Sunshine Recorder

Link: Aaron Swartz's "Crime" and the Business of Breaking the Law

…. In the past couple of months, there’s been reporting on a pair of crimes in the business world so flagrant as to literally take the breath away. The first of these wasn’t actually that widely reported on — in fact, I only know about it because a friend in the healthcare industry sent along an article on it. It’s a long read, but it’s worth taking the time to do so. It details how a medical device company decided to bypass FDA clinical trials and use bone cement in the spines of humans. Given that the cement wasn’t properly tested, it should come as no big surprise that a number of people died as a result. In sentencing the executives responsible for what happened, the judge described how “what has occurred in this case, in terms of wrongfulness — it’s 11 on a scale of 10.” In fact, the judge, for “the first time in his 25-year career… sentenced someone above the federal guidelines.”

That executive, for his role in what happened, received nine months in jail. (The federal guidelines actually suggested six months for this type of offence, which was not even a felony, but a misdemeanor). One of his fellow executives received a lesser sentence of five months.

And then there’s a case that was much harder to miss: that of HSBC, and their foray into the world of money laundering for drug cartels:

Despite the fact that HSBC admitted to laundering billions of dollars for Colombian and Mexican drug cartels (among others) and violating a host of important banking laws (from the Bank Secrecy Act to the Trading With the Enemy Act), Breuer and his Justice Department elected not to pursue criminal prosecutions of the bank, opting instead for a “record” financial settlement of $1.9 billion, which as one analyst noted is about five weeks of income for the bank.

Lay those two cases down beside that of a 26-year old kid who did the online equivalent of checking out too many books out of the library. For doing that, Aaron Swartz was initially charged with four felonies. The prosecutors in the Synthes case agreed to charge the executives only with one misdemeanor each. In the instance of HSBC, they used their discretion to avoid pursuing criminal charges altogether. In Swartz’s case, the government decided to use that same discretion to bolster its initial four felony charges with a further nine — hence the possibility of over three decades of jail time and a $1M fine. Now, Aaron had only been charged — if justice had prevailed, it could have all been thrown out in court — but even in that circumstance, he would have still been roughly $1.5 million out of pocket just defending himself. Those HSBC executives never even got to that point.

I actually had the opportunity to talk with Aaron online a few weeks ago; partly as a result of an article that I wrote for HBR about corruption and its effect on innovation. Looking at the three cases above, I can’t help but see similar symptoms seeping into the justice system. I simply don’t know how else to explain the huge disparity in how justice was sought in these very different cases — other than regulatory capture. It seems you can get away with laundering money for the drug cartels, so long as you’ve been generous with the those responsible for appointing district attorneys; or better yet, if your industry has paid to undo all the regulation that prevents you from getting too big to fail. Similarly, when your lobby has been helping Congress draft the laws that govern food, drugs, and cosmetics, you can make sure that the federal sentencing guidelines are only six months should you breach the responsible corporate officer doctrine. This in turn means you can inject unsafe cement into people’s spines with relative impunity (apparently, those in the healthcare industry were actually surprised when the officers were sentenced to jail, even if it was for only a few months. One of the convicted executives went so far as to ask the judge to delay the beginning of his sentence until after the holidays). But woe betide you if, in the name of openness and sharing human knowledge, you decide to download academic journals. Because that sounds a lot like piracy — and we all know how much has been spent to stamp that scourge out.


How a High-Speed Rail Disaster Exposed China’s Corruption
…The Wenzhou crash killed forty people and injured a hundred and ninety-two. For reasons both practical and symbolic, the government was desperate to get trains running again, and within twenty-four hours it declared the line back in business. The Department of Propaganda ordered editors to give the crash as little attention as possible. “Do not question, do not elaborate,” it warned, on an internal notice. When newspapers came out the next morning, China’s first high-speed train wreck was not on the front page.
But, instead of moving on, the public wanted to know what had happened, and why. This was not a bus plunging off a road in a provincial outpost; it was dozens of men and women dying on one of the nation’s proudest achievements—in a newly wired age, when passengers had cell phones and witnesses and critics finally had the tools to humiliate the propagandists.
People demanded to know why a two-year-old survivor was found in the wreckage after rescuers had called off the search. A railway spokesman said it was “a miracle.” Critics jeered, calling his explanation an “insult to the intelligence of the Chinese people.” At one point, the authorities dug a hole and buried part of the ruined train, saying they needed firm ground for recovery efforts. When reporters accused them of trying to thwart an investigation, a hapless spokesman replied, “Whether or not you believe it, I believe it,” a phrase that took flight on the Internet as an emblem of the government’s vanishing credibility. (The train was exhumed. The spokesman was relieved of his duties and was last seen working in Poland.)
Within days, the state-owned company that produced the signal box apologized for mistakes in its design. But to many in China the focus on a single broken part overlooked the likely role of a deeper problem underlying China’s rise: a pervasive corruption and moral disregard that had already led to milk tainted by chemicals reaching the market, and shoddy bridges and highways built hastily in order to meet political targets. A host on state television, Qiu Qiming, became the unlikely voice of the moment when he broke away from his script to ask, on the air, “Can we drink a glass of milk that is safe? Can we stay in an apartment that will not fall apart? Can we travel roads in our cities that will not collapse?”
Prime Minister Wen Jiabao had no choice but to visit the crash site and vow to investigate. “If corruption was found behind this, we must handle it according to law, and we will not be lenient,” he said. “Only in this way can we be fair to those who have died.” People didn’t forget Wen’s pledge as the first deadline for the investigation came and went, and they continued to demand a fuller accounting. At last, in December, authorities released an unprecedented, detailed report. It acknowledged “serious design flaws,” a “neglect of safety management,” and problems in bidding and testing. It also blamed fifty-four people in government and industry, beginning with Great Leap Liu. The Minister’s name became a byword for “a broken system,” as the muckraking magazine Caixin called the Railway Ministry, a testament to the political reality that, as Caixin put it, “since absolute power corrupts absolutely, the key to curbing graft is limiting power.” When I spoke to an engineer who worked on the railway’s construction, he told me, “I can’t pinpoint which step was neglected or what didn’t get enough time, because the whole process was compressed, from beginning to end.” He added, “There is an expression in Chinese: when you take too great a leap, you can tear your balls.”

How a High-Speed Rail Disaster Exposed China’s Corruption

…The Wenzhou crash killed forty people and injured a hundred and ninety-two. For reasons both practical and symbolic, the government was desperate to get trains running again, and within twenty-four hours it declared the line back in business. The Department of Propaganda ordered editors to give the crash as little attention as possible. “Do not question, do not elaborate,” it warned, on an internal notice. When newspapers came out the next morning, China’s first high-speed train wreck was not on the front page.

But, instead of moving on, the public wanted to know what had happened, and why. This was not a bus plunging off a road in a provincial outpost; it was dozens of men and women dying on one of the nation’s proudest achievements—in a newly wired age, when passengers had cell phones and witnesses and critics finally had the tools to humiliate the propagandists.

People demanded to know why a two-year-old survivor was found in the wreckage after rescuers had called off the search. A railway spokesman said it was “a miracle.” Critics jeered, calling his explanation an “insult to the intelligence of the Chinese people.” At one point, the authorities dug a hole and buried part of the ruined train, saying they needed firm ground for recovery efforts. When reporters accused them of trying to thwart an investigation, a hapless spokesman replied, “Whether or not you believe it, I believe it,” a phrase that took flight on the Internet as an emblem of the government’s vanishing credibility. (The train was exhumed. The spokesman was relieved of his duties and was last seen working in Poland.)

Within days, the state-owned company that produced the signal box apologized for mistakes in its design. But to many in China the focus on a single broken part overlooked the likely role of a deeper problem underlying China’s rise: a pervasive corruption and moral disregard that had already led to milk tainted by chemicals reaching the market, and shoddy bridges and highways built hastily in order to meet political targets. A host on state television, Qiu Qiming, became the unlikely voice of the moment when he broke away from his script to ask, on the air, “Can we drink a glass of milk that is safe? Can we stay in an apartment that will not fall apart? Can we travel roads in our cities that will not collapse?”

Prime Minister Wen Jiabao had no choice but to visit the crash site and vow to investigate. “If corruption was found behind this, we must handle it according to law, and we will not be lenient,” he said. “Only in this way can we be fair to those who have died.” People didn’t forget Wen’s pledge as the first deadline for the investigation came and went, and they continued to demand a fuller accounting. At last, in December, authorities released an unprecedented, detailed report. It acknowledged “serious design flaws,” a “neglect of safety management,” and problems in bidding and testing. It also blamed fifty-four people in government and industry, beginning with Great Leap Liu. The Minister’s name became a byword for “a broken system,” as the muckraking magazine Caixin called the Railway Ministry, a testament to the political reality that, as Caixin put it, “since absolute power corrupts absolutely, the key to curbing graft is limiting power.” When I spoke to an engineer who worked on the railway’s construction, he told me, “I can’t pinpoint which step was neglected or what didn’t get enough time, because the whole process was compressed, from beginning to end.” He added, “There is an expression in Chinese: when you take too great a leap, you can tear your balls.”

Link: The Strange and Evil World of Equatorial Guinea

It is hard not to be impressed when you arrive in the newly rich nation of Equatorial Guinea, especially when you are invited as a guest of the president. There is just a brief wait in the VIP lounge, with its white leatherette sofas and The Naked Gun playing on a flat-screen television, before you are whisked into your limousine, the usual hassles of passport control handled by friendly officials. Leaving Malabo airport you see what looks almost like a modernist sculpture of discarded aeroplanes, one of which has its nose pointing into the air. You wonder if this is some kind of weird memorial to the infamous Wonga coup attempt, when British-led mercenaries failed to overthrow your host in an attempt to get their hands on his oil wealth.

Then there is a drive for several miles along a new three-lane highway. Strangely, it is devoid of traffic – we passed no more than five cars coming in the opposite direction. On either side are new buildings planted among the impossibly lush foliage. There are offices for oil and construction companies, together with scores of new blocks of flats – again all empty.

Eventually you pass the conference centre, a concrete edifice built to host a recent African Union summit. Beside it is a complex of 52 identical mansions, one for every African leader attending the week-long event. It has its own heliport, of course. The houses are all empty.

"Fantastic infrastructure here, isn’t it, compared with the rest of Africa,” enthuses one of my companions as we speed past. This is Adrian Yalland, an ebullient former spokesman for the Countryside Alliance who now speaks up for this West African dictatorship. He has not visited the country before.

Next, you pass an artificial beach and an ultramodern hospital before turning into an impressive Sofitel hotel with 200 rooms, the country’s first spa and a bespoke island nature walk. An 18-hole golf course is being hacked from the verdant jungle. Even the obligatory picture of President Teodoro Obiang has been given a black-and-gold makeover, giving him the look of JFK. There are, however, hardly any guests.

Welcome to Sipopo. This Orwellian complex, grafted on to the capital, Malabo, is the face Equatorial Guinea wishes to present to the world. Obiang, now the longest-serving ruler in Africa and a man accused of presiding over one of the world’s most corrupt, kleptocratic and repressive governments, spent more than half a billion pounds creating it as part of his drive to rebrand his regime. It is small change for a man alleged to pocket £40m a day in energy revenues; his tiny country is sub-Saharan Africa’s third-largest oil producer.

It is like something out of The Truman Show, one of many illusions in a land of artifice. Sipopo cost four times the annual education budget in what is perhaps the planet’s most unequal society, a country where per-capita wealth exceeds Britain but three-quarters of its 675,000 citizens live on less than a dollar a day. Infant mortality rates are among the worst in the world, but that spanking-new hospital, said one doctor, has no patients most of the time. Ordinary people, it turns out, are barred from the area.

Link: Reclaiming the Forests and the Right to Feel Safe

The woman’s exhausted eyes reflected the flames dancing in front of her. A 38-year-old grandmother, she is also a leader of the civilian insurgency that has taken over this mountain town in the state of Michoacán, 310 miles west of Mexico City. Sixteen months of cold and sleepless nights at Bonfire No. 17, one of a number of permanent burning barricades set up here, have taken their toll.

But like the rest of the residents, she cannot afford to let her guard down.

On the morning of April 15, 2011, using rocks and fireworks, a group of women attacked a busload of AK-47-armed illegal loggers as they drove through Cherán, residents said. The loggers, who local residents say are protected by one of Mexico’s most powerful criminal organizations and given a virtual free pass by the country’s authorities, had terrorized the community at will for years.

Cherán’s residents said they had been subjected to multiple episodes of rape, kidnapping, extortion and murder by the paramilitary loggers, who have devastated an estimated 70 percent of the surrounding oak forests that sustained the town’s economy and indigenous culture for centuries.

What happened next was extraordinary, especially in a country where the rule of law is often absent and isolated communities are frequently forced to accept the status quo. Organized criminal syndicates, like the drug cartel La Familia, created in Michoacán, act like a state within a state, making their own rules and meting out grisly punishments to those who do not obey.

But here in Cherán, a group of townspeople took loggers hostage, expelled the town’s entire police force and representatives of established political parties, and forcibly closed the roads.

The Mexican government authorities had previously ignored their repeated pleas for help, the residents said, so the people of Cherán simply took the law into their own hands.

“I felt my knees shake like castanets,” said the woman standing vigil at Bonfire No. 17, Rocio, who, like others here, withheld her last name for fear of reprisals by the criminal networks they are resisting. She recalled her overwhelming fear during those first days of revolt, when residents gathered around as many as 200 bonfires set up at every intersection in town to prevent the loggers from retaliating.

In the months since then, Cherán’s townspeople have established a simple but effective internal protection system. There are fewer bonfires today, but several remain active and a security patrol of residents, or “ronda,” keeps watch at all times. Armed townspeople — from middle-age men to teenage girls — guard the barricades blocking all entrances into town. Their weapons are AR15 assault rifles, seized from the police when they expelled them.

Inside the town, they say, crime is now down almost to zero and most residents seem to feel safe. In recent days, however, people from nearby communities have taken several federal police officers captive, demanding that the newly instated forest patrols be canceled so that they can continue their logging activities. (The officers have since been released.) It is unclear if the hostage-takers were illegal loggers, but tensions are flaring in Cherán as the rest of the country looks on with concern.

Last November, in a court appeal, Cherán acquired a degree of autonomy from the Mexican government; the town still receives federal and state money, and its people must pay taxes, but they are allowed to govern themselves under a legal framework called “uses and customs” that has been granted to some indigenous communities.

Legal experts and academics say that Cherán is the first community to be granted this right as a result of a conflict over natural resources with one of the country’s increasingly powerful criminal syndicates.

Link: The Magnitsky Law

After Sergei Magnitsky was beaten to death in a Moscow jail for uncovering fraud by Russian authorities, investor Bill Browder devoted himself to publicising the case.

A decade ago, Bill Browder was flying high as one of the most successful foreign investors in Russia. With $4.5bn under management, Browder had committed his career and a lot of his investors’ money to proving his proposition that the shares of Russia’s newly privatised, resource-rich companies were absurdly cheap.

The cocksure, US-born fund manager aggressively argued to anyone prepared to listen – and to many who weren’t – that President Vladimir Putin had been unfairly maligned in the western press and was intent on bringing prosperity and order to the biggest country in the world, after the rapacious criminality of the 1990s. To the disgust of many, Browder declared himself delighted when Mikhail Khodorkovsky, once Russia’s richest and most powerful oligarch, was arrested in 2003 and jailed. “Who’s next?” Browder asked cheerfully.

Two years later, however, Browder’s fortunes suffered a similar convulsion of fate. Returning to Moscow one Sunday evening in November 2005, after a routine trip to London, his visa was rejected for unexplained reasons. He was expelled from the country the next morning and declared a threat to national security. His panicking investors stampeded out of his Russia fund, known as Hermitage Capital Management. He was forced into a fire sale of his Russian assets, reducing his funds to just $50m. Hermitage’s offices in Moscow were later raided by the Russian tax police, amid allegations of fraud.

Browder’s career as an investor in Russia had been wrecked, but worse was to follow. Sergei Magnitsky, a dogged lawyer who worked for the law firm that represented Hermitage, later discovered that the Russian authorities had perpetrated a tax refund fraud, using forged Hermitage documents to transfer $230m of state money to a criminal gang. Rather than congratulating Magnitsky for his assistance, the authorities accused him of orchestrating the fraud himself and arrested him in November 2008. After almost a year’s detention, during which time he was repeatedly denied medical treatment, he was beaten to death in his jail cell.

Link: The Failures of Our Economic System

In this exclusive interview, we speak to Raymond Baker (Director of the Task Force on Financial Integrity and Economic Development). We discuss the true scale of the global illicit economy and understand how issues such as government theft, drug trafficking, global wealth, money laundering and the shadow financial system contribute to some of our most intractable issues ranging from poverty to hunger, terrorism and even economic crises.

It is an astonishing testament to our society’s economic development that the decade from 1999-2009 saw OECD countries giving over US$1.07 trillion (around 1.7% of world GDP) in overseas development aid, predominantly to developing economies. It is even more astonishing when you realise that in the same period, over US$8 trillion (an amount larger than the combined size of the economies of China and India) was illicitly transferred from these developing economies into the western world, in most cases- permanently. This amount, combined with the developing world’s estimated US$4 Trillion in external debt, means that 80% of our world population (some 5.15 billion people) live in poverty.

Some may argue that even against the backdrop of debt and outflows, it should still be applauded that these economies have received such a significant amount of aid. Surely, they may add, it must be helping? Economist Loretta Napoleoni notes that, “what turns a developing into a developed nation is not the amount of foreign aid it attracts, but how the money is spent.” Using the example of Africa she continues to describe how, “most of the half-trillion dollars received by Africa since the 1960s has funded military coups and civil wars, not economic development. Between 1982 and 1985, Zimbabwe spent $1.3 out of $1.5 billion of foreign assistance on arms and ammunition. In war-torn countries such as Ethiopia, Somalia and Sudan, foreign asset transfers have provided the most lucrative source of revenue for local armed groups. During the civil war in Sudan, the bulk of food aid intended for famine-stricken regions was spent by local armed groups and warlords, who bought Iraqi weapons to use against the Sudanese army and the population… in fact, 70% of the loans given to developing economies go to purchasing goods and services from Western corporation.” She also refers to the Swedish Economist Fredrik Erixon who has shown that since the 1970s, the volume of aid received by African countries has proven inversely proportional to economic growth. Far from being the cure he says, foreign aid has caused the disease. The more a country receives, the more it sinks into poverty.

The existence of a ‘market’ has been a core feature of human society since the Stone Age. At the heart of this market exists the exchange medium of ‘money’, governed by the ideological science of the ‘economy’. Napoleoni notes, “…The birth of new outlets for exchange has triggered economic progress. Human discoveries and innovations gain new meaning when they are shared with others and this happens when they are traded…” (Rogue Economics, 2008). In this regard, one can observe that a properly functioning economy, in which participants have confidence, is essential to the fundamental operation of society. It is clear to even the most casual observer however, that our global economy is faulty. This system, designed to support human progress, is inaccessible or inequitable for the vast majority of humanity. So what is the true scale of the faults in our economy?

Link: Edward Lucas on Putin and Russian History

The international editor of The Economist and author of a new book about Russia gives an excoriating critique of Putinism and explains how Russia’s amoral present is rooted in a failure to come to terms with its past.

Wherever you turn – from contemporary literature to media reporting – there seems to be an unremittingly negative portrayal of modern Russia as corrupt, undemocratic and gangster-run. Is that a fair description?

Well, it’s both better and worse than the popular perception. It’s worse in the sense that I think the country is really run by what amounts to a gangster syndicate which is ruthless in its pursuit of wealth and power, and distorts the machinery of the state in order to achieve that and to perpetrate crimes against the Russian people. So I think Russia is worse than the slightly sanitised picture we get in the media, not least because of libel laws that mean it’s quite hard to write clearly and bluntly about some of the people involved.

But I think things are also better, because you have a new generation of Russians who don’t remember the Soviet Union, except possibly for childhood memories, are living lives largely unclouded by fear and official propaganda, and are integrated into the world in a way in which Russians haven’t been for 100 years. It’s those people who made up a chunk of those protesters who were filling the streets of Moscow and other cities during the weeks after the phony Duma elections in December [2011]. There’s cause for hope there, and the Putin propaganda bubble seems to have popped pretty substantially. Although he’s still in power he no longer enjoys the hypnotic popularity that he’s had over the last 10 years.

Rather than compare Russia with Europe, might it be more appropriate to compare it with other countries whose oil exports make up a disproportionate amount of their wealth and are often ruled by corrupt, undemocratic and potentially dangerous regimes?

There’s a danger of being patronising and deterministic. It’s like saying African countries can’t be democratic or Asian values are antithetical to democracy. Actually, what we have seen in Europe in the last 25 years is that countries that conventional wisdom thought were doomed to poverty and chaos have become very successful ones and countries that we thought were doing very well have fallen into great difficulties. So I’m very hesitant to say that Russia is beset by eternal woes that mean it can never be democratic, prosperous or law abiding.

I do think the shock of the Soviet collapse was very deep, and many people underestimated how difficult things were going to be after that. The country was ruined in so many ways – from brains to bridges – and a huge work of reconstruction is still needed to get over the terrible damage done by communism. I think it was fanciful to think it was ever going to be very easy, but that doesn’t mean one shouldn’t deplore things that have gone wrong. I think the 12-year Putin experiment in retrospect looks like a very serious wrong turn for Russia, rather than being a gateway to a bright and better future as it was portrayed at the time.

The dominance of the oil and gas sector has allowed Russia to punch above its weight in the world. Without it, the Russian government would surely behave differently.

I think that’s true. The main business of the regime is stealing natural resource rents. Rents is a rather technical economic term, but it’s the windfall money you get from just digging something out of the ground and selling it for a lot of money. There are also what people call bureaucratic rents, which is a fancy word for bribes. I think there are two pyramids in Russia – one of natural resource rents and one of bureaucratic rents or bribes. The regime sits at the top and sucks money up from both of those and then squanders some of it on high living in Moscow but pumps a lot of it into the West, where it’s laundered in places like Vienna and even London and New York.

You’ve chosen five books for us, all of which have been published relatively recently. Is there a single thread that ties your choices together?

I think history and the legacy of the past is something of a thread. The communist party has gone but the KGB is still there, and the difficulty in confronting the crimes of KGB – and the regimes whose instrument it was – is a very big deal. I spent a lot of time in West Germany in the 1980s and was very aware of the very painful and sometimes rather intrusive idea of Vergangenheitsbewältigung, which is the coming to terms with the past. It’s always been striking that once you go east of the Iron Curtain, people are often ignorant about the misdeeds of their country’s history or relativise them in a way that is really shocking by the standards of Western Europe.

There is a feeling that the Soviet Union is gone and forgotten, when it shouldn’t be. There should be a memory of the totalitarian past in a country like Russia. Which is not to say that every Russian should feel personally guilty for it, but everything you see is built on the bones of millions of innocent people and that should be a really big deal in Russia. But sadly – and partly because of the Putin regime – it is not.


The Wrath of Putin
Mikhail Khodorkovsky was the richest man in Russia when he dared  confront then president Vladimir Putin, criticizing state corruption at a  meeting with Putin in February 2003. Arrested that fall, then convicted  in two Kafka-esque trials, Khodorkovsky has been imprisoned ever since,  the once powerful oligarch now an invisible hero for the growing  opposition to Putin’s tyranny. From Moscow, as elections approach and  demonstrators spill into the streets, Masha Gessen chronicles the clash  of two titans, each of whom has badly underestimated the other.
This is the story of two men who are central to each other’s lives,  though they have neither met nor spoken in more than eight years. One of  the men has spent this time amassing impressive power and untold  wealth. The palace he built for himself sprawls over eight million  square feet. He travels from world capital to world capital. Everywhere  he goes, he is asked about the other man. The other man has spent the  past eight years behind bars, going for months without seeing the sky.  He has lost his business and most of his money. His family, his friends,  and most of his colleagues have stood by him, but the decisive  relationship of his life remains the one with the first man.
It  is a story of malice, cruelty, and vengeance—but more than anything it  is a story of a failure of imagination. Almost a decade ago, Mikhail  Khodorkovsky, then the owner of the Yukos Oil Company and Russia’s  richest man, completely miscalculated the consequences of standing up to  Vladimir Putin, then Russia’s president. Putin had Khodorkovsky  arrested, completely miscalculating the consequences of putting him in  prison. During his eight years in confinement, Khodorkovsky has become  Russia’s most trusted public figure and Putin’s biggest political  liability. As long as Putin rules Russia and Khodorkovsky continues to  act like Khodorkovsky, Khodorkovsky will remain in prison—and Putin will  remain terrified of him.
Of his eight years without freedom,  Khodorkovsky has spent more than half in Moscow’s Matrosskaya Tishina  Detention Facility, a 246-year-old jail, where living conditions are far  more punishing than those in a distant prison colony. He has declined  to describe the conditions in which he has been kept in any but the most  general terms, arguing that he is no different from other inmates, but  those who have been held in the same place describe cramped cells with a  hole in the floor that serves as the toilet. Inmates take cold meals  sitting on their cots, a few feet from the hole. Access to the outdoors  is virtually nonexistent. Khodorkovsky has spent a total of nearly three  full years attending his two trials, transported to court and back in  an armored car with a small holding compartment in which he must ride  standing up and bent over. During the first trial, he and his  co-defendant, Platon Lebedev, were made to sit in a cage, behind heavy  steel bars. During the second trial, after a complaint was lodged with  the European Court for Human Rights, they were displayed inside a  Plexiglas cube.
At the root of the conflict between Putin and  Khodorkovsky lies a basic difference in character. Putin rarely says  what he means and even less frequently trusts that others are saying  what they mean. Khodorkovsky, in contrast, seems to have always taken  himself and others at face value—he has constructed his identity in  accordance with his convictions and his life in accordance with his  identity. That is what landed him in prison and what has kept him there.
…
On December 31, 1999, former K.G.B. lieutenant colonel Vladimir Putin  replaced Boris Yeltsin as Russia’s president. Putin moved quickly to  consolidate authority in the Kremlin, taking power away from the elected  parliament and local governors as well as from big business. He cracked  down on the opposition and on the media. People who stood up to him  often found themselves on the run—or dead. Putin made it abundantly  clear what he wanted from the oligarchs: he wanted them to share their  wealth with him and his allies, and he wanted them to stay out of  politics. Those who refused would not be around to complain. Vladimir  Gusinsky had owned a media company, including two television networks  and several magazines; his journalists had been highly critical of  Putin. Gusinsky was arrested and forced to sign over his company to the  state. He was then allowed to leave the country. Once in the West, he  claimed that his signature had been coerced. Russia responded by issuing  an international warrant for his arrest. Gusinsky has spent the last 11  years living in Israel. The stage was set for a confrontation.

The Wrath of Putin

Mikhail Khodorkovsky was the richest man in Russia when he dared confront then president Vladimir Putin, criticizing state corruption at a meeting with Putin in February 2003. Arrested that fall, then convicted in two Kafka-esque trials, Khodorkovsky has been imprisoned ever since, the once powerful oligarch now an invisible hero for the growing opposition to Putin’s tyranny. From Moscow, as elections approach and demonstrators spill into the streets, Masha Gessen chronicles the clash of two titans, each of whom has badly underestimated the other.

This is the story of two men who are central to each other’s lives, though they have neither met nor spoken in more than eight years. One of the men has spent this time amassing impressive power and untold wealth. The palace he built for himself sprawls over eight million square feet. He travels from world capital to world capital. Everywhere he goes, he is asked about the other man. The other man has spent the past eight years behind bars, going for months without seeing the sky. He has lost his business and most of his money. His family, his friends, and most of his colleagues have stood by him, but the decisive relationship of his life remains the one with the first man.

It is a story of malice, cruelty, and vengeance—but more than anything it is a story of a failure of imagination. Almost a decade ago, Mikhail Khodorkovsky, then the owner of the Yukos Oil Company and Russia’s richest man, completely miscalculated the consequences of standing up to Vladimir Putin, then Russia’s president. Putin had Khodorkovsky arrested, completely miscalculating the consequences of putting him in prison. During his eight years in confinement, Khodorkovsky has become Russia’s most trusted public figure and Putin’s biggest political liability. As long as Putin rules Russia and Khodorkovsky continues to act like Khodorkovsky, Khodorkovsky will remain in prison—and Putin will remain terrified of him.

Of his eight years without freedom, Khodorkovsky has spent more than half in Moscow’s Matrosskaya Tishina Detention Facility, a 246-year-old jail, where living conditions are far more punishing than those in a distant prison colony. He has declined to describe the conditions in which he has been kept in any but the most general terms, arguing that he is no different from other inmates, but those who have been held in the same place describe cramped cells with a hole in the floor that serves as the toilet. Inmates take cold meals sitting on their cots, a few feet from the hole. Access to the outdoors is virtually nonexistent. Khodorkovsky has spent a total of nearly three full years attending his two trials, transported to court and back in an armored car with a small holding compartment in which he must ride standing up and bent over. During the first trial, he and his co-defendant, Platon Lebedev, were made to sit in a cage, behind heavy steel bars. During the second trial, after a complaint was lodged with the European Court for Human Rights, they were displayed inside a Plexiglas cube.

At the root of the conflict between Putin and Khodorkovsky lies a basic difference in character. Putin rarely says what he means and even less frequently trusts that others are saying what they mean. Khodorkovsky, in contrast, seems to have always taken himself and others at face value—he has constructed his identity in accordance with his convictions and his life in accordance with his identity. That is what landed him in prison and what has kept him there.

On December 31, 1999, former K.G.B. lieutenant colonel Vladimir Putin replaced Boris Yeltsin as Russia’s president. Putin moved quickly to consolidate authority in the Kremlin, taking power away from the elected parliament and local governors as well as from big business. He cracked down on the opposition and on the media. People who stood up to him often found themselves on the run—or dead. Putin made it abundantly clear what he wanted from the oligarchs: he wanted them to share their wealth with him and his allies, and he wanted them to stay out of politics. Those who refused would not be around to complain. Vladimir Gusinsky had owned a media company, including two television networks and several magazines; his journalists had been highly critical of Putin. Gusinsky was arrested and forced to sign over his company to the state. He was then allowed to leave the country. Once in the West, he claimed that his signature had been coerced. Russia responded by issuing an international warrant for his arrest. Gusinsky has spent the last 11 years living in Israel. The stage was set for a confrontation.


Upping the Ante
With 100,000 protesters — young, old, and everything in between — out  in the freezing streets of Moscow, the heat is being turned up on  Vladimir Putin’s drive for the presidency.

Leaving aside the telling analogy of citizens as mute-animal property, the comment is important for another reason: 100,000 people come out to protest in severe cold, the third such mass protest in the heart of the capital in two months, and the Kremlin is clearly still trying to get used to it — or hoping it will all go away. “It’s a bureaucracy, and it works for itself,” Kotler told me. “It’ll take a long time for them to understand that they’re hired.”
But there is evidence that the initial shock is wearing off and the Kremlin — that is, Putin — is slowly hardening its stance. First, it offered some carrots, in the form of legislation to make party registration easier and to bring back popular election of governors. It stopped cracking down on protests, as it had done in early December. And last week, Putin said his campaign would think about working with the Voters’ League monitors. Russian television viewers even got to see Boris Nemtsov, a veteran of the democratic opposition — and the federal television blacklists — on national television, as well as some criticism of Putin’s performance during his annual Q&A with the public.
Now, there is talk in the capital of “tightening the screws,” one of those still-resonant phrases from the Soviet era, when screw-tightening meant something far harsher than what is available to the Kremlin today. “They’re waiting for the opposition to make a mistake,” says one Moscow source with close knowledge of the Kremlin. “Once they do, it will be a welcome opportunity to crack down.” In fact, the stick has already been used along with the carrots. Opposition figures and those involved in organizing the protests have been harassed in the last months. Nemtsov’s phone was hacked and recordings of his salty discussions with his press secretary were made public. Details of the Christmas holidays of various figures also leaked to the press. The parents of one of the organizers, journalist Ilya Klishin, were summoned to their local branch of the KGB’s successor agency, the FSB, which the security organization later denied.
And the journalist responsible for that rare on-air critique of Putin has since been fired from his station, the Gazprom-owned NTV, where there has been a purge of editorial staff in recent weeks amid rumors that a Kremlin loyalist, Margarita Simonyan, might replace the current head of NTV. Whether or not she does, the point has been clearly made: to bring order to an upstart channel, to remind staff about their ultimate loyalty. It was made even clearer in the decision of Channel 1, the main state-owned channel, not to air potentially sharp programming in the month before the presidential election.

Upping the Ante

With 100,000 protesters — young, old, and everything in between — out in the freezing streets of Moscow, the heat is being turned up on Vladimir Putin’s drive for the presidency.

Leaving aside the telling analogy of citizens as mute-animal property, the comment is important for another reason: 100,000 people come out to protest in severe cold, the third such mass protest in the heart of the capital in two months, and the Kremlin is clearly still trying to get used to it — or hoping it will all go away. “It’s a bureaucracy, and it works for itself,” Kotler told me. “It’ll take a long time for them to understand that they’re hired.”

But there is evidence that the initial shock is wearing off and the Kremlin — that is, Putin — is slowly hardening its stance. First, it offered some carrots, in the form of legislation to make party registration easier and to bring back popular election of governors. It stopped cracking down on protests, as it had done in early December. And last week, Putin said his campaign would think about working with the Voters’ League monitors. Russian television viewers even got to see Boris Nemtsov, a veteran of the democratic opposition — and the federal television blacklists — on national television, as well as some criticism of Putin’s performance during his annual Q&A with the public.

Now, there is talk in the capital of “tightening the screws,” one of those still-resonant phrases from the Soviet era, when screw-tightening meant something far harsher than what is available to the Kremlin today. “They’re waiting for the opposition to make a mistake,” says one Moscow source with close knowledge of the Kremlin. “Once they do, it will be a welcome opportunity to crack down.” In fact, the stick has already been used along with the carrots. Opposition figures and those involved in organizing the protests have been harassed in the last months. Nemtsov’s phone was hacked and recordings of his salty discussions with his press secretary were made public. Details of the Christmas holidays of various figures also leaked to the press. The parents of one of the organizers, journalist Ilya Klishin, were summoned to their local branch of the KGB’s successor agency, the FSB, which the security organization later denied.

And the journalist responsible for that rare on-air critique of Putin has since been fired from his station, the Gazprom-owned NTV, where there has been a purge of editorial staff in recent weeks amid rumors that a Kremlin loyalist, Margarita Simonyan, might replace the current head of NTV. Whether or not she does, the point has been clearly made: to bring order to an upstart channel, to remind staff about their ultimate loyalty. It was made even clearer in the decision of Channel 1, the main state-owned channel, not to air potentially sharp programming in the month before the presidential election.

Link: Suddenly We Know We Are Many

Why the Russian youth have tolerated the political situation in their country for so long and why they are no longer tolerant.

Political freedom has never existed in Russia. Which is why in our country even critically minded people are not used to thinking about society as a whole. […] Politics is one thing, life is another. Russian society, particularly when it comes to my generation, is extremely unpolitical and this gives the government more or less unlimited freedom. We are not concerned about the government and that suits the government just fine. 

Of course there are people, plenty of them, who very definitely do make this connection. But even they do not get involved. There are a number of reasons for this. Firstly, the entire political system in Russia – from village soviet to federal committee – is based on lies, on the pursuit of private instead of societal interests, and on theft. Even an honest person who ends up in politics has to play the game to some extent, otherwise he will be “eaten by less upstanding colleagues. This is why honest people give politics a wide berth. And engage in civil society in other ways. Such as in the voluntary movement which in recent years has become a mass phenomenon. 

Secondly, there has been neither political nor personal freedom in Russia for a very long time. Throughout the 20th century the totalitarian state wanted to control all spheres of life. This is no longer the case. The state no longer reaches into personal affairs, into the family and into people’s inner lives. Beyond this, many people don’t ask more of the state. People are left in peace, they are no longer shot for reading forbidden poetry, they are allowed to wear whatever they want, listen to whatever music they like, travel the world and even think what they wish about the state – and that’s just fine. It is a sort of silent agreement, a mutual nonaggression pact: leave us in peace and we will leave you in peace. The right to live one’s life in exchange for keeping out of politics in exchange. And for quite some time this seems to have satisfied both sides. 

Of course the state does not waste any time in dealing with those who dare to violate this agreement, who poke their noses into things or disrupt the status quo. The attacks on civil rights activists, the murders of prying journalists, the brutal suppression of demonstrations – these are all as much symptoms of the time as social networking or security checks in public spaces. In other words, it is not only hard work to stand up for your rights in Russia, it is also dangerous. And you cannot blame anyone for not wanting to risk their lives. After all, not everyone is a hero and a fighter.

Link: Who Runs Russia?

The middle-aged Gladki’s career has traced the rise of Russia’s first mafiosi, the so called vory v zakone or “thieves in law”, from a quasi monastic order of gang leaders that ran life in the gulags under the USSR, through the wild west days of the capitalist 1990s, to the decade of Vladimir Putin’s Russia. “Now all the vory have gone to work for the FSB [the Federal Security Service, successor to the KGB], and life has got duller,” conceded Gladki, over lunch at a coffee house around the corner from my office. Top ranking “thieves in law” now own legitimate businesses, drive armoured Maybachs, hang out with judges, politicians, and have policemen on their payrolls. But while Russia’s vory have started to go legit, the opposite has happened to Russia’s authorities. Indeed, the basic functions of organised crime – protection rackets, narcotics, extortion and prostitution, have increasingly been assumed by the Russian state. In a WikiLeaks cable, a Spanish judge – an expert on the Russian mafia, who has studied the mob for 11 years – told US diplomats that he considered Russia a “mafia state”, where “one cannot differentiate between the activities of the government and OC [organised crime] groups”.


Russian Election Protests: Over the past week, tens of thousands of Russians, decrying the recent parliamentary election results, attended some of the largest protests since the fall of the USSR 20 years ago. Communists, nationalists, and liberals marched in Moscow, St. Petersburg, and several other cities, shouting down Vladimir Putin and the ruling United Russia Party. They carried signs, calling for the election results to be nullified and alleged vote-rigging to be investigated. Protesters clashed with riot police and over a thousand were arrested, including noted anti-corruption blogger Alexei Navalny. The largest demonstration, coordinated on Facebook, was in Moscow’s Bolotnaya Square. Organizers have announced another mass protest, scheduled for December 24, which they claim will be twice as large. [37 photos]

Russian Election Protests: Over the past week, tens of thousands of Russians, decrying the recent parliamentary election results, attended some of the largest protests since the fall of the USSR 20 years ago. Communists, nationalists, and liberals marched in Moscow, St. Petersburg, and several other cities, shouting down Vladimir Putin and the ruling United Russia Party. They carried signs, calling for the election results to be nullified and alleged vote-rigging to be investigated. Protesters clashed with riot police and over a thousand were arrested, including noted anti-corruption blogger Alexei Navalny. The largest demonstration, coordinated on Facebook, was in Moscow’s Bolotnaya Square. Organizers have announced another mass protest, scheduled for December 24, which they claim will be twice as large. [37 photos]

Link: Mikhail Gorbachev calls for Russian elections to be annulled

Riot police in helmets roughly dragged more than 550 protesters into detention vans Tuesday evening in central Moscow but the opposition warned they would stage a major protest organised via the internet at the weekend. Protesters were planning more demonstrations today. Amid growing international alarm, Mr Gorbachev said the results of Sunday’s poll should be annulled and new elections held due to “numerous falsifications and rigging. The results do not reflect the will of the people,” Mr Gorbachev, president when the Soviet Union collapsed two decades ago, told the Interfax news agency. ”Therefore I think they (Russia’s leaders) can only take one decision – annul the results of the election and hold new ones.” Vladimir Putin’s United Russia party won the polls with a sharply reduced majority, amid signs the prime minister’s once-invincible popularity might be waning.

 

LETTER FROM MOSCOW

On Sunday the Russian government held parliamentary elections. As usual, the results were massaged. But after fifteen years of such massaging, going back to the presidential election of Yeltsin in 1996, voters have finally had enough. A large protest gathered on Monday in the center of Moscow, at Chistye Prudy. Our friends in Moscow write:

What happened today at Chistye Prudy was, unquestionably, a major event. There were five or six thousand people. Most of them were young. For many it was the first conscious political act of their lives. Of course, there were many familiar faces, the ones you see at all the opposition meetings. And of course we got the familiar, empty rhetoric of the old guard of liberal activists: Ryzhkov, Yashin, the rock critic Troitsky. And of course the jokes of Shenderovich and the poems of Bykov.
But the spirit of the meeting, and what followed, was radically new. It was the sense of a new power, a conscious and dignified rage against the government and its police, and a creative willingness to step easily over the narrow bounds of the allowable. And the main thing: a sense of changes happening, not somewhere and sometime, but here and now. On this street, in this square, in this city.I can honestly say: this is the first time I felt the spirit of Tahrir in Moscow. Certainly distant, and certainly for the moment only as potential—but no longer impossible.It’s all happening against the background of an increasingly aggressive and helpless government. Thousands of police, bused into the center of town; their lumbering armored vehicles; fantastical constructions of empty stages with the portraits of our “leaders” and the United Russia bear hanging over them; and most of all, the absurd election results—it all just looks so pathetic. And therefore dangerous. The sense of losing control will aggravate the authorities, will cause them to overprepare. There will be more beatings on the kidneys; more “preliminary conversations” with kidnapped activists; more criminal trials on trumped-up charges.And finally, as never before, one felt today the poverty of the movement’s strategy. No one knew what to do after the protest, where to go, what to demand and of whom. The liberals had no sense that the meeting should not, must not end. The result of the meeting should be a concrete goal: the resignation of the government; cancelation of the election results; the beginning of real change. These goals cannot be stated and then achieved by a narrow group of politicians. They can only be achieved through the will and the conscious organization of a constantly growing collection of people who simply refuse, under any pretext whatsoever, to leave the streets to the police.

LETTER FROM MOSCOW

On Sunday the Russian government held parliamentary elections. As usual, the results were massaged. But after fifteen years of such massaging, going back to the presidential election of Yeltsin in 1996, voters have finally had enough. A large protest gathered on Monday in the center of Moscow, at Chistye Prudy. Our friends in Moscow write:

What happened today at Chistye Prudy was, unquestionably, a major event. There were five or six thousand people. Most of them were young. For many it was the first conscious political act of their lives. Of course, there were many familiar faces, the ones you see at all the opposition meetings. And of course we got the familiar, empty rhetoric of the old guard of liberal activists: Ryzhkov, Yashin, the rock critic Troitsky. And of course the jokes of Shenderovich and the poems of Bykov.

But the spirit of the meeting, and what followed, was radically new. It was the sense of a new power, a conscious and dignified rage against the government and its police, and a creative willingness to step easily over the narrow bounds of the allowable. And the main thing: a sense of changes happening, not somewhere and sometime, but here and now. On this street, in this square, in this city.

I can honestly say: this is the first time I felt the spirit of Tahrir in Moscow. Certainly distant, and certainly for the moment only as potential—but no longer impossible.

It’s all happening against the background of an increasingly aggressive and helpless government. Thousands of police, bused into the center of town; their lumbering armored vehicles; fantastical constructions of empty stages with the portraits of our “leaders” and the United Russia bear hanging over them; and most of all, the absurd election results—it all just looks so pathetic. And therefore dangerous. The sense of losing control will aggravate the authorities, will cause them to overprepare. There will be more beatings on the kidneys; more “preliminary conversations” with kidnapped activists; more criminal trials on trumped-up charges.

And finally, as never before, one felt today the poverty of the movement’s strategy. No one knew what to do after the protest, where to go, what to demand and of whom. The liberals had no sense that the meeting should not, must not end. The result of the meeting should be a concrete goal: the resignation of the government; cancelation of the election results; the beginning of real change. These goals cannot be stated and then achieved by a narrow group of politicians. They can only be achieved through the will and the conscious organization of a constantly growing collection of people who simply refuse, under any pretext whatsoever, to leave the streets to the police.