Jailed for a decade by Putin, the exiled oligarch explains how the Russian leader consolidated his power – and why the West still fails to understand him.
In January 1995 a 31-year-old Mikhail Khodorkovsky travelled to Switzerland to attend the World Economic Forum. At a café in Davos one morning he saw a fellow Russian businessman, Boris Berezovsky, speaking to the Hungarian financier George Soros. It was a small place, and he sat close enough to know they were speaking about Russia’s first post-Soviet-era election, which would be held the following year. “You’ve had a good life so far,” Soros told Berezovsky, “and now the communists are coming back, and it’s time to flee.”
That evening Khodorkovsky had an opportunity to ask the communists themselves, who were also attending the summit: would a victory for them mean disaster for Russia’s emerging business elite? Gennady Zyuganov, the Communist Party leader and presidential candidate, told him: “Mikhail Borisovich, we’re full of respect for what you do, and so we will keep you. We will keep you as the CEO of one enterprise.”
Khodorkovsky had already built or acquired a number of businesses – starting with a café of his own, then a computer and software business, then a titanium manufacturer, then a banking group. He knew how time, effort, intelligence and resources were squandered in the command economy. He found Berezovsky and told him that something had to be done.
This was a sentiment shared by plenty of Russians. The state still owned many of the country’s largest companies and most were managed, by a cadre of “red directors”, as if they were still communist organisations. They struggled to become real businesses: the oil company Yukos had not paid its workers for six months and owed the government $4bn (then a huge sum, more than 1 per cent of GDP) in unpaid taxes. As the election approached, oil workers “were ready to block the export pipelines”, Khodorkovsky recalls when we meet in late April. “That would have meant a collapse of the government.”
Later that year Khodorkovsky was asked to attend a meeting at the Kremlin with a group of other bankers and businesspeople. “They told us there were 800 [state-owned] enterprises and: ‘Take as many as you can.’”
There were conditions attached: the bankers had to make their own deals with management, and they immediately needed to cover the wages of the workforce of any enterprise they took over. Finally, the state asked its financiers to commit “all the money you have” to the deal. “Your entire capital. If you have a little, give it all. If you have a lot, also.”
Khodorkovsky thought he could bring in foreign investors, and keep some of his own money, but no one wanted to take the risk. “The investors said, ‘In six months you’ll have communists in power, and you want us to lend you money? No, no, no. Come to us in six months’ time, and we’ll have a look.’”
Six months passed, and Khodorkovsky no longer needed a loan. With the support of Russia’s bankers and CEOs, Boris Yeltsin had returned to power and a new class of oligarchs helped themselves to the country’s freshly privatised companies. Khodorkovsky took Yukos, the oil and gas producer, and began turning it into an efficient and extremely lucrative business that would make him the richest man in Russia, and the richest person under 40 in the world.
What the oligarchs failed to realise at the time was that it was not only Yeltsin – who they assumed “might still have four to five years” in the Kremlin – with whom they had made a deal. Unwittingly, they had also cleared a path for Vladimir Putin, the former KGB agent who would become head of the security services in 1998, take over the presidency at the end of 1999, and send Mikhail Khodorkovsky to prison for a decade.
Khodorkovsky’s office in Marylebone, central London, is a place of muted tones and dark wood, more suited to a very expensive psychiatrist than an exiled oligarch. He tells me his avoidance of demonstrative consumption – a rule he has imparted to his four children – has been one of his better decisions.
He speaks in a soft Russian but understands my questions, which are in English (he also switches to English occasionally, to clarify a sentence). Smiling often, sometimes with a slight wagging of the head, Khodorkovsky seems slightly incredulous at all that has happened to him. As a potential Kremlin target, he takes his security seriously without letting it take over: “I lead quite a risky life,” he smiles. “But I’m used to it.”
He can’t remember the first time he encountered Putin. “It was not a major event at the time. There was nothing dramatic about meeting him.” It is tempting to draw parallels between Putin, the ignored securocrat, and Stalin, who before he came to power was described by Trotsky as an “eminent mediocrity”, and by the writer Nikolai Sukhanov, in his eyewitness account of the Russian revolution, as a “grey blur, which flickered obscurely and left no trace”. (Trotsky was rewarded with an ice pick to the brain, Sukhanov with a firing squad.)
But Khodorkovsky does remember vividly the moment in 1999 when his business career peaked: on the Priobskoye oil field in Western Siberia, an expanse of 2,000 square miles that had been deemed by Soviet research to be relatively unproductive; Yukos discovered it was capable of producing more than five billion barrels of oil. He can still see the line of heavy goods vehicles, stretching into the distance, ready to begin developing the riches that lay beneath. His childhood dream had been to run a huge factory, to command the behemoth machines: “That was the thing I really liked.”
This appetite for scale was also what made him dangerous to Putin. Under Khodorkovsky’s leadership, Yukos had grown to become Russia’s biggest oil company, producing a fifth of the country’s supply. It used European technology, raised capital from American markets and was exploring a merger – possibly with a US oil giant – that would have made it one of the largest energy companies in the world.
The early years of Russian privatisation were dangerous times. “Those who scared easily either perished in the 1990s or found a different, less risky job for themselves,” Khodorkovsky says. But Yukos was moving more quickly than others towards global standards: its senior management and record-keeping were more transparent than any major Russian business, and Khodorkovsky planned for it to comply with America’s Sarbanes-Oxley rules on corporate governance. Still, he knew this wouldn’t happen unless he addressed the wider problem of endemic corruption in the Russian economy. It was this subject – and his readiness to raise it – that led to the confrontation with Putin that would seal his fate.
When he talks about that meeting at the Kremlin on 19 February 2003, Khodorkovsky smiles and shrugs, almost as if telling a joke. He wasn’t nervous, he says: “It was for me largely a business issue.” He had already discussed corruption with senior cabinet ministers. A regional spokesperson had agreed to raise the matter with Putin, but then got cold feet. “So I thought, ‘Well, OK – I’ll take over.’”
In front of the assembled delegates (and live TV cameras), Khodorkovsky embarrassed Putin with his portrait of a Russia that still ran on bribes. He challenged the president on the sale of another oil company, Severnaya Neft (Northern Oil), which had been acquired by a senator and former deputy finance minister, Andrey Vavilov, for $25m. Northern Oil had been awarded the licence for one of the country’s most valuable oil fields before being sold to the state-owned Rosneft for $623m.
What Khodorkovsky did not realise at the time was that Putin and his allies, he claims, had “already pocketed” hundreds of millions of dollars from such practices. Footage of the meeting, included in the 2019 documentary film Citizen K, shows Putin deprived of his usual calm, shifting in his seat, waving a pen as he furiously rebuts Khodorkovsky.
Khodorkovsky’s arrest on 25 October 2003, when he was hauled from a Yukos plane at gunpoint, was a decisive moment for Russia’s business elite. Many of those not allied to Putin had already fled, including: one of Yukos’s co-founders, Yuri Golubev, who died suddenly at his home in London in 2007; the Georgian oil magnate Arkady Patarkatsishvili, who died suddenly at his home in Surrey in 2008; and Boris Berezovsky, who died by strangulation at his home in Berkshire in 2013. Those who retained their money and power did so with Putin’s permission, Khodorkovsky claims, granted in exchange for their ongoing service.
In some cases, he says, the wealth of Russia’s business elite is used directly to influence political outcomes. His organisation, Open Russia, has evidence of Russian money being used to agitate and amplify the Catalan independence movement in Spain, the migration crisis in Germany in 2015 and the far right in France. “I would probably find it difficult to prove it in court,” Khodorkovsky says. “But for me personally, the information was sufficient to think that that was the case.”
Links between Marine Le Pen’s Rassemblement National and the Putin regime may have influenced the recent French presidential election, in which Le Pen reached the second round but was defeated by Emmanuel Macron the night before we spoke. When Khodorkovsky, who seems to have an appetite for uncomfortable meetings, was asked to speak to the European Parliament’s Committee on Foreign Interference in May 2021, he talked about the Russian connection to Le Pen’s proposed foreign minister, Thierry Mariani. “The link to the Kremlin was obvious,” he tells me, “and I thought that was a case worth investigating by French law enforcers.” Mariani, sitting in the audience, offered no comment.
Khodorkovsky argues that in sowing political division, particularly within the EU, the Putin regime, like many large businesses, values market share above all: “It’s much easier to agree with each individual national government, because economically they’re smaller than Russia. He is like a monopoly supplier talking to differentiated buyers.”
When it comes to oil and gas, he says, this is literally the case. “If somebody has a 30 per cent share [of the energy market], and if you cannot replace that 30 per cent with anybody else, they’re already a monopoly supplier.” The anti-monopoly legislation of Western countries has been set up to prevent such situations, Khodorkovsky points out. But in the aftermath of the 2008 financial crisis, Western governments had a choice between spending huge sums on energy security or keeping their voters warm with cheap Russian fuel. Exceptions were made, the cost-of-living crisis was postponed to another decade, and the West entered “a situation where the supplier can dictate his own terms to the clients… a situation where the West, with its money, is paying for the war that Putin is waging”.
At the same time, he says, Putin’s oligarchs have made the West more like Russia, a situation that bolsters support at home. If Russians know that people with connections to the Kremlin are among the biggest donors to Britain’s ruling party, for example, they are more likely to accept that the work of corrupt elites within Russia is “nothing special… these things happen in the West as well”. The trick is to keep people from appreciating the difference in scale: “One is to scratch your finger, another is to lose your whole arm.”
As a Russian national in Britain – “I am a guest here” – Khodorkovsky argues that it is important not to consider every ethnic Russian an asset of the Putin regime. But there is, he says, “an easy way of checking” whether a Russian businessperson “is a normal person, or whether they are potentially the Kremlin’s agent. You just come up to them and say, ‘What do you think of what Putin is doing today? Is it a war crime? Is he a war criminal? Just tell me, on the record…’ If the person tries to avoid the question, then they have some kind of noose around their neck.”
Russia is 70 times the size of the United Kingdom. Its borders contain more than 10 per cent of the Earth’s land mass and nearly 200 ethnic groups. After sentencing, Khodorkovsky was sent by train to the penal colony of Krasnokamensk, more than 3,000 miles from Moscow, close to the border with China; the journey took a week.
His short memoir of his life behind bars, My Fellow Prisoners, uses ten sketches of his fellow inmates to describe the Russian prison system, which in 2003 held more than 900,000 people. Drug abuse and beatings were common. His face was slashed with a knife as he slept; another inmate, a 23-year-old man named Kolya, disembowelled himself in protest at being framed for a robbery he did not commit.
I ask him if the title of the book could also be addressed more broadly, to Russians in general. “What I tried to show is that the people in prison are exactly the same as people outside,” he says. “Prison culture in Russia projects itself, in a very significant way, onto the rest of society.”
This is reflected in the highest reaches of government: a few eyebrows were raised in Russia in February when the foreign minister, Sergei Lavrov, described an international agreement with the phrase “patsan skazal, patsan sdelal” – which, as Russian prisoners know, affirms that the word of a patsan (literally lad, fella; an accepted member of the prison community) is his bond. “This prison slang shows that there is not much difference between the foreign minister and somebody actually sitting behind bars.”
Khodorkovsky was released on 20 December 2013, one of a number of high-profile prisoners to be freed before the 2014 Winter Olympics in Sochi. Were he to return to Russia now, however, he would immediately be arrested. In 2015 he was accused of having been connected to the murder of Vladimir Petukhov, the mayor of a Siberian city who was shot on 26 June 1998 (Khodorkovsky’s birthday). In 2006, while Khodorkovsky was in prison, the former FSB agent Alexander Litvinenko testified that he had seen a video of the hitman being paid a large sum of money by a member of the security services. Litvinenko was himself murdered the same year, in London, after accusing the Russian government of having assassinated the journalist Anna Politkovskaya, who was shot in the lift of her apartment building on 7 October (Vladimir Putin’s birthday).
Even Putin himself is now trapped by the system through which he has risen to power, Khodorkovsky says. If Putin’s offensive in Donbas is successful, he will be compelled to make another assault on Kyiv; if it fails, he will have to withdraw, and find some other way to claim success. If he commits to using nuclear weapons, it is likely he will be abandoned by his allies in China and India, and possibly his own generals. “This is why he’s so tense at the moment,” Khodorkovsky observes. “He has embarked upon a war he can’t stop.”
Putin is often cast as an icily capable authoritarian, the man who never quite left the KGB, a diplomatic chess player. But Khodorkovsky says the strongman image is incidental to a more fundamental truth about how power is distributed in his country. In a Russia ruled by Moscow, every leader becomes a tsar.
“I think many Russians, but also a lot of Westerners, make a very serious mistake in trying to look for… a better person” to become president, he says. “They are searching for such a person in [Alexei] Navalny, in myself, but that’s a mistake. Anyone who replaces Putin is going to take Russia along the same imperialist route.”
In his view, Russia’s sheer size makes authoritarianism and conflict with its neighbours inevitable. “It is a very large and very diverse country, and if you want to manage it from one central spot, you have to have a very strong bureaucratic apparatus. To have such a huge apparatus at the centre has to be explained by having to protect the country from an outside enemy – there is no other explanation that people will accept.”
This, he says, is the key to understanding Putin – not as a particularly strong leader, but as a product of history. “It is his office as president that makes him what he is. You need to change the whole system, so that that position doesn’t exist.”
Understanding this is key when it comes to predicting what happens next, Khodorkovsky says. Even if Putin wins in Ukraine, he will face a powerful resistance movement that he will have to explain to Russians as the work of Nato – and to keep his legitimacy he would be forced to respond.
“In his head, of course, he is already fighting Nato,” says Khodorkovsky. “Look at what the Russian media is writing – that we’re fighting Nato. Public opinion has already been trained on that. So if he crosses the Baltic countries or Polish border, that will not be news to Russian society.
“He will have to go on. In the end he will be defeated. The question is which soil he will be defeated on.”
The article was first published at The New Statesmen