On 8th December 2008 following a private meeting the Russian President Dmitri Medvedev nominated Nikita Belykh, a well known Russian liberal politician and former leader of the Russian liberal party the Union of Right Forces for the post of Governor of the Kirov Region in central Russia. Belykh’s subsequent appointment set in train a sequence of events which on 18th July 2013 led to the conviction by the Kirov Regional Court of Aleksei Navalny, the well known Russian opposition politician and blogger, for conspiracy to commit embezzlement contrary to Article 160 of the Criminal Code of the Russian Federation.
Navalny’s conviction and his sentence of 5 years imprisonment, has provoked angry reactions. In Moscow several thousand of his supporters protested near the Kremlin. Scattered protests also took place in some other Russian cities. The United States government has expressed its “disappointment” with the verdict. The European Union has said the case highlights concerns about the rule of law in Russia. The rapporteurs of the Parliamentary Assembly of the Council of Europe have condemned his 5 year sentence as disproportionate and have claimed that his prosecution is political.
Media comment at least in Britain has been equally harsh. In an editorial suggestively titled “misrule of law” published on 11th July 2013, a week before the verdict, the Guardian claimed that Navalny’s prosecution was a device to silence a prominent critic of the Russian government saying that “….it goes without saying that the charges are bogus”.
Similar comments have appeared in the Times and in the Financial Times.
Navalny himself has claimed that the prosecution against him is politically motivated. He has claimed that the prosecution against him betrays a fundamental ignorance of how business is conducted in a free market economy. He has also claimed that the prosecution is entirely based on the evidence of three persons who have a personal grudge against him and whose evidence is unreliable.
Navalny’s criticisms have been taken up by others. The charge against him is said to make no sense. Yegvenya Albats, the editor of the Russian liberal magazine New Times, says his conviction spells the end of capitalism in Russia. It is repeatedly pointed out that the case against Navalny was investigated previously but was then dropped. That it was later resurrected is seen as proof that it is without merit and that the motive behind it is political.
It has also been pointed out that the case against Navalny was only resurrected by the Russian Investigative Committee at the personal insistence of Bastrykhin its chief whom Navalny has accused of illegally owning property in the Czech Republic. Navalny’s prosecution is said to Bastrykhin’s revenge.
Support for these claims is said to be provided by certain comments made shortly before the trial by Vladimir Markin the spokesman of the Investigative Committee.
The purpose of this essay is to examine in detail the facts of the case and the conduct of the trial to determine whether any of these claims and criticisms are true.
The Kirov Region is situated in central Russia along the river Vyatka. It is one of the poorer regions of Russia. The capital Kirov, like the Region, has retained the name it was given in the 1930s by the Soviet government commemorating the murdered Soviet politician Sergei Kirov. Its pre revolutionary name was Vyatka.
Wikipedia lists timber as one of the main industries of the city of Kirov. In 2008 at the time of Belykh’s appointment the timber industry in the Kirov Region was concentrated in a publicly owned enterprise known as KirovLes whose director was Vyacheslav Opalev. KirovLes’s owner was the state property fund of the Kirov Region. Its manager was a certain Arzamatsev. I am not sure whether Arzamatsev was a local civil servant or a career official or whether he was also appointed to his post by Belykh.
KirovLes’s financial health at the time of Belykh’s appointment is the subject of dispute. Belykh and Navalny claim its financial situation was bad and that it was heading for bankruptcy. Karnaukhov, a local official with knowledge of KirovLes, argues its financial condition was sound. I think far too much time and effort has been devoted to this question, which is of no importance.
KirovLes is an amalgam enterprise and collective. It possessed a distinct legal personality and was vertically structured with Opalev as director in charge of the whole. However it functioned as a federation of local collectives or enterprises (“levkhozy” – henceforth referred to as “filials”) under Opalev’s overall control but nonetheless allowed considerable operational autonomy and able to contract directly with customers.
Belykh brought with him to the Kirov Region a group of his own advisers. The best known was probably Maria Gaidar, the daughter of Yegor Gaidar who as Acting Prime Minister of Russia in the early 1990s was responsible for Russia’s transition to capitalism. Maria Gaidar had condemned Belykh’s appointment as “selling his soul to the Devil”. Obviously she quickly changed her mind. In July 2009 she was formally appointed Deputy Governor of the Kirov Region.
Others brought by Belykh to the Kirov Region to act as advisers included an individual known as Votnikov and Navalny himself.
The precise status of Belykh’s advisers was clarified by Belykh himself, by his deputy Sherchkov and by Maria Gaidar over the course of Navalny’s trial. The advisers were unpaid and worked on a voluntary (“pro bono”) basis. Their role was advisory. They were not authorised to make executive or management decisions. Navalny as adviser did not have his own office. Most of his meetings were held in Sherchkov’s office. At some point Navalny was offered a paid post with the Kirov Regional Government but turned it down.
Navalny’s status as an adviser to Belykh is clear but I cannot say the same for his remit (ie what he was supposed to do) about which I continue to be confused. I do not know whether Belykh ever gave Navalny a document setting out his duties and the tasks he has been assigned. Perhaps he did but as I have never heard of such a document being produced at the trial perhaps not. It seems Navalny was given some sort of general brief to review and “analyse” conditions in the local timber industry and other industries and “to propose solutions”. As will become clear Navalny interpreted this vague remit as a licence to meddle in the most detailed decisions, which fell completely outside his competence as an unpaid adviser. If Navalny behaved like a loose cannon and if subsequent events bear a passing resemblance to a tale from Gogol much of the blame rests with Belykh for his failure to supervise Navalny and his other subordinates properly.
Whatever the precise nature of Navalny’s remit it is clear that it concerned KirovLes. It is also clear that KirovLes over time became one of his main if not his main concern. At the time Navalny was a relatively young man in his early thirties. Nothing about his past up to that point marks him out as a person obviously competent to analyse the timber industry in the Kirov Region or “to propose solutions” for its problems. Navalny had trained as a lawyer and had dabbled in various business ventures. However he had no senior or professional management or consultancy experience or expertise. Certainly he had no experience of the timber industry. Navalny had however achieved a certain prominence in Russian liberal politics. He seems to have made the acquaintance of some well known liberal politicians and personalities possibly including the former world chess champion Gary Kasparov, the economist Sergei Guriev and Belykh himself. It seems likely that his appointment (like that of Maria Gaidar) was the result of his political connections.
Whatever the reasons for his appointment Navalny’s conduct in his post suggests someone either indifferent to his assigned task or seriously out of his depth. I have seen no evidence that he made a serious effort to study KirovLes and its problems. He did meet with Opalev but there is nothing to suggest that he acquainted himself with KirovLes’s staff or its business to any great extent. It turned out during the trial that most of KirovLes’s senior managers or at least the managers of the filials either could not remember him or were unacquainted with him. There were some suggestions during the trial that KirovLes’s problems were due to uneconomic rents it was receiving from its forests. If so there is nothing I have heard to suggest that Navalny was interested in this problem or offered any solutions for it. At a much later date he did try to get Deloitte to undertake an audit but the circumstances in which this happened are heavily bound up with his case and are not in his favour. I have heard nothing to suggest that he proposed anything remotely resembling a fully researched and properly costed business plan for KirovLes or that he ever presented such a plan to Opalev or Arzamatsev or Sherchkov or Belykh or that he ever set out in detail on paper any of his ideas. I have seen it suggested that there was a plan to break up KirovLes, which Belykh might have supported. If such a plan existed it has never so far as I know been made public.
The Prosecution Case
The prosecution case is that Navalny did not carry out his remit, such as it was, but that together with an associate of his called Pyotr Ofitserov that he organised a conspiracy with Opalev to acquire KirovLes’s timber at 7% below its true price for resale for their mutual profit mainly to KirovLes’s own customers. The timber was formally acquired by Ofitserov’s company the Vyatka Timber Company (henceforth referred to by its Russian initials “VLK”), which in turn sold the timber at its true price to its own customers most of whom had previously been KirovLes’s customers.
Opalev by his own account initially opposed this arrangement but was eventually brought round by a mixture of threats and offers to share in the expected profits. In order to put the arrangement into effect Opalev issued an order to the filials that VLK was to be given a first or exclusive or preferential (it is unclear to me which) right to buy timber from KirovLes at a price below its true price.
Opalev’s stepdaughter Maria Bura was given a post within VLK at the same time as she continued to work for KirovLes despite the obvious conflict of interest, presumably as a gesture of goodwill to Opalev and possibly so she could protect his interests inside VLK and provide VLK with some much needed expertise of the timber industry.
It is important to say however that neither Navalny nor Opalev ever formally owned shares or held any formal position in VLK.
The venture only survived for about four months. Despite Opalev’s order it was unpopular with the filials, who appear to have largely disregarded it. Notwithstanding the low price it paid for the timber VLK failed to trade at a profit. An audit commissioned by Arzamatsev, the head of the Kirov Region’s property fund, reported that the arrangement was harmful to KirovLes.
Navalny attempted to defend the arrangement. He sought to discredit the audit by attempting without success to bring in Deloitte to carry out another audit. He also sought to dismiss Bastrygina, an executive in KirovLes’s accounts department who was involved in the audit. He briefly engineered Opalev’s dismissal with whom he had by this time seriously fallen out.
Navalny’s efforts in the end proved unavailing. As more and more questions piled up he suddenly fled the Kirov Region for Moscow leaving behind him a pile of unanswered questions and Ofitserov high and dry. I believe he never returned to the Kirov Region until his trial.
The Charge – Embezzlement contrary to Article 160 Russian Criminal Code
Assuming the prosecution’s account to be true do these facts describe a crime?
The prosecution charged Ofitserov with embezzlement of 16 million roubles (approximately $500,000) worth of timber bought by VLK from KirovLes at a discounted price and resold by VLK at a market price mainly to KirovLes’s own customers. The charge against Navalny was that he conspired with Ofitserov and Opalev to carry out this embezzlement. Opalev himself pleaded guilty and testified against Navalny and Ofitserov, being the prosecution’s star witness at the trial.
Article 160 of the Russian Criminal Code defines embezzlement as
“…..the stealing of other people’s property entrusted to the convicted person”.
There are therefore two elements:
(1) There must be a theft of property;
(2) The property stolen must have been entrusted to the thief.
Theft is defined as follows by Article 158 of the Russian Criminal Code
“…..the secret larceny of other people’s property”
Larceny is defined elsewhere in Article 158 as
“…..the unlawful, uncompensated seizure and/or the appropriation of other peoples’ property, committed with a mercenary purpose by a guilty person or by other persons, which has injured the owner or any other proprietor of this property.”
The following elements must therefore be present:
(1) An uncompensated seizure and/or an appropriation of property;
(2) Belonging to another;
(3) Which is unlawful;
(4) Is carried out with the intention of financial gain
(“a mercenary purpose”); and
(5) Which causes injury to the true owner or proprietor of the property.
This may be compared with the British definition of theft set out in Section 1(1) of the Theft Act 1968
“A person is guilty of theft if he dishonestly appropriates property belonging to another with the intention of permanently depriving the other of it; and “thief” and “steal” shall be construed accordingly”.
It is clear that despite the differences in legal and political culture the definitions of theft in Russia and Britain have many similarities.
Article 158 requires an “uncompensated seizure” and/or an “appropriation”. The Theft Act 1968 merely requires an “appropriation”. British law defines “appropriation” as an assumption of the rights of the owner of the property, specifically
“any assumption of the rights an owner amounts to an appropriation, and this includes, where he has come by the property (innocently or not) without stealing it, any later assumption of a right to it by keeping it or dealing with it as owner”.
(Theft Act 1968 Section 3(1))
It is clear from the British definition of “appropriation” that future dealing in the property including its sale by the thief is an assumption of the rights of an owner over the property and is therefore an appropriation within the definition of appropriation provided by the Theft Act 1968.
I do not possess a legal definition of the Russian word in Article 158, which is translated in the translation of Article 158 I have used by the English word “appropriation”. However the legal translation agency that has provided this translation of Article 158 has used the English word “appropriation” to translate the equivalent Russian word in the context of a legal definition of theft. This is certainly intentional. It is therefore likely that the Russian word translated by the English word “appropriation” has the same or at least a similar meaning in this context to the English word “appropriation”, which has been used to translate it.
Both Article 158 and the Theft Act 1968 require that the property appropriated must belong to another. The Theft Act 1968 requires that the thief must intend to deprive the owner permanently of the property. Article 158 does not say this though it might be inferred from its language. This is not a relevant question in Navalny’s case and I will not discuss it further.
The Theft Act 1968 requires dishonesty on the part of the thief. Article 158 says that the appropriation must be “unlawful”. Article 158 also refers to “the guilty person”, which may indicate that theft under Article 158 also requires dishonesty. I shall presume it does.
Article 158 requires that the thief must have a “mercenary intention” ie. an intention to profit financially from the theft. This differs from the position in the Theft Act 1968 where there need be no such intention
“it is immaterial whether the appropriation is made with a view to gain, or is made for the thief’s own benefit”.
(Theft Act 1968 Section 1(2))
Article 158 requires that the owner suffers an injury as a result of the theft. I am not sure whether “injury” means financial loss but I shall assume it does. This is not an issue in Navalny’s cases. The Theft Act 1968 makes no such provision. What it does say is that the fact the thief intends to compensate the owner does not prevent the appropriation from being dishonest
“A person’s appropriation of property belonging to another may be dishonest notwithstanding that he is willing to pay for the property.”
(Theft Act 1968 Section 2(2))
How do these definitions square with the facts in the case against Navalny as the prosecution describe them?
Timber belonging to KirovLes to the value of 16 million roubles was acquired by VLK. VLK treated the timber as its own by selling the timber to its customers most of whom had previously been KirovLes’s customers. There was therefore an acquisition by VLK of KirovLes’s property.
Was this acquisition “unlawful” and/or “dishonest”? The prosecution say VLK acquired the timber for less than its value because Opalev, KirovLes’s director, after being threatened and bribed by Navalny and Ofitserov, entered into a corrupt arrangement to transfer KirovLes’s timber to VLK for less than its true price. If so then this was certainly “unlawful” and “dishonest”.
Did the timber still belong to KirovLes after VLK acquired it? A corrupt transfer of timber for less than its true value made “unlawfully” and “dishonestly” as part of a corrupt arrangement agreed in secret by three individuals would not transfer ownership of the timber from KirovLes to VLK. The timber would still be KirovLes’s property. Since VLK sold the timber to third parties after it acquired it there was clearly an assumption by VLK of the rights of the owner over the timber and an intention to deprive KirovLes permanently of the timber.
At this point all the elements for theft required by the Theft Act 1968 are present. In Britain the facts set out in the prosecution’s case amount to theft.
Article 158 adds two further elements. The thief or thieves must have “a mercenary intention” (ie. an intention to make a financial gain from the theft) and the owner (in this case KirovLes) must suffer injury.
The prosecution say Navalny, Ofitserov and Opalev did intend to profit from the theft. As to the injury suffered by KirovLes, the prosecution refer to the financial loss KirovLes suffered from being deprived of 16 million roubles worth of timber for less than its true value.
In conclusion if the prosecution’s account of the case is true all the elements of theft are present whether British or Russian law is applied.
The charge against Navalny was not theft under Article 158 but conspiracy with Ofitserov and Opalev to commit embezzlement of KirovLes’s timber under Article 160. The charge against Ofitserov was embezzlement of KirovLes’s timber under Article 160. The difference in the way Navalny and Ofitserov were charged is due to the fact that Ofitserov was the owner of VLK, the company which actually acquired the timber, whilst Navalny had no share or formal role in VLK.
In Britain the common law offence of embezzlement has been absorbed into the offence of theft. In Britain this would be a simple case of theft. Since the three persons involved (Navalny, Ofitserov and Opalev) acted together there would be no need to complicate the case by introducing the issue of conspiracy. Navalny and Ofitserov would be charged with theft.
Russian law still distinguishes between embezzlement and theft. I am not familiar with Russian jurisprudence on the subject of embezzlement. On a simple reading of Article 160 it is however clear both elements required by Article 160 are present. There was a theft as defined by Article 158. The property stolen was at various times in the trust of Opalev and Ofitserov, two of the persons involved.
In fact there have been multiple breaches of trust. Opalev as KirovLes’s director was in a direct position of trust both as regards KirovLes and as regards its timber. Navalny was in a special position of trust as an adviser to Belykh who was supposed to analyse KirovLes and provide solutions to its problems. Ofitserov had an intimate connection to KirovLes that went beyond that of a mere customer. Both Navalny and Ofitserov knowingly acted in a way that caused Opalev to breach the trust he owed KirovLes by knowingly disposing of its timber in his charge in a way that fulfils the definition of theft. Since there was no lawful transfer of property in the timber to VLK, the timber remained KirovLes’s property even after it was acquired by VLK. Ofitserov by disposing of the timber through his company VLK was unlawfully appropriating timber that was not his or VLK’s and which was therefore in his trust. Navalny conspired with both Opalev and Ofitserov to steal the timber in ways that caused them to breach their trust. It is clear that all the elements required for embezzlement as set out in Article 160 are present.
The facts the prosecution allege do therefore describe a crime. That crime would in Britain be theft as defined by Section 1(1) of the Theft Act 1968. In Russia the crime is embezzlement as defined by Article 160 of the Criminal Code of the Russian Federation. Claims the case against Navalny makes no sense are obviously wrong.
Objections to the Charge
There are two objections to the charge of embezzlement under Article 160 both of which have been extensively discussed on the internet though less so in the trial itself. These are
(1) that a charge of embezzlement of 16 million roubles worth of timber makes no sense when KirovLes’s alleged loss was just 3 million roubles, this being the difference between the amount VLK paid KirovLes for the timber (13 million roubles) and the amount for which VLK sold the timber mostly to KirovLes’s own customers (16 million roubles); and
(2) the somewhat related claim that this was a case where the charge should have been for property damage caused by deceit or abuse of trust under Article 165 of the Criminal Code of the Russian Federation, this being a significantly less serious offence than the offence of embezzlement under Article 160. Again this tends to be argued on the basis of the limited extent of the actual loss suffered by KirovLes.
(1) 3 million or 16 million roubles?
Wisely, rather than engage in a discussion of principles, the prosecution simply answered this objection by referring to a Judgment of the Supreme Court of the Russian Federation that dealt with questions of the theft of state property and which made clear that in all cases pertaining to the theft of state property the measure to be used for the theft is the total value of the property stolen irrespective of whether any lesser amount of compensation has been purportedly paid for it.
The Judgment is binding on inferior courts including the one that tried Navalny. For the purpose of the case it resolves the question. Since KirovLes was a publicly owned company there is no doubt the Judgment of the Supreme Court of the Russian Federation applies to the case.
The Supreme Court Judgment states the obvious. Navalny and Ofitserov were prosecuted for the theft of timber from KirovLes. The figure of 16 million roubles is simply the value of the timber they stole. This figure should not be confused with the completely different figure, which is the value of the injury this caused KirovLes. It is immaterial to the value of the timber stolen that VLK paid a sum to KirovLes for the timber, which was actually less than what the timber was worth. What that does is determine the value of the injury to KirovLes the theft of the timber caused. To argue for the prosecution of a thief on the basis of the value of the loss the theft has caused as opposed to the value of the goods stolen is to say that a jewel thief should not be prosecuted for the value of the stolen jewels because the jewels were insured and the owner has been compensated by the insurers for the theft and is also relieved of the future burden of paying premiums.
(2) Article 160 or Article 165?
The offence created by Article 165 of the Criminal Code of the Russian Criminal Code reads:
“Infliction of property damage on its owner or on any other property holder by deceit or breach of trust, in the absence of the elements of stealing”.
The wording of the offence set out in Article 165 says the offence arises “in the absence of the elements of stealing”. “The elements of stealing” are all present in Navalny’s case (see above). Subtracting the facts from the case that create “the elements of stealing” (the unlawful appropriation of timber belonging to KirovLes) takes away those facts that create the wrongdoing. The presence of the words “in the absence of stealing” mean that Article 165 has no application to Navalny’s case.
Article 165 is one of the Articles in Chapter 21 of the Criminal Code of the Russian Federation, which concern Crimes against Property. Articles 158 to 162 and Article 164 in Chapter 21 all concern offences of stealing. Article 163 covers extortion, Articles 167 and 168 offences involving destruction of property and Article 166 the unlawful occupancy of a motor vehicle without the purpose of stealing. It is clear that Article 165 falls within the Articles in this Chapter that are not concerned with offences of stealing. Since it is precisely theft which is the essence of the offence in Navalny’s case Article 165 has no application to it even if the words “the absence of the elements of stealing” were not present.
Article 165 says the offence involved is one of property damage caused by deceit and/or abuse of trust. Property damage should be distinguished from Economic Activity the crimes concerning which are listed under Chapter 22 of the Criminal Code. Article 165 might conceivably cover a person who has borrowed a friend’s car and who driving it recklessly crashes and damages it. However, more prosaically, Article 165 may be intended to deal with the fiddles, fake expenses claims and other types of loss and property damage commonplace within companies and organisations. Regardless of whether this is so or not Article 165 has no application to Navalny’s case and there are no grounds to say that the charge under Article 160 was not correctly made out and should have been brought under Article 165 instead.
The prosecution’s case against Navalny and Ofitserov is based on the following evidence:
(1) The evidence of Opalev;
(2) The evidence of other witnesses;
(3) The relationship between Navalny and Ofitserov as confirmed by taped telephone conversations and emails between them;
(4) The actual dealings between KirovLes and VLK.
(1) Opalev’s Evidence
In an outburst during the trial Navalny said the “whole case” against him came down to the testimony of just three witnesses: Opalev, Bastrygina and Bura. That is an exaggeration. However of the importance of Opalev’s evidence there is no doubt.
Opalev is one of the three individuals who the prosecution say was part of the conspiracy to embezzle KirovLes’s timber. As KirovLes’s director he was arguably the key figure in the conspiracy. Without his involvement the embezzlement could not have happened. Opalev’s evidence confirming the existence of the conspiracy and providing details of the embezzlement effectively substantiates the prosecution case. Any attempt to argue for Navalny’s or Ofitserov’s innocence must do so by discrediting Opalev as a witness.
Navalny has attempted to discredit Opalev as a witness by claiming that Opalev bears him a grudge because he sought to get Opalev sacked from his post as director of KirovLes and did in fact briefly succeed in doing so.
Opalev may indeed bear Navalny a grudge. However for this grudge to explain his evidence it must be a grudge so powerful that it has led Opalev to plead guilty to a charge of embezzlement of which if his evidence is untrue he must be innocent, which comes with a four year suspended sentence with all that means for Opalev’s reputation and future career, so that he can go to Court and falsely claim Navalny conspired with him to steal timber from his own company. Nothing I have heard about Opalev suggests such a fanatical personality. Accounts I have heard of his demeanour at the trial suggest on the contrary a broken and defeated man.
Of course there are some who go further and believe Opalev was either pressured or put up to it by the authorities as part of a plot against Navalny. No evidence for that came to light in the trial. Opalev was subjected to a tough cross examination by Navalny himself. If Opalev really was acting out a grudge or if he really had been put up to it or pressured into it by the authorities that fact would surely have slipped out. As it was, though Opalev came across at times as vague and confused, which is not surprising given what he has been through, in the end he stood by the essentials of his story and said nothing that might suggest either that he had made the whole story up to act out a grudge or that he was pressured or put up to do it by someone else.
It has been said that Opalev when giving evidence at times contradicted himself. None of the alleged contradictions however undermine his basic story. It is only in fiction that witnesses recall deeply distressing events that happened years before with perfect recall. When this appears to happen in real life more often than not it is a sign that the witness’s evidence has been rehearsed and that the witness is lying.
It is for the Judge to assess the reliability of a witness. The Judge in this case assessed Opalev’s evidence as reliable. He said there was nothing to suggest that Opalev was not telling the truth. I see no reason to question that assessment.
(2) Other Witnesses
The evidence of the other witnesses added little and I will not devote much time to it.
Bura and Bastrygina, the two other witnesses Navalny had in mind along with Opalev when he said the case against him was based on the evidence of just three people, were not members of the alleged conspiracy and could say nothing about it. Bura, Opalev’s stepdaughter, unsurprisingly gave evidence in line with her stepfather’s. However she was hardly in a position to know very much about what had gone on in private between Opalev, Navalny and Ofitserov though she did provide some corroboration for Opalev’s account of the sale of timber to VLK and its subsequent resale by VLK.
In the absence of Arzamatsev , who is on the run from the police on an unrelated charge, Bastrygina gave evidence about the audit Arzamatsev commissioned, which exposed the loss KirovLes suffered from the arrangement with VLK. Navalny is particularly hostile to Bastrygina (as he was at the time of the audit) and believes that she too bears him a grudge. He subjected Bastrygina to a day of exceptionally tough cross examination, on more than one occasion bringing her close to tears. However she stood by her story, which is the same story she told four years ago at the time the audit took place.
Navalny also ascertained under cross examination that many of the directors of the filials and KirovLes’s and VLK’s customers had either no or only the vaguest memory of him and of the events that took place. As these events happened four years ago that is unsurprising. These witnesses had their faulty memories refreshed or supplemented by their witness statements.
Belykh along with Sherchkov and Maria Gaidar – the latter giving evidence for the defence – provided clarification of Navalny’s status as an unpaid adviser. Belykh as Governor said that he had been provided with no information that Navalny’s activities had done the Kirov Region any economic damage but admitted that this was a matter for the state property fund and that he had no informed knowledge of the matter. These elliptical not to say evasive comments were seized on by Navalny’s supporters as somehow supporting Navalny though in truth they do nothing of the sort.
Votnikov, another of Belykh’s advisers, gave evidence that seemed to be mainly about Opalev’s inability to adapt to changes in market conditions despite his undoubted abilities as a production manager. I cannot see the relevance of this evidence. However it turned out that Votnikov is serving a prison sentence for taking a bribe from Opalev. I am told this bribe was a form of protection money Votnikov extorted from Opalev in return for Votnikov protecting Opalev from Navalny. If this is true then it may provide some corroboration for Opalev’s story and shows the pressure he was coming under from Navalny. However I am not sure it is true and it does not prove the case against Navalny even if it is true. On the contrary it might show that Opalev needed protection from Navalny because he had something to hide from Navalny and was up to paying bribes to hide it. I know next to nothing about this case and I will not comment about it further.
Overall apart from further confirming the chaotic state of the administration of the Kirov Region on Belykh’s watch with Votnikov in prison, Arzamatsev on the run and Opalev with a four year suspended sentence to add to the case against Navalny and Ofitserov, I do not think the evidence of these witnesses adds very much. To the extent that it does anything this evidence tends to corroborate Opalev’s story. Accounts I have heard of the final Judgment suggest that whilst the Judge carefully went through this evidence as he is required to do he gave little weight to it except in so far as it corroborates the other evidence in the case.
(3) The Relationship between Navalny and Ofitserov
Navalny and Ofitserov insist that they each came to the Kirov Region independently of each other. Ofitserov’s account is that he was moved to do so on hearing a broadcast by Belykh calling on people of goodwill to come to the Kirov Region to help turn it round. When he arrived he found Navalny there.
This may seem unlikely but it is not impossible. Belykh’s appointment as Governor of the Kirov Region was unexpected and did cause something of a stir in Russian liberal circles. Ofitserov is a liberal having previously been like Navalny a member of Yabloko, Russia’s largest liberal party. It is not impossible that he was seized by the enthusiasm of the moment. I do not know to what extent if any Navalny and Ofitserov were acquainted with each other before they came to the Kirov Region. Even if they did know each other the world of Russian liberal politics is small so it is not impossible that any two prominent Russian liberals drawn to the same place would already know each other.
However from this point on Navalny’s and Ofitserov’s account descends from the merely unlikely to the increasingly improbable and eventually to the completely incredible.
Navalny and Ofitserov both insist that Navalny played no role in introducing Ofitserov to Opalev and in setting up the arrangement with VLK. Supposedly Ofitserov and Opalev came together and set up the whole arrangement by themselves without Navalny being involved.
This of course contradicts what Opalev says, which is that it was Navalny who engineered the whole thing. The Judge preferred Opalev’s account and it is not difficult to see why.
Navalny’s and Ofitserov’s account fails to explain why Opalev, someone whom Votnikov has described as an experienced enterprise director, should agree without prompting to enter into an arrangement with Ofitserov, an individual with whom he was entirely unacquainted, who had no previous background or history in the timber trade and who if he did ever provide Opalev with a properly drafted and costed business plan (something I have never heard that he did) was a most unlikely candidate to carry it out.
The timber trade operates on tight margins with high running costs. It is not a business for the inexperienced or the fainthearted. Opalev of all people would have known this. That makes his agreement to enter into an arrangement with Ofitserov incomprehensible unless he felt obliged or was bribed to do it. In the event and predictably, despite Opalev’s placing Bura his stepdaughter inside VLK, possibly in order to provide VLK with someone with some knowledge of the timber industry, the arrangement was a complete failure even on its own terms. KirovLes lost on the timber acquired by VLK and VLK was unable to trade at a profit despite acquiring the timber at less than its true price.
If Navalny really was as uninvolved in setting up the arrangement between Ofitserov and Opalev and KirovLes and VLK as he and Ofitserov say then it is difficult to understand why he defended Ofitserov and the arrangement with such vehemence when it came under criticism following Arzamatsev’s audit. Taped telephone conversations and records of emails between Navalny and Ofitserov show Navalny campaigning for the dismissal of Opalev and Bastrygina, seeking to bring in Deloitte to discredit Arzamatsev’s audit and eventually fleeing to Moscow when questions about his own role started to be asked.
These telephone conversations and emails between Navalny and Ofitserov also show the extraordinary extent of the collusion between the two. In those emails and conversations Navalny discusses in extraordinary detail conversations he has with Belykh, Sherchkov and others in a way that is surely incompatible with Navalny’s position as Belykh’s adviser. He discusses his plans to dismiss Opalev and Bastrygina and for the appointment of Ofitserov to a consultative post in the local timber industry. He asks for and receives from Ofitserov information about VLK and its business. In the coarsest language he abuses and makes threats (eg. “bitch” – with specific reference to Bastrygina, “sack them”, “crush them” etc) about various persons such as Bastrygina who he comes into conflict with.
The talk is all of intrigues and conspiracies and stratagems though in fairness to Navalny and as he has himself pointed out only a selection of his telephone conversations and emails from the period have been produced and the others may show him in a better light. Regardless Navalny and Ofitserov certainly do not come across in these conversations and emails as two persons working independently of each other.
What the telephone conversations and emails also show is that it was Navalny who of the two was the one in the position of leadership. It is Navalny who comes up with ideas, who demands and provides information and who gives instructions. Ofitserov’s role is mainly passive/receptive. On one occasion Navalny instructs Ofitserov to buy a new mobile phone to prevent their conversations from being taped and to encrypt his emails. Instead of questioning these unusual (and incriminating) instructions Ofitserov simply carries them out.
Navalny has never provided a straightforward explanation for these emails and telephone conversations. The only explanation I have heard is a totally fantastic one: that he was using Ofitserov as some sort of spy or informer to discover what was really going on inside KirovLes. If this is Navalny’s explanation then I would first say that like Navalny’s other claims that Opalev and Bastrygina testified against him because they bear him a grudge, it is very much in character and reflects Navalny’s need always to represent himself as a hero battling a host of enemies, and secondly, that as an explanation it is completely fantastic. Suffice to say there is no conceivable reason why Navalny would need a spy or informer to carry out his tasks as Belykh’s adviser. Nor is there any obvious reason why that person should be Ofitserov. I have heard of no evidence that Navalny ever put such a bizarre proposal to Belykh and Sherchkov, his superiors, who would presumably have had to authorise it.
In any trial the Judge at the end of the day has to decide who is telling the truth. Given the failure of Navalny and Ofitserov to provide a simple account of their connection to each other and of Ofitserov’s dealings with Opalev it is in no way surprising that the Judge decided in the end to believe Opalev rather than Navalny and Ofitserov and to conclude that the two were acting in concert with each other. Given the facts and what the telephone conversations and emails show what would have been surprising is if he had done otherwise.
(4) Course of Dealings between KirovLes and VLK
Ultimately the strongest corroboration of Opalev’s evidence is the actual course of dealings between KirovLes and VLK. It is irrefutable that VLK paid a lower price for the timber it acquired from KirovLes and that it sold the timber at a higher price to its customers most of whom had previously been KirovLes’s customers. It is also irrefutable that Opalev made the order to the filials giving VLK some sort of advantageous position even if the extent to which this order was obeyed and its precise meaning may be open to question.
The evidence that the lower price paid by VLK to KirovLes was a price below the proper market price is provided by
(1) The evidence of Opalev, who actually set the price and who says it was 7% below the market price and that he set this price as a result of the corrupt arrangement he agreed with Ofitserov and Navalny;
(2) The evidence of the higher price paid for the timber by VLK’s customers, most of whom had previously been KirovLes’s customers;
(3) The fact that the lower price paid by VLK was noticed and questioned at the time by Arzamatsev and Bastrygina and the auditors commissioned by Arzamatsev all of whom said KirovLes’s arrangement with VLK was harmful to KirovLes.
It has never been clear to me what Navalny’s and Ofitserov’s response to all this evidence is and whether they admit or deny that VLK acquired the timber at a reduced price. The whole arrangement between KirovLes and VLK only makes sense if VLK acquired the timber at a reduced price. However towards the end of the trial the defence lawyers sought to adduce expert evidence that the price paid by VLK for the timber was the same or even higher than the price of other timber KirovLes sold to other customers at the same time. This suggests that Navalny and Ofitserov claim that VLK paid KirovLes a proper price for the timber and not a reduced price.
The obvious objection to this argument is that what is at issue in this case is not the price of timber sold by KirovLes to other customers but the price of the timber acquired by VLK. The true or market price for any product is decided through a free commercial bargain agreed by the parties at arm’s length. The corrupt arrangement Opalev describes is most definitely not a free commercial bargain agreed at arm’s length. VLK’s sale of the timber to former customers of KirovLes at a high price for which it had previously paid KirovLes a low price appears to corroborate what Opalev says and is a good reason to doubt that VLK acquired the timber from KirovLes at a proper price arrived at through a free commercial bargain agreed at arm’s length.
Arguing that VLK paid KirovLes a proper price for the timber is ultimately incompatible with the existence of the 7% discount Opalev alleges. Whether the discount existed or not is in the end a question of fact. The weight of the evidence including Opalev’s evidence, his order to the filials, Arzamatsev’s audit, Bastrygina’s evidence and above all the difference in prices paid by and to VLK, points strongly to its existence.
A complication is that Navalny and Ofitserov or at least their lawyers made arguments that at times appeared to admit the existence of the discount. For example during closing speeches one of the defence lawyers described VLK as “effectively” KirovLes’s “sales and marketing department” something which the lawyer also said “was very necessary”. This admits a relationship between KirovLes and VLK different from that between a simple buyer and seller. If so then it is difficult to see how the price paid by VLK could have been a market price in which case given the difference in prices paid and received by VLK the existence of the discount becomes unarguable.
It has been suggested that certain commercial cases brought by KirovLes against VLK in the Russian commercial or arbitrazh courts somehow show that the relationship between the two companies was a normal commercial relationship. I know nothing about these cases. However a civil claim would not normally extinguish a criminal liability and I do not see why the mere fact of these cases proves that the two companies were in a normal commercial relationship. The mere fact that KirovLes sued VLK does not show that Navalny, Opalev and Ofitserov did not steal KirovLes’s timber using VLK as their vehicle.
The Judge in the end decided that the difference in the prices paid to KirovLes by VLK and the prices paid to VLK by its customers corroborate Opalev’s claim that the lower prices paid to KirovLes by VLK were the result of the corrupt arrangement Opalev says he agreed with Ofitserov and Navalny. In light of the facts it is difficult to see how the Judge could have come to any other view.
Injury to KirovLes
The definition of theft in Article 158 requires that there should be injury to the owner of the stolen property. Whilst the Theft Act 1968 does not expressly require this I doubt the British authorities would prosecute a theft of this sort if the owner had not suffered harm.
At its simplest the injury KirovLes suffered was the financial loss it suffered because VLK paid less than the proper price for the timber, which KirovLes would have been paid if it had sold the timber through a proper commercial arm’s length contract on the free market. KirovLes’s loss was therefore the difference between the proper price of the timber and the price it was paid by VLK. This difference is said to be 3 million roubles.
The prosecution arrived at what it says is the proper price for the timber by looking at the price VLK was paid for the timber when it sold the timber to its customers most of whom had previously been KirovLes’s customers. If KirovLes had sold the same timber to these customers (as it did before the arrangement with VLK) this is the price they would have paid KirovLes. As I understand it this price was determined by a price formula previously agreed between the customers and Opalev.
I understand that Russian law requires that expert opinion be provided to confirm the proper market price. I presume that it was and that it confirmed that the market price for the timber was the price paid to VLK by the customers.
This approach is fully in line with British practice. See Luxmoore-May & Anr v Messenger May Baverstock  1 WLR 1009
“The measure of damage in this case is, I conclude, the different between what the foxhounds (NB: paintings by the artist George Stubbs) in fact realised consequent on the defendants’ breach of contract and what was their true market value at the time. What better guide could there be to that value than the price at which these paintings happened to be knocked down at Sotheby’s so shortly afterwards? The price which the international art market was willing to pay was surely prima facie the best evidence of the foxhounds’ value”.
Navalny and Ofitserov dispute this approach. So far as I can understand it their argument is twofold:
(1) That VLK did pay KirovLes a proper price for the timber. This is said to be confirmed by the expert evidence they attempted to introduce, which I have previously touched on, which apparently shows that other customers were paying KirovLes even lower prices for timber than VLK was; and
(2) That VLK was providing KirovLes with value over and above the price it paid for the timber by acting “in effect” as KirovLes’s sales and marketing department.
(1) Proper price paid by VLK for the timber?
Though the Judge read through the expert evidence provided by Navalny and Ofitserov concerning the low prices other customers paid KirovLes for its timber to their great dismay he refused in the end to admit this expert evidence as evidence in the case. At Navalny’s and Ofitserov’s insistence he provided a Judgment setting out his reasons.
I have not read this Judgment. From what I have heard of it this Judgment sets out the obvious objection to the relevance of this evidence: the issue in this case is the price of the timber acquired by VLK not the general or average price of timber sold by KirovLes at any one time or the price KirovLes was paid for completely different timber sold under completely different contracts to other customers in circumstances that are unknown. Navalny’s and Ofitserov’s evidence does not touch on the price of the timber acquired by VLK and does not refute the way the price of that timber is calculated by reference to the price paid to VLK for this timber by VLK’s customers most of whom had previously been KirovLes’s customers.
The Judge was therefore in my opinion entirely correct to exclude this evidence. I have no doubt a British Judge in the same position would either have done the same thing or would at the end of the case have said that the evidence did not disprove or affect the prosecution’s case.
The one thing I would say about this argument is that Navalny himself has come to believe it. Reports from the trial speak of his shock when the Judge excluded the evidence. This is confirmed by comments he made later on his blog.
Indeed Navalny seems to have already persuaded himself of this argument when the injury the arrangement with VLK was causing KirovLes was first exposed at the time of Arzamatsev’s audit. Navalny’s campaign to defend the arrangement and discredit the audit was based on this argument. There is a tape of a telephone conversation he had with Ofitserov in which he anxiously questions Ofitserov about prices as he searches for evidence to support this argument. His attempts to get Deloitte to conduct a second audit appear to have been based on this argument. He seems to have convinced himself that Deloitte would also find that because KirovLes sold other timber for lower prices than those paid by VLK Deloitte would report that KirovLes had suffered no harm from the arrangement with VLK. That the purpose of Navalny’s call to Deloitte was to exonerate Ofitserov and himself rather than discover the truth is shown by the record of his telephone conversation with Deloitte. The record shows that he never told Deloitte that there had already been an audit and that the reason he wanted Deloitte to carry out an audit was because he did not agree with the first audit and wanted to discredit it. The telephone conversation shows Navalny devious and manipulative at a moment when he most needed to appear honest and straightforward.
The fact that Navalny has persuaded himself of the truth of an argument which he appears to have thought would result in his acquittal does not make the argument any less wrong. The argument is wrong regardless of whether Navalny himself believes it.
(2) “in effect KirovLes’s sales and marketing department”
Somewhat inconsistently with the claim that VLK paid KirovLes a proper price for the timber is the claim also made specifically in closing speeches by one of the defence lawyers that VLK was providing KirovLes with value over and above the price it was paying for the timber by acting “in effect” as KirovLes’s sales and marketing department.
The best that can be said about this argument is that if that was the intention then this was not the right way to do it. Though Navalny is a lawyer and Ofitserov is a businessman and though both claim to be experts in the way modern business is conducted it seems to have been lost on both of them that if VLK really was taking over the part of KirovLes’s business that was concerned with sales and marketing then this would have amounted to a transfer of an undertaking from KirovLes to VLK.
There is no evidence that any consideration for this transfer (if such it was) was ever given or that it was ever discussed or seriously thought about. At best there seems to have been some vague idea that at some point in the future the arrangement would benefit KirovLes by drastically increasing sales to new customers who Ofitserov and VLK with their supposedly superior marketing skills would discover. The reality is that in the four months that the arrangement was in existence Ofitserov and VLK only found a small number of new customers, the great majority of VLK’s customers remaining at all times the same customers who had previously bought timber directly from KirovLes.
Ultimately what is being suggested is that KirovLes agreed to provide VLK with an unsecured, indefinite and never formally acknowledged loan in the form of a discounted price for its timber in return for possible benefits at some indeterminate future time conditional upon VLK’s own trading success. It is simply not credible that Opalev, an experienced enterprise director, would have willingly agreed to such an eccentric not to say quixotic arrangement especially with someone like Ofitserov who was previously unknown to him unless he was either pressured or bribed into it as he says and it must be doubtful that he would have had the right or authority to agree to it if he did.
In summary neither argument that Navalny and Ofitserov and their lawyers have made to deny the injury done to KirovLes is at all convincing. The Judge was entirely right to reject both arguments. That the arrangement with VLK did KirovLes injury is on the facts simply irrefutable. Not surprisingly as the injury became increasingly obvious Arzamatsev as head of the state property fund and Bastrygina as the relevant executive within KirovLes stepped in to stop it. That the loss suffered by KirovLes is limited to 3 million roubles is the result of their actions and is not something Navalny and Ofitserov should be given credit for.
I will briefly touch on the question of KirovLes’s financial condition, since this has been the subject of much discussion. Briefly I do not know how strong KirovLes’s position was when Navalny and Ofitserov arrived on the scene. However even if KirovLes’s situation was financially precarious that in no way changes the fact that Navalny and Ofitserov caused it injury. It simply does not matter whether the victim of a theft is financially healthy or not. A poor person can suffer harm just as a rich person can.
The whole subject has been confused by irrelevant speculation about whether Navalny’s and Ofitserov’s activities caused KirovLes’s eventual bankruptcy. On the face of it given the limited scale of the loss that seems unlikely. However it is a question which is totally irrelevant to the case. Personally I can think of nothing more destabilising to an organisation in an already precarious condition than to have its experienced director removed in disgrace as a result of his involvement in a financial scandal. To the extent that KirovLes was a major employer in the Kirov Region the lack of visible support for Navalny from the people of the Kirov Region during his trial perhaps tells its own story. However it is not a factor in the case.
Before proceeding further it is worth pointing out that if Navalny and Ofitserov were being tried in Britain on the same facts all the elements in Section 1(1) of the Theft Act 1968 would at this point be present. Article 158 however requires that the thief must have “a mercenary intention” and it is that which I will now consider.
Article 158 does not require that the thief actually gain financially from the theft merely that he have an intention to do so. None of the three persons involved (Navalny, Opalev and Ofitserov) benefitted financially from the theft. The reason is that despite acquiring KirovLes’s timber for less than its true value VLK did not trade at a profit. Since VLK did not make a profit there was no profit to distribute to the three and no financial gain to be made.
Did Navalny and Ofitserov intend to gain financially from the theft?
As to Ofitserov there is no doubt. Ofitserov was the owner of VLK. As the owner of VLK he obviously intended to profit from his business.
As for Navalny he was never an owner or part owner of VLK and never held a post in that company. The only evidence he intended to gain financially from the theft comes from Opalev. Opalev’s evidence on this issue has however no independent corroboration. For that reason this has always seemed to me the weakest point in the prosecution’s case. Though the prosecution was able to produce tape recordings of telephone conversations between Navalny and Ofitserov and copies of emails that passed between them there is no record in any of them of Navalny so much as hinting that he intended to profit personally from the arrangement between VLK and KirovLes.
The only facts that may suggest that Navalny did intend to profit personally from the arrangement are (1) Navalny’s decision to refuse an offer of a paid post with the Kirov Regional government, which may suggest he was expecting money from VLK and did not wish to be placed in a conflict of interest when this happened and (2) a fraught email exchange between Belykh and Navalny some time after these events in which Belykh facetiously calls Navalny “a timber tycoon”, which suggests that Belykh at the time believed that Navalny had intended to profit personally from the arrangement. Both points are so weak the prosecution wisely did not use them though both facts would have been known to the Judge from considering the rest of the evidence.
The Judge nonetheless accepted Opalev’s evidence on this issue. Given that he preferred Opalev’s evidence to Navalny’s on every other issue this is unsurprising. The Judge was entitled to accept Opalev’s evidence, which is consistently corroborated on other issues, and to reject Navalny’s, which is regularly shown to be either unconvincing or simply wrong.
Speaking personally, I would have been prepared to give Navalny the benefit of the doubt on this question and decide that he was involved in setting up the arrangement between Opalev and Ofitserov (as he clearly was) for altruistic reasons, out of some misguided belief that it might genuinely benefit KirovLes, were it not for the rest of his conduct in the case. His passionate defence of the arrangement both at the time and later and the content of his conversations with Ofitserov speak of someone with a personal stake in the arrangement going well beyond what one would reasonably expect from someone who had set it up for purely disinterested or altruistic reasons whilst it is difficult to understand why he would say so many things in his defence that are either simply wrong or untrue if his motives were innocent.
Having examined the evidence in the case, it is clear that it does substantiate the charges brought against Navalny and Ofitserov. The Judge accepted the prosecution’s evidence and I can see no reason why he should not have done so. It appears that the charges were properly made out and there is no reason to think that the verdict is not correct.
The trial was conducted with all the bullying and disrespect for the Judge I have come to recognise as routine in cases of this sort in Russia.
Prior to the commencement of the case the Judge was threatened with lustration. He had to face repeated accusations throughout the trial of bias and demands that he recuse himself. It was also made clear to him that if he decided against Navalny a complaint would be made against him to the European Court of Human Rights. Navalny chose to ignore the Judge’s order to attend Court on a particular date, choosing instead to meet with the Investigative Committee to discuss a different case and to attend a political meeting, despite being previously told by the Judge that the Court would take steps to resolve any problems with the Investigative Committee caused by his non attendance at the meeting. Navalny then publicly accused the Judge of complicity with the Investigative Committee in a plot against him. He also publicly accused the Judge of economic illiteracy when the Judge rejected the evidence of his experts on timber prices. The trial ended with a political speech from Navalny criticising Russia’s political and legal system, which had put him on trial, and making a thinly veiled call for revolution whilst largely failing to address the substance of the case against him. The best that can be said of this behaviour is that it never descended to the level of outright farce as was the case in the Pussy Riot case.
Was the trial however actually unfair?
Article 6 of the European Convention of Human Rights of which Russia is a signatory says the following:
“1. In the determination of his civil rights and obligations or of any criminal charge against him, everyone is entitled to a fair trial and public hearing within a reasonable time by an independent and impartial tribunal established by law. Judgment shall be pronounced publicly by the press and public may be excluded from all or part of part of the trial in the interest of morals, public order or national security in a democratic society, where the interests of juveniles or the protection of the private life of the parties so require, or to the extent strictly necessary in the opinion of the court in special circumstances where publicity would prejudice the interests of justice.
2. Everyone charged with a criminal offence shall be presumed innocent until proved guilty according to law.
3. Everyone charged with a criminal offence has the following minimum rights
(a) to be informed promptly, in a language which he understands and in detail, of the nature and cause of the accusation against him;
(b) to have adequate time and the facilities for the preparation of his defence;
(c) to defend himself in person or through legal assistance of his own choosing or, if he has not sufficient means to pay for legal assistance, to be given it free when the interests of justice so require;
(d) to examine or have examined witnesses against him and to obtain the attendance and examination of witnesses on his behalf under the same conditions as witnesses against him;
(e) to have the free assistance of an interpreter if he cannot understand or speak the language used in court.”
Article 7 of the European Convention of Human Rights also says
“1. No one shall be held guilty of any criminal offence on account of any act or omission which did not constitute a criminal offence under national or international law at the time when it was committed. Nor shall a heavier penalty be imposed than the one that was applicable at the time the criminal offence was committed.
2. This article shall not prejudice the trial and punishment of any person for any act or omission, which at the time when it was committed, was criminal according to the general principles of law recognised by civilised nations”
Navalny was tried before a properly constituted court of law on a charge under Article 160 for an offence of embezzlement which is the same or very similar to offences universal to all criminal jurisdictions and specifically in the case of Britain to a charge of theft contrary to Section 1(1) of the Theft Act 1968. There was substantial evidence to support the charge.
The media fully reported the trial. The trial was filmed and the film was shown on the internet. The public were admitted to the Court room including some of Navalny’s supporters who appeared sporting T shirts emblazoned with the words “Putin is a thief” (something which would certainly not be tolerated in a British court room). Navalny publicly commented on the trial at length whilst it was still underway writing about it on his own blog and sending out tweets via his mobile phone including in direct disobedience of the Judge’s order whilst the final Judgment was being read out.
Navalny was free on bail both before and during the trial. He was represented by lawyers of his choice. Both he and his lawyers were provided with full details of the case before the trial. There is nothing to suggest any lack of preparation on their part. He was given complete freedom to question and cross examine the prosecution’s witnesses, choosing to do so himself whilst wisely leaving legal argument to his lawyers. He was allowed to call his own witnesses and did so. The Judge did refuse to admit his expert evidence on timber prices but gave a reasoned Judgment explaining his reasons for this and as I have said he was fully justified in doing so. The Judge also disallowed some of his other witnesses on grounds their evidence had no relevance or repeated what had already been said. The Judge has the right to do this and there is nothing to suggest this weakened Navalny’s defence. The trial was held no more than a few months after the charge was brought and the sentence handed down after the verdict is within the range provided by Article 160.
The only issue is the independence and impartiality of the Judge.
The Judge, Sergei Blinov, is a local Judge appointed in the proper way who tried a case in his district, which is where the alleged crime was committed. There is nothing about the way the Judge was chosen to try the case to suggest he was not independent or was unfit to try the case. As a local Judge in the district where the alleged crime was committed he was the obvious person to try it.
Blinov is said to be very prosecution minded and to have delivered guilty verdicts in the 130 or 150 cases (accounts differ) previous to Navalny’s that came before him. However I have read nothing anywhere to suggest these convictions were wrong. Besides the proper measure of the Judge’s impartiality in the case is his conduct of the case not his conduct of other cases about which nothing is known.
As to the Judge’s conduct of the case, he did occasionally reject defence applications but there is no reason to construe bias from this. On several occasions when he did this he retired to his chambers to consider the defence’s application and then delivered a reasoned Judgment setting out in full his reasons for doing so. On those occasions when I know something of his decisions they seemed to me to be correct.
I have already discussed the Judge’s decision to exclude Navalny’s expert evidence on timber prices and why I think it was correct. The Judge allowed prosecution witnesses whose memory was faulty to have their memory refreshed or substituted from their written statements but I have never heard that the witnesses denied the truth of those statements and this is in line with international practice. The witnesses for whom this was done anyway tended to be the less important ones. The Judge also excluded other witnesses who Navalny wished to call for reasons I have already discussed. As I have said he was entitled to do this and there is nothing to suggest that Navalny was disadvantaged by his doing so. The Judge admitted evidence from witnesses whose statements gave the wrong address. As the Judge surely correctly said there was no reason to exclude this evidence since there was no doubt about the existence of these witnesses. The Judge admitted as evidence the tape records of Navalny’s telephone conversations with Ofitserov and the emails that passed between the two. There is no doubt about the authenticity of these telephone records and emails (Navalny does not dispute them) or of their relevance to the case. The admissibility of such evidence differs from country to country and is a question of Russian law. I have no reason to think the Judge’s decision was wrong. The Judge refused Navalny’s request that every tape record of his telephone conversations with Ofitserov be produced on the grounds this would exculpate him. So far as I know Navalny never said precisely what was in these conversations that would exculpate him making this look like a fishing expedition in which case the Judge was right to refuse this request.
In summary I simply cannot see anything about the Judge’s conduct of the trial that would call into question his impartiality in the case. On the contrary he seems to me to have bent over backwards to accommodate Navalny. He did not for example cut short or interfere with Navalny’s lengthy and brutal cross examination of Bastrygina even though from accounts I have heard of it much of this cross examination was of doubtful relevance whilst it became increasingly circular as it went on with Navalny asking Bastrygina questions that went over ground that had already been covered.
The one curiosity about this case is that on the one occasion when the Judge is known to have made a mistake the action to correct that mistake was taken not by the defence but by the prosecution. This happened after the verdict when the Judge mistakenly placed Navalny and Ofitserov in custody when they were still entitled to bail. Though this is a breach of the Russian Code of Criminal Procedure and though this fact was pointed out to the defence lawyers by a lawyer who had been following the case they failed or refused to appeal it. It was left to the prosecution to do so and to correct the Judge’s mistake (one which is apparently often made).
In conclusion there is absolutely nothing about this case that obviously stands out as suggesting that the Judge was not independent or impartial. I am not an expert in Russian criminal procedure so I cannot definitely say none of his decisions were wrong. If some of them were they will no doubt be set aside on appeal. However there is nothing about the conduct of this case that renders this trial obviously unfair. On the contrary everything suggests a fair trial and I am sure the European Court of Human Rights will take the same view.
The rapporteurs of the Parliamentary Assembly of the Council of Europe have reported that even on the assumption that Navalny “made a mistake” the sentence he received was disproportionate.
The rapporteurs of the Parliamentary Assembly of the Council of Europe have also said that the charges against Navalny were unsubstantiated, which is obviously wrong. Are they right to say however that his sentence is disproportionate?
If the rapporteurs of the Parliamentary Assembly of the Council of Europe believe that a 5 year prison sentence for a first time offender who pleaded not guilty for the offence of embezzling property worth $500,000, which is the crime for which Navalny was convicted, is disproportionate then they should explain this to the British authorities. British sentencing policy as set out by the Sentencing Guidelines Council is that for a theft of an amount exceeded £125,000 (as in this case) or for more than £20,000 but involving a breach of trust of a high degree (as also in this case) the range of sentences for a first time offender who has pleaded not guilty is 2 to 6 years in prison, with the starting point being 3 years.
This is exactly in line with the 4 and 5 year sentences imposed respectively on Ofitserov and Navalny.
It has been said that Navalny’s theft was on a relatively small scale and that others who have stolen far more than him have been able either to walk free or have received a lesser sentence. Markin the spokesman of the Investigative Committee has come close to admitting as much. It is in fact a commonplace that, as the philosophers say, the law is like a spider’s web, better at catching small flies than big ones. However that is not a reason for giving relatively small time operators like Navalny a free pass. Were that to happen the web would be catching no flies at all.
It is anyway a mistake to minimise the crime for which Navalny has been convicted. This was a crime involving the theft of state property engineered by someone (Navalny) who as an unpaid adviser of the Kirov Regional government was in a particular position of trust. It involved a high degree of deception and was carried out with the purpose of financial gain. Navalny and Ofitserov both pleaded not guilty and Navalny especially conducted an exceptionally aggressive defence that continues to this day. This involves attempts to discredit individuals such as Bastrygina who Navalny previously wanted to dismiss when she acted to stop him.
I do not believe that for this offence and on these facts Navalny would receive in Britain a sentence very different from the one he received in Russia. I do not think this sentence is disproportionate on these facts and I am sure the European Court of Human Rights if asked will say the same thing.
Politically Motivated Prosecution?
The most common criticism of the case is that it is a selective and politically motivated prosecution intended to punish and silence Navalny for his opposition and anti corruption activities.
The relevant provision is Article 18 of the European Convention of Human Rights:
“The restrictions permitted under this Convention to the said rights and freedoms shall not be applied for any purpose other than those for which they have been prescribed”.
Thousands of prosecutions on theft charges happen in Russia every year. One cannot say that this is a selective prosecution because one of the defendants happens to be Aleksei Navalny. The European Court of Human Rights has repeatedly said that the whole structure of the European Convention of Human Rights rests on the general assumption that public authorities in member states including Russia act in good faith. A mere suspicion that the authorities use their powers for ulterior purposes is not sufficient to prove a violation of Article 18. A very exacting standard of proof is applied.
This was a prosecution for a theft offence that was substantiated by a large body of evidence. That in itself makes it very unlikely that the European Court of Human Rights will construe a political motive to this prosecution without clear evidence this was the case. What evidence is there that this was the case?
Apart from a general assumption that any prosecution in Russia of an opposition activist is politically motivated the evidence cited in this case is as follows:
(1) That the case against Navalny had been previously investigated but no charges were brought;
(2) That the case against Navalny was only resurrected following the intervention of Bastrykhin the head of the Investigative Committee who at the time was engaged in a public war of words with Navalny;
(3) Certain comments made shortly before the start of the trial by Vladimir Markin the spokesman of the Investigative Committee;
(4) That the sentence handed down to Navalny and Ofitserov is much harsher than is normal in Russia for the sort of offence for which they were convicted;
(5) The legal manoeuvres following Navalny’s conviction whereby he was first detained and then immediately released following the appeal of the prosecution.
As will become clear in my opinion none of this evidence such as it is comes close to passing the very high threshold set by the European Court of Human Rights, which is required to prove that a prosecution is politically motivated.
(1) Previous Failure to Prosecute Navalny
I do not know why the previous investigations into Navalny’s crime did not result in a decision to prosecute him. An obvious reason is that the evidence in the case only emerged slowly. Though the fact the local police were taping his telephone calls shows that someone in 2009 had already alerted them to Navalny’s activities I understand it was only in 2012 that Opalev finally admitted to his role in the conspiracy and agreed to testify against Ofitserov and Navalny. I do not know when the police got hold of Navalny’s emails with Ofitserov and Belykh but the fact that some of them were leaked in 2012 by a Russian hacker who calls himself Hell suggests that it may not have been before then. In addition those emails contain a message to Navalny from Belykh in which Belykh tells Navalny that Belykh is finding it increasingly difficult to shield Navalny from the police. That might suggest that Belykh had been exerting himself on Navalny’s behalf and played a role in getting the earlier investigations stopped. As Governor of the Kirov Region Belykh might have been in a position to do this. Belykh would have compelling reasons to do this given the poor light the case casts on his administration of the Kirov Region.
Another possible explanation for the delay in bringing the case is that the case only really got off the ground following the formation of Russia’s new elite law enforcement agency, the Investigative Committee in 2011. It is entirely understandable why overworked and under resourced provincial police agencies might be wary of starting a prosecution against a well known public figure such as Navalny. Markin, the spokesman of the Investigative Committee, has again all but said as much, confirming that the Investigative Committee effectively kick started the case, which up to then had like many other similar cases been languishing at the back of the queue.
In the end though the question of why no prosecution was brought earlier simply does not matter. The proper test for this case is not how it compares with earlier investigations that failed. Many crimes are investigated more than once and over a protracted period before a successful prosecution is brought. This is especially so in a case like this where the defendants engage in a conspiracy, which by definition means that many of their actions are carried out in secret. The proper test for this case is how it was conducted. This was a prosecution that ended in a successful conviction following a trial that has every appearance of being fair. Given that this is so there are no grounds to suspect anything sinister simply because earlier investigations ended in failure.
Postscript: The person I know as Peter has provided information on the Comments Thread to this article that explains the failure of the first investigation. The first investigation was made under Article 165. This presumably accounts for the continued belief held by some that the prosecution should have been brought under Article 165 instead of Article 160. As discussed Article 165 has no application to this case. This explains why the first investigation failed and in May 2011 was brought to an end. When the case was reinvestigated under the proper Article, which is Article 160, the evidence fell into place allowing charges to be brought the following year.
(2) Intervention by Bastrykhin
A film made in 2012 shows Bastrykhin the head of the Investigative Committee castigating his investigators for their repeated failure to pursue the investigation against Navalny. The film was made for broadcast on national television and was broadcast on the same day or shortly after. Bastrykhin’s intervention was public. This shows he thought he was entitled to make it and did not think he was doing anything wrong.
Bastrykhin is right. He did not do anything wrong by acting as he did. Whilst it is true Bastrykhin has engaged in a public war of words with Navalny and that Navalny has floated allegations (denied by Bastrykhin) that Bastrykhin illegally owns property in the Czech Republic, Bastrykhin is at the end of the day the head of a law enforcement agency. Investigating crime is his job. Ordering his subordinates to investigate a crime Navalny committed was him simply doing his job.
The only point that can legitimately be made is that there is some question as to whether given the relatively small scale of the theft an agency like the Investigative Committee was the appropriate agency to investigate it. Markin, the spokesman of the Investigative Committee, has said the reason the Investigative Committee became involved was because Navalny’s public prominence made the case in law enforcement terms something of a hot potato so that it needed an agency like the Investigative Committee to undertake it in order to ensure it was handled properly. Behind this comment is surely awareness that because of Navalny’s involvement the case would eventually be referred to the European Court of Human Rights. This is a statement of the obvious and I see no reason why the European Court of Human Rights should not accept it.
(3) Markin’s Comments
Shortly before the start of the trial Vladimir Markin the spokesman of the Investigative Committee as well as explaining the reason for the Investigative Committee’s involvement in the case, made the following comments which have received extensive coverage and which have been reported as all but admitting a political motive to Navalny’s prosecution:
“If a person tries with all his strength to attract attention, or if I can put it, teases authorities – “look at me, I’m so good compared to everyone else” – well, then interest in his past grows and the process of exposing him naturally speeds up.”
This comment in no sense implies a political motive to Navalny’s prosecution. All the comment says is that someone like Navalny who achieves fame by presenting himself as purer than everyone else (as Navalny does through his anti corruption activity) invites questions about his past. If such a person has damaging secrets buried in his past such conduct will bring them to the surface.
This is a simple statement of the obvious familiar to anyone in the US or Britain who wishes to campaign for political office and who has something in their past they want to hide. These words simply do not bear the sinister interpretation that has been placed on them. Again I have no doubt the European Court of Human Rights will take the same view.
(4) Harsher Sentence than usual for this Offence
It seems that fewer than 1% of cases brought under Article 160 in Russia end with a sentence of 5 years imprisonment such as the one that was handed down to Navalny. It has been suggested that this shows that the heavy sentence imposed on Navalny in this case was intended to punish him and that this in turn shows that behind the case was a political motive.
This argument has to assume that the Judge in the case was not independent but was acting under instructions when he handed down his sentence. As previously discussed there is nothing to suggest that.
Navalny’s 5 year sentence is within the range of sentences provided for by Article 160. It is also fully in line with the sort of sentence that would be handed down to someone convicted for this sort of offence but who had pleaded not guilty in Britain.
There are simply no grounds to say this sentence is unduly harsh or that it is intended as some sort of punishment for Navalny’s political acts. Nor is it appropriate to compare the sentence handed down to Navalny with the sentences handed down in the majority of cases where offenders are convicted under Article 160. It is a mistake to minimise the crime committed in this case. It is surely a much more serious crime than the great majority of crimes committed by offenders who are convicted for offences under Article 160. It is also very unlikely that the great majority of offenders prosecuted under Article 160 defend the case in the same aggressive way Navalny has done. That in itself explains why Navalny has received a longer sentence. This is especially so if, as is surely the case, the great majority of offenders prosecuted under Article 160 plead guilty.
Since the sentence handed down to Navalny is within the range provided by Article 160 and is in line with international practice there are no grounds to seeing it as evidence for a political motive to this prosecution. I am sure this will be the view of the European Court of Human Rights.
(5) Detention and Release following Verdict
Immediately following the pronouncement of the verdict Navalny was taken into custody as would certainly be the case in Britain. Within hours he was released following a successful appeal against this decision brought by the prosecution. The prosecution argued successfully in the appeal that there were no grounds to place Navalny in detention pending his appeal when he had previously abided by the terms of his bail.
The sudden release of Navalny at the instigation of the prosecution triggered a storm of speculation imputing various political motives to this act. It was suggested that Navalny might have been released to pacify crowds that had gathered near the Kremlin and who were demanding his release. The crowds however were relatively small (estimates vary between 2,500 to 10,000) making that explanation unlikely. A popular alternative explanation was that Navalny was released on the insistence of Sobyanin, the acting Mayor of Moscow, who wants Navalny to stand in the forthcoming mayoral election in Moscow in which Navalny is a candidate.
The simple reality is that Navalny was released because that is what the law requires. Russia’s Code of Criminal Procedure says a defendant should not be denied bail where there is no reason to do so. This is the case even where the defendant has been convicted for the sort of offence for which Navalny has been convicted provided he is appealing the verdict. Navalny is appealing the verdict and has abided by the terms of his bail so there were no legal grounds to detain him. Placing Navalny in custody was a mistake (though one which apparently is often made) and his release therefore simply corrected a mistake.
In my opinion the European Court of Human Rights is involved in these events though not because there was a political role to Navalny’s prosecution or because his release is a sign of the involvement of the political leadership in his case. Rather it is simply a reflection of the great care that is being taken over his case. There is a long history of complainants bringing cases against Russia to the European Court of Human Rights, which they lose on the substantive issues but in which they score wins on lesser procedural points. Defendants in such cases have been known to spin these wins on procedural points as victories in the case even though they have actually lost on the substance.
A media operation of precisely this sort is unfolding as I write. In the latest in its long line of Judgments the European Court of Human Rights has again ruled that there was no political motive behind the prosecution of the imprisoned Russian oligarch Mikhail Khodorkovsky and that the Judge in his case was independent and impartial so that Khodorkovsky’s trial was basically fair. The European Court of Human Rights did however find that there were some procedural violations in the way Khodorkovsky’s case and his trial was conducted for which however the Court’s criticisms were directed at the police and at the prosecution and not at the Judge. That the European Court of Human Rights does not think these procedural violations ultimately affected the decision in the case is shown by the fact that it only awarded Khodorkovsky 10,000 euros for these violations and refused to award any compensation to Lebedev, Khodorkovsky’s co defendant, at all. The fact that the European Court of Human Rights has however said that there were procedural violations by the prosecution in the trial has enabled Khodorkovsky and his lawyers and media advisers to claim quite wrongly that the European Court of Human Rights has found his trial unfair and to spin a defeat into a victory.
The Russian authorities have become very sensitive to this problem. In a case like Navalny’s, which is almost certain to be referred to the European Court of Human Rights, they acted to prevent the same thing happening again. This to my mind provides a complete explanation for what happened.
Regardless of whether this was the case or not, the European Court of Human Rights will obviously not treat action taken to correct a judicial error as evidence of a political motive behind Navalny’s prosecution.
In summary, none of the evidence that supposedly shows that there was a political motive behind Navalny’s prosecution is remotely convincing or comes close to passing the very high threshold required by the European Court of Human Rights. For that reason I am sure any application to the European Court of Human Rights made on that basis will fail.
Before leaving the discussion of this question, there are two further points I want to make.
It has been said that imprisoning Navalny is a serious mistake that will transform a failed opposition leader into a political martyr.
It is undoubtedly the case that before this case was brought that Navalny’s star was fading. He had proved a divisive and ineffectual leader of the opposition Coordinating Council. He appears to be widely disliked by other leaders of the radical liberal opposition. The veteran Russian liberal opposition leader Boris Nemtsov repeatedly damns him with faint praise and did so again following the verdict. Prokhorov the Russian billionaire oligarch who ran Putin second in Moscow during the Presidential election of 2012 has conspicuously refused to support him in the Moscow mayoral election. The protest movement that began in Moscow following the parliamentary elections in December 2011 of which Navalny has effectively made himself leader is on the wane. Opinion polls show that the more Russians come to know Navalny the greater the percentage of Russians who mistrust and dislike him. Given his arrogance and his unpopular views on many issues that is unsurprising. Navalny’s opinion poll rating before the verdict in the Moscow mayoral election was just 4%. He was only able to register as a candidate for the election because Sobyanin, the acting Mayor, ordered councillors from United Russia, the government party, which Navalny had previously called “the party of crooks and scoundrels”, to support his registration.
All of this to my mind provides compelling grounds to doubt a political motive to this case. Navalny was no conceivable threat to Putin or the government before the case was brought. Jailing him deprives the opposition of an unpopular and incompetent leader whilst giving Navalny an opportunity to pose as a martyr. Jailing Navalny simply because he is an outspoken opponent of the government makes no political sense and is simply stupid. Given the international ramifications of this case if Russia really is a country were prosecutions are decided by the country’s political leadership then it is inconceivable that Putin himself would not be involved. The suggestion I sometimes come across that Bastrykhin and the Investigative Committee have become a law unto themselves and have slipped beyond Putin’s control is completely absurd. In his time Putin has been called many things but there are very few people indeed who call him stupid. The fact that Putin has no conceivable interest in having Navalny jailed and derives no benefit from doing it is an overwhelmingly strong reason to doubt that he or the government or the country’s political leadership have anything to do with the case.
Lastly, though it is a subject that is outside the scope of this essay, I would simply offer my opinion that the political impact of this case has been overstated. Opinion polls show that there has indeed been a small surge of support for Navalny in Moscow (from 4% to 9%). I expect this to fade as even those Muscovites sympathetic to him consider the implications of voting for someone as Mayor who they know is going to prison. Campaigns against miscarriages of justice only gain traction where there actually is a miscarriage of justice. Since there has been no miscarriage of justice in this case public interest in this case (never strong) over time will fade away. The latest opinion poll already appears to show this happening with growing readiness amongst Russians to accept the verdict in the case
Farther afield, interest in the case in the west has been limited with far less interest in the case than that accorded to the cases of Khodorkovsky, Magnitsky or Pussy Riot. Quite simply Navalny has been too obviously a failure politically to attract much interest or sympathy. Doubtless his imprisonment will be added to the long list of “crimes” of which the Russian authorities routinely stand accused but merely to say that is to show how little genuine interest in his case there really is.
As for the radical liberal opposition to Putin, they now have another martyr to add to their list, which however is already full to the brim with various equally dubious and unlikely individuals who like Navalny are deeply unattractive to the great majority of Russians if only because of their criminal records. A radical change in political strategy is urgently needed as the complete failure of the radical opposition’s project shows. Dropping their blind support for characters like Khodorkovsky, Navalny, Pussy Riot and (when he comes up for trial) Udaltsov is an imperative political necessity. Getting a proper leader is now the priority and would be a good start.
The purpose of this essay was to examine Navalny’s case to see whether the many criticisms made of it are right. Having examined both the law and the evidence in detail and having also looked at the conduct of the trial it is impossible for me to see that they are. Navalny was properly convicted following a fair trial for a recognised criminal offence. I am sure the outcome would have been the same if this case had been prosecuted in Britain. Had it been prosecuted in Britain I am also sure it would have attracted none of the interest this case has attracted because it was brought in Russia.
There is no reason to suspect a political motive behind this case. It is in almost every respect a commonplace case of white collar theft. Vladimir Markin, the spokesman of the Investigative Committee, has again basically said as much. It is the sort of case that happens in all countries at most times. The case’s only unusual feature is that Aleksei Navalny is involved in it as one of the defendants.
There will now be an appeal. It may be that over the course of that appeal more or different facts will come to light or more errors by the Judge will be discovered, which might cause the appeal court to set the verdict aside. I have to say I think that very unlikely. Beyond that there will no doubt be a complaint to the European Court of Human Rights. Given the backlog of cases in that Court unless steps are taken to give Navalny’s case priority (for which I can see no reason) the likelihood is the European Court of Human Rights will not rule on the complaint before Navalny is released even if he serves his full sentence. When that does happen for the reasons I have said I expect his complaint to fail.
As for Navalny himself, unless he manages to pull off a totally unexpected upset in the Moscow mayoral election that forces the authorities to take the extraordinary step of overturning the verdict in his case, which I have to say I also think extremely unlikely, he must now prepare himself for a long spell in prison. He has the option of changing his plea and of seeking early release or of applying to Putin for a pardon but I suspect that his vanity and his need to avoid disappointing his supporters will prevent him taking it. He can always in the meantime hope that something unexpected like a successful appeal, an upset victory in the European Court of Human Rights or a political revolution in Russia will set him free. Until one of these unlikely events happens he remains guilty as charged.
Navalny’s trial has gone almost entirely unreported in the west or in the Russian English language media. Even RAPSI, Russia’s legal news agency, stopped reporting it in English. This reflects the incredibly tedious nature of the case and the slight interest in it. That has however made life hard for an analyst who does not speak Russian. I therefore have to thank the person I know as Yalensis who has provided regular updates and commentaries on the case which I have followed and myself commented on. Without those updates and commentaries this essay could not have been written. These updates and commentaries can all be found on the blogsite Kremlin Stooge. I want to thank Mark Chapman, the host of Kremlin Stooge, for making that all possible.
I also wish to thank Jon Hellevig, Dmitri Babich, Yalensis (again) and the person I know as Peter for providing translations of the various Articles in the Russian Criminal Code I have discussed and for providing clarification of the legal manoeuvres that caused Navalny’s unexpected release following the verdict. I should say that I have nonetheless continued to use translations of the relevant sections of Articles 158, 160 and 165 of the Russian Criminal Code drawn from the following website http://www.russian-criminal-code.com/
Though the translations provided by this website of the Articles of the Russian Criminal Code date from 2000 the definitions of the offences set out in these Articles are unchanged. I have preferred to use these translations of the definitions of the offences set out in these Articles since the website was made for use by lawyers and therefore translates Russian legal terms by their English equivalents.
Lastly, I would like to thank Anatoly Karlin. His view of the case is very different from mine but his interpretation of it has offered insights that have caused me to make some of the points I have made. Indeed at times this essay is practically a debate with him.
It goes without saying that all the opinions in this essay and any errors in it are my own.
Postscript: A link to my interview on 18th July 2013 with RT TV on the Navalny case following his conviction https://www.dropbox.com/s/ggugxezs3xwdc53/Alexander_Mercouris.asf
Barring the introduction at this late stage by Navalny’s mother of an evil twin who actually committed all the offenses in place of Navalny and let him take the fall, I would have to call this game, set and match, Alex. Very, very well done. The law is dry as a popcorn fart and large helpings of it make the eyes of ordinary people glaze over like Krispy-Creme doughnuts, but the detail here is well-collated and linked so as to show its purpose is to forestall silly arguments and the fact-free form of bullheaded one-way conversation which has become quaintly known as “quacking”, rather than just superfluous jurisprudential fluff. All the information is there, presented in a beautifully logical tab-a-goes-into-slot-b progression, and I marvel once again at your command of the language.
There will, of course, be a dedicated attempt to make the whole case appear ridiculous with that, “Navalny was prosecuted for stealing a forest” scorn, exactly the same as the “Khodorkovsky was prosecuted for stealing his own oil” bumper-sticker soundbite. If there is anything the Russian liberals have learned from the west and Gene Sharp, it is the value of the soundbite and of relentless sloganeering. However, there is little escape here from reality, and each position taken is well-defended.
Thanks much for the shout-out, and I was delighted also to see attribution to Peter. Some might disagree, and he has been labelled a troll on my blog, but I don’t see him that way at all. While his dislike for Putin and his government is a matter of record, he seems far too smart to be put off by quacking arguments, and remains within the realm of the convinceable provided a rational, fact-based argument can be presented. Also, he demolishes any weak spots in a case with savage ease. He’s been particularly hard on you, but I think that’s just because he expects a lot from you and no anti-Putin faction could fail to note how important your opinions and discourse have become to the pro-Russia cause.
Once again, great respect for this omnibus effort. I hope you will not mind if I use it to cap the overall entry on the Navalny trial, at The Russia Debate.
First of all thanks for your very kind comment.
I had to laugh when I read this “The law is dry as a popcorn fart and large helpings of it make the eyes of ordinary people glaze over like Krispy-Crème doughnuts”.
Totally true! I am glad you think I made it a little more digestible.
Excellent work, Mercouris! You totally nailed it and stuck your landing.
I believe this post is, as Mark says, the “definitive KirovLes” for all time.
Thanks for the acknowledgement. I am amazed and impressed how you took even some of my confused and contradictory ramblings about the case, honed in on the core issues, and coverted the chaff to gold!
Well, I guess that shows the benefit of having a good legal education…
(These are just my first impressions, I will more comments later, I obviously have to read this through more than once…)
It could NOT have been written without you and far from finding your comments in any way confused or contradictory I found them consistently shrewd and insightful.
Well, as I followed the case closely on a day-to-day basis and heard all the araguments and debates in the courtroom, and also followed on Navalny’s blog, so I tried to get all points of view, there were some times when I changed my mind on some points of fact, and then flipped back again later. The law can be very confusing to a layman. For example, that 16-million vs. 3-million thing is a very technical point and it took me a long time to “get” it, even though the answer was buried deep in the bowels of the prosecution case. (Basically, they used a valid technical-legal loophole to nail Navalny for the larger amount.) etc
P.S. to help have everything all together in one archive, I am going to post a bunch of links below for the source materials on the trial (starting with the daily courtroom sessions from youtube). This was probably the most transparent and well-presented white-collar embezzlement trial in all of Russian history!
That’s merely your assertion not supported (as far as I can “see above”) by anything but your own amateurish theorizing. Can you cite any actual precedent where a court has recognized selling through an intermediary (at a modest markup) as theft?
Most thieves are intermediaries Peter unless they want to keep for themselves the goods they steal. Professional thieves invariably sell what they steal. The literature on this is vast and easily accessible and someone of your incomparable research skill can easily access it. Unless Navalny and Ofitserov wanted to build up for themselves a mountain of idle timber the only point of stealing KirovLes’s timber would be to sell it.
I have already explained to you on Kremlin Stooge why the term “mark up” in this context is wrong. If VLK was a genuine timber merchant it should have bought the timber from KirovLes at the proper price and sold it to its own customers at a proper price.
So I gather the answer is no, you cannot cite a single precedent in support of your funny theory. Epic fail, as usual.
No Peter, the answer is yes. As I have said already, if you are looking for precedents then a precedent is every single case where the thief resells the goods he steals. The number of precedents is so prodigious that you can look them up yourself. Since of course you already know this there is no point in my doing so and no sense or purpose to your question.
Oops, looks like you totally misunderstood the question. I’ll repeat:
Can you cite any specific precedent where a court has recognized selling through an intermediary trading company (at a markup of several percent) as theft in the legal sense of the word?
The question is wrong and its wrong formulation I am afraid betrays your failure (or refusal) to understand the case though in truth it is simple enough.
VLK is not an “intermediary trading company”. It is the vehicle used by the thieves to steal the timber. VLK did not sell any goods at “a mark up”. VLK sold the timber which was stolen at the market price determined by the pricing formula previously agreed between KirovLes and its customers.
I have a suggestion to make for you Peter. I believe you live in the United States. Why don’t you go to your local Walmart store and agree with the store manager that he gives you Walmart’s products on sale in the store at half their offered price? You can then resell them to the public through your company at the same prices Walmart charges splitting the profit with the store manager. When Walmart and the police come after you, you can tell them you didn’t steal Walmart’s products, it is “a mark up” and that yours is “an intermediary trading company” and see what happens.
No problem, I’ll amend the question:
Can you cite any specific precedent where a court has recognized selling through an intermediary trading-or-whatever-you-please-to-call-it company (at a markup-or-whatever-you-please-to-call-it of several percent) as theft in the legal sense of the word?
This is exactly the same wrong question asked in exactly the same wrong way as before.
I have already told you what VLK was. Navalny and Ofitserov stole KirovLes’s timber. They used VLK as their vehicle for the theft. Obviously they sold the timber for more than its acquisition cost. Thieves always sell or try to sell stolen goods for more than their acquisition cost. There would be no point in stealing the goods if they didn’t.
Examples where companies have been used as theft vehicles are myriad. Yukos in Russia, Enron in the US and Polly Peck in Britain are just three.
Maybe, but you have yet to explicitly cite a single legal precedent immediately relevant to the particular case in question. Just do it, thank you in advance.
I see, what you want are examples of similar cases. Well here are a few drawn from my own experience:
1. A pharmacist who ran a small pharmacy under a franchise arrangement stole from his own business drugs, which were only available on prescription from a doctor. He sold the drugs on the black market. In those days (the 1990s) this was a major problem with prices for fresh prescription drugs on the black market being very high. I seem to remember that the drugs were actually sold through his brother’s company but I cannot say this for certain. He then used some of the proceeds from his black market sales of these drugs to make the books of his own business balance. I remember feeling sorry for this man because he did what he did not out of any desire for personal gain but purely because his business had fallen into heavy debt and it was the only way he could find to save it. In the event the business did eventually go bankrupt. I should say that my involvement in this case was with the proceedings to disqualify this individual from working in future as a company director.
2. A sales manager for Tate & Lyle stole goods from Tate & Lyle by fabricating fictitious contracts, which he then filled himself through bogus companies he established for the purpose. He purported to negotiate the prices for the sales with the “buyers”, who were of course in reality himself, ensuring that he obtained the goods at a low price. What was bizarre about this case was that the thief claimed that what drove him to commit the theft was that his doctor had mistakenly told him he was suffering from a fatal disease. Since he thought he had only a short time to live he thought he might as well live it up by stealing from his employer. He continued to claim this even after he was convicted and had served his sentence and wanted to sue the doctor in negligence for the mistaken advice.
3. There was a very similar case of another sales manager who also “sold” his company’s goods to fictitious companies of which he was the true and who also purported to negotiate the sales of the goods. I don’t remember the name of his employer. In this case the sales manager claimed that the sales were not fictitious and that he had actually sold the goods to a real buyer who was an individual he claimed to have met and who was supposedly his business partner and a shadow director and shareholder in his companies. No evidence for the existence of this person however ever came to light and the prosecution claimed that he did not exist. I don’t know the outcome of this case because I referred this person to Monty Raphael, the London lawyer who in those days specialised in defending individuals of this sort, but I cannot believe he wasn’t in the end found guilty.
In every one of these cases money was of course paid to the companies whose goods were stolen to make it appear that genuine sales were taking place. This is an essential part of the deception without which the theft cannot be concealed and becomes impossible. In every case however the theft (and the accounting fraud carried out to conceal it) was detected as a result of an audit.
As I have said already (and as Vladimir Markin of the Investigative Committee has also said) such cases are commonplace. There is nothing unusual about them or about Navalny’s.
No, vague similarity is surely not enough. If Navalny’s case is such a commonplace, you should have no problem producing an exact legal precedent: same scheme, same scale, same charges, long jail time. Thank you in advance.
Really Peter this is ridiculous. There is no “vague similarity” in the three cases I cited. All involved the same scheme, scale and charges as in Navalny’s case except of course that they happened in Britain so that the charge in every case was brought under the Theft Act. As for jail time, the first two cases certainly involved it though in both cases the defendants pleaded guilty. Navalny’s refusal to plead guilty or indeed to admit to any fault at all is the one thing in his case that marks it out as unusual. Very few defendants in Navalny’s position would do the same, which is why he ended up with a much longer sentence than he might otherwise have done. However I provided in the essay the sentencing policy guidelines in Britain for cases such as Navalny’s where a first time offender is convicted after pleading not guilty for a crime on the scale of the crime Navalny committed and involving an abuse of trust. Navalny’s sentence is exactly in line with those guidelines which is how as you know from the discussions on Kremlin Stooge I was able to predict it accurately.
For your information a legal precedent is not a case that is in every respect identical to the case being tried. A legal precedent is a case where the Court pronounces on a point of law. The essay cites two such precedents (1) the Russian precedent for the charge to be based on the value of the property stolen and (2) the British precedent on the calculation of loss.
No, clearly not: in Navalny’s case, there were no black market, fictitious contracts, inexistent persons, and money going to wrong pockets.
According to the indictment, the “scheme and scale” were as follows: company A bought* half a million dollars worth of timber from company B and resold** it to legit end customers at a modest markup*** of about 7%. The question remains the same: are you aware of any such case resulting in conviction for embezzlement and long jail time?
* buy verb to obtain in exchange for payment
** resell verb to sell something that you previously bought
*** markup noun the amount by which the price of something is increased before it is sold again
There was no mark up Peter. I don’t know why you persist in using this word when VLK simply sold the timber to its customers at the same price KirovLes would have sold it. Not that it matters any more but as I have previously pointed out to you, use of this term by the defence during the case by confirming that VLK acquired the timber at less than its true price would have helped the prosecution’s case. Your stubborn insistence in using this wrong and in fact highly incriminating word speaks more of your inability to face the facts of this case than of anything else.
For the rest, why do you say the contracts to sell the products in the Tate & Lyle case or in the third case I mentioned were any more fictitious than those in the KirovLes case? They were illegal contracts, but then so were the contracts in the KirovLes case. The contracts in all three cases as in the KirovLes case were all the results of corrupt arrangements. There was (probably) an inexistent person in the last case but no such persons in the first two. The person who acquired the products in the second two cases and possibly also in the first were in all cases limited companies in which the thief or thieves had an interest, which is exactly what happened in the KirovLes case. What makes you think that the customers who bought the products from the thieves in the last two cases were part of the black market? That was true in the first case but certainly not in the other two. On the contrary the customers were entirely genuine customers who bought the products in good faith, again as was (probably) true in the KirovLes case.
As for money ending in the wrong pockets, that was the intention in the KirovLes case, which is why Navalny and Ofitserov were convicted and why Opalev pleaded guilty. That was also the case in all three cases I have cited. Both British and Russian law require such an intention. They do not require that the thief actually benefit from the theft. It is not a defence that the thieves in the end failed to benefit from it.
Lastly, your summary of the indictment is completely wrong. As you know the charge in this case was not that the timber was simply bought by VLK but that the timber was embezzled by being wrongly acquired by VLK via illegal contracts as part of a scheme concocted by Navalny, Ofitserov and Opalev. The fact that in order to argue for Navalny’s innocence you have to misrepresent the indictment shows that you realise he is guilty even if you cannot bring yourself to acknowledge it.
There surely was — see definition above.
No, there’s nothing incriminating whatsoever in the word “markup” — see definition above.
For the rest, I gather your answer to my question is still no, you can’t cite any immediately relevant precedent. No problem, I’ll help you out.
The current case did have a precedent of sorts: the same case, two years ago. If you actually had a clue, you would know that the Kirovles case against Navalny and Ofitserov was originally initiated in May 2011 under Article 165 (infliction of pecuniary damage… in the absence of indicia of theft). It wasn’t until much later that Article 165 was replaced with 160, so one wonders what made the Investigative Committee make such a bizarre U-turn and discover extra-large-scale theft where they previously didn’t see any at all. Take your guess:
a) They have found the missing smoking gun.
b) The very meaning of the word “theft” has changed sometime between 2011 and now.
c) They are chaotic idiots.
d) They got a call from upstairs.
PS. One also wonders what you would be saying now had they gone ahead with prosecuting under Article 165.
I have explained repeatedly why there was no mark up and why use of that word is incriminatory not that it matters anymore. I have cited three exactly analogous cases. I have explained what a legal precedent is and why you are using that term wrongly. I have explained the position viz Article 165. It has no application to the case, which is why the case under that Article was not pursued and the decision was taken to proceed under Article 160. Thank you for clarifying the point.
For the rest it is clear from your misdescription of the indictment that you are shaping the facts round your argument rather than your argument around the facts. When that happens a discussion goes nowhere and becomes open ended. This is where it stops. I will allow you one further comment since I know that having the last word is important to you.
No, you have told three irrelevant unverifiable anecdotes. If you really had a clue, you would perhaps try to compare Navalny’s case with that of Khodorkovsky.
As promised, here is my first attempt to gather all the key source materials together into one archive. This will be of assistance, hopefully, to some future law student who intends to write their dissertation on this case. Each youtube video ranges from around 3 to 8 hours.
The trial extended over a period from 3-4 months, 19 days in all, but obviously not sequential.
Day #1 of KirovLes trial.
Day #2 of KirovLes trial.
Day #3 of KirovLes trial.
<a href="http://www.youtube.com/watch?v=WMozraDDhek" Day #4 of KirovLes trial.
Day #5 of KirovLes trial.
Day #6 of KirovLes trial.
Day #7 of KirovLes trial.
Day #8 of KirovLes trial.
Day #9 of KirovLes trial.
Day #10 of KirovLes trial.
Day #11 Part 1 of KirovLes trial.
Day #11 Part 2 of KirovLes trial.
Day #12 of KirovLes trial.
Day #13 of KirovLes trial.
Day #14 of KirovLes trial.
Day #15 of KirovLes trial.
Day #16 of KirovLes trial.
Day #17 of KirovLes trial.
Day #18 CLOSING ARGUMENTS
Day #19 VERDICT AND SENTENCING
Sorry, I messed up that 4th link, but it still works if you click on it.
More source materials:
Suspicious emails exchanged between Navalny and Ofitserov formed a key element in the Prosecution case against them. In his verdict, Judge Blinov placed heavy emphasis on these emails, stating they corrobated the verbal evidence of witnesses Opalev, Bura, and Batrygina. And trending him to believe THEIR version of reality over the stories spun to him by Navalny and Ofitserov.
These suspicious emails were originally laid out on the internet as part of an archive provided by the hacker “Hell”, who had busted Navalny’s GMAIL account. A blogger named “sporaw” picked through the extensive archive and found some interesting stuff involving Navalny, Ofitserov, Belykh, Gaidar, and the rest of the merry band. The Navalny/Ofitserov emails essentially broke the frustratingly elusive KirovLes case, much to Bastrykin’s delight. Based on this new information, the Investigative Committee was able to obtain warrants to obtain the emails, in more kosher fashion, from Navalny’s own computer. The emails were presented and read out loud in court, along with proof of chain of evidence, legally obtained warrants, etc. Navalny could not, and did not even try to, dispute the authenticity of the emails. Their authenticity was confirmed and proved by digital signature encoding program DKIM (Domain Keys Identified Mail), used by GMAIL.
(Prosecution also obtained warrants for telephone wiretaps for various conversations which had been taped years previously,during the time when highly suspicious local law enforcement agencies were investigating Navalny’s dubious activities in Kirov. These taped cell phone conversations were also presented in court and played out to the Judge, along with proof of chain of evidence, expert analysis of the voice records, and legally obtained warrants.)
Defense was not successful in excluding any of the wiretaps or emails from evidence exhibits. After which, their case became fairly hopeless, because the emails and phone taps pretty much tell the real story what was going on behind the scenes.
Thanks for doing this and this is incredibly helpful. It means that the whole material about this case is now gathered in one place.
More source materials for the KirovLes archive: Here is the full text of the Prosecution case . This is what Prosecution went into the trial with. And emerged from the other end of the meat grinder with pretty much the same story, in their final summation. Defense calls this a travesty (“They didn’t even LISTEN to our side of the story!”) Prosecution calls it vindication (“We knew all along dey was no-goodniks…”)
Document contains written witness testimony, a lot of numbers and blah blah blah, plus the juicy stuff = the intercepted emails and tapped cellphone conversations.
Now, what I would really like to get my hands on is the written copy of Judge Blinov’s verdict, which he delivered orally, in his thick V’atka accent, in a 4-hour marathon filibuster (with just one break for a throat lozenge).
Does anybody know if a written transcription of Blinov’s verdict exists? And if so, where to find it? I looked but cannot find it, and I am about to give up this elusive quest…
More source materials for the KirovLes archives:
Here is Russian Supreme Court Ruling from 27 December 2007 .
The ruling was passed before KirovLes was a twinkle in anybody’s eye.
This is the key document that solves the riddle of “Why 16 million and not 3 million rubles?”
aka “Why Article 160 and not article 165?”
Prosecution cited this ruling, and so did Judge Blinov.
Ruling very clearly states that in cases of embezzlement of government property, the accused embezzler should be charged for the full amount of what was taken, EVEN IF some of the loot was subsequently repayed (or replaced with loot of a lesser value).
Hence, since Prosecution proved that basically, VLK had no right to even look at the lumber in the first place, let alone trade it, then it is just one additional step, based on above ruling, to simply add up the sum of prices of the 16 transactions that passed through the hands of the shell company VLK. These transactions added up to the 16 million rubles.
Hence, it don’t matter that VLK paid KirovLes back all the money eventually except for around 3 million rubles.
Counterintuitive, but there you have it. It’s the law!
And based on this, the case actually turns out to be fairly simple, despite the surface complexities.
Dear Alexander: More source materials for the KirovLes acrhive.
I almost forgot this one, it’s pretty juicy. It’s a blogpost containing transcriptions of some of the questionable cellphone conversations between Navalny and Ofitserov. This material was used in court by the prosecution.
Included is the famous conversation in which Navalny calls Bastrygina a c*nt; as well as the one in which he and Ofitserov plot to put Opalev in a figurehead position at KirovLes in which he (Opalev) will be blamed for making the unpopular decisions (e.g., layoffs) while Ofitserov is actually running the show behind the scenes.
I can’t wait to read your detailed defence of Magnitsky’s cadaver synod.
The trouble is the Magnitsky case has been almost entirely unreported and I am still trying to get hold of the Judgment. If and when I do I will review it.