The October 25 arrest of Mikhail Khodorkovsky, who at the time was CEO of Russia's largest oil company YUKOS, on charges of tax evasion and embezzlement has heightened concerns that President Vladimir Putin may be moving Russia back in a more authoritarian direction. Panelists at a November 3 AEI event discussed Russia's political and economic future in light of this developing story.

AEI's Leon Aron noted that Khodorkovsky's arrest strikes at the heart of the rule of law. The burgeoning Russian economy depends upon transparency, innovation, and risk-taking, and Putin's actions send the chilling message that abiding by such methods warrants prosecution.

AEI's Radek Sikorski noted that Putin craves Western validation but surrounds himself with former KGB colleagues, intervenes militarily in the former Soviet republics and Chechnya, and disrupts successful capitalists who dare to support political opposition groups--actions for which Sikorski recommended a price: "As long as Russia continues down its current path, there should be no more summits at Crawford, no more tea with the Queen of England, no more hobnobbing for Putin at the G7 summits."

Anders Aslund of the Carnegie Endowment for International Peace called the arrest part of a "systematic drive toward authoritarianism" and the order to freeze YUKOS stocks "state confiscation of private property."

Harley Balzer of Georgetown University described Khodorkovsky's arrest as part of a broader attempt by Putin to gain control of Russia's natural resources, which Putin sees as the key to Russia's participation in the global economy.

Angela Stent, also of Georgetown University, noted that Khodorkovsky won the grudging favor of the Soviet liberal intelligentsia through his donations to universities and support of civil society. Many Muscovites view his arrest as a setback to democracy, from which it could take Russia fifteen years to recover, and as a signal of Putin's consolidation of regulatory power over economics and politics.

The panelists agreed that Khodorkovsky's arrest represents a dangerous reversal for Russian capitalism and that the Bush administration should reassess its embrace of President Putin as the key to Russian democratic reform.