Three Ways Evtushenkov is like Khodorkovsky (and Three Ways He Isn’t)

Just about everyone has been saying that the (house) arrest of Vladimir Evtushenkov, the decision to charge him with theft, money laundering and a handful of other charges, and the evident intent to rid his Sistema holding company of the regional oil player Bashneft, is Episode II of the Khodorkovsky/Yukos case. Rather than join that particular chorus, I thought it might be useful to run through a exercise in quick compare-and-contrast.

Three ways in quick Evtushenkov is like Khodorkovsky:

(1) Evtushenkov is one of Russia’s most powerful businessmen, just as Khodorkovsky was in 2003. Attacking Evtushenkov and dismantling (at least partly) his empire sends a message very similar to that sent when Khodorkovsky was arrested: nobody is beyond reach.

(2) Evtushenkov was doing at least one annoying-to-the-Kremlin thing that Khodorkovsky was doing 11 years ago: he was beginning to put key parts of his business empire out of the reach of the Russian system. The upcoming Bashneft IPO can thus be seen in the same light as Kodorkovsky’s wooing of international strategic investors for Yukos. The cardinal rule of Putinism is that all of the key resources of the economy belong to the political system as a whole, not to the person who happens to have control over them on any given day. Going too far towards cementing your own position is a major no-no.

(3) In the end, Sechin wins. This has been written about by almost everyone, so I won’t go into much detail here, but the assumption is that Bashneft will join the Rosneft empire, which was initially launched with the takeover of Yukos.

Three ways in which Evtushenkov is not like Khodorkovsky:

(1) Evtushenkov is not a political challenger to Putin. I have never been of the opinion that Khodorkovsky was arrested because of his political ambitions; he was arrested, it seems to me, because he challenged Putin’s ability to redistribute resources within the economy. Because Russia’s key economic resources are central to political power and competition, anyone involved in the economy at a high level is, of course, involved in politics, and that goes for Evtushenkov, too. But it’s worth noting that while Khodorkovsky did form relationships with the Russian opposition and civil society (such as both were at the time), Evtushenkov does not.

(2) 2014 is not 2003. In 2003, Putin was still trying to establish his political system, and others were still learning the changing rules of the game. Now, in 2014, the rules are well known to all of the key actors, and especially to one as successful as Evtushenkov. The fact that Evtushenkov has come under attack will thus send a very different signal to the rest of the economic elite than did the attack on Khodorkovsky. This isn’t about establishing the parameters of the economic game. Rather, it is either about subjecting the economic game to an altogether new logic, or about the breakdown of the game itself (or both). Time will tell.

(3) This time, it’s not personal. Presumably, the arrest and charging of Evtushenkov was sanctioned at the very, very top, as was the arrest of Khodorkovsky. But Khodorkovsky was an adversary to Putin from the beginning of their relationship, and Putin took a personal interest in the oligarch’s downfall. Evtushenkov is the ultimate insider, and while he has conflicts with other insiders – including Sechin – there is no reason to believe that he has come to (proverbial) blows with Putin. And that, in turn, suggests that being loyal and playing by the rules no longer bring the same dividends they once did.

I’ll leave it to readers to decide whether the more profound implications of the Evtushenkov case are to be found among the similarities to the Khodorkovsky case, or among the differences.

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One response to “Three Ways Evtushenkov is like Khodorkovsky (and Three Ways He Isn’t)

  1. thanks for the post. what I learned is that this is not a political case, but economical, which is slightly better for Sistema’s assets. what is your thoughts on the future of Evtushenkov’s assets? will they be nationalized?

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