BIOGRAPHY www.khodorkovsky.com SUMMARY BIOGRAPHY Mikhail Khodorkovsky is a Russian philanthropist who has dedicated his life to promoting the values of a liberal democracy in his home country. Imprisoned by Vladimir Putin’s regime, he was one of the longest serving political prisoners in modern Russia. Prior to his arrest in October 2003, Khodorkovsky was the head of Yukos, one of Russia’s largest oil producers. Khodorkovsky transformed what was an outdated Soviet enterprise, introducing modern and transparent standards, and developing the company into one of Russia’s most successful companies. declared the two men ‘prisoners of A leading businessman, Khodorkovsky conscience.’ was also an increasingly outspoken critic Khodorkovsky wrote extensively about of corruption in Russian life, and the the injustices he saw in prison and about authoritarian direction of Russian politics. his vision for Russia, which turned him To that end, he began funding opposition into a leading political commentator in parties, and established the Open Russia Russia and a worldwide gure. Foundation, a non-governmental organisation promoting a strong and In December 2013, shortly before the eective civil society. Sochi 2014 Winter Olympics, Khodorkovsky was unexpectedly Having become the most outspoken critic pardoned. Upon his release he declared of the Putin regime, Khodorkovsky was that he would continue with his support arrested and charged with fraud and tax of political prisoners and the cause of civil evasion. He was sentenced to nine years society in Russia. In September 2014, in prison, increased to eleven years after a Khodorkovsky launched the Open Russia second trial. The two trials were criticized movement, with the aim of uniting as unfair and politically motivated by Russian citizens in support of the rule of Russian and international commentators law, free and fair elections, and a strong alike; and in 2011, Amnesty International civil society. EARLY YEARS Mikhail Khodorkovsky was born on June 26, 1963, the only child of Marina and Boris Khodorkovsky, who worked as chemical engineers at an industrial tool plant. He followed in the footsteps of his parents, studying at Moscow’s Mendeleev Institute of Chemical Technologies. From a young age, Khodorkovsky saw the importance of modernising Russia’s increasingly outmoded technological and scientic infrastructure; and in 1987, at the age of 24, he founded the Youth Centre for Scientic and Technical Development, to provide market research to large manufacturers and introduce them to new technologies. In 1989, following the development of a successful import-export business, Khodorkovsky acquired a banking licence, and with several business partners formed Bank Menatep, one of the rst commercial banks in Russia. Subsequently, Khodorkovsky and his business partners established Rosprom, a diversied holding company, precursor of Group Menatep Limited (GML). annual “Entrepreneur of the Year” prize. Yukos was the envy of Khodorkovsky’s peers and many of his contemporaries began plotting the “Yukosisation” of their own companies. Shares in Yukos could be acquired not only in Russia but also on the major stock exchanges of Europe and Khodorkovsky launched his rst civic project in 1994, founding the Podmoskovny Lyceum the United States (Yukos was considering on the outskirts of Moscow. The lyceum’s mission is to provide a rigorous education to a full oatation on the New York Stock underprivileged children – in particular orphans, victims of terrorism, and children of Exchange). By mid 2003, a merger with military servicemen. Run by highly qualied sta dedicated to creating a caring Sibneft had been agreed, and talks for atmosphere, and to providing the best opportunities for each child, the goal of the selling a major stake to Exxon Mobil or lyceum is to ensure that by the end of their time there, the children are ready and able to Chevron were well advanced. qualify for a state grant to attend higher education in Russia. By 2003, Yukos and its subsidiaries had a From the rst, for Khodorkovsky, philanthropy had always been about the improvement market capitalisation of $21 billion, and of people’s lives. But the experience of the 1998 crisis had profoundly changed the 1990s, including the prospect of a produced 20 per cent of Russia’s oil – the Khodorkovsky’s outlook. As a successful business leader and patriot (he had been an return to power of the communist party equivalent of 2 per cent of world enthusiastic member of the Komsomol in his youth), he came to believe that he had a in the 1996 presidential election. In the production. The company had become responsibility to help develop Russian society at a more fundamental level. After 1998, he months prior to the election, according to the second-largest taxpayer in Russia polls, President Boris Yeltsin lagged far after the state gas monolith Gazprom, behind communist leader Gennady contributing 4.1 per cent of the Russian Zyuganov, who had announced that he federal budget. would reverse privatisations if elected. President Putin himself congratulated Although in the end Yeltsin was Yukos on its 10th birthday in 2003. He was re-elected, matters for Yukos worsened quoted as saying: “Competently with the 1998 Russian nancial crisis. The employing modern scientic and price of oil was $8 per barrel, and the technical achievements, Yukos is YUKOS production cost was $12 per barrel. condently moving on a trajectory of Demand on the domestic oil market stable growth.” plummeted and exports were blocked. With the collapse of the Soviet Union in 1991, Russia was left with huge state-owned There was no money to pay salaries or to industries, many of them run by ineective ‘red managers’ resistant to modernisation, and pay down debts. plagued by corruption and organised crime. With his partners, Khodorkovsky In 1996, Khodorkovsky and his business partners invested in a majority stake in Yukos at a implemented an historic turnaround cost of $309 million, the price set by the state in the privatisation process under the Yeltsin based on best international business administration’s ‘loans for shares’ programme, through which investors lent the state practice – looking for eciencies money in return for the right to purchase state assets. At the time, Yukos did not look to be wherever possible. In the span of just a such a wonderful deal. Saddled with debts of between $2-3 billion (read more in The few years, they reduced per barrel costs to Yukos Library), Yukos was producing just half a million barrels of oil per day, compared to $1.5 and increased production to over the 1.4 million barrels it had been pumping in 1987, at a cost of up to $12 per barrel, which one million barrels per day. was more than the then selling price. In 2002, Vedomosti, Russia’s leading business daily, jointly published by the Russia prohibited foreign investors from acquiring assets in its oil industry. In fact, few Financial Times and the Wall Street investors had any appetite for Russian assets due to the many risks inherent in Russia in Journal, awarded Khodorkovsky its thus expanded his own philanthropic young people, based on the values and activities, and also Yukos’s corporate practices of democracy, civil society, and social responsibility programmes. Indeed, market economics; and funding for a Yukos became Russia’s leader in the eld, “Russian Booker Prize” for literature. In with a particular focus on supporting addition to such programmes, Open schools, hospitals, and libraries in Russia was amongst the few communities where the company domestically-funded organisations that operated. Yukos helped to fund made grants to human rights employee mortgages and oered organisations. generous resettlement grants. In 2002, Yukos was recognised by the Russian In 2003, Yukos pledged $100 million in government as the “Best Company for support, over the course of a decade, for Compensation and Social Payments the Moscow State Humanities University. Programmes” and for “Implementation of In the same year, Khodorkovsky also Social Programmes at Enterprises and provided a major endowment to support Organisations.” the Khodorkovsky Foundation, a UK-registered charity that provides As part of Khodorkovsky’s commitment scholarships for higher education, and to developing Russia’s global links, in makes donations to educational 2001, Yukos also funded the United States establishments. The Khodorkovsky Library of Congress with a grant of $1 Foundation’s endowment ranks it million, earmarked for a Russian rule of amongst the largest of such charities law programme called Open World, to operating in Russia, and today it oer fellowships for Russian scholars and continues to provide support for Russia’s students with leadership potential. students and educational establishments. The Foundation also supports the And in 2001, Khodorkovsky and Yukos Oxford-Russia Fund, which has provided shareholders also created the nancial support and scholarships for Yukos-funded Open Russia Foundation, Russian students to study at the with a view towards sustainably building University of Oxford. and strengthening civil society in Russia. Funds were disbursed through Following Khodorkovsky’s arrest in 2003, philanthropic programmes and the Russian authorities launched a competitive grant programmes in a wide concerted campaign against his variety of educational, cultural, and social philanthropic legacy. Open Russia, by spheres. Programmes included the then, one of Russia’s largest foundations, Federation for