Kremlin takes its revenge on the oligarchs

Mikhail Khodorkovsky's second trial for fraud has already lasted nearly a year. But his real 'crime' is to have crossed Vladimir Putin

On the second floor of a scruffy courtroom in central Moscow, the stairwell reeking of fried potatoes and the floor wet and dirty from the snow melting off boots, Russia's most famous prisoners undergo yet another day in their seemingly interminable trial.

Mikhail Khodorkovsky, formerly Russia's richest man, and his former business partner Platon Lebedev are taken each day from their holding cells at Moscow's notorious Matrosskaya Tishina prison, bundled into a cage in a police van and driven to the courtroom. Already sentenced to eight years in prison, Mr Khodorkovsky is now undergoing a second trial, widely dismissed as even more of a farce than the first, that could see him put behind bars for a further two decades.

The courtroom is an exercise in the absurd that could come straight from the pages of Gogol or Kafka. The two defendants sit inside a bullet-proof glass cage, nicknamed the "aquarium", that is remarkably similar in structure to the hundreds of snack kiosks that dot the streets of Moscow. A bank of six defence lawyers sits opposite the trio of prosecutors, who in their navy uniforms look like ticket collectors on a train. Huge mounds of documents are everywhere.

The judge, sitting in front of a Russian flag, peers over proceedings and looks thoroughly bored. It's not surprising – the trial started last March, and nobody knows when it will finish. The prosecution promises to call 250 witnesses, and so far only 40 have taken the stand. Then it will be the turn of the defence, who say they plan to call top-ranking Russian officials including the Prime Minister, Vladimir Putin, to the witness stand.

They have been through all this before, of course. Arrested in 2003, Mr Khodorkovsky was given a nine-year prison sentence in 2005, later reduced to eight, which until the new trial he had been serving thousands of miles from Moscow in the wastes of Siberia.

His conviction was widely seen as a message from Mr Putin, then the President. Mr Khodorkovsky had breached an unwritten agreement that the President had made with Russia's richest men, the oligarchs, when he took office in 2000. The businessmen were permitted to keep their vast financial gains from the tumultuous 1990s in exchange for staying out of politics.

Mr Khodorkovsky was the most successful of these oligarchs. He had started out making money through the Komsomol, the Communist youth league, and by the late 1990s was in charge of Yukos, Russia's biggest and richest oil company. He was never into the obscene displays of wealth and bling for which other oligarchs such as Roman Abramovich have become well known. Especially in the early years, he cut a modest figure, wearing geeky glasses and thick cardigans. But he had begun to break the rules of the game, financing opposition political groups, and this was the price he paid.

Yukos was dismembered, and most of its assets were auctioned off, ending up under the control of the state-run company Rosneft, chaired by Igor Sechin, a shadowy Kremlin figure close to Mr Putin and thought to lead a clan of hardliners within the Russian elite. Mr Khodorkovsky was convicted of fraud and tax evasion and sentenced to eight years in prison. The message sent was loud and clear – don't mess with the Kremlin.

It is widely acknowledged that it was difficult to become rich during the 1990s while remaining fully within the bounds of the law, and most of the oligarchs could quite easily be convicted of similar crimes if the political will were there to bring them to court. Mr Khodorkovsky became the poster boy for what happens if you break the unspoken agreement with the Kremlin.

But while eight years seemed like a long sentence, the years ticked down quickly. Various reasons were found to ensure that Mr Khodorkovsky was denied early release, including a caution for taking a walk in prison grounds with his hands in the wrong position. At one stage, a fellow inmate even came forward to claim that the former Yukos boss had sexually assaulted him, a charge that was dismissed as absurd even by the normally compliant courts system.

The authorities insist that both trials were instigated by purely legal concerns, but supporters of Mr Khodorkovsky have said that the second trial was initiated due to a fear of what would happen if he were released. The way that Mr Khodorkovsky's PR team, and his extensive array of foreign supporters, portray him – essentially as an emblem of good corporate governance and a philanthropist who fell foul of an evil regime – finds little truck among ordinary Russians. They view the oligarchs – including those who are still in favour with the Kremlin – as little more than opportunists who robbed the country of its wealth at a time when the majority of people went hungry. But the worry among Russia's ruling elite is that Mr Khodorkovsky's time in jail has the potential to give him what no other billionaire who grew rich during the 1990s has – moral credibility with the Russian population. "With every year that goes by, he becomes seen less as a thieving oligarch and more as a potential political alternative," Dmitry Oreshkin, a Moscow-based political analyst, says.

Mr Khodorkovsky has become an active commentator on events in Russia, despite his location behind bars. He recently won a literary award for a series of letters he exchanged with the winner of the Russian Booker Prize, Lyudmila Ulitskaya, and a letter exchange with the best-selling novelist Boris Akunin has also been published. Last week he published a long article in a US newspaper, decrying the direction of modern Russia and warning that without political reform the country was liable to collapse. "There is very little chance of a 'not guilty' verdict," Mr Oreshkin says of the trial. "This is about revenge; it's about a lesson to other businessmen, and it's about fear of him becoming an opposition figurehead if he's released."

President Dmitry Medvedev, who took over from Mr Putin in 2008, is a lawyer himself and has promised to reform the country's notoriously weak court system. But most observers in Moscow say he would be powerless to go against Mr Putin and the system and have Mr Khodorkovsky released, even if he wanted to.

Back in the courtroom, last week was taken up with the questioning of Alexei Golubovich, formerly a top-ranking Yukos executive, called by the prosecution to give evidence against his old boss. "Our trial is quite paradoxical," said the lead defence lawyer, Vadim Klyuvgant. "Often, the prosecution's witnesses end up supporting our case. Much of what he said has been very helpful to the defence."

On Friday, Mr Golubovich was being directly questioned by Mr Lebedev from inside the "aquarium". The witness was visibly uncomfortable, answering most questions with claims not to remember the events or not to know. After one mumbled response, Mr Lebedev swung round with a triumphant look in his eyes. "You do realise what you've just admitted to?" he asked the witness, to sniggers from the audience. Every claim from Mr Golubovich that he can't remember something was met with a darkly sarcastic "I see". Mr Lebedev appeared to be thoroughly enjoying himself, perhaps because he finally has the chance to stretch his razor-sharp intellect, denied mental exercise so long during the dull years of imprisonment.

Mr Khodorkovsky sniggered along on occasions, and the harassed-looking prosecutors occasionally jumped up to object. The defendants appeared rather like a pair of cheeky schoolboys tormenting obtuse teachers who have put them in detention.

The trial could go on for at least another year, and the defence says there are repeated procedural violations in favour of the prosecution. Even some normally loyal figures have suggested that trying Mr Khodorkovsky a second time on similar charges is ill-advised. But the need to keep him locked up is stronger. "This is explicable using Stalinist, bandit logic," Mr Oreshkin says. "It's about who is stronger. The authorities think that if they release him, it won't be a display of humanity, a display of lenience. It would be a display of weakness. And that is unacceptable."