Foreign Correspondence

[Amaunet]

Elder Bush is no longer retained by the Carlyle Group as of October, 2003, after his trip to Russia.

Former President George H. W. Bush traveled to Russia in September and spoke at a dinner attended by Mr. Khodorkovsky.

That event prompted Moscow newspapers to speculate that the visit was part of an effort by American companies to secure a merger with Yukos Oil, where Mr. Khodorkovsky was chief executive until he quit on Monday in a swirl of fraud and embezzlement charges. His replacement, a Russian-born American, was confirmed yesterday.

The Carlyle Group, an investment bank that retained the elder Mr. Bush as an adviser until a few weeks ago, has a close business relationship with Mr. Khodorkovsky. Although Mr. Bush was in Russia as a Carlyle representative, the bank said, his visit had nothing to do with oil deals and he did not meet privately with Mr. Khodorkovsky.

The whole thing soured badly as Khodorkovsky was arrested.

The sale of Yukos shares to a U.S. company would entail that representatives of American big business would be sitting in the Russian parliament. Russia would cede its sovereignty if it allowed transfer of strategic assets to corporations that are, in turn, closely linked to foreign governments. This would be like having a representative of Russian business in the U.S. congress voting on or blocking key legislation relating to the national interest.

After Khodorkovsky’s arrest and losing all that oil Elder Bush separated from Carlyle.




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