Khodorkovsky Takes Trip to Berlin After Decade in Putin’s Prison

Dec 20, 2013 3:05 pm ET

Dec. 21 (Bloomberg) -- Mikhail Khodorkovsky, once Russia’s richest man, was staying in a Berlin hotel after Vladimir Putin ended his 10 years in prison with a pardon that stands to improve the Russian leader’s human rights record.

Russia’s most famous inmate until yesterday arrived in the city on a private jet, according to former German Foreign Minister Hans-Dietrich Genscher, who said in a statement he assisted in obtaining Khodorkovsky’s release with the support of Chancellor Angela Merkel. The former tycoon thanked Genscher in an e-mailed statement and said he’d first focus on repaying “my debt to my parents, my wife and my children.”

The 50-year-old former businessman funded opposition parties before his arrest and campaigned from prison for Russia to develop a civil society. The former owner of Yukos Oil Co. didn’t say where he’ll go next or if he’ll settle in another country, as have several former Yukos executives.

“There will be conditions attached to Khodorkovsky’s pardon, requiring him to keep a low profile,” Chris Weafer, a senior partner at Moscow-based consulting company Macro Advisory Partners, said by phone on Dec. 19.

The decision to free Khodorkovsky may help distract from international outrage that Russia has stoked on several fronts - - including its plan to enforce a ban on what it calls gay propaganda at February’s Winter Olympics. World leaders including U.S. President Barack Obama say they’ll skip the 2014 Games in the Black Sea resort of Sochi.

‘Charm Offensive’

Putin’s move “is best understood as part of a domestic and international charm offensive ahead of the Sochi Olympics,” said Alexander Kliment and Yael Levine of the Eurasia Group, a political risk research firm. “It does not presage a fresh commitment to substantive reform of Russia’s political economy or business climate.”

Khodorkovsky will travel to Switzerland after Berlin, Spiegel Online reported, without saying how it obtained the information. He will receive a permit to travel in the Schengen area, Spiegel said.

Khodorkovsky’s mother has cancer and has been treated in Germany, according to Dmitry Gololobov, former chief attorney at Yukos. His mother, Marina, is in Korallovo near Moscow after returning to Russia, Khodorkovsky’s lawyer Vadim Klyuvgant told Bloomberg News by phone. She may return to Berlin today, Bild reported, without citing anyone.

“My mother is now nearly 80 years old and again facing cancer and more surgeries,” Khodorkovsky wrote in the New York Times last month. “Her son has been in jail for 10 years, and there is a high probability that we are never going to see each other outside of a prison again.”

Yukos Dismantled

Khodorkovsky’s son Pavel said in October that his father won’t resume his business life. Yukos was dismantled and sold at auction, mostly to state-run OAO Rosneft, to cover back taxes. Former Yukos managers have amassed more than $2 billion of assets and cash held in two Dutch entities, which they say is intended for shareholders who lost in the Yukos liquidation. Khodorkovsky transferred his stake in the company to a business partner after his 2003 arrest.

Putin came to power in 2000 pledging to curb the political influence of businessmen who gained control of Russia’s resource wealth after the Soviet Union collapsed. Khodorkovsky was arrested for fraud and tax evasion at a Siberian airstrip in 2003. He has maintained his innocence, saying the cases against him and Yukos are retribution for financing opposition parties, an accusation the Kremlin has denied.

Caring for Family

“I think after he’s free, Khodorkovsky will concentrate on caring for his family and mother,” Gololobov, the attorney, said by phone from London, where he now lives. “He’ll drop out of the public eye. He won’t speak out against Putin.”

Getting back some of a fortune once estimated at $15 billion would be tricky. Khodorkovsky ranked 16th on the Forbes billionaires list in 2004.

Rosneft, which has grown into the world’s largest publicly traded oil company by output, isn’t concerned about any attempts by Khodorkovsky to regain former Yukos assets or lawsuits filed by ex-managers, Igor Sechin, the state-run oil company’s chief executive officer and a former Putin deputy, told reporters yesterday. A group of former executives that has kept management of Yukos assets outside Russia has won some cases against Rosneft.

“We don’t see any risks for the company,” Sechin said. “The fact that Mikhail Borisovich sought a pardon improves the legal basis to defend our interests in court.”

Sechin said he had few concerns about the man himself and would even consider a job application from Khodorkovsky, although all top management slots at Rosneft are filled.

“Mikhail Borisovich is an experienced, creative man,” he said. “He’ll put his talents to use.”

Transferred Stake

In 2004, Khodorkovsky transferred his stake of more than 60 percent in Group Menatep Ltd., which held about 40 percent of Yukos, to business partner Leonid Nevzlin. Nevzlin fled a murder charge in Russia and is now living in Israel.

Former Yukos managers are holding onto proceeds from the $1.5 billion sale of Yukos’s stake in Lithuanian refiner Mazeikiu Nafta AB to PKN Orlen SA and the $240 million sale of Transpetrol AS back to the Slovakian government. They’ve also won cases against Rosneft in the U.K. and the U.S. to recover more than $600 million in loans granted to Yukos units before the state-controlled company bought them at auction.

“My father has moved on,” his son said in an October interview with the BBC. “He wants to be with his family.”

No Softening

Khodorkovsky’s pardon came less than two months before Russia hosts the Winter Olympics. It follows an amnesty this week, during the 20th anniversary of the nation’s constitution, that applies to as many as 22,000 people. Among those slated for release are two members of the all-female punk band Pussy Riot imprisoned after performing a “punk prayer” protesting Putin in Moscow’s main Orthodox cathedral in February 2012.

Putin’s opponents aren’t taking Khodorkovsky’s pardon as evidence the president is softening, and the imprisoned former billionaire has had the threat of additional charges held over his head.

“I’d rather bet my money on political strategy and the Olympics than on softness in old age” as Putin’s motive for the pardon, said Sergei Guriev, a former adviser to Prime Minister Dmitry Medvedev. Guriev fled to Paris in April after two months of interrogation over a case involving Yukos.

“I’m very surprised and happy for Khodorkovsky,” Guriev said in an e-mail yesterday. “As for me, I will stay in France.”

--With assistance from Ilya Arkhipov in Moscow. Editors: Torrey Clark, Larry Liebert, John Walcott