US Says Yukos Verdict Erodes Russia's Reputation

The United States says Tuesday's verdict in the trial of Yukos oil company founder Mikhail Khodorkovsky further erodes Russia's reputation and confidence in its legal institutions. But the Bush administration is ruling out punitive action against Moscow, saying there already is self-inflicted damage to Russia's economy and investment climate.

There is bipartisan support in Congress to censure Moscow for what are seen as anti-democratic steps, including the Khodorkovsky prosecution.

But the Bush administration, while reiterating its concern about the appearance of unfairness in the trial, is ruling out punitive action while saying that the Russian economy has already been harmed by repercussions from the case.

At a news briefing, State Department Spokesman Richard Boucher said the United States has long held that the Yukos case raised what he termed "very serious questions" about the independence of Russia's courts, the right of due process, and the sanctity of contracts and property rights in that country.

He said the Khodorkovsky verdict, sending the Yukos founder to nine years in a prison camp for tax evasion and fraud, continues to erode Russia's reputation as well as public confidence in its legal and judicial institutions.

But under questioning, he said the Bush administration does not support a bill introduced in Congress by House members Christopher Cox and Tom Lantos that would suspend Russia's membership in the G-8 grouping of leading countries until it adheres to international democratic norms.

Spokesman Boucher said the administration continues to hold that Russian participation in international institutions "is a positive thing" and that isolating Russia would "not do any good."

At the same time, he said Russia has been penalized because of the Yukos affair, which he said has had a damaging effect on the country's economy in both foreign and domestic investment and business confidence:

"Russia has already paid a price. Russia will continue to play the price as long as there are questions about the rule of law in Russia," Mr. Boucher says. "You've seen the drop-off in investment. You've seen the questions raised in business circles. You've seen even questions raised among Russian themselves about the climate in Russia for investment and business. So I think there is a definite price to be paid for the lack of rule of law."

Without citing specifics, Mr. Boucher said U.S. interaction with Moscow, including at summit meetings of Presidents Bush and Putin, is different from what it might have been had Russia been pursuing a consistent path toward democracy.

At his White House news conference Tuesday, President Bush said he had expressed his concerns to Mr. Putin about the Khodorkovsky case at their most recent meeting three weeks ago in Moscow.

Mr. Bush said it appeared to members of his administration that the Yukos chief had been judged guilty before the trial. He said the United States would monitor the expected appeal of the case with interest.