Khodorkovsky Flees to Berlin After Decade in Prison

Mikhail Khodorkovsky, once Russia’s richest man, is staying in a Berlin hotel after Vladimir Putin ended his 10 years in prison with a pardon.

Russia’s most famous inmate until yesterday arrived in the German capital on a private jet, according to former German Foreign Minister Hans-Dietrich Genscher, who said in a statement he assisted in obtaining Khodorkovsky’s release with the support of Chancellor Angela Merkel. The former tycoon thanked Genscher in an e-mailed statement and said he’d first focus on repaying “my debt to my parents, my wife and my children.”

The 50-year-old former owner of Yukos Oil Co. funded opposition parties before his arrest and campaigned from prison for Russia to develop a civil society. He didn’t say where he’ll go next or if he’ll settle in another country, as have several former Yukos executives. He will hold a press conference at 1 p.m. at the Museum Haus at Checkpoint Charlie in Berlin tomorrow, according to a statement on his website.

“There will be conditions attached to Khodorkovsky’s pardon, requiring him to keep a low profile,” Chris Weafer, a senior partner at Moscow-based consulting company Macro Advisory Partners, said by phone on Dec. 19.

Family Reunion

Khodorkovsky was reunited with his eldest son Pavel in Berlin today, Spiegel Online reported, citing the former businessman’s spokeswoman Olga Pispanen. His parents have also arrived in Berlin on a passenger flight from Moscow, Spiegel said.

The decision to free Khodorkovsky may help distract from international outrage that Russia has stoked on several fronts - - including its plan to enforce a ban on what it calls gay propaganda at February’s Winter Olympics. World leaders including U.S. President Barack Obama say they’ll skip the 2014 Games in the Black Sea resort of Sochi.

Putin’s move “is best understood as part of a domestic and international charm offensive ahead of the Sochi Olympics,” said Alexander Kliment and Yael Levine of the Eurasia Group, a political risk research firm. “It does not presage a fresh commitment to substantive reform of Russia’s political economy or business climate.”

Khodorkovsky will travel to Switzerland after Berlin, Spiegel Online reported, without saying how it obtained the information. He will receive a permit to travel in the Schengen area, Spiegel said. The German publication said that Israel and London are also potential destinations.

Sick Mother

Khodorkovsky’s mother has cancer and has been treated in Germany, according to Dmitry Gololobov, former chief attorney at Yukos.

“My mother is now nearly 80 years old and again facing cancer and more surgeries,” Khodorkovsky wrote in the New York Times last month. “Her son has been in jail for 10 years, and there is a high probability that we are never going to see each other outside of a prison again.”

Khodorkovsky’s son Pavel said in October that his father won’t resume his business life. Yukos was dismantled and sold at auction, mostly to state-run OAO Rosneft (ROSN), to cover back taxes. Former Yukos managers have amassed more than $2 billion of assets and cash held in two Dutch entities, which they say is intended for shareholders who lost in the Yukos liquidation. Khodorkovsky transferred his stake in the company to a business partner after his 2003 arrest.

Political Influence

Putin came to power in 2000 pledging to curb the political influence of businessmen who gained control of Russia’s resource wealth after the Soviet Union collapsed. Khodorkovsky was arrested for fraud and tax evasion at a Siberian airstrip in 2003. He has maintained his innocence, saying the cases against him and Yukos are retribution for financing opposition parties, an accusation the Kremlin has denied.

“I think after he’s free, Khodorkovsky will concentrate on caring for his family and mother,” Gololobov, the attorney, said by phone from London, where he now lives. “He’ll drop out of the public eye. He won’t speak out against Putin.”

Getting back some of a fortune once estimated at $15 billion would be tricky. Khodorkovsky ranked 16th on the Forbes billionaires list in 2004.

Rosneft, which has grown into the world’s largest publicly traded oil company by output, isn’t concerned about any attempts by Khodorkovsky to regain former Yukos assets or lawsuits filed by ex-managers, Igor Sechin, the state-run oil company’s chief executive officer and a former Putin deputy, told reporters yesterday. A group of former executives that has kept management of Yukos assets outside Russia has won some cases against Rosneft.

No Risks

“We don’t see any risks for the company,” Sechin said. “The fact that Mikhail Borisovich sought a pardon improves the legal basis to defend our interests in court.”

Sechin said he had few concerns about the man himself and would even consider a job application from Khodorkovsky, although all top management slots at Rosneft are filled.

“Mikhail Borisovich is an experienced, creative man,” he said. “He’ll put his talents to use.”

In 2004, Khodorkovsky transferred his stake of more than 60 percent in Group Menatep Ltd., which held about 40 percent of Yukos, to business partner Leonid Nevzlin. Nevzlin fled a murder charge in Russia and is now living in Israel.

Former Yukos managers are holding onto proceeds from the $1.5 billion sale of Yukos’s stake in Lithuanian refiner Mazeikiu Nafta AB to PKN Orlen SA and the $240 million sale of Transpetrol AS back to the Slovakian government. They’ve also won cases against Rosneft in the U.K. and the U.S. to recover more than $600 million in loans granted to Yukos units before the state-controlled company bought them at auction.

‘Moved On’

“My father has moved on,” his son said in an October interview with the BBC. “He wants to be with his family.”

Khodorkovsky’s pardon came less than two months before Russia hosts the Winter Olympics. It follows an amnesty this week, during the 20th anniversary of the nation’s constitution, that applies to as many as 22,000 people. Among those slated for release are two members of the all-female punk band Pussy Riot imprisoned after performing a “punk prayer” protesting Putin in Moscow’s main Orthodox cathedral in February 2012.

Putin’s opponents aren’t taking Khodorkovsky’s pardon as evidence the president is softening, and the imprisoned former billionaire has had the threat of additional charges held over his head.

“I’d rather bet my money on political strategy and the Olympics than on softness in old age” as Putin’s motive for the pardon, said Sergei Guriev, a former adviser to Prime Minister Dmitry Medvedev. Guriev fled to Paris in April after two months of interrogation over a case involving Yukos.

“I’m very surprised and happy for Khodorkovsky,” Guriev said in an e-mail yesterday. “As for me, I will stay in France.”

To contact the reporters on this story: Jake Rudnitsky in Moscow at jrudnitsky@bloomberg.net; Irina Reznik in Moscow at ireznik@bloomberg.net

To contact the editors responsible for this story: John Walcott at jwalcott9@bloomberg.net; Stephen Voss at sev@bloomberg.net

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