The criminal charges, which carry a five-to-10 year prison term, are the latest to be lodged against a vocal Kremlin critic and have some U.S. lawyers with Russian expertise skeptical about the country’s commitment to the rule of law.
“Russia is falling into a dictatorship and [Navalny's] arrest is entirely political,” says Jamison Firestone, the cofounder and managing partner of Moscow-based law and accounting firm
who fled Moscow for London in 2010
after he discovered that someone was trying to obtain a $21.5 million fraudulent tax refund by forging his signature on client documents and the authorities refused to act. “At its best, the indictment says to Navalny that if you continue to open your mouth, you’re going to prison. At its worst, he’s already going to prison.”
The Investigative Committee of the Russian Federation—a body akin to the Federal Bureau of Investigation—filed the charges against Navalny under
Article 160 of Russia’s criminal code
according to a press release outlining the allegations
. Prosecutors claim Navalny embezzled roughly $500,000 from the regional government of Kirov, a province just west of the Ural Mountains, by participating in a scheme to steal timber from a state-owned company.
Navalny, who has publicly described the charges as “
strange and absurd
,” has been released by Russian authorities and agreed not to leave Moscow while his case is pending. Regional prosecutors in Russia previously investigated similar charges against Navalny before dropping the matter,
according to news reports
. But as a leading Putin and anticorruption crusader—
once called Navalny “
Russia’s Erin Brockovich
” for taking on corporate greed—Navalny continued to draw the interest of those loyal to the government.
“All politics in Russia are intensely personal,” says Robert Amsterdam, a name partner at
Amsterdam & Peroff
, whose unique “political litigation” practice was
profiled earlier this year by The American Lawyer
. Amsterdam once represented imprisoned Yukos CEO Mikhail Khodorkovsky, and has remained a vocal critic of the current Kremlin regime since being kicked out of the country several years ago.
Amsterdam claims the “personal piques and interests of the various players involved” often determine who receives justice in Russia and notes that the case against Navalny “demonstrates the institutional breakdown” among the warring clans vying for influence within the Kremlin.
who runs his own blog
perspectives on global politics and business
, says Putin is obsessed with the reversal of Russia’s geopolitical position. A faltering economy, a troublesome opposition movement, the U.S.’s growing status as a gas exporter, and the crisis in Syria are all contributing to Putin’s “fear of the falling dominoes of the Arab Spring,” he says.
As Amsterdam sees it—and he has enjoyed many conversations over the years with nervous partners at Am Law 100 firms—one implication of Navalny’s arrest for U.S. lawyers operating in Russia is the advent of a so-called dual state, with the rule of law applying to most of society and the “
” catering solely to the interests of the ruling regime.
U.S. lawyers must navigate such a bifurcated system carefully. As
, a former Yukos lawyer who has fled to the U.S.,
wrote in an email to participants
in the 2010 St. Petersburg International Economic Forum: “As you listen to Russian officials and businessmen discuss potential gold mines in investing in Russia, be mindful that there are numerous land mines as well.”
“International law firms aren’t in Moscow to take political positions,” says Firestone, a former board member for the American Chamber of Commerce in Russia. “They want to make money, so they’re happy taking the gas and government contracts from a dictatorship.”
Akin Gump, Baker Botts, Baker & McKenzie, Cleary, Hogan Lovells, and Squire Sanders all have offices in Moscow, as do Am Law 100 firms like
Chadbourne & Parke
Debevoise & Plimpton
Haynes and Boone
Latham & Watkins
Morgan, Lewis & Bockius
which picked up Dewey & LeBoeuf’s local operations in May
Orrick, Herrington & Sutcliffe
Skadden, Arps, Slate, Meagher & Flom
White & Case