Since Navalny's legal troubles accelerated in the last year, at least one of the Foundation's known donors has been chivvied right out of Russia, and the home of the organization's managing director, Navalny's friend Vladimir Ashurkov, has been raided by the federal police.
Westerners might think that a graft-buster's criminal prosecution in Russian backwater doesn't really concern them, but Navalny's core argument has always been that corruption isn't bound by national borders; it's Russia's most readily exported commodity (again, see Cyprus, or re-read that sentence above about VTB's European pension deposits). In an event in British parliament held about a year before the protest movement transformed him from a cult online celebrity into the de facto leader of the opposition, Navalny was asked by a well-meaning questioner whether or not it was possible for a foreign company to do business in Russia without paying bribes. His response was: "Yes, but it's very expensive." American corporations and businessmen subject to the Foreign Corruption Practices Act should remember this observation as they try to capitalize on Russia's recent accession to the World Trade Organization.
As of Thursday morning, there were four outstanding indictments against Navalny - one accusing his brother Oleg, a postal worker, and his parents, the owners of a wicker factory, of money-laundering -- although he was only on trial for the most-documented charge of "embezzlement" of $500,000 from a state-owned forestry company. How flimsy is this case? Earlier this month, a Chicago-based law firm, Loeb and Loeb, which had pored through the available evidence for months, put out a useful white paper on Navalny's supposed misdeeds. The facts pertaining to the present indictment, which can have only amused even the most veteran Chicago attorneys, are these.
In 2009, Navalny volunteered as an advisor to N. Yu. Belyx, the oppositional regional governor of Kirov. He was first put to work overseeing the Kirov Regional State Unitary Enterprise, or Kirovles, the state-owned forestry company that at that time was operating at a loss, owing to the economic recession. Shortly after assuming his role, Navalny was contacted by an old colleague from his days in the liberal Yabloko party, Petr Ofitzerov, who, in March 2009, had formed a consultancy, Vyatka Timber Company LLP (VLK), and was keen on using the firm to do business in Russia's lucrative timber industry. Navalny put Ofitzerov in touch with V.N. Opalev, then the general manager of Kirovles, which is where Navalny's involvement in the ensuing deal ended. In April 2009, Kirovles and VLK entered into a general contract agreeing to allow VLK to act as a broker for Kirovles. The contract was then amended over the next several months to include each specific deal relevant to the Kirovles-VLK arrangement. Some customers listed in these amendments were newly found by VLK; others were old Kirovles clients, but now the consultancy acted as an intermediary buyer of forestry products, which it would then sell to third party customers (the markup price constituted VLK's profits). After a time, Opalev decided that the business VLK was bringing into Kirovles wasn't worth the cost in loading and shipping overhead, so he instructed his branch directors to cut out the consultancy middle man altogether and sell directly to Kirovles clients. Opalev terminated the company's contract with VLK on September 1, 2009. Navalny was not a party of all of these decisions, nor did he receive any money that changed hands between VLK and Kirovles throughout the tenure of their contract.