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07/12/2004:
"Soros and YUKOS"
pittsburg live.comSunday, November 16, 2003
On the eve of what was once Russia's most sacred holiday -- "Revolution Day," the anniversary of the 1917 Bolshevik Revolution still celebrated as "Day of Accord and Reconciliation." -- there was neither accord nor reconciliation at the Moscow offices of the Hungarian born American billionaire George Soros.
Instead, there were some 40 large men in camouflage gear with stun guns, hand trucks and moving vans at the Soros Foundation. They ordered the staff out of the building and then loaded documents and computer printouts from the past 15 years, as well as office equipment, onto their vans. The New York-based Soros Foundation that operates under the name "Open Society Institute" had spent more than $1 billion on charitable and educational projects in Russia during the past 15 years. This summer, George Soros said that he was closing out his Russian activities.
Dmitry Lovrev, a lawyer for the Soros Foundation, said they had a 10-year lease on the office, that they were up-to-date with the rent. Kantimir Karamzin, speaking on behalf of the building owner claimed that no rent had been paid since 2001, and assured "there was no political motive for moving out George Soros."
Perhaps Mr. Karamzin did not have all the facts. Last July, when Soros decided that he had given enough cash to Moscow, the investigation into the Yukos oil giant moved into top gear.
In October, the chairman and CEO of Yukos, Mikhail Khodorkovsky, was arrested. He is still in prison.
There was a lot to investigate. In an auction run by his own bank, Khodorkovsky paid only $309 million for Yukos -- early this year the company was worth $45 billion. In 1998, Khodorkovsky survived charges by U.S. investigators that he had helped launder $10 billion with his own bank and the Bank of New York.
Khodorkovsky, who is just 40 years old, is the richest man in Russia, worth over $15 billion. Share prices of Yukos plunged by 18 percent on his arrest and have only now begun to climb back with Khodorkovsky resigning from Yukos. He is charged with tax evasion, theft, forgery and fraud. And, what we have to remember is that the unfortunate Khodorkovsky is an oligarch -- a very rich man who helps control the policies of his country to become richer.
Russians don't like oligarchs, so there is little criticism of President Vladimir Putin when he says, "It just doesn't work if you support the laws of the state when the prosecutor has got the handcuffs locked on you."
But why should the Russians be bothering America's very own George Soros?
Like the bold oligarch that he is, Soros denounced the arrest of Khodorkovsky as "persecution" that would force business to submit to the Russian state.
"I believe that he acted within the constraints of the law in supporting political parties. I am doing the same in the United States."
By this remark, George Soros was reminding us that he had given $10 million to the Democratic National Committee for "regime change" in the 2004 elections. Of course, he is acting within the constraints of the law, in the same way that Khodorkovsky was when he named his charitable organization, the "Open Russia Foundation," and said that there was no connection with the Soros "Open Society Institute" although they did fund some projects together.
Khodorkovsky nabbed Lord Rothschild of London and our own inimitable Henry Kissinger for his board of directors. Gifts to American charities began to flow. Khodorkovsky joined the advisory board of the U.S. Carlyle Group, a super rich private equity fund, where he conferred in Moscow with the former Secretary of State James Baker III and former President George H. W. Bush.
Soros and Georgia/Pravda
While Soros's largest donation of all time to the Democratic Party is not yet receiving undue attention, the arrest of Russia's richest man and the Yukos losses continues to be a major story. In less than a month, votes for the State Duma will determine the extent of support for President Putin.
Putin's political party, United Russia, is running only a few points ahead of the Communist Party. Both are trying to shed the image of being fat cat bureaucrats. Of even greater concern to Putin is the large numbers of young people who are now supporting the Communists. Both major blocs could use the votes of the liberal parties that recently rallied in Moscow in support of their own positions and for the freeing of Khodorkovsky who financed both liberal groups.
Prosecutors will have no problems in finding charges against many Russian tycoons involved in the "quick and dirty" privatization programs under Boris Yeltsin in the mid- 1990s. The theory, developed by the Clinton administration, was that once private property was established, the new owners would fight for democracy against a strong Communist challenge.
When Yeltsin won, by very dubious means, oligarchs were given state jobs and enormous powers. At that time, Condoleezza Rice, who is now national security adviser, wrote that the Clintonistas were overlooking the "looting of the country's assets by powerful people." Under Putin, the prosecutors have for four years been building their cases and, again in theory, a rule of law may emerge.
Dateline D.C. is written by a Washington-based British journalist and political observer.
