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. Last Updated: 07/27/2016

Russia, U.S. at Odds Over Khodorkovsky

www.state.govState Department spokesman Richard Boucher
Moscow risked a rift with Washington on Saturday over the legal action against oil giant Yukos, calling U.S. criticism of the affair disrespectful as the Russian government itself looked split on the issue.

The U.S. State Department, in comments echoed by Germany, raised concerns on Friday that the case -- which has seen Yukos boss Mikhail Khodorkovsky thrown into jail on massive fraud charges -- might be politically motivated.

State Department spokesman Richard Boucher said on Friday that the Kremlin should act to dispel concerns that Khodorkovsky's arrest was a political attack.

"There's always the issue [in] a case like this as to whether it's a single event or whether it has some sweeping implication for the rule of law in Russia," Boucher said.

But Moscow called the criticism hypocritical.

"This statement is a continuation of a notorious policy of double standards," Foreign Ministry spokesman Alexander Yakovenko told Russian television.

"It is, at the very least, tactless and disrespectful toward Russia," he said.

The National Security Council also weighed in on the matter, saying it raises "significant concerns about the state of the rule of law and the investment and business climate in Russia."

NSC spokesman Sean McCormack said, "It is important for Russian authorities to dispel concerns that this case is politically motivated."

Eugene Lawson, president of the U.S.-Russia Business Council, warned pointedly in a statement that "it is much easier to destroy than to build investor confidence."

The assault has spooked investors, some fearing it could herald an assault on Russia's privatized businesses.

Yukos shares plunged after the arrest, and their descent accelerated when prosecutors froze a major stake in the company.

In a meeting with investors on Thursday, Putin sought to calm fears and counter criticism of the methods used against Yukos, saying the case was little different to high-profile corporate fraud cases elsewhere.

"Putin reminded us of the situations that have arisen in the U.S. with Enron and WorldCom," a participant said.

On Friday, Prime Minister Mikhail Kasyanov said he was concerned by Khodorkovsky's arrest. This was a clear challenge to Putin, who has said the case must be left to the prosecutors.

Russian newspapers said the comments highlighted splits in the government, and speculated that Kasyanov might soon follow Kremlin chief of staff Alexander Voloshin, who resigned this week, apparently in protest at the arrest of Khodorkovsky.

Analysts interpret the legal assault as an attempt to crack down on Khodorkovsky's political ambitions, since he has openly funded political parties.

But the public still supports Putin. The respected VTsIOM-A polling agency said on Saturday the president received 73 percent approval among 1,600 Russians polled this week.

This was nearly his lowest score this year but well above his rating after he came to power in 2000 promising to end the chaos of the Yeltsin years.

Yakovenko said Washington had unfairly singled out Russia for criticism.

"I cannot remember the State Department making such statements about other countries in similar cases," he said.

Some politicians -- such as Anatoly Chubais, a leader of the liberal Union of Right Forces party -- have tried to make capital from the case, calling it politically motivated, and most Russians would agree with him.

Nearly two-thirds of Muscovites asked by VTsIOM-A were skeptical about Kremlin assertions the Yukos affair was purely a criminal matter and saw Khodorkovsky's arrest as political.

(Reuters, LAT)