All things Russian

Apparently even Russian people find playing politics with kids lives distasteful. On a cold January day 30,000 or more walked the streets of Moscow and in several other cities to protest the ban on US adoptions of Russian children. The Kremlin says only 9,000 people were there, but this photo says otherwise and opposition counts as people walked through metal detectors verified over 30,000.

A recent anti-Putin protest didn’t even draw this much support to the streets. Apparently these people have seen first hand some of the unbelievably shocking secret video footage of life inside Russian orphanages that is floating around Youtube. I’d post a link to one but watching this type of horror is painful as well as remembering it as you blog on the subject.

Russian nationalistic pride finally overcame kindness however when the Duma passed the law to completely abolish US adoptions in Russia. This only affects about 3,000 kids a year in Russia and those US parents will very likely still adopt from other sources, so the overall affect in human suffering is virtually nothing. A small bonus was that the Duma was forced to tack on a very small budget boost to orphanages in this law so that they wouldn’t get completely crushed in the international press, which widely ignored the token gift anyway.

Amazingly enough now the Russian government has proposed banning ALL foreign adoptions entirely! The overwhelming negative response to the US ban didn’t seem to even faze politicians in the lower house who just now included this in their yearly list of nationalistic proposals to restore Russian pride. 

Ultimately this event goes to show that Russian political experience is still in it’s infancy and that the rules there are very different. No savy politician in a long standing democracy would go anywhere near such a law. It’s not only a career ending move but a lifetime anti-achievement award that would follow you forever. In Russia however it passed the Duma with almost every politician supporting it, even the ‘opposition’. Of course some are reconsidering their votes now that over 100,000 people have signed a petition to dissolve the Duma in only a couple weeks. Sadly the political rules in Russia have changed recently and there will be less direct elected representatives and more popular vote representatives. This recent change was a return to previous election rules because Putin’s party got a little scared last election.

My heart bleeds for Russian children left in orphanages as well as others in the same situation around the world. You can measure a society by how they treat their weakest members. How does your society rate?

Putin would like the world to believe Khodorkovsky stole his billions from Mother Russia during the chaotic collapse of the Soviet Union. This tale is the farthest from the truth.

Khodorkovsky didn’t make his money by asset stripping. He started his first business during the Glasnost period prior to the USSR’s collapse. He and his family were already a part of the Soviet elite structure with significant friends in high places. By 1988 he was import/exporting 10 million per year in a wide variety of goods, which at that time in the Soviet Union was amazing. He jumped into banking early when nobody in Russia even really knew what banking was and had rich partners that helped finance his importing. He became head of energy investment in the early 90’s then Deputy Minister of Fuel and Energy of Russia in 1993. In 1995 he acquired a heavily indebted Yukos Oil company.

One of the common myths about Oligarch’s stealing Russian assets is they ‘stole’ them in some fashion. The economic truth of the situation was that not many private Russians had much wealth to purchase these gigantic national companies when the government decided to sell them. Instead of selling these assets to international investors the government literally accepted the highest Russian bidder, which was often much much lower than the assets value. Khodorkovsky cobbled together just over 300 million to buy Yukos, something almost no Russians at that time could do. The company wasn’t stolen, it was sold to the highest bidder but excluded foreigners. 

Berezovsky, another Oligarch, created a different Oil company called Sibneft in 1995 by taking the most valuable assets from the state oil company. Putin ran Berezovsky out of town for various reasons. B passed his Sibneft to Abramovich, another Oligarch, who later agreed to merge Sibneft with Yukos. This would have created the 2nd largest Oil producer in the World. It was not to be however as Khodorkovsky was arrested and Yukos was confiscated.

Khodorkovsky himself isn’t entirely sure why he was jailed. I think he was jailed because he was in the Oil business that was going to be nationalized by Putin’s government. He was planning to sell a significant portion of the company to giant international Oil companies who Putin would not have been able to get the company back from. He wouldn’t simply get out of the business like Berezovsky and Abramovich did and instead decided to invest in political moves to try to counter the government decision to take his Oil business. Putin wanted Kremlin control over the Russian Oil business because he knew it was extremely profitable. He was using a complex Oil contract sales scheme through a company named Guvnor to skim some Oil profits off the top for himself. Putin is conservatively estimated to be worth over 1 billion dollars but exact figures are impossible. His wealth is entirely disproportionate to his salary.

Khodorkovsky voluntarily returned to Russia from a vacation in the US despite knowing that he would be arrested. He felt compelled to be part of the fight against a return to absolute State power. He could have walked away from it all with well over a billion dollars, but he refused to take the easy way out.

In Russia going to jail is a very serious problem. Khodorkovsky was put on trial for tax evasion when in fact Yukos paid more taxes to the government than any other company in Russia. When Khodorkovsky was going to get out of jail he was suddenly on trial again…for stealing millions of barrels of Oil. It was another sham trial of course in a Russian legal system where the Kremlin determines guilt of innocence before the judge even reads the case. His jail term was extended until 2016 when he is currently scheduled to get out of prison. I doubt Khodorkovsky will ever get out of jail with Putin still in firm control of Russia.

Yukos shareholders have won over $400 million dollars in settlements from independent judges around the world against Putin’s Russia. Yukos was illegally taken and Khodorkovsky is sitting in jail because he would not walk away and let Putin take over Russia. Sadly there were not enough Russian people with the personal moral convictions Khodorkovsky had to stop Putin. Today Russia is firmly returning to Soviet days of supreme control exercised by a very few elite.

Watch the movie here if your interested in Khodorkovsky…

http://vimeo.com/33466491