When Dmitry Medvedev became president of Russia two years ago he pledged to combat "legal nihilism," the disrespect for law that feeds corruption and backwardness in his country.
Any hope that Medvedev might behave differently from his mentor, and Russia's real ruler - Prime Minister Vladimir Putin - has been doused by the biggest show trial since the days of the Soviet Union. On Monday, the former oil tycoon Mikhail Khodorkovsky, who's already served seven years in Siberian jails on trumped up tax-evasion charges, was found guilty in a second sham trial.
This time Khodorkovsky was convicted of stealing more than 200 million tons of oil from his former company, Yukos. Such a charge is ludicrous - this huge a theft couldn't have been hidden, and anyway, Yukos was on its way to becoming Russia's most transparent oil operation.
Khodorkovsky's real crime was that he financed liberal political groups and human rights foundations (other tycoons either fled or cozied up to the Kremlin). The oilman ran afoul of Putin, a two-term president who may run again after his current term as prime minister.
Apparently, Putin wants to ensure that Khodorkovsky stays in prison long after the next elections in 2012. A few weeks ago, when a TV interviewer asked the prime minister what he thought about the case, he responded: "A thief should sit in jail."
So no one in Russia was surprised at the verdict. But what makes this case so important to the West is what it reveals about Russia's direction. After Khodorkovsky's first trial, the government grabbed Yukos, Russia's best run private oil company, and handed it off to Kremlin insiders.
Law, shmaw, as international - and Russian - businessmen have learned to their peril. They must contend with what locals call "telephone justice," which means that a Russian official can call a judge and dictate the verdict.
Transparency International - which monitors corruption levels in 178 countries - ranked Russia as 154th in 2009. Dozens of Russian human rights workers and journalists who have tried to investigate corruption have been murdered, with few cases resolved.
Foreign leaders had hoped the youthful Medvedev - who talks the talk of modernization and high-tech innovation - might improve the legal climate. Almost four years ago at the Davos World Economic Forum, I asked Medvedev - a former law professor - whether he believed in "rule of law" or "rule by law," meaning the authoritarian practice of using laws to beat down the opposition. "Rule of law," he snapped.
If this is how Medvedev views himself, he has yet to demonstrate it in practice.
"None of the promises Medvedev made about reform in the country have materialized," says Pavel Khodorkovsky, the son of the defendant, and a young Internet entrepreneur. Speaking by phone from New York City, where he is now living, he said, "I was hopeful that Medvedev wanted to do something greater."
In a powerful statement, before the verdict was delivered, the elder Khodorkovsky laid out the obstacles that confront Russian modernizers.
"What must be going through the minds of the entrepreneurs," he asked, "or senior industrial managers, or simply an ordinary creative person, watching our trial, and knowing its result is absolutely predictable?
"The obvious conclusion is frightening in its simplicity. The siloviki (powerful Russian bureaucrats who are now or were previously members of security agencies) can do anything. Those who clash with the system have no rights whatsoever.
"A government that destroys its best companies ... that is suspicious of its people ... is a sick government.
"Millions of eyes throughout all of Russia and throughout the whole world ... are watching for the outcome of this trial with the hope that Russia will after all become a country of freedom and of the law, where the law will be above bureaucratic officials."
Until then, Russia's innovators and talented entrepreneurs will be blocked; it will remain an oil-driven despotism unable to advance or to take its place among highly developed nations.
The Russian foreign ministry has told Western governments the Khodorkovsky case is none of their affair. Untrue. Russia aspires to be part of Europe, to join the World Trade Organization, yet its government's behavior will determine whether this is possible.
As Khodorkovsky awaits sentencing, his son holds out "a little hope" for a lenient jail term - or even a presidential pardon. Medvedev talks of "rule of law" for Russia and Putin talks of "the dictatorship of law." Which is it to be?