[A-List] Russia: Putin tightens grip

["Michael Keaney" <michael.keaney@xxxxxx>]

Envoy warns arrest of tycoon could harm Russian economy
JIM HEINTZ, Moscow
The Herald, October 27 2003

The arrest and jailing of the head of Russia's largest oil company could
harm efforts to restore the economy, the US ambassador warned.

Alexander Vershbow was speaking a day after Mikhail Khodorkovsky,
billionaire head of the Yukos oil giant and Russia's wealthiest man, was
seized by special forces at a Siberian airport, sent back to Moscow to be
charged with forgery, fraud and tax evasion and jailed in a notoriously
overcrowded remand centre.

Businessmen and politicians contend the inquiry into Yukos, which began in
July, is a political vendetta. Khodorkovsky, whose wealth is estimated at
£5bn, has funded two opposition parties.

The arrest raised the question of whether Russian law was being used
selectively, Vershbow said.

He added that Washington was concerned about the growing tensions around
Yukos and feared the move could create doubt among foreign companies and
potential investors in the Russian market.

Khodorkovsky can be held for up to two months, his lawyer said. A Yukos
spokesman confirmed the tycoon was being held in Moscow's Matrosskaya
Tishina, a detention unit regarded as often worse than prison.

Yuri Kalinin, deputy justice minister, said Matrosskaya Tishina had 3500
detainees in a facility built for 2500.

"Still, this isn't terrible - last year there were 8500 people held there,"
he added. He said Khodorkovsky was in a cell with several others.

The prosecutor general's office said Khodorkovsky was charged with fraud,
forgery, embezzlement and tax evasion.

A Yukos statement called the charges "absurd" and said the company "does not
doubt for a moment that the entire investigation is politically motivated".

Khodorkovsky and other oligarchs are greatly resented by Russians who did
not benefit from the sell-off of state property. With elections coming up,
pro-Kremlin parties have gained ground among voters since authorities began
to put pressure on the oligarchs. AP