战略与国际研究中心-PONARS-Policy-Memo-307_6页_84kb

The Yukos Affair: Terminating the Implicit Contract

Core Content

The Yukos Affair of 2003 marked a significant shift in the relationship between the Russian state and its oligarchs, particularly Mikhail Khodorkovsky, one of the country's leading business figures. The affair involved the arrest of Yukos' top management, including Khodorkovsky, and the freezing of a large portion of the company's stock. It reflected the end of an implicit contract between the state and the oligarchs, which had been in place since the privatization era of the 1990s.

Main Points

• Arrests and Charges: On July 2, 2003, Platon Lebedev and Alexei Pichugin were arrested for financial fraud and alleged involvement in contract killings. Khodorkovsky was arrested on October 25, 2003, for fraud, tax evasion, and theft. The General Procuracy (GP) froze 44% of Yukos' stock, signaling a major escalation in the conflict.

• Yukos' Significance: Yukos was Russia's largest company by market value, second-largest in profits, and fourth-largest in sales. It played a major role in the country's energy sector, with every sixth car in Russia being fueled by Yukos' products.

• State's Response: Putin publicly dismissed speculation about the arrests and announced the end of the Yeltsin-era informal patronage system. He replaced Alexander Voloshin, the head of the Presidential Administration (AP), with Dmitri Medvedev, indicating a shift in political power and policy direction.

Key Causes and Motivations

1. Khodorkovsky's Political Ambitions

• Khodorkovsky was seen as attempting to influence public politics through the privatization of political space.
• The CNS report ("The State and The Oligarchs") suggested that he aimed to bring the Duma under oligarchic control.
• His charity campaign and alleged donations to political parties (including the Communist Party) were perceived as direct political moves.
• The arrest of Yukos' management was intended to neutralize his political leverage ahead of the 2003 Duma elections.

2. Conflict Within the Presidential Administration

• Tensions existed between Kremlin veterans (like Voloshin) and newcomers from St. Petersburg (like Sechin and Ivanov).
• The old faction was seen as the "roof" (protection) for the oligarchs, while the new team aimed to undermine this system.
• The resignation of Voloshin and the appointment of Medvedev signified the end of the Yeltsin legacy in state-business relations.
• The new team favored legal and administrative reforms, not the old patronage model.

3. Mergers and Acquisitions Policy

• Yukos' merger with Sibneft' created the fourth-largest oil company in the world.
• The potential sale of Yukos to U.S. oil giants like ExxonMobil or ChevronTexaco was viewed as a threat to national interests.
• The Kremlin had previously shown soft approval of such deals, but the sale of Yukos' shares to foreign entities was seen as a breach of the implicit contract.
• The Anti-Monopoly Committee could have blocked the merger, but the state allowed it, suggesting a preference for the merger to proceed without Khodorkovsky.

Key Information

• The implicit contract between the state and the oligarchs involved:
  • State non-interference in privatization outcomes.
  • Oligarchs' obligations to avoid political interference, pay informal rents, and contribute to national development.
• The Yukos affair symbolized the end of this contract, with the state moving toward a formal rule-based system.
• Despite the arrests and charges, Yukos is expected to survive, as it is a major player in the economy.
• The future of Russian politics depends on how legal procedures are handled in major cases, including Yukos and others.

Conclusion

The Yukos Affair represents a pivotal moment in Russian political and economic history, marking the end of an informal patronage system and the beginning of a more formal legal approach. While the motivations behind the state's actions remain opaque, the affair underscores a shift in power dynamics and the state's determination to redefine its relationship with big business. The outcome of this conflict will likely shape the future of Russian governance and the role of the oligarchs in the country's political and economic landscape.