedoms.... But his position as a business oligarch...overshadow everything else about him. Ordinary Russians do not trust him. However, Mr. Putin and the security establishment present a greater threat to liberal democracy. Ultimately, the state has unlimited force at its disposal. Using it to arrest a businessman...smacks dangerously of authoritarianism.... Mr. Putin was right to break up the kitchen cabinet of oligarchs that he inherited from Boris Yeltsin. But he is wrong to insist that the oligarchs have no right to play a role in public politics and it is even more wrong for Russia's law enforcement agencies to be used to destroy all possible political opposition."

"The Limits Of Oligarchy"

The conservative Daily Telegraph editorialized (Internet version, 10/27): "Anybody who thinks Russia is a modern, liberal democracy got a nasty shock [with the arrest of] Mikhail Khodorkovsky.... This being Russia, the fact that it is only a month before a parliamentary election and he is the principle backer of two opposition parties is unlikely to be a coincidence. What happens now could determine whether Russia is ready to join the club of serious, grown-up countries, or will descend once again into the lawlessness for which it is infamous.... Recently, the president's associates have been turning up the heat on Mr. Khodorkovsky and his fellow oligarchs.... But Mr. Khodorkovsky's arrest is not just a simple matter of harassment. When Vladimir Putin was elected in 2000, he in effect did a deal with the oligarchs.... He would leave them alone as long as they behaved themselves and did not challenge his authority.... Now that truce is no more. In the West, the worry is this will lead to all out war between the Kremlin and the oligarchs. Not only would that jeopardize the booming Russian economy...it would also be a serious setback to Russia's modernization. A destabilized Russia would be a tragedy for its people. But it would be serious for us, too.... We could lose a vital, if imperfect ally in the war on terror. President Putin...should rein in his more paranoid friends in the security services. As for the oligarchs, they must realize that, in a democracy, only an elected government can exercise real power."

"Crimes Without Punishment"

The conservative Times held (10/27): "If the Russian people had been cut into the new economic order, with a fair privatization program that gave the common man clout, capitalist Russia might have become a more clearly democratic place.... Russia has become safer since then--but not for the very rich. President Yeltsin, complaisant godfather of the half-dozen richest 'oligarchs,' has given way to the sterner President Putin. He quickly signaled that he would destroy the oligarchs 'as a class'--but, until recently, limited himself to picking on the two billionaires with media empires that disagreed with the Government’s political line. But wealth brings too much power to allow any billionaire permanent invisibility.... Mr. Khodorkovsky has emphasized corporate accountability. He now pays taxes and dividends, gives to charity, and publishes comparatively transparent accounts. So government probes in recent months into Mr. Khodorkovsky’s business, and his arrest at the weekend, have alarmed the increasingly respectable Russian business world. Mr. Putin might feel threatened by the potential use of wealth to buy political influence; but he, like the oligarchs he fears, has a profound responsibility to be accountable."

FRANCE: "Crisis In The Kremlin"

Right-of-center Le Figaro remarked (10/30): "The shockwave of the Russian political crisis is finally reaching the Kremlin. Voloshin's... resignation signals the magnitude of Russia's political upheaval...[and signals] an important shift in the Kremlin's balance of power. The resignation would consecrate the victory of Putin's faithfuls, the 'Silovikis', over Eltsin's former 'family.' According to some, this would be the equivalent of a 'political coup.'"

GERMANY: "The Russian Path"

Moscow correspondent Markus Wehner had this to say in center-right Frankfurter Allgemeine (10/31): "Mikhail Khodorkovsky's arrest will change the political and economic landscape in Russia. The shock sits deep with which the stock market has reacted to the arrest.... Putin's phrase that the Prosecutor-General knows what it does sounds like mockery for everyone who knows about the past activities of Russia's justice authorities.... According to Putin's recipe, Russia can grow only if the market economy is closely linked to political stability. But in his eyes, this stability can be safeguarded only by an authoritarian, centralist rule.... It is still uncertain how the Yukos affair will develop and what effect it will have on Russia's economy...but the flight of capital of Russian investors has begun again and some international companies have reversed their planned investment in Russia."

"Russia's Grip For Oil"

Gerd Zitzelsberger argued in center-left Sueddeutsche Zeitung of Munich (10/31): "Much more is involved than how the Russian justice authorities deal with a dubious billionaire. And even more is involved than how the Putin clan chases away the clan of former president Yeltsin from the 'meat pots.' From a western point of view, the Khodorkovsky affair centers mainly how Russia will deal with its natural resources in the future.... The grip of the Russian government on natural resources will intensify. There are a variety of instruments to do this. The profits from Yukos and others were too tempting. But the outrage over Khodorkovsky and other oligarchs in the public is now nurturing the ground for a populist economic policy."

"Policy Of Weakness"

Business daily Financial Times Deutschland of Hamburg judged (10/31): "The power struggle between Oligarch Khodorkovsky and President Putin is taking on increasingly disruptive characteristics.... Putin could not have acted more amateurishly.... He brutally implemented his goals by ignoring the effects on the global public and the finance markets.... The Russian president must now hope that investors, in view of the prospering economy...will return. But all this cannot be interpreted as a policy of strength. Despite the upcoming victory in the Duma elections, Putin is too weak to win the struggle against the oligarchs.... That is why Putin needs the support of intelligence service people. In order to get them, he is now risking Russia's prosperity and the confidence of the international community."

"Fight For The Kremlin"

Moscow correspondent Tomas Avenarius filed the following editorial for center-left Sueddeutsche Zeitung of Munich (10/30): "President Putin has every reason to be in a bad mood. If he signs Alexander Voloshin's dismissal certificate...the power balance between the liberal economic 'robber capitalists' on the one side and the authoritarian intelligence faction in the Kremlin on the other would be lost.... Since Putin took power in 2000, post-Soviet Russia has been increasingly taking the form of an authoritarian state.... It is clear that a state in which intelligence service members occupy influential economic and political key positions, cannot be a liberal state. Such a development would mean for Russia that it will not resolutely develop not even in the 21st century.... Is this the state, which the alleged 'reformer of the century' Putin wants?... He either drafted a plan for a cold coup with his former colleagues from the intelligence services, and then he has succeeded. Or he is unable to balance power and has now, because of his own weakness, put his fate into the hands of the intelligence people. Then he would suffer a historic defeat."

"Putin Losing Balance"

Dietmar Bartz noted in an editorial in leftist die tageszeitung of Berlin (10/30): "Alexander Voloshin's resignation can be embedded into a simple model: politics won over the economy. The Kremlin chief of staff was the most important supporter of Russian industrialist Mikhail Khodorkovsky. If he really quits, the 'authoritarians' will have won over the 'liberals,' the Putin people over Yeltsin aides, the people from St. Petersburg over the people from Moscow.... But with Voloshin's departure, the complicated balance between these two factions will also collapse. Putin will no longer play the two groups off against each other, but, following the parliament, the regional leaders, and the media, Putin will now also have 'homogenized' the government apparatus.... By doing so, Putin is continuing a horrible characteristic of Soviet history. Putin will lose an enormous political latitude toward his apparatus, since he and his party supporters will now be inseparably connected. This means that the times are getting even worse for those who are opposed to the omnipresence of the state."

"Khodorkovsky's Arrest"

Left-of-center Frankfurter Rundschau editorialized (10/29): "The election of some oligarchs or their representatives to the Duma and to governorships did not disrupt the consensus set up by Putin as long as it was regionally limited. The financing of opposition forces was the problem. Khodorkovsky committed this sin less because of his personal ambitions but rather based on the logic of his economic power. This power considerably increased through the merger of his Yukos company with Sibneft. Putin's team saw a double threat by an economic colossus that became active in an unpleasant way not only in their field of business but also on the level of civil society."

"Putin's Intelligence Service Clan"

Centrist Mitteldeutsche Zeitung of Halle observed (10/29): "Khodorkovsky's arrest is the logical continuation of a policy that Putin and the members of the intelligence service clan have pursued since they moved to the Kremlin. Masked FSB combat forces, which arrested Khodorkovsky, are nothing new under Putin. They were already allowed in April 2001 to storm the relatively independent TV station NTW. The past year also showed that the intelligence service clan won the power struggle long before Khodorkovsky's arrest. In the drama over the Northeast Theater, Putin immediately backed the suggestion of the intelligence service for a quick violent solution. In Chechnya, too, Putin and the FSB inner circle are still pinning their hopes on the use of force to resolve problems."

"Risks For Putin"

Center-right Maerkische Oderzeitung of Frankfurt on the Oder noted (10/29): "Putin's course has considerable risks. If the privatizations of the 90s are really be reversed, chaos and anarchy are looming. How does the president want to react to it? With a military dictatorship? By deporting the nouveaux riche to other countries? Oligarchs Berezowski and Gussinsky are already there. Khodorkovsky did not want to go. That is why he is now in prison."

"Death Of Capitalism"

Business daily Handelsblatt of Duesseldorf concluded (10/28): "The West must openly say what it thinks, since the survival of democracy and market economy in Russia is at issue. The plunge of Russian stocks and bonds was only the first vote of no-confidence of investors in Russia and other countries of Putin's policy. Now his friends Schroeder, Blair, and Bush must openly tell their buddy in the Kremlin what they think of his policy, that they want Russia only as a partner if the vast empire returns to the path of democracy and freedom. But the Europeans and Americans should not allow anybody to divide them again when they compete for Russian gas and oil. Clear conditions must be set for Russia to avoid the things the daily Izvestia wrote yesterday: 'Capitalism died for the second time in Russia...with the arrest of model entrepreneur Khodorkovsky."

"Putin's Law"

Berthold Kohler argued in center-right Frankfurter Allgemeine (10/28): "The losses at Moscow's stock market are based not only on the anxious question of who should lead the Yukos oil company as long as Khodorkovsky has no Internet connection in his prison cell. The enormous flight of capital is mainly driven by the fear that Russia's economy cannot develop as freely as it appeared. An equation mark still stands between economic and political power. Nobody but President Putin knows this better, and he also became president with the support of the oligarchs' funds. In return, this state refrained from opening the chapter of privatizations again. Since then, rules seem to be in effect in Russia that everybody can earn as much money as he wants as long as he confines his activities to becoming wealthy and does not try to shake off the control of the state, for Putin, like Lenin, does not believe in the power of confidence."

"Power Struggle"

Horst Klaeuser commented on regional radio station Westdeutscher Rundfunk of Cologne (10/27): "After oil tycoon Khodorkovsky's arrest, peace [between the oligarchs] and President Putin has been broken and a 'war' between capital and Kremlin is inevitable. The attitude of the young capitalist entrepreneur and the Kremlin leadership that is acting increasingly autocratic, shows that Russia is by no means an open economic nation. The control of the powers-that-be of courts, prosecutors, and intelligence services is obvious. The filling of high-ranking positions in the government with agents and soldiers shows how serious Putin is about the 'dictatorship of democracy'.... The fact that one month before the Duma elections and five months before Putin's probable re-election...the Kremlin is getting nervous is not a good omen. Four years ago, it was the tough action in the Chechen war with which the young president scored points in the election campaign. Today, he considers it popularly correct right to attack the wealthy--probably to conceal the fact that rampant poverty and the enormous differences in income are not caused by the oligarchs but by the bureaucratic, inflexible policy of the old guard. Despite all promises, Moscow will not be allowed to become a partner of the West with such a policy."

"The Oligarch Loser Showdown "

Tomas Avenarius asserted in center-left Sueddeutsche Zeitung of Munich (10/27): "Mikhail Khodorkovsky was not afraid of a showdown [with President Putin]--he only came off worst, and the Kremlin does not give a damn about the fact that this arrest is very detrimental to Russia's economy. The hardliners from the intelligence services, who are among Putin's closest aides, want the long-term safeguarding of political power. They are hardly interested in reversing Russia's privatization, since they are well-profiting from it. But this is the problem. In Russia, 17 billionaires are confronted with 40 million people living below the poverty level. The question is whether those who became rich at the expense of society will also do something for society in the form of a 'oligarch tax' or [by setting up] a fund for education. The fact that this is not a matter of discussion shows that nobody is interested in the legitimation of privatization. As long as the oligarchs support parties that supported the Kremlin's policy, they were allowed to rake in money. But those who demonstrate political ambitions are summoned by prosecutors. These are the rules of the game of reformer Vladimir Putin."

"Moscow"

Manfred Quiring judged in right-of-center Die Welt of Berlin (10/27): "It was a demonstration of power that the Russian security forces, including the intelligence forces, showed over the weekend.... If the situation were not that serious, we could laugh at the operation of tough intelligence officials in order to arrest an individual. But the situation is serious, since the issue is the state of the Russian rule of law.... There are thousands of wealthy Russians in Vladimir Putin's empire. But [security officials] focus their attention on those people only if there are conflicting interests with the powers-that-be. In the Khodorkovsky case, it was the political ambitions of the young billionaire that disrupted the Kremlin's circles. His attempt to support left and right-wing opposition parties and turn them into a counter force to the Duma was a gesture of lesè majesté and deserved to be punished.... This makes clear one thing: Russia is still far away from a democratic state."

ITALY: "Russia, The Kremlin’s Final Attack Against The Oligarchs"

Fabrizio Dragosei wrote in centrist, top-circulation Corriere della Sera (10/31): “There is an all out war for the top government positions in Russia.... The country’s biggest company...is now in a state of suspension: shares can neither be sold nor transferred. And this signal greatly worries the markets, given that Yukos was among the most transparent of Russian companies and it had attracted the interest of foreign investors.”

"Voloshin Gone"

Elite, classical daily Il Foglio commented (10/30): “The resignation of the Kremlin’s Chief of Staff Aleksandr Voloshin is proof of a divorce that has been in the air for a long time. There was talk of it since last year.... The equilibrium between the two souls of the Kremlin had lasted for a long time. It ended with the arrest of the oil magnate Mikhail Khodorkovsky.”

"Moscow, Another Point For The ‘Hawks’"

Leading business daily Il Sole-24 Ore noted (10/30): “Vladimir Putin has allegedly already accepted the resignation of his Chief of Staff Aleksandr Voloshin.... The team of political advisers that Putin inherited from his predecessors could leave the Kremlin with Voloshin.”

POLAND: "Kremlin Does Not Like The Independent"

Waclaw Radziwinowicz wrote in liberal Gazeta Wyborcza (10/27): “Whatever Khodorkovsky may have on his conscience, he has become, as Russians say, the cleanest oligarch. As the head of Russia’s biggest oil company, he was the first to recognize that the future is not business made ‘the Russian way’ (that is, based on good connections with bureaucrats), but business that is open and transparent.... Khodorkovsky would not bow and scrape. He became self-assured, as if he lived in a normal country. But the Russian authorities do not like those who are independent, not to mention those who do not share with the authorities themselves. That is why the chief of Yukos has become their victim.”

"Not The First One, Not The Last One"

Slawomir Popowski wrote in centrist Rzeczpospolita (10/27): “The reason behind the arrest of Mikhail Khodorkovsky, the richest man in Russia, is exactly the same as in the case of Vladimir Gusinsky and Boris Berezovsky--money and power. Coming to power together with Putin was a completely new generation of people--largely connected with special services and power structures--who have everything except capital.... The second reason is politics. When Putin assumed power, a sort of agreement was made with the oligarchs: they were to do business and stay away from politics. In the opinion of the Kremlin, the head of Yukos broke this rule. Not only has he refused to give money to the pro-Kremlin Jedinstvo, but he also started to speak publicly about politics, and supported financially the liberal opposition. He refused to behave as the authorities dictate, and showed resistance--which struck at the very foundation of the increasingly authoritarian political system being built around Putin.”

EAST ASIA AND PACIFIC

AUSTRALIA: "The Tsarist World Of Vladimir Putin"

Bruce Jackson wrote in the liberal Age of Melbourne (Internet version, 10/30): "The 'crimes' of Khodorkovsky are considerable in the eyes of the new regime of former KGB officers who now surround President Vladimir Putin.... But the real charge behind the arrest contains much more. This has been a year in which independent media and business owners in Russia have been put out of business by the strong-arm tactics of the newly vigilant Federal Security Service.... In a climate that progressive Russian business people compare with the fearful 1950s, Khodorkovsky made the fatal mistake of expressing political opinions and having the temerity to provide financial support to opposition parties.... In the increasingly tsarist world of Putin, Khodorkovsky had the additional misfortune of being the last surviving oligarch. 'Oligarch' is a term of art for 'rich Jews' who made their money in the massive privatization of Soviet assets in the early 1990s.... Since Putin was elected President in 2000, every major figure exiled or arrested for financial crimes has been Jewish.... The implications of Khodorkovsky's arrest go beyond the suppression of democratic voices and the return of official anti-Semitism. This arrest must be seen in the context of increasingly aggressive and extrajudicial actions in Ukraine, Moldova, the South Caucasus and Chechnya. There has been a massive suppression of human rights and the imposition of a de facto Cold War-type administration in Moscow. It is not too soon to wonder if we are witnessing the formal beginning of a rollback of the democratic gains we have seen since the fall of the Berlin Wall in 1989."

WESTERN HEMISPHERE

CANADA: "Intimidated In Russia"

The leading Globe and Mail editorialized (Internet version, 10/29): "Foreign investors have long worried about Russia's commitment to an open economy, free markets and the democratic reforms needed to keep them that way...and only recently has Russia started to emerge from their bad books.... But confidence is a fragile thing, as Russian President Vladimir Putin has learned after the weekend arrest of Mr. Khodorkovsky.... Now investors fear Mr. Putin and his close associates are reverting to their KGB roots to throttle opposition voices.... There can be no doubt it was the tycoon's prominent financing of liberal opposition parties in advance of the crucial Dec. 7 parliamentary elections--as well as fears about his own growing political ambitions--that precipitated a lengthy investigation into his affairs, the jailing of a key ally without charges and his own subsequent arrest. Mr. Putin, who faces the electorate himself next March, knows full well that the business oligarchs are deeply disliked...at a time when ordinary Russians are struggling to put food on the table.... Unlike those who have retreated from the political limelight or who still have friends inside the Kremlin, Mr. Khodorkovsky is an easy target for intimidation. And that's why there is good reason to worry about what appears to be a dangerous detour on the road to democracy."

"Rule Of Law Best Way To Fight Russia's Oligarchs"

The conservative Montreal Gazette observed (Internet version, 10/28): "In this one arrest can be seen all the mistakes Russian leadership has made--and continues to make--since the fall of Communism in 1989. Chief among these has been the failure to establish the rule of law, the essential underpinning for the stability of both government and the economy.... That it is Khodorkovsky who has been arrested has suggested to observers around the world that Putin cannot shake off his KGB instincts--once a Stalinist, always a Stalinist.... In the United States, excesses [of 19th century robber barons ]were slowly corrected through the rule of law.... More than a decade has passed since Russia lurched into the modern world, after centuries of authoritarianism. Nobody disputes that this was a difficult transition. But Putin is not helping the process by singling out his political opponents for legal prosecution. He should instead first sponsor legislation to set the rules in Russia's new capitalistic economy.... Until those things happen, Putin's pretense of judicial impartiality is a bad joke."