To ease investment jitters, Medvedev allies float Khordorkovsky release

After serving a seven-year sentence, Russian former oil tycoon Mikhail Khodorkovsky is on his way back to a Siberian penal colony following an additional sentence of six years by a Moscow court last month. Yet signals from the Kremlin Wednesday suggest that President Dmitry Medvedev might be mulling the risks of freeing him.

One sign is from an interview with the Kremlin's top economic adviser, Arkady Dvorkovich, who told the online newspaper Gazeta.ru that the controversial second sentence meted out against the politically disobedient ex-billionaire could chill Russia's troubled investment climate.

"I think a large part of the international community will have serious questions, and the risk assessment of working in Russia will increase," Mr. Dvorkovich is quoted as saying.

Analysts point out that Dvorkovich is a staunchly loyal Medvedev man, who is unlikely to go off script – especially on an issue that has explosive implications for the open struggle between Medvedev and Prime Minister Vladimir Putin over who is to be the Kremlin presidential nominee in elections that are just over a year away.

Another sign Wednesday is a column by Gleb Pavlovsky, a longtime Kremlin adviser, posted on the state-run English-language TV network Russia Today's website that calls the Khodorkovsky verdict "excessively cruel" and openly doubts that the court was acting independently.

"These signs reveal an uneasiness among Russia's top elite about the Khodorkovsky case," says Sergei Strokan, a columnist with the liberal Moscow daily newspaper Kommersant. "There is a feeling that this case is getting too big, and it's not going to go away unless, maybe, something about it gets changed."

After coming to power a decade ago, Mr. Putin singled out Khodorkovsky for prosecution after he, almost alone among Russia's top business leaders, refused to stop funding political opposition and civil society groups.

Khodorkovsky's oil empire, Yukos, was dismantled and parceled out among state-owned firms, primarily the Kremlin's oil company Rosneft. When his first seven-year sentence was due to expire, Khodorkovsky was brought back to Moscow for a controversial second trial on charges that legal experts say contradict the first set of charges on which he was convicted.

Experts say Putin's personal hostility remains the central reason for Khodorkovsky's ongoing incarceration, a view corroborated by a 2007 US diplomatic cable about the case released last month by WikiLeaks. Some suggest that the signs could mean that Medvedev may be about to break with Putin, perhaps by announcing clemency or a sentence reduction for the former tycoon.

"I do think Dvorkovich's position is a certain signal," says Alexei Makarkin, director of the independent Center for Political Technologies in Moscow.

"Pardoning Khodorkovsky is politically impossible right now ... but we may find that the decision of the court last month is not final, that something may yet be changed. It may also be that the damage wrought to Russia's economic prospects by the Khodorkovsky case is more substantial that the authorities had previously thought."

Claims that the Khodorkovsky verdict has negatively affected Russia's foreign investment standing appear to be contradicted by last week's announcement of a $7.8-billion Arctic oil exploration deal, which was brokered by Putin, between Rosneft and the British petroleum giant BP.

A 2008 US diplomatic cable released Tuesday by WikiLeaks shows that BP has been courting Rosneft for years, despite that company's close links to the Kremlin and deep involvement in seizing Khodorkovsky's assets.

But if Medvedev wants to look like a viable candidate for reelection, he needs to do something to break decisively with Putin, his powerful predecessor and likely rival for the job, experts say.

"As the presidential election nears, Medvedev needs to take some strong positive positions in order to step out from the shadow of the prime minister," says Mr. Strokan. "So far he's going nowhere, and all polls show that the public regards him as secondary to Putin. His political support lags far behind, and Putin seems to outmaneuver him at every turn. Time is running out for Medvedev to do something to distinguish himself."