Financial Times, by Isabel Gorst, 22 August 2008

A Russian court on Friday rejected an appeal for parole by Mikhail Khodorkovsky, the jailed oil tycoon, in a case widely seen as a litmus test for Russia's new president, Dmitri Medvedev, who has pledged to implement legal reforms.

Mr Khodorkovsky, who has served over half of an eight-year sentence for tax evasion and fraud while head of the Yukos oil corporation, is legally entitled to parole.

But the judge in a court in the Siberian city of Chita said Khodorkovsky, did not "deserve conditional release" because he had flouted prison rules.

Mr Khodorkovsky, who claims he was imprisoned to punish him for his opposition to Vladimir Putin, the former Russian president who is now prime minister, issued a statement saying, "The last five years have relieved me of any illusions about the Russian judicial system."
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Lyudmila Mikhailovna, the head of the Moscow Helsinki Group, a human rights organisation, said Friday's court ruling was "a political decision, not a judicial decision".

"Khodorkovsky is not a stupid person. He would not break prison rules," she added.

Yuri Shmidt, Mr Khodorkovsky's lawyer, said fresh charges of money laundering and embezzlement brought against his client last year would have prevented his immediate release even if he had won parole.

If convicted of the new charges, Mr Khodorkovsky could face another 22 years in prison.
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The Associated Press, by Catrina Stewart, 22 August 2008

A Russian court rejected jailed oil tycoon Mikhail Khodorkovsky's request for parole on Friday, ordering him to serve out the remainder of his sentence in a ruling his lawyer called politically motivated.

Khodorkovsky the former head of Yukos oil company, and once Russia's richest man was sentenced to prison for eight years in 2005 on charges of tax evasion and fraud in what Kremlin critics slammed as a flawed trial.

"Prisoner Khodorkovsky does not deserve conditional early release," Judge Igor Faliliyev said at the Ingodinsky regional court in the Siberian city of Chita, citing as reasons his refusal to take part in professional training in sewing while in prison, and an alleged misdemeanor dating back to October.

Khodorkovsky showed little surprise at the decision, appearing calm as the judge finished speaking. As he was hustled out of the courtroom by guards, he said Russia's "legal system will not be reformed anytime soon."

Detained since 2003, Khodorkovsky has served more than half of his sentence and has been eligible for parole for the past 10 months.

Most of that sentence has been served in the remote Chita region, nearly 4,000 miles east of Moscow. In December 2006, he was moved from a prison camp to a pretrial detention center in the city after new charges were brought against him and his business associate Platon Lebedev.

The prosecution of the oligarch was widely seen as an attempt to silence a Kremlin opponent and consolidate control over Russia's strategic energy sector.

The charges and subsequent demand for huge back taxes led to the effective renationalization of Yukos, which was taken over by the state oil company Rosneft.

Prosecutor Andrei Federov told the court that Khodorkovsky should serve out his full sentence, because he had not repented his crimes. Prison officials also present at the hearing said that Khodorkovsky had flouted prison rules on several occasions.

In particular, he is accused of failing to hold his hands behind his back during a jail walk last October. But in a surprise revelation to a Russian magazine earlier this year, cellmate Igor Gnezdilov said he had been blackmailed by the guards into making a false allegation against Khodorkovsky.

Vadim Klyuvgant, lawyer for the defense, said after the hearing that the decision to deny the former billionaire parole was politically motivated and would be appealed within the 10 days allowed by the court.

Speaking to reporters, he said the ruling was handed down "by a court that is not free and is heavily influenced by those who are simply scared of freeing Mikhail Khodorkovsky."

"There's no limit to this fantasy," he said.

Khodorkovsky's parole hearing was seen as a test of new President Dmitry Medvedev's commitment to reforming the judiciary and combating what the Russian leader called "legal nihilism" in Russia.

But the defense was philosophical in defeat, pointing to the enormous task facing officials in overhauling the legal system, often criticized for its perceived lack of independence.

"It won't happen immediately," Klyuvgant said. This kind of reform "requires hard work and a very strong will."

Khodorkovsky will have another shot at parole in six months' time, Klyuvgant said, if the appeal fails.

Even if the judge had granted parole, Khodorkovsky would not have walked free. He is in pretrial detention on new charges brought against him and Lebedev in June. His pretrial detention has been extended to Nov. 2.

Global Insight, by Natalia Leshchenko, 22 August 2008

Mikhail Khodorkovsky, previously Russia's richest tycoon, was denied parole yesterday at a hearing in a district court in Siberian town of Chita. Khodorkovsky, the founder of Yukos oil
company, once the flagship of Russian energy industry, was imprisoned in 2003 for eight years on charges of tax evasion and saw his $40US billion company dismantled. Having served half of his term, Khodorkovsky was eligible for appeal, an opportunity he used. Russian legislation allows parole on the conditions of good conduct and lapse of time served. The judge found that Khodorkovsky failed on the former, referring to his breaches of prison conduct such as not holding hands while walking along the corridor, and three others of similar insignificance. Khodorkovsky's lawyers are preparing to appeal against the decision within the allocated 10 days.

Significance:Taken at face value, the grounds for denying parole could not seem more absurd, but of course the wider context is decisive in Khodorkovsky's case. First, he refused to plead guilty to the charges, promising only to abide by law if released; second, a new case of tax evasion has been running against him since last year, and the prosecutors argue that if released Khodorkovsky may seek to influence witnesses or flee the country. These certainly affected the judge's decision, but of course few doubt that he was not the principal decision-maker in the case. Khodorkovsky was imprisoned for challenging the Kremlin elite, and it is the Kremlin where the decision on his parole is ultimately taken, despite the formal references to the rule of law. Although Khodorkovsky had pledged not to return to business if released, it is not the fear of a new rival but a pure sense of revenge that must be driving the Kremlin to keep him in jail. Yet, ultimately, Khodorkovsky's imprisonment continues to symbolise the weakness of Kremlin rather than its strength, for inability to set an opponent free. Khodorkovsky's release has long been lobbied for in the West, and would be seen as a gesture of rapprochement from the Kremlin after the bitter fall-out over Georgia in recent weeks, but then again Moscow is stubbornly anti-Western at the moment. His release would also reinforce President Dmitry Medvedev's encouragements to domestic private business, but it appears that the president has other important fights to wage. The Kremlin must have sound and even understandable reasons to keep Khodorkovsky in prison, but his imprisonment equally limits their own reputation, prestige, and capabilities.