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YUKOS’S RUSSIAN MEGA DEAL FLOUNDERING

MOSCOW – The most famous game of Japanese Go ever chronicled was the last match of the 64-year old master, Shusai, and his young challenger, Kitani Minoru of the Seventh Rank. This began in June 1938, and ended, 237 moves and six months later, on December 4. The master was defeated.

To understand how a run of apparently random moves on the Go board became a sequence of fatal mistakes, it is necessary to study the chart of the game, as well as the contemporary commentaries, as retold in a story by the great novelist Yasunari Kawabata, who first reported the match in more than 60 instalments for a Tokyo newspaper.

Go is a board game, first invented in China, then refined over several thousand years by the Japanese. It is not at all like chess, except in the most general sense that the object of the game is to establish on the 361 points of the board, a position that is not only invulnerable to attack by your opponent, but that enables you to surround and capture his pieces, known as stones. The game is so complex that the unwitting player will sometimes not realize when he is surrounded, his stones about to be annihilated. Among the great players, considerable expertise is required to determine the score.

The game was second nature to the Viet Cong and the North Vietnamese generals, who applied its principles to plot the downfall and defeat of the US army in Vietnam between 1963 and 1973.

The great Russian strategists from Suvorov to Zhukov have been strangers to Go’s precepts; I doubt the game is taught much these days at the general staff college. Russian commanders, like the Germans and Americans, believe in the chess-like defence and offence of massive threat, overwhelming force. But if you are to realize how many mistakes the Yukos chief executive officer Mikhail Khodorkovsky has already made in his game with the Kremlin, it will be useful to keep your eye on the Go board. That Khodorkovsky himself appears to think his tactics will enable him to keep the territory he has marked out as his property reflects a chess-induced belief that the game he is playing is the same as the one by his opponents. That Khodorkovsky is a na’fve and inexperienced player is something that naturally attracts sympathy. But as the old masters have always known, money can never buy experience. Belief in the overwhelming force of money is a mistake Khodorkovsky made, even before he sat down at the game-board.

Once play commenced, Khodorkovsky made 6 errors, the evidence for which he has disclosed himself.

Mistake 1 – Khodorkovsky calls on US Ambassador Alexander Vershbow to inform him that his partner and the Yukos co-shareholder Platon Lebedev is about to be arrested by federal prosecutors.

Mistake 2– Lebedev is arrested and imprisoned on charges of quarter-billion dollar fraud and embezzelement on July 2. Shortly afterwards, Khodorkovsky attends a reception to mark Independence Day at the US Embassy, where he tells all who will listen that Lebedev’s arrest is a political attack. By that, I suppose he means to imply that he prefers to play games that are strictly commercial in character. That’s another way of saying that if the preponderance of money doesn’t assure control of the game, Khodorkovsky doesn’t want to play. But since Khodorkovsky has also let it be known that his money is being spent for political purposes, his second move appears contradictory in character. Either that, or he is trying to say that he only likes to play games he is sure to win. Of course, that’s most unsporting.

Mistake 3 – Khodorkovsky’s American retainers (among which Henry Kissinger has been identified as on the payroll) lobby the US State Department to intervene with a demonstration of support for Khodorkovsky. An official statement is released accordingly.

Mistake 4 – Khodorkovsky attempts to mobilize his stones, rallying fellow oligarchs to his defence. He proposes the Russian Union of Industrialists and Entrepreneurs send President Vladimir Putin a letter, and follow up with a face-to-face meeting. Writing pieces of paper has always seemed a feeble method of operational deterrence, at least since British Prime Minister Chamberlain tried it with Chancellor Hitler at about the same time as the great Go match in Japan. It is doubly unfortunate for Khodorkovsky, because the other industrialists are unable to agree on what the letter to Putin should say.

Mistake 5- Khodorkovsky threatens that unless his partner is released from prison, Yukos may stop lifting crude oil or pumping refined products into some of the regions of Russia. This turns the unfortunate Lebedev into a hostage for a lot of other stones on the board that Khodorkovsky has yet to control.

Mistake 6 – the oligarch-controlled Russian media publish the rumour that a wave of asset cash-outs may be under way, as Khodorkovsky’s fellow oligarchs threaten to give up their stones, and abandon their positions.

In the 1938 match, the challenger and the master opened ceremonially, the former (playing Black) at the top right-hand corner of the board; the latter (playing White) at the bottom right-hand corner. It wasn’t until moves 3 and 4 that the game began in earnest.

As Go is a territorial game, with almost no limit of time, space or pieces to play, each of your moves is a test of the intention of your rival to contest space, or to outflank. When the stakes are high, the lack of limits inevitably pushes the players to great patience, and the game to great lengths. A show of impatience in the early stages usually dooms the player to a short game, and to defeat.

If Khodorkovsky knew his history, he should have had second thoughts about engaging Kissinger, because the latter famously failed to win at Go, and just as famously lost the Vietnam War. But Kissinger is more than a loser; he is, by the self-proclaimed standards according to which the Washington administration judges others, he is a war criminal. Impatient even in the cermonial opening stage of the game, Khodorkovsky thus showed his opponent that he is counting on defending Russian assets with American losers. This is inexplicable.

As an ambassador Vershbow was just the messenger: the message was delivered by the State Department’s announcement which Khodorkovsky had paid for. Khodorkovsky thereby converted a game for assets that were not in question – Lebedev is charged with stealing a fertilizer company Yukos the oil company – into a game for Khodorkovsky’s survival as an American – dare we use the chess term? – pawn. In the Japanese schools that teach Go to aspiring masters, they say, ever so politely, Never listen to a loser, or you will be doomed to repeat his mistakes. Concentration of force failed Kissinger in Vietnam, just as it is failing the US Army in Iraq today. But a threat of force, without the substance – what is that?

In his first errors, Khodorkovsky offered himself up as Lebedev’s hostage, and then threatened to use force, while at the same time inviting his bluff to be called. He became a prisoner himself, spread so thinly over the board that he invited the very thrust he and Ambassador Vershbow couldn’t muster. The Kremlin display of arms during the 17-hour search of Yukos premises and archives on July 11 was the inevitable result. The combination of move and counter-move demonstrates that Khodorkovsky’s territory is space which he lacks the ability to hold.

Young Go players often cannot stand the strain of deliberation. In the annals of the Japanese game, there are cases of brilliant young men who went insane. It is reported that the challenger in the 1938 match went to a clairvoyant and asked for advice on how to win. The proper method, he was told, is to lose all awareness of self, while awaiting an adversary’s play. Shedding the desire to win is the key, attaining selflessness the only way. It is understandable that a young fellow like Khodorkovsky might not have heard this advice. But in just six opening moves, he has demonstrated such callow vanity, he has all but convinced his opponent that defeat will be easy. If Khodorkovsky is to survive the mid-game, with a chance of playing the end-game, he will have to study, not the board, but himself.

But the Kremlin, playing White in this game, knows it commands the advantages of both time and space. “I am, of course, opposed to arm-twisting and jail cells,” President Putin replied, when the Khodorkovsky alliance presented itself for the face-to-face meeting last Friday. But then, he added, arm-twisting is exactly what Khodorkovsky and the other oligarchs are doing to lobby the Duma and the other institutions of government. As for prison, Putin went on, “I don’t think this is the method to deal with economic crimes, but at the same time we need to punish economic violations.”

What Khodorkovsky, Lebedev and Vershbow all know is that the president was referring to the lengthy process by which Lebedev had been invited to address the dossier of his crimes, and to negotiate his amends. If he hadn’t refused, he would not have been arrested. So what Putin was saying was that the other methods had been tried, and they had failed. “A society split into small groups with their own narrow interests cannot concentrate on implementing major national projects”, Putin went on. And to make certain Khodorkovsky was attending carefully, he told him what the end-game would be like. Unanimity isn’t winning, Putin said. “But we will have to agree on all the main ways and work on a common position if we want to develop our country.” To a man who had run to a foreign embassy, and appealed for the intervention of a foreign government, who has been negotiating with foreign companies to sell a strategic stake of his company, Putin was saying: forget it, or you will lose.

Sometimes in the late stages of the great games of Go, a situation arises called the Ko, It is one of the big differences between chess and Go. Roughly speaking, Ko is when two players take and retake each other’s stones, and can continue doing this for an eternity, without making a significant difference to the larger disposition of their forces. To put a stop to this, and allow the game to reach an outcome, the player whose stone is first taken must play elsewhere on the board, before being allowed to return to the scene.

Khodorkovsky has enough resources to imagine that he can play the Kremlin into and out of the Ko situation. But whether he’s right about that we shall see, although only after the next round of moves is played. By moving his US pieces so prematurely, so hastily, however, Khodorkovsky hasn’t left himself much space on the board, Exxon-Mobil and Chevron-Texaco have already turned down buyout opportunities they were presented with by Mikhail Fridman and the Tyumen Oil Company. The American oil companies must now reconsider whether Khodorkovsky and Yukos carry the same level of risk. In the mid-game, as Khodorkovsky tries to persuade them otherwise, and convince the Kremlin he has succeeded, Putin’s play should haunt him. Has Khodorkovsky already demonstrated that the territory Putin called “our country” is just a board-game to him? If that is so, Khodorkovsky has lost.