Khodorkovsky case a ‘complete farce’: lawyer

Reuters Analysis: A court sentence on ex-oil tycoon Mikhail Khodorkovsky will hurt Russia's international reputation and endanger its relations with major trading partners, possibly discouraging investment in an economy which needs modernizing.   

Khodorkovsky, who fell out with the Kremlin, faces six more years in jail after a judge sentenced him on Thursday for theft and money-laundering in a ruling which German Chancellor Angela Merkel said appeared to be politically motivated.   

The U.S. State Department said the case "appears to be an abusive use of the legal system for improper ends" while a senior Obama administration official said the sentencing would complicate Russia's bid to join the World Trade Organization.   

The court's decision also passes a longer-lasting and perhaps more fundamental verdict on the leadership of Prime Minister Vladimir Putin and President Dmitry Medvedev.   

The widely-expected sentence casts serious doubt on Medvedev's promises to boost the rule of law and on his will or power to reform state institutions as the emerging economy hungrily seeks foreign investment.   

For analysts and investors alike, it undercuts any optimism about progress on problems such as corruption, which Western executives describe as the biggest barrier to doing business in Russia. It may raise questions about Medvedev's ability to follow through on a modernization drive to diversify Russia's economy away from oil and gas and toward high-tech investment.   

Medvedev, steered into the presidency by his predecessor Putin in 2008, has made a range of promises to remedy problems facing the country, although he has yet to make much headway on fulfilling any of them. Putin and Medvedev say they share the same goals for Russia, but Medvedev has emphasized modernization, the rule of law and civil society.  

The sentence may have implications for relations with the European Union, Russia's largest trade partner.   

The British Foreign Office voiced concerns earlier this week about the need for a transparent judicial system for UK investors in Russia, possibly threatening bilateral trade, which is expected to be around $10 billion US in 2010.   

UK companies accounted for $19.4 billion of the $262.6 billion in investment that Russia has attracted since the 1991 Soviet collapse, making Britain the country's fifth largest investor. Prime Minister David Cameron is due to visit Russia in 2011.   

Khodorkovsky's sentence has the potential to damage newly strengthened ties with the United States. Earlier comments on the case from Secretary of State Hillary Clinton and the White House caused Russia to fire back a tersely-worded statement this week, telling the West that it should mind its own business and stop meddling in Russia's affairs.   

Medvedev and his U.S. counterpart Barack Obama have hailed a "reset" in relations, supported by the signing of a landmark nuclear arms pact, after ties fell to a post Cold War low during Russia's five-day war with pro-western Georgia in 2008.   

The Khodorkovsky sentence could give Russia critics in Washington ammunition against further rapprochement with Moscow. 

The sentence will be attributed to the will of Putin, whose personal rivalry with the oil tycoon -- including Khodorkovsky's 2003 arrest -- marked his 2000-2008 presidency.   

Kremlin critics cast Khodorkovsky's original 2005 conviction as retribution for publicly challenging Putin on issues including corruption, and for using his massive oil revenues to fund opposition groups.  

Putin, who is widely seen as Russia's top decision maker, often weighed in on the Khodorkovsky case during the recent trial while Medvedev refrained from commenting, leaving analysts to ponder the president's ability to make decisions on important issues.  

Analysts say the decision provides few clues about whether Medvedev or Putin will run for president in 2012, but it suggests Putin will retain ultimate power in either case.   

It also sidelines Khodorkovsky, who became a prominent Putin critic and had previously shown political ambition, for parliamentary elections late in 2011 and the 2012 presidential vote. Both Putin or Medvedev have hinted they may run for president but said they will decide together which of the two will stand.   

Although unlikely, the sentence does not rule out a pardon by Medvedev, which would be the boldest move of his presidential career. This would show yet unseen ambition from a leader who most Russians believe is happy to play second fiddle to Putin.