Sabrina Tavernise's exclusive interview with Mikhail
Khodorkovsky, just weeks before his dramatic arrest,
is a frank account of the billionaire's rise to power,
covering everything from his account of the 1991 coup
to his blunt opinions about other oligarchs and the
Kremlin. Tavernise, who was also reporting for the New
York Times, conducted the interview in Russian at
the headquarters of Khodorkovsky's oil company, Yukos,
in late September 2003. The interview was translated
by Helen Grigoriev, and has been edited for length and
| Editor's Note: On November 3,
2003, four days after the publication of this interview
and nine days after his arrest, Khodorkovsky stepped down
from his position as head of Yukos oil.
Tell us about your past, your personal past. What did
your parents do?
My parents were Muscovites. They worked at the Kaliber factory.
It's a factory that manufactures various measuring devices:
rulers, micrometers, projectors. ... I went to this pre-school
that shared a fence with the factory, and we would always climb
the fence with the intent of pocketing some interesting metal
things for ourselves. My parents worked there as engineers.
My father was a construction engineer, and my mother was a production
In 1991, when Yeltsin stood on the tank, where were you?
I was in the White House [in Moscow]. I was an advisor to
the Russian Prime Minister [at the time, who was then facing
down a coup.]
Were you scared? Do you remember that feeling?
Yes, of course. I was absolutely calm during that whole situation.
In these cases, I'm always calm. I was just convinced that we'd
either be sent to jail or shot.
I had an uncomfortable feeling with Yeltsin's press secretary,
Mr. Vashchyanov. ... He's very intelligent looking, he wears glasses,
and he had a machine gun across his chest. And he is talking
to me, and he turns his head to me, and he turns the gun to
me too, and I just [gasps for air] because I could see that
the safety device was taken off of the gun, and his finger was
on the trigger. It was just a more comfortable way for him to
hold it. [Laughs] Everything else was relatively calm.
Have you ever thought of leaving Russia?
During Soviet times, of course not. I was a student at the
university in the department that dealt with rocket fuel. No
one would have let us leave the country. But when perestroika
took place, I thought about what it would be like to live someplace
else. And I even tried, as I traveled, to feel what it would
be like to live in a different society. I've been to Europe
and it didn't work out. At one point, I even bought an apartment
in England and then sold it.
Why? You didn't feel comfortable?
You know, every person has a different sense of home. Some
people are more cosmopolitan; it is easier for them to travel
all over the world, live in other countries. Many journalists
are among those people. And others are homebodies by nature.
Their home, their own circle of friends, that for them personally
is more important. And I probably fit into the second category.
I have to travel a lot, but relaxation to me is when I am at
What is the most important change in your life between
1991 and today? Do you even have enough time to brush your teeth?
There haven't been many changes in my everyday life. I'm living
in the same way that I'm used to. But there is a serious lack
of time. I allow myself certain things that help me make up
for the lack of time. For example, I have a driver, because
in a car, I either read or sleep. Catch up on sleep; especially
if you consider Moscow's traffic jams, it's not so bad. And
I now have the opportunity to fly on a private jet, which really
allows me to save time and it allows me to be more mobile, because
it's a problem for me if I have to leave home for a long time.
I can even fly to United States for a day, that's important
for me. That I feel is a positive part of the changes.
Ten years ago, many people said that everybody had to give
bribes to do business in Russia. Since everyone took bribes,
they said, how could they be judged on the basis of what was
legal or legal? If it wasn't right, they said, then everyone
would be in jail. How do you feel about that? Was business back
then the way Americans saw it: "Russia, Mafia, bandits?" What's
You know, the business sphere in Russia was difficult, and
remains complicated....each person in every moment has certain
self-limitations: what he can do to reach his goals and what
he can't do to reach his goals. I admit that those people that
have very high limitations become saints, but they do not become
entrepreneurs. And people whose bar is set too low, I don't
think that they remain entrepreneurs for very long, they become
criminals. And the rest depends on what limitations you choose
for yourself. I made a choice for myself: I said that I will
not break the law. I saw that the situation was changing, I
knew how business was conducted in other countries in the world,
and how it varies, but nevertheless I liked the way that open
public companies conducted business. That's why I said that
not only will I not break any laws, but I also will not break
any widely accepted ethical principles. And if I am not sure
whether something fits into that idea, I will ask. But before
1999 I did not operate like that. I did not break Russian law,
but everything else wasn't my concern.
What do you mean by everything else?
Everything else is the question of ethical standards. Russian
legislation allowed many things that in the West were already
considered inappropriate. For example, our standards on insider
information were completely different, our standards of false
advertising were completely different, our standards of working
with shareholders were completely different. I worked within
the standards that existed in Russia.
I agree that many people have had to break or are breaking
laws within the boundaries of their business that exist there
and ethical conventions that exist here. I was able to avoid
that, and still be successful in business.
How did you manage to avoid that?
You see, every person looks for opportunities. If he is a
little bit lucky, he finds the opportunities. If he is less
lucky, but is ready to break the law, then he finds other opportunities.
I was able to avoid that. And that is why I'm fearlessly talking
to our respected prosecution, telling them that you can show
that we broke ethical standards as far as we understand them
today, and that is true, and it went on until 1999. But we did
not break the law.
I see you have a new office.
In the other office we had to remodel to meet our needs, we
constantly had problems with our network. We use paperless technology;
we do not have any paper output in the company, and it turned
out that we needed a completely different technical system.
But to transfer the company while we renovated the office space,
and then move back, as we could in New York -- unfortunately
there aren't many office buildings of that caliber available
in Moscow, so we just built ourselves a new building and sold
the old one.
And what is that picture behind you? [pointing to a large
abstract painting on the wall]
Honestly, I don't know. I don't trust my artistic taste, so
the designers that were hired to decorate did it according to
their taste. My demands were only that [the whole office] would
be a transformable space. ... The structure of the company is
constantly changing. The composition of the necessary working
groups is constantly changing. We have many divisions that are
based on the project principle, which means that they are put
together for each project. They need different types of space,
so [we need to be able to] take it apart and put it together.
And what about at home?
At home, I'm very conservative. ... I can't stand the modern
design, all those glass structures on the bottom. I like everything
to be dependable, heavy, English furniture.
Can you describe your company? Has the merging [between
Yukos and smaller rival Sibneft] taken place?
No, the merge has not taken place yet. we are currently in
the process and we have to be done by the end of the year, and
then starting January 1st, we will be operating as one unified
What will happen; what will the company [be] like?
The company [Yukos] will be the largest oil company in Russia,
and the 4th largest in the world in oil production. It's a large
Russian company, a large oil company by global standards.
... But let's not overstate the role of oil in the Russian economy.
If we take Saudi Arabia for example, there 90% of the economy
is tied up in oil. In Russia the oil fraction of the economy
is around 20%, and that's oil and natural gas combined....
... Our company produces/will be producing somewhere around
5% of the gross national product. That's a lot for one company,
but it's less than, for example, the share of Nokia [cellphone
company] in Finland. It's a large Russian company, [and] large
as an oil company by global standards.
What is happening with your company right now?
Today there is an attack going on by the government that has
been motivated by certain political powers. This attack is not
targeting the company, but targeting very specific people. Without
a doubt, today the shareholders of Yukos are becoming victims
of the attack; some staff members are becoming victims. The
targets of the attack are the shareholders and the management
of the MENATEP Group that is in turn a shareholder of the company
Why is the government attacking specific people within
a specific company? What do they want with them?
We, without a doubt, happen to be very influential people
in the country. And we have our own views on development of
our country; it's development according to the democratic model.
There is a section of the government that supports that model,
and there is a section of the government that does not support
There is consensus in place on the issue of property. Everyone
thinks that property ought to be private. Some of the people
think that private property has to coincide with democracy,
and some of the people think that private property can exist,
but we can hold off on democracy. The company itself has nothing
to do with it, the company itself is a matter of private property,
and there is a consensus on that issue. But the people, the
shareholders, they are fairly influential, and they have the
opportunities to support one or another political power....
I have announced that I support two political parties, liberal-democratic
in their nature: the Union of Right Forces, and Yabloko. And
that's a problem.
So they think that you are too influential?
We are fairly influential, and we have the opportunities to
help those that are choosing an alternate development route.
So it is not a question of my personal involvement in politics
or the question of personal political involvement by the employees
or shareholders of the company. It's the question of our ability
and our desire as individuals to support the democratic developments
in our country. Not everyone is okay with that. There are people
in our society who think that it's normal, and others who think
that we should be denied our civil rights. I don't agree with
that. I think that that property and civil rights are not only
equal in merit, but civil rights are even more important than
Would you describe Russia as being between two models?
Everything is very simple and very clear. In our country in
1996, we had presidential elections, where we elected president
Yeltsin. And in that moment we had a choice between the path
of development that was taken by France, America, and other
developed western countries. That was one way, and another way
that was offered to us was the path of development taken by
the Soviet Union, China prior to reforms, and so on. It was
a clear alternative. The people chose the option that would
follow the development in the western societies. We began moving
in that direction, and that other alternative no longer exists
-- no one is asking us to go back to the Soviet Union.
But now we're presented with a different choice: are we choosing
the model of, let's say, the United States, or the model of
Venezuela or Guatemala? ...
Some people think that Russia should follow the example of
Guatemala, where there is private property, but at the same
time all the political life is in the hands of the government.
Some people think, and I'm among them, that in modern society
it is impossible, if we want to be a developed country, to say
that there should be private property but it's not important
what happens to democracy. These are not separate issues. A
country cannot be wealthy if it is not democratic.
Among Russians there is some criticism about privatization,
and the deals that were made during the early 1990's. How would
you respond to those people, the screaming grandma, or babushka,
on the street corner who insults you? She was not able to make
To the grandmother I say that in 1990-95, you stood in line
at the gas station, if you owned a vehicle, and you did not
receive any benefits from the oil companies' budget. Oil companies
did not pay taxes [then]. Today in 2003, we produce fifty percent
more oil than we did in 1996, we pay five times more in taxes,
out of which the salaries for teachers and doctors are paid,
and you are not waiting in line at the gas station. That's what
I tell the grandmother.
But this is what I'll tell an American investor who doubts
whether or not the shares were rightfully obtained: I'll tell
him that the government, for completely understandable reasons,
made the decision to sell off a large industry because it did
not pay taxes. ... This was on the brink of the 1996 elections,
when everyone was certain the Communists were going to win.
The Communists firmly announced that any companies that were
sold off would be nationalized without payment. So you understand
that no investor would have paid a single dollar for this company.
We paid, for the first part of the company, a total of $450
million-- $150 million before the election and then $300 million
after the elections.
Do you have a receipt?
Of course, of course. And that's considering that the company
was $3 billion dollars in debt -- it was a huge risk. But when
we bought the second part of the company in 1997, after the
election, such risk didn't exist, and we paid $1.2 billion for
it. That was right on the eve of the oil crisis, and there were
not that many investors who wanted to buy a company in Russia.
Americans think that in ten years of democracy, the Communist
Party has been the biggest threat to democracy in Russia. What
do you think is the biggest threat?
The biggest threat is that we do not have a civil society,
and so there are people, groups of people, who want to have
the power in their hands, basically bypassing democratic procedures,
by keeping the shell, but taking out the meaning. There are
people who think that the country would do well with an authoritarian
And who are they?
There are very many people in the government who came out
of the Soviet times and have not changed. There are [also] younger
politicians who think that the authoritarian way of developing
is right for the country. On the one hand, it seems like there
is a democracy in place, a multi-party system, and so on, but
on the other hand there isn't a democracy, which means that
very little depends on the expressed desires of the people.
There is an impression of a [democratic] society, an independent
court system, but when you look at it closely, you can see that
it is not independent. A civil society, a self-governing society
by the citizens does not exist.
Is that really a threat?
Of course. It's a serious threat. In Russia in the last thousand
years, since the Novgorod Veche, [a popular assembly in ancient
Russia] we have been taking a step towards the West. And in
Russia, the West and democracy are synonymous. And then we've
taken steps towards Asia..., which, for Russia, is synonymous
with totalitarianism. For us, there really is a question of
what we are moving towards, the West or the East. It's a traditional
problem for Russia, and probably the country's most poignant.
If we were to take Peter the Great for example, everyone thinks
that he pushed Russia closer to the West, but in reality he,
much like Ivan the Terrible, pushed it towards the East, by
devaluing human life.
In the beginning of the 20th century we tried to move West...Railroad
construction began in Russia, and Western entrepreneurs began
to take part in the work. And then in 1917 we went back to the
East again. Again human life lost all value for us. For us the
West means a high value on human life, for us the West is civil
rights. For us the East is the lack of civil rights, and as
a result, no value on the human life. Please understand that
this has nothing to do with property. Property is a separate
thing; it can be decided one way or another. We're talking about
whether we will have a society with civil rights or without
civil rights. I don't know how serious a choice that seems to
you, but for me, as a citizen of my country, it is a very serious
So which direction are we moving in now, to the East or
to the West?
We're moving towards solving the problem. We dealt with one
issue in 1996, whether or not to have private property or not
to have private property. ... And now we come to this issue. And
I'm absolutely convinced that this issue will be before our
citizens at the 2008 election.
Today it is impossible to say where we are going, East or
West. Part of our society is moving East and part of it is moving
West. Society cannot split apart, we have a unified country,
we don't have any place were we can separate. So we must come
to a consensus within our society. But whether it will be an
authoritarian consensus or a democratic consensus cannot be
As far as politics, what do you think was [exiled oligarch
Boris] Berezovsky's mistake? Why is he outside the country [recently
granted political asylum in Britain] and why can't he operate
Berezovsky is the type of person who already lost interest
in business. He was interested in politics, but continued to
do business. And he created a lot of very difficult contradictions
for himself. Then, the mistakes that he made, he made them as
a politician, in my opinion. I don't want to go over them now.
You can be involved in business, you can be involved in politics,
but you cannot simultaneously play well on both fields. There
is always a choice.
Are you involved in politics?
I'm without a doubt involved in lobbying for the interests
of the company at the State Duma [parliament]. As a citizen
I support one or another political power, which I talk about
publicly. Myself personally, I am not involved in politics.
I have not taken part in a political process. You understand
that it is one thing to financially support people who have
similar views, and a different thing entirely to take part in
a political process yourself. One demands money, and I as a
person have it; another demands time and mental energy, which
I as a head of a company do not have. ...
Read more about Mikhail Khodorkovsky
in "How to Make a Billion Dollars"
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