Khodorkovsky & Lebedev Communications Center

Today the prosecution filed a motion asking the court to extend the defendants’ detention at Matrosskaya Tishina SIZO (investigative isolation) by 3 months, until November 17, 2009. As our readers may remember, On June 2, 2009, Judge Danilkin ordered the defendants to remain in SIZO until August 17. The order provided that this method of detention may be extended by 3-month increments.

Morning session:

The courtroom was completely full when the trial resumed today. Artists, well-wishers and journalists packed into the courtroom. Mr. Lakhtin resumed from where he was stopped by the judge last Thursday – Volume 160, protocol of seizure from Bank Trust (DIB). [To remind everyone: Mr. Lakhtin spent most of last Thursday afternoon reading documents that were seized at Bank Trust. The protocols are being read to establish the documents’ origins.]

Mr. Krasnov reminded the court that the search was conducted without a court order, as required by law, and that the case under which this protocol was created was not stated. Mr. Krasnov told the court that Mr. Lakhtin read inaccurate dates and figures, and concealed from the court that a bank’s representative gave investigators a statement contesting the origin of some of the documents.

Mr. Lebedev asked the court to examine the document and read the bank representative’s statement, where he asked the investigators to note that documents were not seized from his office – but were collected from various departments. He asked the court to look at some of the documents listed. These documents were printed on April 4, 2008, while the search was conducted on April 9, 2008. Mr. Lebedev explained that these documents are not usually printed and it was clear that the prosecution called ahead and asked the bank to prepare – meaning that no search of any kind was conducted, which is attested by the bank representative’s statement.

Mr. Lakhtin moved on to protocol of examination of the items seized at Bank Trust and the investigator’s order recognizing documents that were seized to be material evidence, attaching them to case # 18/41-03. Mr. Krasnov asked the court to note that Mr. Lakhtin basically summarized these documents, without reading a single entry.

After Mr. Lakhtin read a translation of a share purchase agreement that was concluded between Bank Menatep and Daiwa Europe Ltd., Mr. Krasnov noted Mr. Lakhtin’s selective summarizing and the fact that the defendants’ names were not mentioned in the agreement. Mr. Khodorkovsky, after noting that this is the second time that Mr. Lakhtin read this agreement, added that, unlike what Mr. Lakhtin implied, this agreement (signed on January 29, 1998) was not part of Menatep’s acquisition of YUKOS, and, if the court will be interested, Mr. Khodorkovsky will explain during his testimony what the purpose of the agreement was. Notably, the monetary value of the agreement was only $50 million USD.

After Mr. Lakhtin read a subsequent swap agreement, Mr. Krasnov explained Mr. Lakhtin’s omissions, including the fact that Mr. Lakhtin did not read who signed the document. Mr. Lakhtin continued to read various addendums to the aforementioned agreements. After Mr. Lakhtin finished another block of documents, Mr. Krasnov asked the court to note similar objections.

After a 20 minute break, Mr. Lakhtin continued to read additional addendums. Mr. Krasnov continued to stress that the documents were neither signed by nor addressed to the defendants. Also, Mr. Lakhtin continued with his aversion to announcing that the aforementioned agreements and addendums were subject to English law.

Mr. Lakhtin was interrupted by Judge Danilkin, who informed Mr. Lakhtin that he is about to read for the second time a document which he read back on August 4, 2009. Mr. Lakhtin clammed up, while the presiding judge asked him if he wanted to read the same set of documents again. Mr. Lakhtin went to another set of documents – and Judge Danilkin told him that he read these documents as well. Mr. Lakhtin, looking confused, leaned over to Mr. Shokhin, but the presiding judge asked him if he was ready to move on to another volume. Mr. Lakhtin asked for Volume 70, which elicited a surprised look from the judge, who told Mr. Lakhtin that he should have mentioned it during the break. The court called a 2 minute break to allow the secretary to bring the case volume.

Mr. Lakhtin read a record of a bank account belonging to Dunsley Ltd. [Cypriot authorities refused to cooperate on a legal assistance request from Russian prosecutors, when the latter were seeking financial documents belonging to Dunsley and Nassaubridge Management Ltd.] Mr. Lebedev explained that from whatever cheat sheet Mr. Lakhtin was reading he couldn’t even get the type of transaction and the number right. Mr. Lebedev told the court that the defense will return to this document and will explain what it is and why it’s significant. While Mr. Lakhtin was busily looking for what to read next, Judge Danilkin helpfully told Mr. Lakhtin what documents from this volume Mr. Lakhtin already read – back in June. Mr. Lakhtin moved on to one of the few documents he’d skipped almost two months ago.

Mr. Lakhtin read several orders from Dunsley Ltd. to DIB, authorizing the purchase of foreign currency (USD). (Notably, the prosecution implied something illegal in the fact that a company which received dividend payments in Russian rubles wanted to convert them into hard currency.) After one of these documents, Mr. Krasnov pointed out to the court that Mr. Lakhtin did not read all of the information correctly, including the ruble/dollar exchange rate. Also, Mr. Lakhtin neglected to tell the court that the document contained handwritten information, written by an unknown person. Mr. Lebedev explained in more detail what Mr. Krasnov pointed out.

After Mr. Lakhtin read another one of the orders, Mr. Lebedev asked the court to note that the prosecution continued to insist that the purchase of dollars by Dunsley was laundering.

Mr. Lakhtin read a letter from Mr. Karimov to Ms. Agranovskaya, managing partner of ALM Feldmans, requesting all legal representation agreements concluded by ALM Feldmans with a number of companies and physical persons, including Messrs. Khodorkovsky and Lebedev. Mr. Krasnov noted that Mr. Karimov demanded documents which contained confidential information. Yet, just as with the search and seizure at ALM Feldmans, there was no court order – as required by law. (Mr. Krasnov implied that Mr. Karimov used intimidation to gain access to confidential documents without a court order.)

Mr. Lakhtin objected to Mr. Krasnov’s “analyzing evidence.” He told the court that Mr. Karimov acted in accordance with the Code of Criminal Procedure and Russian Constitution. Also, Mr. Karimov only had to follow the Code of Criminal Procedure – not the law governing attorney confidentiality. Therefore, Mr. Karimov did not break any laws. Mr. Krasnov attempted to reply, but was interrupted by the presiding judge, who told the parties to save it for the closing arguments.

Mr. Lakhtin read several more documents and finished Volume 70.

Afternoon session:

As soon as the hearing resumed, Mr. Lakhtin informed the court that prosecution will file an oral motion asking the court to extend the defendants’ detention in SIZO until November 17, 2009. (Mr. Lakhtin told the court that he will provide a copy of what he was reading to the court’s secretary.) He began by reading the charges. Next he mentioned that the defendants' detention was continuously extended by Chita courts. Telling the court that the defendants’ current term of detention in SIZO will expire on August 17, Mr. Lakhtin explained that the prosecution’s position remained the same as they had previously stated in a July 7 response to Mr. Khodorkovsky’s motion from July 3.

According to Mr. Lakhtin, the defendants' medical condition did not preclude their continued detention in investigative isolation. Perhaps Mr. Lakhtin was wistfully remembering the travesty that was Mr. Aleksanyan’s detention in Matrosskaya Tishina SIZO. Mr. Lakhtin moved on to explaining additional reasons to continue to hold the defendants in investigative isolation, most of which were similar to the July 7 arguments that we link to above. These included:

• Defendants are accused of serious crimes, with extremely high damages;
• Most of the members of the organized group led by the defendants were hiding from investigation – and if defendants were set free they would hide as well;
• Defendants presented a grave risk to society [in support of this last one Mr. Lakhtin referred to wiretapped conversations between Mr. Gololobov and Ms. Bakhmina].

Next, Mr. Lakhtin switched gears and told the court that the defendants’ detention was based on a court order and was in compliance with Article 5 of the European Convention on Human Rights and with the Russian Constitution. According to Mr. Lakhtin, any other type of custody than the one in which the defendants are currently held would place witnesses and civil complainants (both companies and physical persons) in danger. Reiterating that Chita courts had already ruled on the defendants’ custody, Mr. Lakhtin again cited Mr. Golubovich’s deposition, using same language that was denounced by Mr. Khodorkovsky on July 7.

Next, Mr. Lakhtin argued that circumstances requiring defendants' detention have not changed - they could run, destroy evidence and influence witnesses. Mr. Lakhtin did not stop there and, after a short pause, decided to go for broke and throw the kitchen sink. According to Mr. Lakhtin, even from behind bars, the defendants managed to hide several billion dollars in laundered assets by using… Yukos Capital S.a.r.l. (Mr. Lakhtin actually informed the court that the U.K. and Ireland  - where Yukos Capital has bank accounts – refused the prosecution’s request for legal assistance), and that the defendants continued to hide YUKOS assets from the company shareholders and creditors. Mr. Lakhtin described how the ownership of Mazeikiu Nafta and Transpetrol oil pipeline were transferred to Yukos Finance B.V., by citing an article in Kommersant. 

Mr. Lakhtin went on to accuse Messrs. Khodorkovsky and Lebedev of orchestrating in 2005, while remaining in custody, a change of ownership of Yukos Capital – from Yukos Finance B.V. to Yukos International U.K., B.V., thus putting it under the control of Bruce Misamore. Mr. Lakhtin did not stop there. He alleged that the aforementioned transfer was the direct cause of YUKOS bankruptcy, according to a deposition of Mr. Rebgun, YUKOS bankruptcy trustee (the same Mr. Rebgun who lost Yukos Capital and Yukos Finance cases in Netherlands). According to Mr. Lakhtin, these actions were a direct cause of loss to YUKOS shareholders, many of which were foreign citizens.

If Mr. Lakhtin was selling a set of knives in an infomercial, this would have been the point where he would have yelled “But wait, there’s more!” Mr. Lakhtin accused Messrs. Khodorkovsky and Lebedev of continuing to exercise control over Yukos Capital and of using that company to attack former YUKOS subsidiaries – by filing lawsuits demanding repayment of loans. He cited the April 28 decision rendered in Amsterdam in favor of Yukos Capital against Rosneft, as reported in an April 29 article in Kommersant. Next,

Mr. Lakhtin accused the defendants of hiding billions in embezzled funds and not paying the judgment of Meschansky Court. Instead, according to Mr. Lakhtin, the defendants continue to use these funds to actively impede investigators, by paying the living expenses of several former YUKOS managers living in the U.K. and elsewhere – including “members of organized group” Messrs. Elfimov, Brudno and Burganov. Mr. Lakhtin neglected to mention that everyone mentioned above was granted political asylum and every Russian request for extradition was denied.

Next, Mr. Lakhtin realized that he was talking so much about Mr. Khodorkovsky he forgot about Mr. Lebedev. According to Mr. Lakhtin, although it was obvious that Mr. Khodorkovsky was the leader of the “organized group,” he consulted with Mr. Lebedev and continues to do so. In any event, Mr. Lebedev used his position as chairman of Group Menatep to take possession of all laundered funds. According to Mr. Lakhtin, all of the above “facts” support the prosecution’s assertion that the defendants, should they be let out of custody, will impede the investigation. Mr. Lakhtin reiterated the prosecution’s request to extend the defendants’ stay at SIZO until November 17, 2009. In support of this oral motion, Mr. Lakhtin handed the court copies of the Kommersant articles that he referred to earlier.

Mr. Klyuvgant went first. He asked the court if the defense could get a copy of what Mr. Lakhtin just said. [Mr. Lakhtin promised that he would provide a copy of his oral motion to the court secretary.] However, the presiding judge informed Mr. Klyuvgant that the only documents that he could give him were the aforementioned Kommersant articles. Mr. Klyuvgant was not deterred. He told the court that this was the first time that the defense was faced with a novelty of an oral motion supplemented with newspaper articles. Next, Mr. Klyuvgant explained that the defense needed to examine in detail what were basically new charges against the defendants. While Mr. Klyuvgant did not specify what defense saw as new allegations, based on Mr. Lakhtin’s reading the prosecution may be thinking of secretly investigating “intimidation of witnesses,” “impediment to investigation,” and “attacking Rosneft.”

Mr. Klyuvgant explained to the court that, unlike the prosecution, the defense did not want their clients’ fate, after being held in for two and a half years in investigative isolation, to be decided in a cavalier manner. Therefore, the court needed an opportunity to examine in writing what Mr. Lakhtin read. Further, Mr. Klyuvgant asked to have at least until tomorrow to prepare a response to Mr. Lakhtin’s motion. He reminded the court that the prosecution had put in limbo a simple request from the defense concerning the computer disks with conversations between Ms. Bakhmina and Mr. Gololobov – this is more serious. Mr. Klyuvgant again asked the court to provide the defense even an informal copy of what Mr. Lakhtin just read, so that defense may prepare an effective response.

At first, Judge Danilkin would not budge, telling Mr. Klyuvgant that Mr. Lakhtin filed an oral motion and that, besides the Kommersant articles, he had nothing to give to the defense. Mr. Krasnov inquired about a copy of the protocol from today’s hearing, which prompted a painful look from the court secretary, and Judge Danilkin told Mr. Krasnov that protocol of today’s hearing would not be ready in time. Mr. Krasnov persisted, asking for at least the protocol for the afternoon part of the hearing. Mr. Klyuvgant joined in, telling Judge Danilkin that the defense would be more than satisfied with Mr. Lakhtin’s “rough draft” that he promised to give to the court secretary. Mr. Klyuvgant explained that Mr. Lakhtin was citing deposition testimony, verdicts from various courts, and other case materials – the defense needed to have this information in order to respond effectively. Judge Danilkin was immovable, telling Mr. Klyuvgant that he’d said what he had to say.

Then, having a second thought, Judge Danilkin asked Mr. Lakhtin if he was prepared to turn over the “rough draft.” “Our position remains the same,” noncommittally responded Mr. Lakhtin. “Meaning your motion will remain oral?” asked the judge. Not waiting for Mr. Lakhtin’s response or, maybe, taking Mr. Lakhtin’s nodding as one, Judge Danilkin asked the representative from Rossimuschestvo if he supported the prosecution’s motion.

Mr. Lebedev began speaking even as the government representative was replying in the affirmative. Mr. Lebedev told the court that since Mr. Lakhtin was so keen on citing international law, Russian Constitution and even the Code of Criminal Procedure, then he should know that the CCP requires requests for determination on [measures of restraint] to filed only in written form (Mr. Lebedev was referring to Sections 101, 108, and 109 of the CCP). Also, in addition to complying with the requirement of Section 101, Part 4 of the CCP (based on law, substantiated and properly motivated), the document has to be signed by an authorized person. Mr. Lebedev told the court that he will not forget what had just happened at the hearing and will file an appropriate complaint with the ECHR. Furthermore, Mr. Lebedev added that many of the ECHR decisions noted that the prosecution did not observe laws and procedures when it came to measure of restraint. Mr. Lebedev asked the court to re-examine Sections 108 and 109 of the Code of Criminal Procedure, and to re-assert its authority vis-à-vis the prosecution, as established in Section 29 of the CCP [Authority of the Court].

Mr. Khodorkovsky reiterated the defense’s request for additional time to prepare a response. Also, Mr. Khodorkovsky insisted that the court find an appropriate procedural form for what Mr. Lakhtin said so that the defense could prepare its response. “Your Honor, I’d like to draw your attention, since you already have familiarity with the case materials, to what we’d just heard. Even as heard, [Mr. Lakhtin’s statement] is evidence of, either, additional investigative actions against, conclusions of which run counter to what is asserted in the indictment [before you], or Mr. Lakhtin was making defamatory and criminal statements against us, which would give us cause to ask for his recusal.” Mr. Khodorkovsky concluded by telling the court that in order to make a reasoned decision on what Mr. Lakhtin just said in his motion, it wasn’t enough to base it on what was heard – it had to be in writing.

Immediately after Mr. Khodorkovsky was finished, Judge Danilkin took a 5 minute break. After returning, Judge Danilkin announced that the hearing will be adjourned until 17:30. During that time the court secretary would prepare an excerpt from the protocol, containing the text of what Mr. Lakhtin said. It appeared that that Mr. Lakhtin did turn over his “rough draft” after all.

Returning to the courtroom at 17:30, attendees, which included members of the press, were blocked from re-entering – first by the guards, then by bailiffs. After a half-hour wait the crowd was ushered in.

The court secretary handed an excerpt from the protocol to both parties, including to each defendant. After seeing that the excerpt was 8 pages long, Ms. Liptser asked the court to allow the defense until Friday morning to prepare a response. The presiding judge refused, instead extending Mr. Klyuvgant’s earlier request by almost 4 hours, telling defense that their response should be ready by 14:00 tomorrow.

The trial will resume on Thursday, August 13, 14:00 Moscow Time.