JUSTICE UNDER PRESSURE ― EXECUTIVE SUMMARY: THE PROSECUTION’S CASE ― Prepared by Defense Counsel of Mikhail B. Khodorkovsky & Platon L.

Lebedev

CONTENTS

BACKGROUND................................................................................................................................ 3 DUE PROCESS VIOLATIONS AND OFFICIAL MISCONDUCT DURING THE PROSECUTION’S CASE................................................................................................................. 4 • • • • • • • • • • • • • • • • • • • • Failure to Explain Charges.................................................................................................. 4 Obstruction by Prosecutors and Investigators of Access to Evidence............................. 5 Refusal to Admit Exculpatory Evidence Presented by the Defense................................ 5 Refusal to Obtain Exculpatory Evidence from Available Sources.................................. 6 Refusal to Admit or to Seek Defense Evidence from Abroad.......................................... 6 Admission of Illegally-Obtained Evidence......................................................................... 6 Misrepresentation of Evidence............................................................................................ 6 Vanishing Evidence.............................................................................................................. 7 Incomplete Evidence............................................................................................................. 7 Erroneous Mathematical Calculations............................................................................... 7 Inaccurate Translations....................................................................................................... 8 Prosecutors’ Incomprehension of Case Materials............................................................. 8 Attempts to Control Testimony of Prosecution Witnesses............................................... 8 Circumventing of Lawful Procedures Applicable to Witnesses....................................... 9 Interference in Defendants’ Access to Counsel and to Case File..................................... 9 Denial of Defense’s Access to Official Trial Transcripts.................................................. 10 Disrespect for Defendants.................................................................................................... 10 Direct and Indirect Threats to Defense Counsel................................................................ 10 Suspected Eavesdropping of Defense Communications Not Investigated....................... 11 Control and Harassment of News Media............................................................................ 11

PROSECUTION WITNESSES FAIL TO CORROBORATE CHARGES................................. 12 DEFENSE MOTIONS SYSTEMATICALLY DENIED................................................................ 13 Court Without Jurisdiction................................................................................................................. 13 Flawed Indictment............................................................................................................................... 14 Khodorkovsky and Lebedev Continue to be Held Unlawfully in Harsh Pre-Trial Isolation Cells......................................................................................... 14 CONCLUSION................................................................................................................................... 16

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BACKGROUND

This document has been prepared by defense counsel of Mikhail B. Khodorkovsky, former chief executive of the Yukos Oil Company, and of his business partner Platon L. Lebedev, who have been on trial since March 2009 in Moscow’s Khamovnichesky Court. The purpose of this document is to provide a summary of the prosecution’s presentation of its case against the defendants, which ran from April 21, 2009 to March 29, 2010. This document is part of a series of legal summaries issued by defense counsel as the case has unfolded. 1 Certain elements of the analysis herein may be impacted by developments in court as the trial continues to unfold. This document does not purport to list all the violations of due process and examples of prosecutorial misconduct which occurred during the presentation of the prosecution’s case. A more detailed and definitive summary report, to be issued following the trial, will supersede this document. For further information and to receive copies of defense motions and court documents, please contact the legal defense team via the Khodorkovsky & Lebedev Communications Center.2 — Khodorkovsky and Lebedev were convicted and sentenced to eight years imprisonment in 2005 and banished to Siberia. They were victims of severe abuses of institutions of Russian state power – from investigatory, prosecutorial and regulatory authorities to the judiciary – committed by a group of figures in the political establishment who viewed them as challengers or competitors. The interests of political and commercial adversaries had coalesced to orchestrate the state’s incarceration of the two men and raiding of their company’s assets. When Khodorkovsky and Lebedev became eligible for parole in 2007, those in power who still perceive them as a threat stepped up efforts to find new grounds to keep them incarcerated for a long time to come. In addition to keeping Khodorkovsky and Lebedev isolated from society, their adversaries seek to conceal the corrupt and criminal actions committed against them and other victims of the Yukos affair with the participation and under the protection of high-ranking officials. Starting in 2003, an enormous repository of data was seized from Yukos, and also accumulated in the course of numerous investigations of individuals or companies connected to Russia’s most successful private energy company. Reams of documentation were sloppily compiled in a 188-volume case file. Lacking organization, analysis or any hallmark of investigatory diligence or competence, the case file was presented to Khodorkovsky and Lebedev in February 2007 as the evidentiary basis for a new trial against them, on charges of alleged embezzlement and “money laundering”. Khodorkovsky and Lebedev are accused of embezzling 350 million metric tons of oil worth over $25.4 billion and “laundering” over $21.4 billion, and embezzling $102 million in shares held by Eastern Oil Company and “laundering” the proceeds of their sale. The allegations have no credible grounding either in the facts described or in the legal terms invoked by prosecutors. Ordinary, widespread business practices are blithely and ignorantly labeled by prosecutors as criminal. Since the time the allegations were formally presented in 2007, Khodorkovsky and Lebedev have made consistent efforts to engage with investigators and prosecutors in good faith, seeking to understand and respond to them as required by law. While Khodorkovsky and Lebedev made every effort to engage through established procedural rules, in contrast, the investigators and prosecutors consistently acted outside of the boundaries of the law. The basic duties of the investigators and prosecutors – to investigate relevant facts and to build a case grounded in law or to terminate a case where no actionable crimes exist – remain unfulfilled.

A summary of the due process violations that occurred in the investigation of the current case is available at http://www.khodorkovskycenter.com/content/defense-stay-motion-summary. A summary of the first month of the current trial is available at http://www.khodorkovskycenter.com/current-trials-legal-status. 2 Contact information is available under “Media Center” at www.khodorkovskycenter.com.
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On April 21, 2009, in the Khamovnichesky Court in Moscow before Judge Viktor N. Danilkin, Khodorkovsky and Lebedev pleaded not guilty, while emphasizing that the charges remain incomprehensible and unexplained. Over the eleven months that followed, through March 29, 2010, the prosecution presented the evidence that is supposed to support its case.3 Yet rather than prove their case, prosecutors spent this time engaged in rote reading of reams of random pieces of the case file, and in presenting witnesses who proffered either no testimony germane to the accusations, or testimony that actually contradicted the accusations. The prosecution has been unable to explain any logical connection between the data they have compiled or the witnesses they called, and the charges against the defendants. After having nearly a year to present their case, the prosecution has shown no proof of “embezzlement” and no proof of “money laundering” – despite their persistent assertions that both occurred on a grand scale.4 For its part, the Khamovnichesky Court has repeatedly shirked its responsibility to compel the prosecution to act within the confines of procedural rules. The judge has repeatedly ignored or unjustifiably rejected defense arguments about procedural violations, electing to be willfully blind to the many violations that have contaminated the process from the investigatory stage to the ongoing trial. Wrongly asserting that it is not within his purview to do so, the judge has failed to exercise his authority to cure even the most egregious flaws pointed out by the defense.

DUE PROCESS VIOLATIONS AND OFFICIAL MISCONDUCT DURING THE PROSECUTION’S CASE

The prosecutors’ presentation of their case against the defendants has been fraught with due process violations and incidents of official misconduct, committed either by the prosecution or the court, or by both in tandem. The pattern of due process violations and incidents of official misconduct that emerged during the presentation of the prosecution’s case has been wholly incompatible with fundamental norms of fairness and justice. The following overview is representative of the prosecution’s handling of its case, and the court’s inability or unwillingness to remedy so many of the breaches of law that have been occurring: Failure to Explain Charges: When Khodorkovsky and Lebedev pleaded not guilty on April 21, 2009, they emphasized that the charges remained incomprehensible and unexplained. Nowhere does the indictment set forth the elements of any alleged crime or succeed in connecting any specific evidence to the allegations. On the contrary, the charges are an artifice of criminalization of lawful and widespread business practices.5

Detailed reports of the court proceedings are available at http://www.khodorkovskycenter.com/newsresources/from-the-courtroom. 4 For further information, please refer to the transcript of the defense team’s press conference, held upon completion of the prosecution’s presentation of documentary evidence, available at http://www.khodorkovskycenter.com/newsresources/stories/joint-defense-team-statement-end-prosecution-s-presentation-written-evidence, and the transcript of the defense team’s press conference held upon conclusion of the prosecution’s presentation of its case, available at http://www.khodorkovskycenter.com/news-resources/stories/press-conference-transcript-april1-2010. 5 See in this regard the Report of the Parliamentary Assembly of the Council of Europe issued August 7, 2009, entitled, “Allegations of politically motivated abuses of the criminal justice system in Council of Europe member states”, available at http://assembly.coe.int/Documents/WorkingDocs/doc09/edoc11993.pdf. Of particular note, the Report states the following at paragraph 132: “The new charges against Mr Khodorkovsky and Mr Lebedev are also poorly specified: despite the constant exhortations of the defence, the prosecution has so far failed to set out which facts it intends to prove by which evidence, and what their significance shall be in terms of criminal responsibility. Stating that Mr Khodorkovsky and Mr Lebedev embezzled all the oil produced by Yukos over a given period and randomly designating huge volumes of company documentation as ‘evidence’ does not seem to be sufficient. The new charges, concerning essentially the same business transactions as those covered by the first judgment, also seem to reflect a considerable change in the legal assessment by the prosecution – from
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After months of reading “evidence” and after bringing 51 witnesses to be heard in the courtroom, and despite several requests by the defense for explanations and clarifications, prosecutors have failed to elucidate how it was possible that Yukos covered its operating expenses and invested heavily in capital improvements and acquisitions and paid dividends – all financial operations recorded on the books of Yukos and several other companies and banks – when all oil as the primary source of the funds necessary for these operations was allegedly stolen. Prosecutors have also failed to explain how there could be “money laundering” without any underlying crime. Instead, they have simply stubbornly stuck to a script – their indictment – which denies legal and factual realities ranging from the fundamental definition of “crime” to the highly regulated structure and operation of vertically-integrated energy companies. Prosecutors have refused to clarify key questions, such as whether they are alleging it was oil products that were stolen or proceeds of the sale of such products, and where the stolen goods or funds were taken; and they have remained silent on the method, time and place the alleged crimes were committed. While prosecutors were permitted to speak for hours and days on end, simply reciting parts of an indictment that everyone in the courtroom has already read, the defendants or their counsel have attempted to address the substance of the charges. Yet they have been continually interrupted by prosecutors or their statements cut short or dismissed by the judge. Over the past three years, all pleas by the defendants and motions by their counsel to have the charges explained have been rebuffed by investigators, prosecutors and judicial authorities. These pleas and motions are routinely deemed “premature” – yet even one year into the trial the prosecution has still not explained the legal and factual basis for the charges. Meanwhile, prosecutors have asserted that it is sufficient to read documents, extracts of documents, or document titles, without connecting the information therein to the charges alleged. Even reading tables of contents was deemed sufficient by the prosecutors to adduce proof. • Obstruction by Prosecutors and Investigators of Access to Evidence: The defendants – and even the court itself – were denied access to wiretap recordings being described by the prosecution at the proceedings. Defense attempts in July 2009 and again in November 2009 to have the recordings submitted to the court were rebuffed by investigators and the Federal Security Service (“FSB”), and the judge was unable to compel the production of the recordings in question. Defense counsel asserted not only that a UK wiretap by the FSB was unlawful, but also that transcripts provided by prosecutors should be checked against the recordings, given the prosecution’s established pattern of distorting evidence in the case.6 The concealment of the recordings raises serious questions not only about the real probative value of the prosecution’s transcripts, but also more broadly about the motives and methods of work of the investigators and prosecutors, and the incapacity of the judge to compel the production of evidence held by the authorities. Refusal to Admit Exculpatory Evidence Presented by the Defense: The court has repeatedly denied allowing evidence presented by the defense to be added to the case file. The defense has fruitlessly asked that exculpatory evidence in its possession be considered. Meanwhile, investigators and prosecutors have consistently and repeatedly been allowed to add materials to the case file as they have wished.

evasion of taxes on otherwise legal sales of oil to the embezzlement of the same oil. In addition, the prosecution seems to be intent on accumulating the two apparently contradictory and mutually exclusive assessments, in an attempt to keep the accused in prison beyond the term to which they were already convicted on the basis of the tax evasion charges.” 6 In a similar effort by the defense to confirm the accuracy of a prosecution transcript, on February 26, 2010, after the defense successfully pleaded to have the court play back an audio recording of the interrogation of witness Gitas Anilionis, major discrepancies were revealed between the audio recording and the official prosecution transcript.
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Refusal to Obtain Exculpatory Evidence from Available Sources: The judge has unjustifiably declined to exercise his power to compel the production of evidence that would be available from state agencies and businesses. A case in point is Transneft, the state-owned monopoly that tightly controls the movement of oil through Russia’s pipeline network. To date, the court has refused to subpoena Transneft records sought by the defense. The defense asserts these records would indicate that the allegedly embezzled Yukos oil was in fact legitimately sold and transported through the state pipeline network. It will remain to be seen whether the court obtains and examines such obviously probative evidence before the end of the trial. Likewise, publicly available Russian government documents from the 1990s, demonstrating government policy geared towards the development and functioning of Yukos as a vertically-integrated energy company, have to date not been sought out by the court from official sources for inclusion in the case materials. With the defendants unable to enter such germane exculpatory evidence into the official case record, the evidence cannot be used in the interrogation of witnesses and will presumably be excluded from the judge’s deliberations, unless the court suddenly becomes interested in putting these materials on the record. The court’s blocking or delaying of the admission of such evidence frustrates the defendants’ fundamental due process rights. Refusal to Admit or to Seek Defense Evidence from Abroad: The court has refused to avail itself of procedures available to obtain relevant evidence from people, located in the United States and Europe, who were expected to provide evidence corroborating defense positions. While these people have stated that they are willing to cooperate with Russian authorities, the court has shown no interest in facilitating their involvement. In contrast, investigators and prosecutors have been able to exploit procedures to obtain and submit evidence from people outside of Russia. Admission of Illegally-Obtained Evidence: In addition to disallowing defense attempts to admit exculpatory evidence, the court has also denied defense requests to exclude over 400 documents that were illegally seized. The court has typically stated that the defense’s objections over evidence are “premature” – to be dealt with later. As a result, the process is at risk of being contaminated by “fruit of the poisonous tree” – with a verdict based in part on evidence of unlawful origin, including documents obtained by investigators through multiple illegal searches and seizures at the lawyers’ offices. The defense will be watching closely to see how the judge treats this illegallyobtained evidence. Misrepresentation of Evidence: In verbally presenting Yukos audit documents, the prosecution changed the words “income” and “taxes paid” to “debt” and “taxes owed”. In several instances the prosecutors falsely stated that documents bore authentication marks such as stamps and signatures, where in reality no such marks existed. In other instances signatures of the same people were different from one document to another. Multiple versions of documents were presented, with no indication of which, if any, was the final version. The prosecutors described a letter allegedly from Lebedev, yet failed to mention that – as the court saw when Lebedev insisted the item be examined – the original letter was crossed out by hand with a large “X”, several phrases were also crossed out, there were several handwritten additions of unknown origin, the letter lacked a date and signature, and the prosecution’s “True Copy” stamp was missing the required signature. Numerous documents of unknown origin were presented, having been printed from computer drives for which the chain of custody was unclear. In several instances the prosecutors gave partially or completely inaccurate descriptions of document contents. As an example, in summarizing a document of South Petroleum Ltd., a prosecutor simply asserted that the document showed that “defendants were taking funds from that company”, even though the document showed nothing of the sort. The prosecutors failed to explain what relevance the document had to the proceedings at all. A further example, also unexplained by the prosecution, was the
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assertion that the defendants embezzled a volume of oil in 2003 that in fact exceeded the actual sum produced by almost two million metric tons. In yet another example, one document presented by the prosecutors contradicted the indictment by revealing that the founding capital of the Russian company Fregat was worth over 154 million rubles – not the 14 rubles stated in the indictment. Furthermore, in arguing that Khodorkovsky and Lebedev should be kept in strict pre-trial isolation, the prosecution asserted that a Siberian court had determined that Khodorkovsky should be held in such conditions to prevent him from destroying evidence or intimidating witnesses; there was in fact never any such ruling in a Siberian court. • Vanishing Evidence: A regional federal court decision relevant to the substance of the current proceedings – and helpful to the defendants – was transmitted by the regional federal court to the prosecutors in Moscow. The Privolzhskiy Region Federal Arbitrazh Court has confirmed that it sent the entire case file to the prosecutors. However, when asked to produce the case materials in court, the prosecutors simply stated that they had never received them, and refused to confirm whether they had requested the materials at all. There has been no further indication that the prosecutors will attempt to find or obtain the lost appellate court materials. The judge has been unable to compel the prosecution to produce the sought-after decision, and has dropped the matter despite protestations of the defense. Incomplete Evidence: In many cases the prosecutors announced they were presenting a document “in full”, but in fact only read the title of the document or a few selected sentences. Sometimes the first and last pages of a document would be read, but nothing in between, thus leaving it up to the defense to come back to these documents several months later in order to provide the court the proper context of the materials. Documents such as sales contracts were ostensibly read “in full” – but in reality only cursory or irrelevant details of the document were provided, with no mention of who were the parties or what was being sold. Shareholder meeting agendas were summarized, with no information on actual decisions taken at the meetings – and no indication of whether Khodorkovsky or Lebedev even participated. Company procedures were described in part – omitting information about the rigorous controls in place that would have prevented the alleged embezzlement. Sections of an independent legal analysis of the acquisition and consolidation of Yukos shares were read – though the full approval of those share transactions by the Russian competition authority was not mentioned. The prosecution likewise skipped over parts of a PwC memorandum they presented, which stated that the Russian government approved of the privatization and consolidation of Yukos. Some documents abruptly ended mid-sentence, with an unknown number of missing pages. Some documents running several hundred pages were handed to the judge for his perusal for a several seconds – then, without a word of analysis, the prosecution announced the document henceforth was part of the court record, and moved on to the next document. The prosecutors acted erratically and randomly, with no discernable method or purpose – other than perhaps an attempt to flood the court with raw data. When prompted by the defense to engage on the relevance of any given document, the prosecutors refused, and stated that the judge was free to assess the materials – in his chamber, rather than in open court with the benefit of the adversarial process. Erroneous Mathematical Calculations: The prosecutors stubbornly refused to correct erroneous mathematical calculations in the indictment, or to explain the miscalculated numbers. In August 2009 the court rejected as “premature” a defense motion that sought to confirm that the numbers do not add up – and ever since then the court has allowed the erroneous calculations in the indictment to remain. It remains to be seen whether the court will seek to correct these obvious errors.

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Inaccurate Translations: Translations of non-Russian materials in the case file were wholly inadequate for courtroom purposes, or blatantly falsified. Beyond obvious errors – such as translating “December 28” as “December 34”, or a 2001 financial statement as a 2000 financial statement – standard financial terms were routinely improperly translated. “Thousands” were confused with “millions”, and “hundreds” were confused with “thousands”. The word “products” was translated as “countries of Europe, Asia, Africa and the Americas”. Some translations merged multiple documents into one translation. Corporate entities were mixed up: “Yukos Supply and Trading Limited” was translated as “Yukos Brokerage Limited” – which was not only an inaccurate translation, but also a reference to a different entity incorporated in a different jurisdiction. At one point prosecutors presented an allegedly incriminating document signed by a “Victoria Road”, when in fact the name was that of the street address of a Yukos unit in London. Some translations failed to indicate the presence of authentication marks such as stamps and signatures in the originals, while other translations indicated that such authentication marks existed whereas they did not. Some translations contained struck out lines from the original documents, or contained question marks or handwritten comments not found in the originals. Some translations were improperly edited; for example, in one case a paragraph that strongly supported the defense position was simply non-existent in the official Russian translation of the document that was submitted by prosecutors to the court. On most occasions the prosecution and court ignored defense protests about such translation inaccuracies; in one instance a prosecutor stated that nothing in the Russian Code of Criminal Procedure set standards for translators, and that in any case the prosecution found the translations in the case file to be suitable. For its part the court has done nothing to exclude the flawed translations or to order corrections. Prosecutors’ Incomprehension of Case Materials: The prosecutors sometimes read documents apparently without understanding that in fact the documents undermined their own position. Several documents showed that company income was earned, dividends were paid, various large-scale purchases or loans were made, oil was transported through government-controlled pipelines, and massive sums were paid in taxes – rendering impossible the large-scale embezzlement allegations against the defendants. In one instance, the prosecution apparently unwittingly read conclusions of a government report commissioned in 2001 that chastised the government for mismanagement of auctions, noncompliance with procedures and failure to exercise effective managerial control over government shares in the oil industry. For much of their presentation, rather than attempting to explain the meaning or relevance of the documents they were reading, the prosecutors simply read “cheat sheets” – the indictment was cut into hundreds of strips of paper that bookmarked the case volumes, providing a script yet no analysis. At best the prosecutors demonstrated only a superficial comprehension of the materials they read. They often had trouble pronouncing relevant words, repeatedly misstated numbers, and always shirked away from any discussion of the substance of the materials. Printed e-mail message chains were read backwards, starting with the most recent message, confusing the chronology and contents. Other documents were also read backwards – starting with the last page rather than correcting an erroneous reverse collation. A spreadsheet was read down column-by-column rather than across row-by-row, rendering virtually unintelligible the contents of the document and demonstrating that the prosecutor did not understand the meaning of the information. Attempts to Control Testimony of Prosecution Witnesses: When the testimony of the prosecution’s own witnesses began to veer away from the prosecution’s line of argument, prosecutors sought to replace live testimony with transcripts of prior out-ofcourt interrogations that they desired to be inserted into the court record. Over repeated objections by the defense, the court allowed the reading of interrogation transcripts into the court record even when the prosecutors could not, as required by law, point to any
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material contradictions between in-court testimony and the statements made in the outof-court interrogations as transcribed. The interrogation transcripts were only selectively provided to the court by prosecutors, and when provided the transcripts were often incomplete. • Circumventing of Lawful Procedures Applicable to Witnesses: As revealed during the process of interrogating witnesses under oath at the stand, investigators have used previously-launched parallel cases as a means to influence individuals being called to testify at the current trial. By interrogating witnesses in what are technically separate cases – although involving many of the same relevant facts – the authorities are circumventing rules that prohibit them from influencing the testimony that the witnesses give in the current trial. The interrogators cannot be ignorant of the concerns people will have about the possible consequences of not complying with the wishes of state authorities who are clearly bent on re-convicting the defendants. This is particularly the case for certain witnesses who are or were themselves under criminal investigation, or facing the threat of criminal investigation. The lessons of several high-profile cases involving the torture and detention of potential witnesses7 in Yukos-related cases are undoubtedly present in the minds of those now being interrogated – without Khodorkovsky’s or Lebedev’s defense counsel present – by investigators in the parallel cases. The investigatory fishing expeditions being run in parallel to the trial thereby create opportunities to influence testimony, while unfairly circumventing rules forbidding the coaching of witnesses. Meanwhile, the interrogation transcripts from the separate investigations are being inserted into the evidentiary record of the current trial without any legal basis. Those transcripts have done nothing to advance the prosecution’s case, and have only further contaminated the current process with unlawfully sourced materials. Efforts by the defense to ask questions shedding light on the parallel investigations – which are demonstrative of the authorities’ lack of adherence to fundamental due process rules – were cut off by the court. In numerous cases witnesses asserted that due to non-disclosure agreements signed with investigators, they were not permitted to reveal information about the parallel investigations. Interference in Defendants’ Access to Counsel and to Case File: In the courtroom, the defendants are locked into a heavily guarded aquarium-like glass booth, making it difficult for them to consult with defense counsel and to view case materials. The booth’s thick bulletproof glass makes it difficult for the defendants to consult with their counsel during the hearing. As the defense counsel are seated facing the prosecutors and with their backs to the defendants, they often do not hear when their clients are attempting to catch their attention. Documents, notes and even media clippings passed by counsel into the aquarium are under constant surveillance by armed guards.8 Meanwhile, in the defendants’ Moscow detention facility, their lawyers have been repeatedly barred from visiting them in their isolation cells with a laptop computer containing a digitized version of the case materials. In practical terms, by banning the use of a laptop computer, the prison officials were thereby requiring defense counsel to bring thousands of documents into the isolation cell in order to consult with Khodorkovsky and Lebedev with access to the full case file. Prison officials ignored an unequivocal ruling by the Russian Supreme Court agreeing with Lebedev’s lawyers that they should be permitted to bring electronic media into the isolation cell. Following the court rulings won by the defense on this issue, however, the State Duma recently considered new legislation which would ban the use of laptops and other electronic equipment by lawyers consulting with their clients in detention facilities. Given the

For the most prominent examples, see http://www.khodorkovskycenter.com/history-background/other-keyindividuals. 8 In applications by Khodorkovsky and Lebedev to the European Court of Human Rights, their confinement in the courtroom during trial has been declared an admissible complaint.
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high profile of their lawyers’ battle on this issue, this new legislation appears specifically targeted at frustrating Khodorkovsky’s and Lebedev’s due process rights – yet in the process the State Duma may also disadvantage all other defendants being held in detention facilities throughout Russia. The State Duma has not yet voted on this matter, but this is one of the most recent examples of the willingness of the authorities to create law for this one case which has a negative impact on the whole country. • Denial of Defense’s Access to Official Trial Transcripts: Citing the Russian Criminal Procedure Code, which stipulates that official trial transcripts are to be prepared within three days of court sessions, the defense has repeatedly motioned the court to provide copies of the current trial’s official transcripts. In April 2010, the defense argued that delays of several days or even several weeks could be understandable, but that there was no credible justification for the court not having provided a single official trial transcript to the defense since October 2009. In May 2010, some additional official trial transcripts were provided to the defense, but only covering the proceedings up to November 2, 2009. Since May 2010, the defense has been provided no further official trial transcripts for the proceedings past November 2, 2009.9 Among the concerns that the defense seeks to address is the court’s habit of excluding the full text of motions and in-court statements, which have instead been summarized along the following lines: “Khodorkovsky made a statement to the court, objecting to actions of the presiding judge.” The exclusion of the defense’s legal reasoning from the official transcript is a brazen distortion of the trial record, and it is all the more unfair considering that prosecutors have been permitted to insert documents into the official transcript as they desire. More broadly, official trial transcripts are a key tool that defense lawyers refer to in formulating their arguments and ensuring a robust defense strategy as a case unfolds. Facing the intransigence of the court and the prosecutors on the issue, the defense sought an official clarification of the court’s position in writing, which would form the basis of an appeal to the Russian Constitutional Court. Disrespect for Defendants: Prosecutors insulted the defendants on numerous occasions, stating for example that Khodorkovsky’s opinion did not matter to anyone except his defense lawyers and his cheering fans in the courtroom (April 21, 2009)10; or responding to Lebedev’s due process concerns by stating that his entreaties are “useless” and adding, “just as we have planned, so we will proceed” (April 27, 2009); or calling the defendants “so-called political prisoners” (June 9, 2009). In response to Lebedev’s reminder that in 2007 the Swiss Federal Tribunal ordered Switzerland’s prosecutors not to cooperate with their Russian counterparts on the Yukos case due to grave politically-driven human rights infringements, a prosecutor retorted: “So what?” (July 28, 2009). When the defendants asked to view case materials, a prosecutor objected to passing a case volume into the locked and heavily guarded aquarium-like glass booth where they were being kept in the courtroom, stating “they could destroy the evidence!” (June 4, 2009) Prosecutors have repeatedly made contemptuous and sarcastic statements about the defendants in open court, displaying a troublesome lack of dignity and respect. Direct and Indirect Threats to Defense Counsel: Shortly after the authorities began to attack Yukos in 2003, lawyers acting for the company or for Khodorkovsky and Lebedev routinely endured unlawful searches and the confiscation of privileged and confidential documents. Lawyers were threatened with disbarment or prosecution without valid cause, as a form of intimidation and vengeance for defending Khodorkovsky and Lebedev. Prosecutors have gone as far as to implicate defense

As of August 31, 2010 – meaning that to this date the defendants have been deprived of the official trial transcripts throughout the entire phase of the trial during which they have been presenting their defense. 10 For more detail on this incident and others cited in this paragraph, please refer to the courtroom reports available at http://www.khodorkovskycenter.com/news-resources/from-the-courtroom.
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counsel themselves with criminal liability due to their professional association with the defendants. The prominent cases of Svetlana Bakhmina and Vassily Alexanyan – two lawyers who were incarcerated and, in the case of Alexanyan, subjected him to treatment that the European Court of Human Rights11 found to be inhuman and degrading while he was terminally ill – revealed the cruel depths to which the authorities could act with impunity. These incidents created fearful precedents for the lawyers working on the current case. In the run-up to the current trial, prosecutors suggested that the defense counsel’s due process-related interventions should be assessed against “ethical” and “professional” requirements – essentially threatening disbarment. Such was the response to the defense’s reasoned and legally-grounded objections to prosecutorial misconduct in trying to hold the prosecution to the standards and requirements of the law. Prosecutors have regularly brandished such threats during the course of the trial as well, particularly when tensions have risen in the courtroom over defense protestations of injustice.12 These barely veiled threats of punitive treatment weigh against all counsel representing Khodorkovsky and Lebedev. • Suspected Eavesdropping of Defense Communications Not Investigated: When, during the current trial, the defendants had strong grounds to believe that their communications were the target of illegal eavesdropping by law enforcement agencies, efforts to examine the issue were rebuffed. On May 26, 2009, prosecutors denied that they had ordered wiretaps. The judge simply accepted this denial and has made no subsequent moves to investigate the defendants’ well-grounded fears of illegal eavesdropping. As the trial progressed, prosecutors continued to make statements that have confirmed the defense’s belief that illegal eavesdropping has occurred and may still be occurring. Control and Harassment of News Media: With television news media in Russia largely controlled by the state, coverage of the current trial has been unsurprisingly sparse or non-existent. National television networks are the main source of news for most Russians, meaning that many people are being kept in the dark about the prosecution’s failing case against Khodorkovsky and Lebedev. At the trial, the live video feed that had been established to a press room in the courthouse at the start of the trial was cut off, thereby limiting attendance by journalists to those who could fit into the courtroom. Of the journalists consistently present in the courtroom, the prosecution singled out Novaya Gazeta’s Vera Chelischeva for harsh criticism, accusing her of fomenting the public’s negative opinion on the case. Although Chelischeva has regularly been in attendance to monitor the trial first-hand, the prosecution dismissed her writings as not worthy of being taken seriously, since she did not have direct access to the evidence – in what is supposed to be an open trial.

For the vast majority of the prosecutorial abuses described above, the court has passively or actively condoned the ongoing miscarriage of justice. In these circumstances, doubts inevitably arise as to the judge’s capacity to render a judgment independent of pressure from the prosecutors or the political figures behind the case.

11

The Court found this treatment to be contrary to Article 3 of the European Convention on Human Rights. See Aleksanyan v. Russia (Application no. 46468/06), judgment of December 22, 2008. 12 For example, during the prosecution phase of the trial, threats were made on April 29, 2009 and January 21, 2010, stating that the Moscow Bar ought to review the good standing of the defendants’ lawyers.
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PROSECUTION WITNESSES FAIL TO CORROBORATE CHARGES

Over a six-month period beginning at the end of September 2009, the prosecution paraded a series of witnesses into the courtroom. Their testimony was marked by prosecutorial coercion, manipulation, and, notwithstanding the foregoing, irrelevance to the allegations against Khodorkovsky and Lebedev. In the course of the witness questioning, some of the witnesses refuted the arguments of the indictment, for example testifying that Yukos production companies were indeed paid for their crude oil – undermining a fundamental prerequisite of the embezzlement and therefore money laundering charges against the defendants. Even the state-appointed Yukos bankruptcy receiver asserted that Yukos was well-organized and efficiently produced and sold large volumes of oil. Regarding the disputed Eastern Oil Company share exchange, one witness testified that Khodorkovsky’s efforts to protect Eastern Oil Company’s assets were well-founded. The defense catalogued over three hundred discrepancies in the transcripts and audio tapes of this witness’s interrogations. The court nevertheless allowed the prosecutors to submit this evidence into the trial record. Indeed, the court allowed prosecutors to enter interrogation transcripts into the evidentiary record even when these transcripts were culled from investigations of separate cases in which the witnesses did not have defense counsel present. Rather than properly cross-examine their own witnesses, prosecutors lazily asked a few brief stock questions of certain witnesses before asking the court to submit prior interrogation transcripts as evidence. Under procedural rules, such transcripts may only be submitted into the evidentiary record where discrepancies exist with the testimony given by a witness in the courtroom. The most flagrant example of the prosecutors flouting these rules occurred on March 11, 2009, during the cross-examination of former PricewaterhouseCoopers employee Stanislav Zaitsev. Prosecutors had prior interrogation transcripts entered into the evidentiary record despite objections of the defense, who pointed out that no discrepancies with the oral testimony existed. Perhaps afraid of what live witnesses might say on the stand, the prosecutors clearly preferred scripted statements prepared under controlled conditions – in some cases witnesses stated that they had been asked to sign documents prepared by interrogators who had drafted supposed summaries of their interrogations. Yet even using these transcripts as a crutch in their crossexaminations, the prosecutors seemed more concerned about appearing to bulk up the court file rather than actually proving their charges – in any event, none of the transcripts contained proof of the allegations against the defendants. Meanwhile, not a single of the alleged “injured parties” – such as the production companies that allegedly failed to receive proper payment in exchange for oil products – testified in court. In February 2010, Khodorkovsky unsuccessfully asked the judge to suspend the trial after a prosecutor – apparently unwittingly – confirmed in contradiction of the charges that Yukos had in fact received revenue from sales of oil. The prosecution’s actions in manipulating its witnesses should also be considered in light of the indirect threats that the witnesses faced. Since 2004, investigations of various Yukos-related matters were indiscriminately launched, paused, restarted or dropped by investigators. Potential witnesses in a new case against Khodorkovsky and Lebedev were directly or indirectly pressured by the authorities in an attempt to corral a group of pliant witnesses and to accumulate whatever documents that could possibly be presented as evidence against Khodorkovsky and Lebedev. Against this backdrop, it is all the more remarkable that the prosecution’s witnesses were unable to provide a scintilla of evidence to prove the absurd charges now being faced by Khodorkovsky and Lebedev.

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DEFENSE MOTIONS SYSTEMATICALLY DENIED

From the outset of the trial the defense has diligently filed motions addressing both the substance of the prosecutor’s allegations and procedural failings. These defense motions have been reasoned and grounded in accordance with Russian law. The most important of these motions, and related statements made in court by the defendants, have sought to force the prosecution to explain how there could be embezzlement of oil when the same volumes of Yukos production were reported, accounted for and heavily taxed; or how there could be “money laundering” without any underlying crime. The gravity of the prosecution’s violations of the defendants’ fundamental rights, and the prosecution’s non-compliance with duties of fairness and objectivity, led the defense to petition on numerous occasions for the recusal of individual prosecutors or the entire prosecutorial team.13 As the trial has unfolded the judge has persistently proven himself to be either unwilling or unable to cure the violations committed by investigators and prosecutors – even where doing so is within his powers as clearly prescribed by law. Although the judge allowed the defense lawyers and the defendants themselves to decry foul play, he has nevertheless overwhelmingly failed to remedy the violations in the investigation and prosecution of the case. With the judge continually allowing prosecutors to prevail in disputes over due process despite their patently untenable positions, the defense has repeatedly entered written objections to the judge’s conduct into the trial record.14 The court’s lack of responsiveness in the face of an expanding catalogue of due process violations has robbed the defense of even minimum fair trial standards. The vast majority of motions filed by the defense have been rejected by the court. Judge Danilkin overwhelmingly sides with the prosecutors, making short rulings that do not address the relevant law and legal reasoning presented by the defense. The defense was unable to obtain favorable rulings on 90 out of 104 motions filed up to the end of March 2010, while almost all of the prosecution’s motions have been granted. In addition to these motions, the defense has systematically made objections to protest the recurring procedural violations of the prosecutors. Hundreds of objections have been entered into the trial record, though it is unclear what effect if any these objections will have upon the judge. Three fundamental legal issues that have been the subject of defense motions are described below, concerning the court’s lack of jurisdiction; the flawed indictment; and the unlawful ongoing incarceration of the defendants under harsh conditions of pre-trial detention.

Court Without Jurisdiction The case currently being prosecuted at trial is in fact outside of the jurisdiction of Moscow’s Khamovnichesky Court. Pursuant to the Constitution of the Russian Federation, no one may be deprived of the right to have their case heard by that court and that judge under whose jurisdiction the case has been accorded by law. The issuance of a verdict by an unlawfully composed court is an unconditional ground for its repeal, directly prescribed by the Code of Criminal Procedure of the Russian Federation. Indeed, it is prescribed by the rules on territorial judicial jurisdiction that a case shall be subject to being heard by a
13

During the prosecution’s phase of the trial, such petitions were presented by the defense on April 24 and April 28, 2009, August 14, 2009, September 19, 2009 and November 11, 2009. 14 During the prosecution’s phase of the trial, such written objections were presented by the defense on April 28 and 29, 2009, May 12, 2009, June 3, 2009, September 9 and 29, 2009 and October 19, 2009. As the trial progressed without an improvement in adherence to fundamental norms of due process, the defense became compelled to motion for the recusal of the judge.
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court at the place of the commission of the alleged act, and if several acts are alleged, then at the place of the commission of the most recent or the gravest of them. If the act was begun in one place and ended in another, then the case shall be heard by a court at the place where it ended. In the present case against Khodorkovsky and Lebedev, not a single one of the alleged acts, including the gravest involving alleged money laundering, was committed, or begun, or ended in the jurisdiction of Moscow’s Khamovnichesky Court. While the prosecution made references to actions of members of the law firm ALM Feldmans, located in the jurisdiction of Moscow’s Khamovnichesky Court, who were said to have participated in the alleged acts imputed to Khodorkovsky and Lebedev, no members of that firm are defendants in the present case, and none of acts alleged in the indictment ended in firm’s premises. The legally-prescribed procedure for changing territorial jurisdiction in certain situations was not initiated or applied in the case now before the Khamovnichesky Court. Under these circumstances, for want of jurisdiction, the Khamovnichesky Court lacks the competence prescribed by law for adjudicating the case against Khodorkovsky and Lebedev.

Flawed Indictment The indictment is contaminated by a multitude of gross violations of the requirements of the law. The actual formulation of the charge does not contain a description of specific actions imputed to the defendants – and in the majority of situations, likewise does not contain an indication of the place, time and other circumstances of alleged acts. Legal terminology is employed presumptively and amateurishly, stigmatizing the defendants but not making a cogent case against them. Meanwhile, not knowing just what specifically they are being charged with, the defendants are deprived of their right to a defence. The charges contain contradictory – including mutually exclusive – assertions about the alleged criminal activity. Along with an assertion about the theft of all of the oil produced by Yukos in a given period, the indictment contains assertions about the theft of the oil products manufactured from this same oil, and the proceeds from the company’s sale of this same oil. Contrary to the requirements of the law, the indictment lacks a list of the persons who may be summoned to the trial as witnesses and experts on the part of the defence. As a result, when the court decides upon the summoning of witnesses to court, it cannot in fact refer to the list that should be in the indictment as required by law. In addition to the above examples, defence lawyers petitioned repeatedly about the multitude of further flaws in the indictment that impede the lawful adjudication of the case by the court. The legal and factual violations of the indictment deprive the current process of a clear-cut object and clear-cut boundaries and frustrate the defendants’ right to a defence. Nevertheless, a defence motion that the case be returned to the prosecution to remedy the defects in the indictment was rejected by the court, without explanation of its reasoning in reference to the grounds cited by the defence.

Khodorkovsky and Lebedev Continue to be Held Unlawfully in Harsh Pre-Trial Isolation Cells The defense has also repeatedly petitioned the court to have Khodorkovsky and Lebedev removed from the confines of ongoing pre-trial isolation in favor of the less restrictive conditions of incarceration to which they are entitled under law. The defendants have been subjected to the restrictions on access to legal counsel and the limitations on family visits imposed under pre-trial detention rules. These restrictions, coupled with minimal exposure to fresh air and direct sunlight and inadequate opportunities for exercise, make the pre-trial detention regime extremely difficult physically and psychologically, particularly over extended periods.

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In December 2006, Khodorkovsky and Lebedev were transferred from Siberian labor colonies, where they had been serving their sentences since October 2005, to a pre-trial detention facility in Chita, in Russia’s Far East. In February 2009 they were transferred from there to Moscow’s Matrosskaya Tishina detention facility, meaning that the defendants have been continuously held under this strict regime of pre-trial isolation for over three years.15 Added to the two years spent in pre-trial detention before the end of their first trial and appeal, the defendants have spent over five years detained under these strict conditions of isolation, compared to just approximately one year in the less restrictive conditions of incarceration of a general prison colony. As pre-trial isolation is considered an exceptional form of incarceration, the court in Moscow must decide every three months whether to extend the duration of the detention measures. The defendants have pointed out to the court that the detention measures to which they have been subjected are inconsistent with Russian criminal procedure law, the Russian Constitution and Russia’s international obligations under the European Convention on Human Rights, as confirmed by Russia’s Constitutional Court, the Presidium of Russia’s Supreme Court, and the European Court of Human Rights. Yet in what has been described by Lebedev as a recurring “ritual”, the court has without fail complied with every prosecution request to extend the defendants’ incarceration in the pre-trial detention facility. The prosecution’s arguments in favor of continued pre-trial detention have ranged from the paranoid to the absurd – including an argument made twice – both in November 2009 and February 2010 – that if released from pre-trial detention the defendants might be better able to “coconspire” in the filing of claims at the European Court of Human Rights, and thereby, supposedly improperly, “exert pressure” on the Russian justice system. Khodorkovsky and Lebedev are therefore enduring a situation described by their defense counsel as “double bars” – their conditions of incarceration constitute ongoing compounded punishment inconsistent with the sentence they received in 2005, and imposed vindictively and unlawfully by prosecutorial authorities with the backing of a compliant court.

The widely-reported deaths of 37-year-old lawyer Sergei Magnitsky in November 2009 and 53-year-old entrepreneur Vera Trifonova in April 2010 both occurred at Matrosskaya Tishina; both detainees were denied medical treatment after refusing to cooperate with corrupt officials. Matrosskaya Tishina is also where former Yukos lawyer Vassily Alexanyan was held in brutally inhumane conditions from April 2006 to February 2008, until he became terminally ill after being denied treatment for HIV and lymphatic cancer as punishment for not providing false testimony against Khodorkovsky.
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15

CONCLUSION

The presentation of evidence and interrogation of witnesses by the prosecution in court has been a months-long run of theatrics devoid of any meaningful plot. The prosecution’s case reflects the slipshod work of the investigators, adding nothing of relevance to the indictment and shedding no light upon how the data in the case file or the testimony of the witnesses support the charges against the defendants. Data presented have been incomplete, misleading and of dubious authenticity – and devoid of any analysis. The prosecutors have shown themselves to be obviously woefully unqualified to understand the financial and operational exigencies of a major vertically-integrated oil company. Their approach to prosecution has complied neither with the requirements of the Russian Criminal Code nor with those of the Russian Code of Criminal Procedure, nor with fundamental provisions of the Russian Constitution. Through their actions and attitudes the prosecutors have abused their powers willfully and in bad faith, audaciously positioning themselves above the law. Prosecutors have stubbornly stuck to a script – their indictment – which denies legal and factual realities ranging from the fundamental definition of “crime” to the highly regulated structure and operation of vertically-integrated energy companies. Beginning with a blatant denial of the presumption of innocence, the indictment and the process that produced it were replete with legal and factual flaws and procedural violations that have only been exacerbated by the prosecution’s methods at trial. While the court has attempted to maintain a semblance of normal trial processes, it has failed to correct the flaws in the indictment, or to ensure compliance at trial with fundamental requirements of due process. After one year of presenting what they call “evidence” and after bringing 51 witnesses to be heard in the courtroom, the prosecutors have been unable to elucidate how it was possible that Yukos covered its operating expenses and invested heavily in capital improvements and acquisitions and paid dividends – all financial operations recorded on the books of Yukos and several other companies and banks – when the entire oil production of Yukos over a period of six years was allegedly stolen. Khodorkovsky and Lebedev and their defense counsel have made these arguments in court, yet the prosecutors avoid engaging on such facts, preferring to push forward relentlessly with rote reading. Prosecutors have droned on for hours and days on end, mechanically reading Yukos-related documents; yet almost every effort by the defendants and their counsel to address the substance of the indictment or the contents of materials presented as evidence has been futile. The behavior of the prosecutors in the courtroom has only weakened their credibility and reinforced the incongruity between obvious facts and the allegations of embezzlement and “money laundering”. Khodorkovsky has described the prosecution’s actions as a debasement of the judicial process. The severity of the prosecutors’ willful and bad faith abuse of their powers seems to indicate that the political figures driving the Yukos affair either do not know or do not care what is actually being presented in court, as long as the spectacle superficially appears to be a real trial. The court meanwhile has both passively and actively joined in the due process violations of the prosecutors. The judge has willfully ignored or unjustifiably rejected defense complaints about procedural violations, or delayed consideration of issues with a constant refrain that the complaints are “premature” – despite the obvious immediate relevance impacting the trial. The defense will carefully track how many of the multitude of issues deemed “premature” are actually revisited by the court with appropriate consideration – or any consideration at all. To date, in shirking its role ensuring compliance with procedural rules and fundamental norms of justice, the court has revealed an incontestable bias favoring the prosecution and has already tainted its verdict. Writing in The Independent on January 31, 2010, journalist Shaun Walker stated: “The courtroom is an exercise in the absurd that could come straight from the pages of Gogol or Kafka.”16
16

For other independent views on the trial, please see http://www.khodorkovskycenter.com/mediacenter/comments-around-world.
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According to defense lawyer Vadim Klyuvgant, speaking at the trial’s one-year mark, “the last 12 months have provided continuous proof of the artificial, political and corrupt nature of the persecution of [Khodorkovsky]…neither by presenting irrelevant evidence nor by questioning frightened witnesses has the prosecution been able to prove the absurd charges.” Speaking on the last day of the prosecution’s case, Khodorkovsky stated: “[For] exactly one year [the prosecution] presented the indictment and offered evidence. Three questions remain unanswered: 1. 2. 3. Who said, and where is it documented, that Yukos’s crude oil disappeared? Who verified, and how did they verify, that crude oil disappeared from Yukos? From what income did Yukos have to pay taxes if all its crude oil disappeared?

[It is] possible to spend as much time [as one wants] on questioning people and bringing in papers, but if after a year there is no answer to the key factual question, then this is not a trial – it’s a fiction.” On March 29, 2010, almost exactly one year after its commencement, the prosecution announced they had finished presenting their case. The court then scheduled the opening of the defense’s case for April 5, 2010. The court’s practice to date does not bode well for a fair hearing of the defense’s arguments, for the submission of defense evidence at trial, or for relevant witnesses to speak freely to the allegations. Yet as ever, the defendants are fighting a principled battle within the constraints that have been imposed upon them. As stated by Lebedev on April 23, 2009: “If we are fighting for justice, I want this court to be a temple. I want those who represent the law, when they come here, to know the law. That is why, Your Honor, I am fighting for your honor.” Whether the court will be able to preserve its own honor – and that of the Russian legal system which will be judged on the basis of this bellwether trial – is increasingly in doubt.

August 31, 2010

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