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Shades of '90s instability return to Russia

The Yukos trial resumes Monday in Moscow amid woes fueled by a journalist's assassination and a run on banks.

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Russia's image of order and stability, cited as President Vladimir Putin's key accomplishment, faltered last week as bailiffs began dismembering the once-profitable oil giant Yukos and panicked depositors staged a run on several of the country's top banks.

Also, Paul Khlebnikov, a leading Western journalist who covered Russia's secretive business community, was gunned down Friday outside his Moscow office in an apparent contract killing.

Though outwardly unconnected, these developments are fueling a sense of disarray among Russians worried the political and economic crises of the 1990s, which Mr. Putin appeared to banish, may be lurking beneath the surface.

"We see a slowing of reforms in every area. Everybody is very frightened," says Andrei Kolesnikov, a political expert with the liberal Kommersant newspaper. Events like the forced bankrupting of Yukos, he says, "are bad for Russia, bad for business, and bad for Russia's image abroad."

The Yukos case has roiled Russia's political waters since last year's arrests of top shareholder Platon Lebedev and CEO Mikhail Khodorkovsky in connection with the shady privatization of a state-owned fertilizer company a decade ago. The trial of both men on criminal charges including fraud, forgery, and tax evasion resumes Monday.

Critics say Mr. Khodorkovsky is the victim of selective justice, singled out for prosecution by a vindictive Kremlin because of his support for opposition parties and his personal political ambitions. They argue his chances of receiving a fair trial in Russia's servile court system are virtually nil.

"Courts here are subordinated to the authorities; they have no independence," says Yevgeny Yasin, director of the Higher School of Economics in Moscow.

Others argue that Khodorkovsky, who was Russia's richest man as recently as last year, is being punished to set an example to the other superwealthy oligarchs who control at least a quarter of the country's economic output. "In the 1990s Russia was a kleptocracy; Putin had to change that," says Alexei Pushkov, a TV commentator. The Kremlin took aim at particular oligarchs who "were most inclined to convert their money into political power," he says.

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