Authorities refused to disclose spending on the Yukos case

In the beginning of 2015, Russia has created Autonomous nonprofit organization “international centre for the legal protection” (MTSPZ), which was tasked to coordinate the legal protection of Russian state assets from the claims of former shareholders of Yukos in different countries. Judicial processes were or are in seven countries, at stake is $50 billion to ex-Yukos shareholders (their interests are represented by the Gibraltar GML) trying to recover from Russia. The costs of the courts can reach tens of millions of dollars, say industry experts, but exactly how much Russia spends on defense on the “case of Yukos”, it is impossible to say. Although the law on NGOs requires all nonprofit organizations to publish reports on the receipt and expenditure of funds, reporting MTSPZ still not been published in a special portal of the Ministry of justice, Ministry of MTSPZ and also refused to provide it .

MTSPZ “submitted” to the justice Ministry all documents (this means that the statements for 2015 were given until 15 April 2016), the reply of the press service of the Ministry of justice on request . But if the documents are submitted on paper, the Ministry of justice is under no obligation to post or provide at the request of citizens or organizations, to the reply. As of December 19 reporting MTSPZ in the relevant database on the website of the Ministry of justice was not. “We have this information directly are required to submit to the Ministry of justice, which we did,” said the CEO MTSPZ Andrey Kondakov, refusing further comment.

“When NGOs submit statements not through the procedure of posting on the website of the Ministry of justice, but simply on paper, very often these reports do not appear in a common database. Although the Ministry took upon itself the obligation to create a single public database of the records of NGOs in taking and continuing to take reports in paper form, it creates a loophole for hiding the accountability of some NGOs,” says the analyst of the center “transparency international — R” Anastasia Oriole.

In this case, the NCO is structure, de facto controlled by the Ministry of justice. Although MTSPZ was formally established two state academic institutions, he is the official agent of the Ministry of justice, Kondakov said in an October interview with “Vedomosti”. “I can’t, unfortunately, discuss the budget. I can only say that the Ministry of justice rightly requires to be detailed to the last penny reports on the costs of services of law firms and associated costs, and carefully checks everything”, — he admitted.

Undeclared secrecy

Balance sheet MTSPZ (in the SPARK database. — ) it follows that income, she has more than 3 million rubles for the year, and therefore, the organization should provide full reporting, including documents on expenditure of monetary funds and on using other property, said the Oriole. Current assets MTSPZ only at the end of 2015 amounted to 881 million rubles, “voluntary property contributions and donations” — 212 million rubles, follows from the SPARK database. Of reporting to the Ministry of justice could be seen how much the center received from the Federal budget or from Russian organizations and citizens, how much did you spend on the target activity.

The Federal budget does not reflect the costs in the “Yukos case”, but there are provisions for the main event “the protection of the interests of the Russian Federation in the international court and other legal disputes concerning financial claims to the Russian Federation”, the main Manager which is the Ministry of Finance. In 2016 under this article is allocated 4.71 billion rubles, for 2017 is allocated 3.38 billion RUB, the Press service of the Ministry of Finance did not answer the question of which budget line are the costs for the “Yukos case”. These costs can be in the form of subsidies to legal entities (open portion of the budget subsidies ANO “MTSPZ” is not found, but some subsidies are provided to legal entities in accordance with a secret Appendix, follows from the draft budget for 2017-2019). The press service of the Ministry of justice did not answer the question of whether imposed on reporting MTSPZ secrecy. But from the explanations of the Ministry to be that there are no fundamental obstacles to the disclosure of this information — it just has to do MTSPZ. “Reporting on paper does not exempt a nonprofit organization from the obligation of placing the statements on the information portal of non-governmental organisations, or from the publication in the media,” — said in response.

The Internet was not subject to reports and reports of NGOs, “containing data and images, the distribution of which is restricted or prohibited by law” should be of the order of the Ministry of justice in 2010 on the placing on the Internet of reports of non-profit organizations. In fact, this is the only limitation, on the basis of which MTSPZ could not disclose information about its activities, says Anastasia Oriole.

The law on the media in question

Failure to provide the Ministry of justice reporting MTSPZ in response to the request violates the provisions of article 47 of the law “On mass media”, which guarantees the right of journalists to receive information not related to “state, commercial or other specially protected by law secret,” says Ivan Pavlov, head of “Team 29” — informal Association of human rights lawyers and journalists (Pavlov and his colleagues sought from the Ministry of justice of the disclosure the accounting statements of the ANO “TV-Novosti”, administering RT for the years 2009-2012, reported). In October 2015, a government source said that the Ministry of justice concluded a contract with MTSPZ. If so, then the choice MTSPZ as a contractor of the Ministry of justice had to be carried out on the basis of the tender, said Pavlov. However, the information that such a contest took place, no. On the procurement website and in the SPARK database no contracts MTSPZ not listed. At government sites information about any MTSPZ instructions from authorities could not be found.

Coordination of all foreign processes in the Yukos case was assigned to MTSPZ by decision of the government, Kondakov said in an interview with “Vedomosti”. In April 2016, the Hague regional court quashed the decision of international arbitration on $50 billion, but GML has filed an appeal in the Netherlands, where hearing has not yet begun. In Belgium and France, Russia seeks the lifting of the imposed arrests on state property. In the UK and the US proceedings were suspended, and in Germany and India, was withdrawn at the initiative of the former shareholders of Yukos. In France, the former shareholders have suffered a series of setbacks (including some arrests of ownership was deemed illegal by a French court).

In each country defend Russia team of local lawyers in the US, the UK and Germany, is an international White & Case in Belgium and the Netherlands — Hanotiau & van den Berg reputable law Professor albert Jan van den Berg, in France — De Gaulle Fleurance & Associés. The final decision about which firm to work, the government claimed the head MTSPZ in an interview. Services of such firms are expensive — the hourly rate partner White & Case could reach $800, suggests the lawyer for Herbert Smith Freehills Alexei Panich. In the same month a price tag on protecting Russian interests in the three countries — the US, Britain and Germany — could reach $2 million, he admits. In addition, MTSPZ engaged in the communication support of the processes. So, in June 2016 MTSPZ attracted a PR firm Daniel J. Edelman for lighting of the American process, that revealed the U.S. justice Department that “the work for the client has already begun, but the contract is still being negotiated”, but soon the trial in the US was suspended.

At the trial on the “case of Yukos” from 2006 to 2014, when the court of Arbitration in the Hague ruled against Russia, Moscow has spent $37 million, follows from the text of the sentence in which these costs are discussed in a separate Chapter. The funds were spent on fees to lawyers and experts. Services 11 expert cost the country $4.5 million, legal services (10 partners, 35 lawyers and 25 paralegals and trainees) is $27 million.

The British magazine Economist in April 2016 claimed, referring to some evaluation without specifying the precise source, that during the years of litigation on the “Yukos case” sides spent on lawyers $300-400 million, and Russia — two-thirds of this amount. The representative of the GML did not respond to a request .

Pricing law firms

The intensity of work on the case and, as a consequence, the payment of lawyers vary from month to month. One month to go the preparations for the meeting and the meeting, the other can go work on procedural documents, and the third may not occur. In the active months for each country (USA, UK, etc.) Russia could spend about $200-600 thousand Is the average figures for the UK. In the US, costs may be more. The work is paid based on the hourly rates of lawyers. It is unlikely that rate of partner White & Case, which may be of the order of $800 will be higher or lower than the rates of similar firms in the market. All customers interested in first and foremost do not bet, and the final figures, says Panitch.

Common practice — approval of the budget under certain assumptions, beyond which the firm should not. For individual customers, the margins are not set, and discounts, on the contrary, can be given, especially in such cases. It is not excluded that White & Case has given Russia a discount, perhaps even significant, at least at my hourly rate. Budgets can be agreed for the whole thing (pending final judgment), its specific stage or a specific year, which is very important when talking about client-state or state structure. Recent work in the framework of the annual budget, since they should calculate how much can be services of the law firm in the calendar year, otherwise it may be a problem with the payment services, says Panitch. The litigation with the former shareholders of Yukos “cheap cost”, but that is irrelevant compared to the tens of billions of dollars that require a Russian former shareholders, said Kondakov “Vedomosti”. MTSPZ watching, not to pay lawyers: “for Example, one highly respected firm caused us a lot of questions. Began to ask them, and as a result managed to beat in terms of rubles no less about 25 million,” he said.