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. Last Updated: 07/27/2016

TWO KOPEKS' WORTH: Public Show To Star Putin, 18 Tycoons




Friday's meeting in the Kremlin between President Vladimir Putin and 18 businessmen should not be expected to depart from the script of a play titled "Surrender of the Oligarchs," but it will be a play produced for public consumption, not necessarily a reflection of reality.


With 18 businessmen present, nothing in the meeting will be secret. Anything that Putin can say, he's already said in public: All businessmen will be treated equally, any court cases will be conducted strictly according to the law, and privatization sales will not be reviewed en masse.


Any businessman who disagrees will in effect be saying, "This is fine for all the other oligarchs, but you have to treat me better." The only other option is to agree with Putin, to submit to a public show of surrender.


Perhaps the question of an amnesty for privatization and tax crimes will arise f if one of the oligarchs has the courage to raise it. Putin's answer would almost inevitably be negative. An amnesty would give away his ammunition against the oligarchs. It would be unpopular with voters and signal the resumption of business as usual.


But after the public show, questions will remain. Will the government really treat all businessmen equally, or is the show just a cover for installing new, more Putin-friendly, oligarchs? Will the court system really be independent and protect the rights of the accused? Answers to these questions may become apparent fairly quickly.


Next Wednesday, the Supreme Court Presidium will hear the Federal Security Service's request to reopen an espionage investigation against environmentalist Alexander Nikitin. This is a test of the independence of the judicial system. Nikitin's case has been reinvestigated several times, with several indictments filed and thrown out. The Supreme Court has heard the case twice: once to order an earlier reinvestigation, once to confirm Nikitin's acquittal.


If the court allows the St. Petersburg FSB, the descendant of Putin's former employer, to reopen the case, oligarchs f and every citizen f will know that justice and fair enforcement of the law are not the purposes of the courts. What's happened to Nikitin could happen to anybody.


On Sept. 18, the results of the Onako Oil Co. privatization sale will be announced. If the auction is conducted fairly, it would seem that businessmen will be treated equally in the future. The mechanics of running an auction are not difficult, and the government can conduct a fair auction if it wishes.


But stories are already circulating that the fix is on. According to these hypotheses, one favored oligarch f in many instances named as Roman Abramovich f would be allowed to purchase Onako's shares at just above the starting auction price, with any serious competitors knocked out of the auction by problems with the tax police, and with the shares paid for f indirectly f by a loan from the government. I have no way of knowing whether these stories are true, but if on Sept. 18 Abramovich has made a bargain purchase of Onako, Putin's credibility will suffer.


Today's meeting is just for show, but the Supreme Court and the government will soon tell us whether we can believe Putin's promises. Let's hope they tell us that all people and all businessmen will be treated equally under the law.


Peter Ekman is a financial educator based in Moscow.