Verdict Against Putin Foe Troubles White House

Former Yukos oil company CEO Mikhail Khodorkovsky gestures while standing behind a glass wall at a courtroom, in Moscow,, on December 27, 2010 A Moscow court on Monday found jailed tycoon Mikhail Khodorkovsky guilty in his second trial on charges of embezzlement, Russian news agencies reported. AFP PHOTO / ALEXANDER NEMENOV (Photo credit should read ALEXANDER NEMENOV/AFP/Getty Images) AFP/Getty

MOSCOW - Russian Tycoon Mikhail Khodorkovsky was convicted Monday of stealing oil from his own company and laundering the proceeds, a verdict likely to keep the man who once challenged the power of Vladimir Putin behind bars for several more years.

In a statement, the White House said it is troubled by what appears to be "an abusive use of the legal system for improper ends." The White House says the ruling undermines Russia's commitment to deepening the rule of law and hurts its ability to strengthen ties with the U.S.

The unrelenting legal attack on Khodorkovsky, once Russia's richest man, has come to define the country's transformation under Putin. The outcome of the second trial exposes how little has changed under President Dmitry Medvedev despite his promises to strengthen the rule of law and make courts an independent branch of government.

Putin, now prime minister, remains the more powerful leader. Any lingering doubt that the verdict would be guilty was dispelled this month when he said Khodorkovsky was a proven criminal who should sit in prison.

Putin, seen as the driving force behind the trial, has not ruled out a return to the presidency in 2012 and appears unwilling to risk the possibility that a freed Khodorkovsky could help unite and lead his political foes.

German Foreign Minister Guido Westerwelle characterized the trial as "a step back on the way to modernizing the country."

During his seven years in prison, Khodorkovsky has been transformed into a symbol of the struggle for democracy in Russia. His hair, now gray, is cropped short and his complexion is pasty from lack of sun and exercise, but he appears strong and unbroken.

It was clear from the opening pages of his verdict that the judge had found Khodorkovsky and his business partner Platon Lebedev guilty. Reading the full verdict and announcing the sentence was expected to take several days.

Khodorkovsky, 47, is nearing the end of an eight-year sentence after being convicted of tax fraud in a case seen as punishment for challenging the Kremlin's economic and political power, in part by funding opposition parties in parliament.

The conviction on charges of stealing nearly $30 billion worth of the oil that his Yukos company produced from 1998 to 2003 and laundering the proceeds could keep him behind bars until at least 2017.

Prosecutors accused Khodorkovsky and Lebedev of stealing the oil from Yukos' own production units and then selling the oil abroad at higher prices. The defense called the charges ridiculous, arguing that prosecutors do not understand the oil business, including the payment of transit fees and export duties.

One of Khodorkovsky's lawyers, Vadim Klyuvgant, said Monday that if this logic were extended to the state oil and gas company Gazprom, the same charges could be brought against Medvedev.

"The court ruled that the difference between the oil price at the production site and at the market represents theft," Klyuvgant said. "Gazprom, where Medvedev served as board chairman, buys oil at the production site at a price 10 times lower than the market price in Rotterdam. Isn't that selective justice? Do they have any shame?"

Numerous witnesses, including current and former government officials, testified during the 20-month trial that the charges against Khodorkovsky and Lebedev were absurd.

Hundreds of Khodorkovsky supporters rallied outside the courthouse, holding up signs saying "Freedom" and "Russia without Putin." Police roughly detained some of them as they chanted "Freedom" and "Down with Putin."

In the courtroom, Judge Viktor Danilkin read the verdict in a rapid-fire monotone, his low voice drowned out at times by loud chants from outside. Khodorkovsky and Lebedev sat impassively in a glass cage. Khodorkovsky exchanged glances with his elderly mother, Marina. His father, Boris, sat next to her, his head bowed.

"Frankly speaking I'm just shocked," Khodorkovsky's mother said. "Before I thought the judge was a clever and professional person. I still think so but I guess he was subjected to strong pressure and that he is ashamed to look up."

The judge rarely raised his eyes as he read for more than seven hours with two short breaks. Khodorkovsky's lawyers estimated that if Danilkin maintains the current pace, he could finish reading all 250 to 300 pages in another couple of days and then announce the sentence. They then plan to appeal.

Boris Nemtsov, who was among a number of opposition leaders who joined the protest rally, said the case has nothing to do with the law or justice

"Danilkin is the person who will make public the political decision primarily of citizen Putin, who is suffering from an acute form of Khodorkovsky phobia," Nemtsov said. "He needs to be treated."

When Putin came to power in 2000, Khodorkovsky was among a handful of oligarchs who controlled much of Russia's economy and were used to dictating their terms to the Kremlin.

Putin set out to put them in their place, a task made easier because most Russians reviled the businessmen who had grown fabulously rich in the 1990s at a time when many of their countrymen were thrown into poverty.

Khodorkovsky's arrest in October 2003 and the subsequent state takeover of his Yukos oil company allowed the government to reassert control over the energy sector and tamed the other wealthy businessmen, who have obediently followed Kremlin orders ever since.

The Kremlin also consolidated its hold over political life. Soon after Khodorkovsky's arrest, parties that he had funded were shut out of parliament or sidelined. New controls were imposed on non-governmental organizations, like those once funded by Khodorkovsky, that have worked to help strengthen civil society in Russia.

On Friday, Khodorkovsky published an opinion piece in the daily Nezavisimaya Gazeta containing a scathing criticism of Putin. "I wish Putin kindness and tolerance, I wish him to be loved, not feared. Maybe not by all, but loved sincerely and unselfishly, and not just by dogs," he wrote in a reference to Putin's fondness for animals.

Medvedev, who despite his title remains Putin's junior partner, has promised to strengthen the rule of law as part of his mission to modernize Russia and attract more foreign investment. An acquittal in the Khodorkovsky trial would have been seen as evidence that Medvedev has the power to deliver on his promises.

While the guilty verdict was condemned by many political figures in the U.S. and Europe, it was expected and is unlikely to cause any lasting damage to relations.

Khodorkovsky's wife Inna said in an interview with the monthly Snob magazine that she expects him to be kept behind bars at least until 2012. She said that her husband wasn't expecting any clemency from the authorities.

"My husband is a strong man," she said. "He has made a decision for himself and has no hope."
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