Former YUKOS CFO Bruce Misamore’s Deposition
Bruce Misamore, former YUKOS CFO, gave his deposition to Khodorkovsky defense lawyer Yelena Levina in Washington DC on March 9, 2009, certified by a Washington DC notary public. In a nearly 10 hour long and 50 page deposition, Misamore confronted the charges in the indictment against Khodorkovsky and Lebedev.
In court on May 20, 2010, Judge Danilkin ruled in favor of the prosecution's objection to including Misamore's deposition. Despite defense motions appealing the decision, the ruling stood.
Misamore joined YUKOS as CFO in February 2001 and remained in this role until December 2005. In his deposition, Misamore describes his mandate as YUKOS' CFO as not being "limited to insuring that YUKOS was in compliance with financial and corporate governance standards in the Russian Federation and other jurisdictions where the company operated," but included reporting to the company's board and CEO (Mikhail Khodorkovsky), "insure that Yukos met ‘best practices' standards recognized internationally with regard to all aspects of YUKOS' financial management, but particularly as it related to accounting, finance, investor relations and corporate governance".
YUKOS' Corporate Governance
He noted that by 2002/2003, the company was "regarded as the model for financial reporting, corporate governance and investor relations in Russia". These qualities were verified by internationally recognized experts from law firms, accounting firms and investment banks including PwC, UBS, Morgan Stanley, Akin Gump in preparation for both a New York Stock Exchange listing and Eurobond issue. Misamore stated that:
"While YUKOS ultimately did not submit its application to the NYSE or issue the Eurobonds, Akin Gump, PWC, and the others did complete their review of the company's practices and also completed exhaustive documentation of their findings. YUKOS' accounting, finance and governance practices, and its internal controls in these regards, were effectively in a position to satisfy the standards that would have been necessary for either an NYSE listing or issuance of the Eurobonds, subject primarily only to the further implementation of controls, to comply with the then new Sarbanes-Oxley (SOX) requirements."
The Charges
After reading and summarizing the charges Khodorkovsky and Lebedev are facing, Misamore contended:
"The prosecution is completely wrong in its ridiculous allegations. The prosecution is attempting to characterize as criminal the sound business practices adopted by YUKOS which allowed it to make the transition from being an unprofitable state-owned company to a company competing on the international markets, to survive the turmoil of the late 1990s when oil prices and the Russian economy collapsed, and to become the best managed and governed company in Russia. In reality, the alleged embezzlement and money laundering reflect the ordinary-monetary transfers and redistribution of revenues and capital within a vertically-integrated company, which is the very essence of a profitable and efficient commercial enterprise."
Testifying
Noting the Russian Procuracy's branding of himself as a possible suspect in a criminal case in retaliation for my efforts to resist the government's expropriation of YUKOS, Misamore declares his inability to appear and testify at Khodorkovsky and Lebedev's trial. He concludes that it would be an "honor and a privilege to stand up for Messrs. Khodorkovsky and Lebedev in Russia", and that he would be happy to "meet with and testify before the judges in this case in either the US or the UK if it would assist in their understanding of the case facts".