MOSCOW – The Moscow Times published an editorial Friday, which could only have been written by Judas Iscariot. The editorial is a wholesale denunciation of Mikhail Khodorkovsky, demonizing the man as he faces a likely prison sentence if the charges brought against him by Russian prosecutors are proven to be true. Talk about hitting a man when he is down.
The editorial comes in the wake of a decade-long relationship between Khodorkovsky’s Menatep and Yukos companies and Moscow Times.
Moscow Times is published by a former Dutch communist Derk Sauer who came to Russia as a reporter back in early 1990s. The early origins of financing for Moscow Times are still shrouded in a mystery buried deep in the files of a well-known organization in McLean, Virginia. But the newspaper found its niche promoting the privatization programs of President Boris Yeltsin, his favorite Anatoly Chubais, and his favorite in the U.S. Treasury, Lawrence Summers. Naturally, it became the favorite of the beneficiaries of that privatization. The editorials back then literally thanked God for people like Chubais and other prime beneficiaries of Russian privatization that saw mass looting of the country. At the peak of this sell off, the Moscow Times publisher applied for and landed himself a new patron – Khodorkovsky. Sauer needed his money to publish Playboy and Cosmopolitan. The methods, terms and scale of that cash injection into Sauer’s business remain almost secret to date. One of Khodorkovsky’s investment advisorsat the time has said that Sauer wanted to sell 20 percent of his publishing group; Khodorkovsky, acting through an outfit called Menatep Lausanne, agreed to just half, 10 percent. It is not known if the money Khodorkovsky paid Sauer is among the funds, which Khodorkovsky is now accused of laundering abroad. What is known, however, is that Sauer’s closest associates and partners have admitted selling their shares to Menatep for political protection in Russia. They never mentioned, however, how much money they got for that transaction. Nor did they ever announce the subsequent largesse the company kept on receiving for the following decade. Yukos was one of the first sponsors of the new newspaper by Sauer, Vedomosti.
His renamed banks and oil companies remained generous advertisers and sponsors. Moscow Times returned the favors by never asking any difficult questions about Menatep or Khodorkovsky, who attacked the Times of London group for daring to report that he was connected to Menatep Bank at the time of its default and collapse in 1998. That suit was settled by the Times of London with a confidential agreement that has deterred it from ever investigating Khodorkovsky again. The Moscow Times was already on retainer, and didn’t need a lawyers’ warning. Never once did Moscow Times notice wrongdoing at Menatep and Yukos; never once did the newspaper ask a difficult question; instead, it dispatched its reporters to brave sub-zero Siberian temperatures to do warm-up articles on how Yukos was changing Russia and Russian oil.
All that changed a few weeks after the July 2003 arrest of Platon Lebedev. Within days of the arrest, Moscow Times ran a front-page story accusing Lebedev of systematically intimidating reporters and curbing free speech. The reporters’ names were never mentioned. What Moscow Times did not reveal was that in a highly secretive deal, Sauer and his ironically named Independent Media had bought back the shares from Menatep and sold them, plus the stake held by VNU of the Netherlands, to Vladimir Potanin. The deal was arranged by Leonid Rozhetskin, a founding shareholder of Moscow investment bank Renaissance Capital and dealmaker
On contract to Potanin through Norilsk Nickel, where Rozhetskin is In November 2003, Potanin was the first big businessman to abandon Khodorkovsky, and to save himself offer tokens of his obedience to the Kremlin. The Moscow Times suddenly discovered the evil in Yukos and Khodorkovsky. Leading Moscow expatriates have told The Russia Journal how dismayed they were at the about turn by Moscow Times. “The newspaper never had any credibility, but the manner in which they turned on Khodorkovsky is just shameful,” said a leading American business leader in Moscow.
Few noticed that Moscow Times had begun to provide the same services to Potanin and his Norilsk Nickel and Interros holdings it had been giving to Yukos. No difficult questions about Potanin’s over-hyped investment deal with Hank Greenberg of AIG; no investigative stories of Potanin’s lobbying for favour from Finance Minister Alexei Kudrin; no truthful reports of the Norilsk Nickel miners’ strike against Potanin and his co-shareholder, Mikhail Prokhorov; no record of Potanin’s defeat in manipulating the Norilsk mayoral election won by a mine union leader.
Moscow Times and its parent company are hugely in debt to Potanin. At least, about 45 percent of their shares are owned by Potanin, and because of inherited debts, the Potanin interests have effective control.
The latest editorial by Moscow Times, biting the Khodorkovsky hand that once fed it while concealing Potanin’s hand, is a first, even for the newspaper known for its lack of openness and professional standards.
Judas would be ashamed. He was paid to betray his master, it is well known. Judas took sides, but then in remorse took his life. Sauer isn’t in that class.