Khodorkovsky & Lebedev Communications Center

[Almost a year to the day of the start of the public hearings, the prosecution informed the court that they were resting their case. As we further describe in our report, after considering two motions filed by the defense, the court scheduled the start of the defense's case for Monday, April 5.

Mr. Khodorkovsky made a brief statement.
"[For] exactly one year [the prosecution] presented the indictment and offered evidence.
Three questions remain unanswered:
1) Who said, where is it documented, that YUKOS's crude oil disappeared?
2) Who and how verified that crude oil disappeared from YUKOS?
3) From what income YUKOS had to pay taxes if all crude oil disappeared?
[It's] possible to spend as much time [as one wants] on questioning people and brining in papers, but if after a year there is no answer to the key factual question, than this is not a process - it's a fiction."]

Due to this morning's events the trial resumed about 30 minutes late, as the court waited for members of the prosecution and defense to arrive at the courthouse.

Mr. Lakhtin argued against granting all of Mr. Gruzd's motions. According to Mr. Lakhtin, Mr. Gruzd failed to substantiate his arguments, ignored requirements of the Criminal Procedure Code and was using his motions to mislead the court and to delay the trial.

Mr. Lakhtin argued against the defense's motions in reversed order. First, concerning the detailed analysis prepared by Mr. Rebgun's staff, Mr. Lakhtin told the court that investigators were not required to appoint experts to conduct a financial-accounting analysis of YUKOS. Therefore, Mr. Gruzd's arguments were groundless. Next, according to Mr. Lakhtin, Mr. Rebgun testified that he had no access to foreign assets of YUKOS, which in itself was proof that Mr. Rebgun's report, contained in the bankruptcy case materials, was not necessary to be added to the case materials. Finally, concerning the analysis of YU-Mordovia, Mr. Lakhtin went over what he called "extensive findings" showing that YU-Mordovia was a "sham" company, found to have been a part of an extensive tax evasion scheme. According to Mr. Lakhtin, Messrs. Khodorkovsky and Lebedev were not being tried for tax evasion, with Ms. Golub being investigated on those charges.

Arguing against Mr. Gruzd's second motion, Mr. Lakhtin told the court that the inventory reports should not be added, because they only sought to document instances where property was missing due to inadequately kept paperwork. That was not the case with the crude oil - all instances of embezzlement were well-documented, because "crude oil was illegally converted for personal use" through sales at artificially lowered prices. In any event, Mr. Lakhtin argued, inventory reports were used to determine the market prices of the company's assets.

Mr. Lakhtin took a different approach to Mr. Gruzd's motion to include bankruptcy case volumes showing full satisfaction of Rosneft's claims. He repeated Mr. Gruzd's motion in its entirety and then told the court that the bankruptcy court did not investigate any circumstances related to embezzlement charges against Messrs. Khodorkovsky and Lebedev. In any event, according to Mr. Lakhtin, being compensated for lost profits (Yuganskneftegaz's claim in bankruptcy) was different from the claim that all of its crude oil production was embezzled (claims in this trial). Once again, Mr. Lakhtin argued that Messrs. Khodorkovsky and Lebedev were not being charged with tax evasion, but with embezzlement. Therefore, all three motions should be denied.

Reading from a prepared response, Judge Danilkin ruled that defense did not establish any legal grounds and DENIED all three motions.

Mr. Lakhtin, after being asked whether the prosecution was going to call anymore witnesses, told the court that the prosecution was resting its case.

After a 15 minute break, Mr. Khodorkovsky made a brief statement. First, he told the court that he was puzzled by its decision to deny all of defense motions, without explaining its reasons. This was troubling, particularly when the court decision and a report of YU-Mordovia, for example, determined that YU-Mordovia was acting for YUKOS, not some organized criminal group. Furthermore, Mr. Lakhtin's insistence that a property inventory report was used to determine the market price was less than credible. According to Mr. Khodorkovsky, the inventory report clearly established that crude oil ended up with YUKOS, not with an organized criminal group. The report was part of the bankruptcy court's case file, the same bankruptcy court having determined that Yuganskneftegaz suffered damages from not receiving all the profits from crude oil sales - not from crude oil embezzlement. According to Mr. Khodorkovsky, because the events and circumstances being examined in both trials were exactly the same, he was puzzled as to what he was being charged with and what he was defending himself from. Mr. Khodorkovsky argued that the court and the prosecution were wholly ignoring the issue preclusion, which applies to the circumstances that have to be proven in court - who controlled the property, who received the property and what specifically the victim suffered. Mr. Khodorkovsky concluded that, although his statement did not a procedural status, he needed to let the court know what problems and violations of their rights defendants faced in court.

Mr. Klyuvgant took the floor and told the court that the defense had a common position composed of two parts. The first part consisted of objections to Mr. Lakhtin's earlier announcement that the prosecution was resting its case, because it was procedurally flawed and violated a direct court order. Mr. Klyuvgant reminded the court that on April 21, 2009, Mr. Lakhtin clearly stated the prosecution's intention to call to testify representatives of civil complainants in this case, after prosecution's witnesses have testified. Mr. Klyuvgant read from the transcript of the court proceedings, which contained Judge Danilkin's ruling on how each party shall present their case, specifying that prosecution will call witnesses and civil complainants. According to Mr. Klyuvgant, once it was issued, the ruling became mandatory, with the prosecution never contesting it. Mr. Klyuvgant told the court that the prosecution continues to use the argument that "all victims have the right to justice" when demanding speedy proceedings and arguing to keep Messrs. Khodorkovsky and Lebedev under arrest. The defense was eager to question these parties under oath. Therefore, before going any further, defense asked the court to address the prosecution's non-compliance with the court's ruling.

After a break, Mr. Lakhtin told the court that no one could tell the prosecutors how to argue their case and how to present their evidence. According to Mr. Lakhtin, the defendants' rights were not being violated by the prosecution choosing to not question someone at this stage of the trial.

Judge Danilkin, without acknowledging his ruling from April 21, told the parties that he acknowledged the prosecution's resting of its case.

Mr. Klyuvgant filed motions to have the court set aside enough time to allow the defense to prepare prior to putting on its case. Specifically, the defense asked that the court set aside enough time to allow the court personnel to prepare the official transcript of the court proceedings and to allow enough time for the defense to examine it, in addition to the evidence currently found in the case materials. Mr. Klyuvgant set out four reasons in support of his motion.

First, at this stage of the trial the official transcript was available to through October 1, 2009. The entire transcript was needed to allow defense attorneys and their clients to precisely refer to specific testimony, documents or motions, as they were entered into record. Second, Mr. Klyuvgant noted that new volumes of case materials have been added to the case file. The defense needed time to acquaint itself with their order and to copy and analyze their contents. Third, Mr. Klyuvgant noted that failure to have a copy of the official transcript and the newly compiled case volumes will undoubtedly lead to delays during the subsequent court hearings, with the defense spending time searching for and identifying where a particular document or piece of testimony was located. Finally, Mr. Klyuvgant noted that Messrs. Khodorkovsky and Lebedev, after a year of a grueling schedule punctuated by lack of hot food and exercise, needed time to recharge for what would undoubtedly be an even more physically and mentally exerting stage of the trial.

In support of his arguments, Mr. Klyuvgant cited the Criminal Procedure Code, numerous decisions by the European Court of Human Rights and Article 6 of the ECHR. Mr. Klyuvgant, without asking for specific time period, asked the court to allow the defense enough time to prepare, using the following time considerations as a guideline: one day for each day of the transcript, as it becomes available; one day for two volumes of case materials, to allow for copying; and one day for each new volume of case materials, to allow examination of documents therein.

After lunch, Mr. Lakhtin told the court that neither the Constitution nor the Criminal Procedure Code had any provisions specifying that the defendants should be allowed time to examine trial transcripts or additional case volumes. According to Mr. Lakhtin, because defendants and their attorneys participated in the trial, the court should provide "a reasonable" time for the defense to prepare.

Judge Danilkin partially granted Mr. Klyuvgant's motion, giving the defense and their clients until Monday, April 5, to prepare. [In this case, "reasonable" meant 4 working days. -Eds.]

The trial will resume on Monday, April 5, 10:30 Moscow Time.