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Inside the grey stone walls of an old government building, a senior bureaucrat sipped his cognac and described the new rules for business in Russia.

"The President is higher than the law," said Erast Galumov, managing director of Izvestia, a state enterprise that manages property on behalf of the Kremlin. "We don't live in law-abiding state."

Those words surprised Rudy Amirkhanian, a British-trained lawyer who was visiting the bureaucrat on that day, May 17. He had been hoping to get a lease extension on behalf of a car dealership in downtown Moscow.

Unfortunately for the Trinity Motors dealership, Russia has changed dramatically since Canadian and British investors set up the showroom in 1992.

The days of economic collapse and random banditry are finished, Mr. Amirkhanian says. But even before his meeting with Mr. Galumov, the veteran businessman was fully aware of the latest threat: an increasingly powerful Kremlin.

As the two men spoke, judges in a Moscow courtroom were reading a lengthy verdict against Mikhail Khodorkovsky, who used to be the richest man in Russia before he ran afoul of President Vladimir Putin.

Mr. Amirkhanian says he was astonished by the blunt assessment of the post-Khodorkovsky climate he heard from Mr. Galumov -- especially after the bureaucrat noticed the MP3 player in the hands of Mr. Amirkhanian's assistant, recording the conversation.

"Russia is peculiar country," Mr. Galumov said. "It cannot be changed; you like it as it is or quit. It'll never be a democratic state, [only]a Third World country with nukes.

"It's useless to oppose the system. The law is simple: Someone important says it should be done a certain way, and he'll get it his way."

He continued: "Why is Khodorkovsky in jail? He said the wrong things and he'll stay in jail."

During the two-hour conversation, Mr. Galumov broadly hinted that the lawyer could suffer the same fate as Mr. Khodorkovsky if he didn't stop fighting the Kremlin about the car dealership's lease.

Last October, Mr. Amirkhanian says, the landlord promised him another year's extension of the lease, before Trinity started $860,000 (U.S.) renovations of the ground-floor showroom just north of the city's central Pushkin Square.

The property managers gave him approval documents for the renovations, and sent him a copy of the lease for signatures.

But after the new showroom opened in March -- becoming Russia's only car dealer devoted exclusively to Cadillacs -- the landlord informed the dealership that the lease would not be renewed.

Unofficially, Mr. Amirkhanian said, he was told that "somebody important" wanted the storefront location himself.

Mr. Amirkhanian went to court, claiming that his contract gives him first right of refusal; in other words, a chance to match the bid offered by anybody else who wants the property.

Before the court proceedings reached any conclusion, however, the lawyer found himself riding the elevator up toward Mr. Galumov's office, turning left, and stepping into a well-appointed office that once served as a study for Nikolay Bukharin, a former Soviet leader who was executed in one of Stalin's purges.

On the building's stone exterior, facing Pushkin Square, crests with the words "Lenin" and "USSR" still adorn the facade, although they're barely visible among the clutter of advertisements for beer and cellphones.

Mr. Galumov wanted to give his tenant a warning: Leave the premises, or there will be trouble.

"There is a presidential corporation and we are a part of it," Mr. Galumov said. "If you want to start a war with presidential corporation you are welcome. But it's useless. You can call us federal bandits or whatever. We are federals. If you want to compete with us . . ."

The bureaucrat trailed off into laughter.

Nine days later, about 25 or 30 security officers from Mr. Galumov's company visited the car showroom and ordered everyone to leave. A frightened employee called Mr. Amirkhanian for instructions; he told them to obey.

The security officers changed the locks and painted the windows white.

Reached by telephone, Mr. Galumov confirmed his meeting with Mr. Amirkhanian and several of his statements -- although he took issue with the context.

His security officers' actions were legal, Mr. Galumov said: Only court bailiffs have the right to evict a tenant, but people can also leave a premises of their own free will.

"They moved out voluntarily," Mr. Galumov said. "If our guards had begun shooting, it would be different. But we just said, 'Take your things and get out.' "

Mr. Galumov also confirmed his assessment of presidential power in his country. "Russia is a country where the presidential resources are a colossal force," he said.

Later, the bureaucrat called back to clarify himself.

"What I meant was that when the administration's resources are confronted with cheaters, they get even more resources to fight back," he said.

The Arbitration Court of Moscow is scheduled to hear the case on Wednesday.

Graeme Smith is The Globe and Mail's Moscow bureau chief.

gsmith@globeandmail.ca

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