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Working in Russia is risky business

Marketplace Staff Oct 25, 2007
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Working in Russia is risky business

Marketplace Staff Oct 25, 2007
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Doug Krizner: Today is the half-way point in an eight-year prison term for Russian oligarch Mikhail Khodorkovsky. The anniversary was to have made the former oil magnet eligible for parole, but Russian prosecutors have brought new charges against him.

The case illustrates how, to do business in Russia, you’ve got to play by the rules of Russia’s president. Geoff Brumfiel reports.


Geoff Brumfiel: The Russian government says Khodorovsky was jailed for fraud and tax evasion. But ask his lawyer, Robert Amsterdam, and you’ll get this answer:

Robert Amsterdam: Khodorkovsky is in jail, in Siberia, at the risk of his life every day, because he wanted the free market to exist in Russia.

To realize that dream, Khodorkovsky bankrolled a major opposition party, and supporters say that landed him in jail. Only those who play by Putin’s rules prosper.

Recently, the government let aluminum king Oleg Deripaska, a staunch loyalist, buy RussNeft, a privately-held oil company that was under Russian investigation. In the energy industry, the pressure to cosy up is enormous.

Philip Hanson, an economist at the University of Birmingham:

Philip Hanson: The bosses of companies like that almost certainly keep their lines fairly open to the Kremlin and talk about what their plans are.

He says the bosses might get a call from the Kremlin to invest in an oil field in Khazakhstan, and they’d better be ready to do it.

Khodorkovsky’s case serves as a warning not to play the wrong politics.

In London, I’m Geoff Brumfiel for Marketplace.

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