M.B. KHODORKOVSKY’S EXPLANATIONS IN THE INGODINSKY DISTRICT COURT
DURING THE EXAMINATION OF AN APPEAL PURSUANT TO ART. 125 CCP RF
22 October 2008

If one were to read the charges literally and not pay attention to the fact that in them are contained certain statements that contradict the core assertion, the investigation is charging me with the theft of 350 mln. tonnes of oil, i.e. a quantity comparable with or exceeding the entire annual production of Russia in the period of the years 1998-2003. This, of course, is not the 50 supposedly stolen trillion about which the Procuracy had written in its time on [its web]site, but implicitly – it is the same thing. And this is constantly being replicated in the mass information media, i.e. this – is not a “technical error”.

From the moment of the bringing against me at the beginning of the year 2007 of this charge, which remained unchanged in the new version as well - of 29 June 2008, I honestly tried to convince the investigative group not to humiliate itself and the country with knowingly absurd assertions. I attempted to explain that to do that which they have written there, i.e. to steal 350 mln. t of oil, - is physically impossible and unimaginable from the point of view of modern science. And just on the strength of this obvious fact, such a charge, knowingly unimaginable, does not afford an opportunity to defend oneself.

I would like to note that the Criminal Code contains a separate article about the theft of oil – there, it is very understandable how this is implemented, both from a physical point of view and from a practical point of view. How this is implemented in that charge which has been brought against me, I do not understand, and asked that this be explained to me.

The investigators nodded their heads and promised to report [my request] to management. They do not decide anything themselves here, they only report everything to management. The result – everything has remained as before. As before, they pretend that they were proving something and have even proven something. To my misfortune, this is not my first case or criminal investigation, and on the basis of the first case I already know that they will pretend that they are proving one thing (that about which I have said), and then, in court, basing themselves on the fact that they have got assertions that contradict this fundamental basic statement contained somewhere in the charges, will substitute the wordings.

I will give an example. I had a charge in the first case of evasion from the payment of taxes in another manner; it ran through there like a red thread. But in the final decision of the court, they accused me of not having submitted documents and of false documents, having said that somewhere there, in this charge, such an assertion is encountered. Therefore, despite the fact that one assertion had passed through like a red line, they convicted me for another one, from which I was not defending myself.

It is precisely for this reason, because I have already run up against such a situation during the examination of the first case, - that I am now requesting from the investigation to clarify to me the charge, including to either explain, or to take out, all the statements that contradict the fundamental assertion.

Because otherwise, I consider that this is being done, like in the first case, - for the purposes of depriving me of the right to a defence. I will not cite the convention provisions, but it is obvious that this here kind of false charge, this is an unallowable thing.

Having received on 30 June a so-called “new charge” and having seen that all the drivel remains in place, I asked the investigation in writing to clarify for me the charge. A second time already I have asked that this be done. The first time – when in 2007 they brought [it] and refused to clarify [it], the second time – on 30 June 2008.

They have again refused to clarify the charge for me, and this is in the [interrogation] record, for an understandable reason - they are not capable of clarifying this drivel.

To engage in divination – what specifically they had in mind in actuality - is not something I should have to do. They have to tell me what it is they are accusing me of.

But, nevertheless, several important questions unavoidably arise and demand an answer at the stage of the preliminary investigation, and not after my many-year sojourn in a SIZO during the course of the examination of the case on the merits.

1 If one reads the text of the charge literally, as I have already said – chopping out the contradictory assertions that I am asking be clarified to me - then my “crime” consists of this: that transactions with oil in Russia, at the wellhead (i.e. right next to the actual well) were effected not at Rotterdam prices (that’s a city-port over in Holland), but much cheaper.

If this is a crime, then:

A) If they would undertake to clarify, I would ask the investigation to explain, as well as to substantiate, why it was necessary to sell oil in Russia at Rotterdam prices.

I would likewise ask the investigation, if they would undertake to clarify to me, to calculate the consequences of such “investigative-procuratorial economics”. Any more-or-less competent specialist will say that in the event that we had sold oil at the wellhead at Rotterdam prices, then the prices at Russian filling stations already eight years ago would have become substantially higher. By my calculations, 92 [octane] petrol would today cost 60-80 rub./litre.

It is interesting by what norms of the CC in this situation one should qualify the actions of such monopolists who would establish a price of 60-80 rub./litre at filling stations today? I know, because the Procurator-General regularly speaks about this on television. But if Messrs. Karimov, Alyshev, Rusanova, their superiors, oversight procurators and the other authors of this unhealthy initiative demand [this and] consider it correct to do this, then they are aiding and abetting such a grave crime against consumers and their country. And I’m not asking them to clarify this. They – refuse.

B) It is universally known that a practice of intra-corporate trade analogous to YUKOS was applied everywhere then and is applied to this day, including by all the state companies. It must be said that the top leaders of our country asked to name the theme “head on”. I respond: by «Rosneft», by «Gazprom», by «Rosoboronexport». Furthermore, I personally do not consider that this is a violation. I am convinced that this - is economic unavoidability, and the legality of such actions, i.e. intra-corporate trade, is recognized as obvious by the President of the RF, and by the Government, and by the Procuracy-General.

When I ask that the charge be clarified to me, then among other things it is not understandable to me why the Investigative Committee headed by its chairman, appointed by parliament upon the submission of the President, is allowing itself to so directly and cynically violate the fundamental constitutional provision about the equality of all before the law, inasmuch as for all vertically-integrated companies, including those named, this is lawful, and, more than that, - economically unavoidable, while for YUKOS this - is a violation of the law.

It was reported to us on television that the chairman of the Investigative Committee had reported our case to the President of the RF. I have a justified suspicion that what was being reported to the President of the RF, who knows the industry professionally, was not what is written in the charge, inasmuch as to substantiate such assertions to a specialist in the field of civil law and a former chairman of the Board of Directors of «Gazprom» is simply impossible. He knows and understands all this perfectly well. Therefore it is very interesting to me [to know] who disinformed the chairman of the Investigative Committee himself. I have already, in principle, spoken about this; I have a supposition who did this. For this reason as well I am asking that the charge be clarified to me.

Further I step onto the shaky soil of suppositions.

2. I allow [that], perhaps, the investigation really does think that all the proceeds from the oil went not to «YUKOS», but to me and my colleagues personally, into the pocket, but they were unable to write this in the text of the charge brought against me, i.e. I was compelled to suppose what they are imputing to me in actuality, inasmuch as, once again, the duty to clarify the charge to me has not been fulfilled. This would have been at least in some measure physically understandable if they had charged me not with the theft of oil, but had charged [me] with the theft of monetary funds. Proceeding from a presumption of the innocence of the investigation, let us suppose for a brief minute that it is simply illiterate, i.e. does not know how to word a charge, and is not deliberately and openly anticonstitutional, about which I have spoken earlier.

Then I ask them, please, say and indicate, say that what was stolen was money and indicate where specifically all that was stolen by us is found.

I was prepared to help the investigation and to tell where the pseudo-stolen [money] is found, because I do not consider this stolen. For this I asked for the materials of the bankruptcy of YUKOS, because the event of the bargaining away of YUKOS took place already when I was found in jail. But I, as a specialist, know where these materials are found, and, correspondingly, am prepared to help the investigation establish where the pseudo-stolen [money] is found. They refused me.

Besides this, for the proving of my guilt or non-guilt (if, let us suppose, I say yet again, they are taking into their heads not the physically unthinkable theft of oil, but the theoretically possible theft of monetary funds), the investigation would have to do several very simple things: first compare the supposed and actual incomes of the company, and then contrast these incomes with the actual expenditures and balances. This is a classic from the textbook on criminalistics, on the investigation of thefts. A classic! The investigation stubbornly refuses to carry out such a simple procedure, and time and again denies our petitions about this, saying that this “does not have to do with the case”. How does this “not have to do with the case”? If taking an inventory will not uncover a shortfall – i.e. proceeds minus expenditures equals the balance – then there is and can not be any theft! Anything else is unexplainable and, I say yet again, such a charge I do not understand.

3. Under either of the two versions of the charge (both the anticonstitutional one – when, in spite of the Constitution, they place me in an unequal position before the law in comparison with other vertically-integrated companies – and the simply illiterate one, when they, for example, wrote one thing in the PPO [Order to Bring Charges], but have in mind something completely different), the investigation had to:

Explain and prove the origin of the YUKOS property sold during the bankruptcy. After all, it is clear that if all the oil and the proceeds from its realisation had been stolen, and other substantive sources of income an oil company, it is understandable – does not have (at any rate the investigators do not assert that we were also sewing mittens in parallel), then by definition there simply can not be any property other that accounted on the YUKOS balance sheet in 1997 – and this is approximately 30%, even a bit less, than the property of YUKOS that was sold in the process of bankruptcy. It is understandable: there is that which was in 1997, there is that which was sold in 2004 and later, in the procedure of bankruptcy, while the difference, obviously, was bought for the money obtained from the oil that had been stolen and sold. That is, in the treatment of the investigator, - for criminal money. Moreover, what is being spoken of is nothing short of 37 bln $ (i.e. of 800 bln. rub.), and maybe even more. A bit much for an error or simple inattentiveness. To clarify where is this stolen property – all right, or the property purchased for the stolen money, - this is the duty of the investigation.

Second, the investigation was required to identify and freeze all the property purchased for this here money here that had been obtained in a criminal way. As I have already said, this is 70% of all the property sold during the bankruptcy of YUKOS. About this I gave testimony and wrote in petitions. Inasmuch as this property is already sold off, then the proceeds from its realisation, in the event of my being found guilty, are going to have to go to the pseudo-victims. Why am I saying “pseudo-victims” - well, because I do not consider this property stolen, therefore I consider there can not be any victims either. Nevertheless, the court still is going to have to determine these victims. But the property is already sold off, and the money has gone someplace. 800 bln. – [hold on] for a second – isn’t five kopecks. If the investigation considers that this truly is stolen money. They had to have frozen this property, or frozen the money, or at least do this now, if they have not done this earlier.

Obviously understanding the absurdity of the situation, the investigation also refuses to carry out this, its direct duty. But thereby it deliberately causes harm to the pseudo-victims. I repeat, what is being spoken of is, at the very least, 800 bln. rub.

4. Besides this, the investigation, if it truly asserts that all was stolen, must establish all the accomplices who had acquired in the years 1998-2003 in particularly large amounts (tens of millions of tonnes) the property that, in the opinion of the investigation itself, had been stolen and legalised – petrol, fuel oil, diesel fuel, etc. I, once again, indicated in my testimony who this is: the FSB, the MVD, the MChS [Ministry for Affairs of Civil Defence, Emergency Situations and the Liquidation of the Consequences of Elemental Disasters], the MoD. I declared a petition, having indicated what information about this ought to be attached to the case [file]. Here, too, the investigation evaded its duties, and denied this petition also as “not having to do with the case”. I don’t know if they understand the absurdity of the charges and simply don’t want to engage in folly. Or, if they consider that the property was indeed stolen and transferred to accomplices; then, that means, they are covering up for participants in organised criminal activity. Both the one and the other are inadmissible – in equal degree unlawful are both to obstinately bring a charge, understanding its absurdity, and to not execute one’s duties – to not research circumstances concerning accomplices about which the organizer is giving testimony.

A few more minor examples.

We asked to interrogate a witness - Bruce Misamore. He is altogether accessible for the investigation, even though he is found beyond the border, but, nevertheless, he has always declared about his readiness to give testimony. He is a foreign citizen, but, like Platon Lebedev has already told, this does not bar. All the more so, I say yet again, he was always ready to give testimony. What kind of person is this? It is - the financial director of the company YUKOS. When they arrested me in October 2003, he remained in the management of the company, and after my arrest was preparing a report on the state of the property of the company based on the results of the year 2003, i.e. he is the [person] most fully informed about the property of the company after the completion by me of the pseudo-theft imputed to me. Inasmuch as to me is imputed pseudo-theft until the end of 2003, then it is precisely the financial director, who remained, what is called, “on the farm” in the company after me, who can shed light on this case in the greatest detail, i.e. what property remained in the company.

Furthermore, he had issued against his signature public reports about what property was preserved in the company.

To interrogate this witness they are denying us for incomprehensible reasons.

Sirs, and what if all the property is where it should be, and the person who subsequently had this property at his disposal – in 2004, in 2005, declares to you that “this property had been transferred to me” – what, this does not have to do with the case?

Excuse me, if the person who managed the company after me talks about how he did have property, I had managed to account for it, and they tell me: “this does not have to do with the case”. How does it not have to do [with it]?

From the charge one can not understand what specifically it considers theft and in what manner. As I have already said, most often encountered is a statement that it is oil that has been stolen, but likewise encountered is the statement that oil products were stolen, encountered is the statement that monetary funds were stolen.

I understand that the investigation desires to preserve for itself maximum freedom for manoeuvre in court, but this is unlawful. The event of the crime must be concretely set forth in the charge. Either this is oil, well then let’s bicker about how one could have stolen 350 mln.t. of oil. Or this is something else?

And the method of the stealing. The investigation is using such an expression that [what was stolen] was stolen “by way of transfer from balance sheet to balance sheet”. I – am a specialist. I have both a technical and an economic education, and even a legal one. But to me, as a specialist, this method is unclear: I know what a transfer from a balance sheet to a balance sheet is, and in such a manner to steal anything whatsoever is impossible. This – is a method for reflecting [transactions] in financial accounting, and nothing more. I will not get into detailed clarifications now, but I allow that the charge may be using this term in some other, not generally accepted decryptions. But then I ask to explain to me in what sense they are using this term, because that classical term which is being used, which I know, which I was taught in college, does not allow me to understand how in such a manner one can steal some kind of physically existing property. Yet oil, after all, is property that physically exists. I ask to explain this to me.

Either this charge shouldn’t be there at all, or, if it, contrary to common sense and elementary logic, is nevertheless there, there must be evidence not only that confirms it, but that refutes it as well. And the duty of the investigation – is to gather both the one and the other evidence. They are denying me in my petitions, they are saying that the evidence gathered is sufficient for them for the charge. But for me for defence [it is] insufficient. And I can not, by their own assertion, gather it myself. While their duty is to gather. They are denying me in this.

Today, there is no accusatory evidence in actuality, because a physically inexplicable thing is impossible to prove, and there is no exculpatory evidence, because the investigation is refusing to gather it, while [that which has been] gathered by us it refuses to attach to the case [file].

But this is already not an investigation, but the appearance thereof.

In essence – this is a lynching.

And so, once again I want to formulate.

1. A charge has been brought against me, but not explained, in which even the event of the crime is incomprehensible, in my opinion, also absent are both elementary logic and common sense. I want that they explain to me this logic, though it be incomprehensible to me now. Therefore they are forcing me to prepare for a defence from my suppositions with regard to the events imputed to me. That is, I am compelled to suppose what they have in mind, and from this to prepare for a defence. In actuality, this directly violates my right to a defence.

2. The investigation has refused to establish the place where the pseudo-stolen [property] is located. Once again: I do not consider this property stolen, but if the investigation considers this, then it must establish the place where it is located. Thereby, refusing to establish the place where it is located, despite my readiness to give testimony, the investigation has not created the prerequisite for the subsequent procedural actions towards which an investigation is specially oriented by both the CCP and the Procurator-General, who regularly comes out [with public statements] about how one of the most important tasks of an investigation is to trace stolen [property] and return it to the victims. This the investigators are required to carry out. Thereby, it violates my rights, about which I will speak a bit further on. That is, not only the rights of the victims, but my rights as well. Why? Because, not having carried out item 2, it is not carrying out item 3.

3. The investigation has refused to freeze the pseudo-stolen property. Thereby is allowed its selloff and further turnover. And thereby I, in the event of a guilty verdict of the court, am deprived of the opportunity to satisfy the demands of those whom the investigation considers victims, by way of the return to them of this here same pseudo-stolen property. Moreover, the given violation can not practically be eliminated during the course of the examination of the case on the merits, because the further turnover of the property, which is taking place constantly, rules out the possibility of making up for the investigation’s lack of follow-up during the course of the examination of the case on the merits. It is already impossible to find it. Time moves on, after all.

4. The investigation has refused to establish the pseudo-accomplices. And again – yet again. Inasmuch as I do not consider the property stolen, I, naturally, do not consider the Ministry of Defence and the other agencies that bought a huge quantity of oil and oil products from YUKOS for the duration of all the years – I do not consider, of course, that they participated in the theft and legalisation of stolen [property]. But if the investigation considers thus, then it ought to have established these pseudo-accomplices, and, thereby, it would then be able to demand from them this here pseudo-stolen property. But inasmuch as it has not established them, did not demand the property from them, then I, correspondingly, am being deprived of the opportunity, as I have already said, in the event of the issuance of a guilty verdict of the court, to satisfy the demands of the pseudo-victims on account of this property. And to fulfil this during the time of the examination of the case on the merits is impossible, because, as you understand, both the property and the derivatives from it, - they are being spent with each [passing] day, with each [passing] month, with each [passing] year.

5. The investigation is consistently refusing to provide and attach exculpatory evidence it is concealing. Thereby, I am being deprived of the opportunity to base myself on it during examination of the question of extending the term of detention, during the declaration of a petition on the termination of the criminal case to the procurator at the stage of the preliminary investigation, within the framework of a preliminary hearing. That is, even if the court during examination of the case on the merits decides to attach this evidence (and – [hold on] for a second – there are three thousand volumes of it, being concealed by the procuracy, and I named concretely what is contained there), then I can cite them only after the completion of the presentation of evidence by the prosecution, i.e. after many months, if not years, have passed after this could and should have been done. This violates my constitutional right to a defence, dooming me to being found in a SIZO for many years. If this attachment had been made now, then I would already be citing it, complaining to the procurator about the unsubstantiated initiation of a criminal case. The investigation is violating this specially.

6. The investigation has refused to conduct a review [audit] of the company or to attach the results of an inventory that are had by the investigation in hand to the case (this – is exculpatory evidence, one of many [pieces thereof]). This would have been easy to do right after the opening of the case in 2004, but with each month it gets harder and harder to do this, because the retention periods of documents are passing. And by the time of the examination of the case on the merits in court, the retention periods of documents for a series of years, in particular for 1998, 1999, and even for 2000, will have passed. Correspondingly, documents that nobody is going to be required to retain any more are going to be irretrievably lost. Thereby, I once again am deprived of the right to a defence, which can not be restored during the time of the examination of the case on the merits simply because by that moment a significant part of the documents will already have been lost.

Well, and to conclude my address, I want to say a few words more.

I have now had the very interesting experience of the process [trial] with respect to conditional early release, which showed me that over the time of recesses, the procurator, and, perhaps, the court as well, receive from Moscow delusional crib-notes for their further procedural positions and actions.

I want to declare right away that such a method of work undermines trust in the independence of the court, while the replacing of the questions raised in our appeal by other questions, falsified by the procuracy, such as: “the decision was issued by an authorized person in the time periods established by law…”, is abuse of authority and a direct crime against justice, and specifically – falsification of the arguments of an appeal.

In the same way, reference to falsely stated documents, not researched by the court – which also was used during the course of the process [trial] with respect to conditional early release – will appear as falsification.

I specially substantiate why my rights, being violated now, can no[t] be restored in the course of the examination of the case on the merits. Replacement of the essence of this appeal with another one contrived by the procuracy is likewise falsification.

I would ask the court during the course of the examination of this question, which represents great significance for the defence of my and Platon Lebedev’s constitutional rights, not to allow [itself] and not to permit anybody any such falsifications.