Court Bans Kompromat on Yukos

Russia's best-known muckrakers have dedicated hundreds of pages of their glossy monthly magazine to the dirt they've dug up on the controversial pasts of dozens of top businessmen and politicians.

The staff of Kompromat.ru magazine have managed to examine in detail the contentious climbs to power of Kremlin chief of staff Alexander Voloshin, Security Council chief Vladimir Rushailo and the dynamic Alfa Group duo of Mikhail Fridman and Pyotr Aven -- all without a legal hitch.

But then they went after Russia's richest man, oil magnate Mikhail Khodorkovsky.

In an unprecedented legal action last week, a Moscow court banned the distribution and sale of Kompromat.ru's latest issue, titled, in English, "Who Is Mr. X," a play on the first letter of Khodorkovsky's name in Cyrillic.

On Thursday, Moscow's Khamovniki Court held a preliminary hearing on the magazine's appeal and decided to hear the case in full June 16.

The disputed, 98-page edition is filled with articles covering virtually every aspect of Khodorkovsky's meteoric and scandal-tainted climb to the top, including original reporting along with reprints from the Russian and Western press.

Bailiffs from the Khamovniki Court were acting on a complaint issued by Alexei Kondaurov, an aide to the president of OOO Yukos Moscow, a division within the oil major's structure.

According to a copy of Kondaurov's suit obtained by The Moscow Times, the Yukos official claims the magazine's allegations that he is connected to the Communist Party are false and have damaged his business reputation. On that basis, the Khamovniki Court ruled to stop the publication of the magazine. Not a word is mentioned in the suit about other material in the issue of the magazine that allege past misdoings by Yukos owners and managers.

A spokesman for Yukos, Alexander Shadrin, said the company viewed the issue of the magazine "very negatively," and that it published "all kinds of crap." He said the company was "particularly disturbed" by the fact that it had reprinted articles over which Yukos had sued in the past -- and won. However, he would neither name the specific articles nor could he say whether Yukos itself would sue the magazine. He said that "would depend on the outcome of the other case."

Even though Kompromat.ru does not have a reputation for dogged fact-checking, media watchers said the case marked a new level of litigiousness from the company owned by Russia's most powerful oil magnate.

"This in essence looks like censorship," said Alexei Pankin, the editor of media magazine Sreda. "But it is difficult to take publications like kompromat.ru seriously. You can never tell whether it is serious investigative journalism or just zakazukha," referring to articles reporters are paid to publish.

The case against Kompromat.ru comes on the back of a wave of suits filed by Yukos against the Western press. It is currently suing Bloomberg in London, and last year it sued Britain's Sunday Times.

The litigious activity, in turn, comes on the heels of an image makeover for Khodorkovsky. After gaining back full ownership control of Yukos in 2000 following a series of high-profile conflicts with minority shareholders in which he diluted their stakes, Khodorkovsky embarked on a massive -- and remarkably successful -- PR campaign to clean up his public persona. Khodorkovsky and Yukos are now the darlings of the Western media and investment community, the epitome of good corporate behavior.


But it hasn't always been that way.

Back in 1999, when he had minority investors locked out of shareholders meetings, he was seen as the embodiment of what had gone wrong in the country's transition to oligarchic capitalism. Questions were asked about how he had parlayed Komsomol connections in the early 1990s into the rights to handle billions of dollars worth of government accounts. Observers also wondered aloud how he managed to acquire the bulk of Yukos, a company now worth more than $20 billion, for a mere $159 million in 1995.

Kompromat.ru founders and editors Sergei Sokolov and Kirill Belyaninov say Khodorkovsky now wants to control the media to make sure no more questions appear in the press about his past or present business dealings.

"[Yukos] is acting like the Politburo," Belyaninov said. "This marks the return of censorship. It is against the law for a court to ban the distribution of the press."

Belyaninov said 5,000 copies of the magazine were handed over for distribution on the evening of May 19. Just hours later, he and Sokolov received a phone call from Kondaurov inviting them out to dinner. Another 5,000 were meant to have been printed later. He said that during their meeting, Kondaurov offered to buy the entire print run -- an offer he said they refused.

Just three days after that, they received a court order to remove the magazine from distribution, he said.

Reached on his mobile telephone Thursday, Kondaurov would say only, "Everything that was written was absolute lies, not just about me, but about Yukos, too."

He attributed his ability to move so quickly to ban the magazine to his having managed to get a copy of it "before it came out."

"Yukos has been saying it's the most transparent company in Russia," Belyaninov said. "We're saying that's not the case."

Khodorkovsky's profile has become even higher in recent months as he has moved into the political arena. He has publicly stated he will finance the liberal Yabloko party and the Union of Right Forces in parliamentary elections later this year, while another sizeable Yukos shareholder, Sergei Muravlenko, reportedly intends to underwrite the Communists.

Since announcing that he would step down as Yukos CEO in 2007, Moscow media have been filled with speculation that Khodorkovsky intends to run for president in 2008.

The head of the Communist Party press service, Andrei Andreyev, denied they had received any funds from any Yukos shareholders.

He did, however, confirm that Kondaurov had run as No. 4 on the party list in the Far East in 1999 State Duma elections, but had not been elected. Andreyev also declined to confirm or deny the Kompromat.ru reports that Kondaurov had been an influential supporter of Zyuganov, saying only it was "theoretically possible."

As its power has grown, Yukos has moved to cultivate links with journalists, funding a program to help to develop the regional press.

The Moscow Times
http://flb.ru/info/18101.html
By Catherine Belton, Staff Writer
30.05.2003