“A decade ago, Bill Browder was flying high as one of the most successful foreign investors in Russia. With $4.5bn under management, Browder had committed his career and a lot of his investors’ money to proving his proposition that the shares of Russia’s newly privatised, resource-rich companies were absurdly cheap,” write John Thornhill and Geoff Dyer in a must-read account of the case of Sergei Magnitsky:
The cocksure, US-born fund manager aggressively argued to anyone prepared to listen – and to many who weren’t – that President Vladimir Putin had been unfairly maligned in the western press and was intent on bringing prosperity and order to the biggest country in the world, after the rapacious criminality of the 1990s. To the disgust of many, Browder declared himself delighted when Mikhail Khodorkovsky, once Russia’s richest and most powerful oligarch, was arrested in 2003 and jailed. “Who’s next?” Browder asked cheerfully.
That was before Sergei Magnitsky revealed that Russian officials had orchestrated a tax refund fraud, forging Hermitage documents to transfer $230m of state funds to a criminal syndicate:
Rather than congratulating Magnitsky for his assistance, the authorities accused him of orchestrating the fraud himself and arrested him in November 2008. After almost a year’s detention, during which time he was repeatedly denied medical treatment, he was beaten to death in his jail cell.
……From that day, Browder has devoted the same near-manic energy he once spent on cheerleading investment opportunities in Russia to exposing the country’s darker side. … He and a team of five dedicated researchers have published reports forensically describing Magnitsky’s detention and death, financed several films highlighting the links between Russian officials and the criminal underworld, and, with the lawyer’s family and friends, helped set up a website, called Russian Untouchables, which airs the videos and documents corruption.
His campaign may soon result in the US Congress adopting a law naming the 60 Russians identified by Browder as being responsible for the false arrest, torture and death of the 37-year-old lawyer. The act, which has been ferociously resisted by the Kremlin and the US administration and some business interests, would freeze the foreign assets of, and deny visas to, those named individuals.
If adopted, as now seems likely, the law would be one of the most arresting human rights initiatives in years, an extraordinary example of what Browder calls “civilian diplomacy”. Unprosecuted miscreants from other countries could be added to the list. Parliaments in Europe could well be encouraged to follow the US lead.
“There could be no more fitting tribute to Sergei,” says Browder. “He believed in the power of the law.”
“Putin tasted the forbidden fruit,” Browder says. “From that moment on, the oligarchs became his business partners as opposed to his opponents, and all the corporate governance work I had been doing became a huge pain in their backside.”
Leon Aron, a Russia scholar at the American Enterprise Institute in Washington, says: “We were appalled when Bill Browder attacked Khodorkovsky when he was arrested and kicked a man when he was down. But I believe in epiphanies. Browder is now conducting a moral crusade.”
If passed, the Magnitsky bill will be “the most significant human rights legislation about Russia since the end of the cold war,” says David Kramer, president of the Freedom House think tank:
Browder had meetings with pretty much anyone in Washington who would agree to see him. Not only was the case of Magnitsky a compelling one – “he is almost a literary figure, a genuine Russian hero”, as one Senate aide puts it – but Hermitage had the technical skills to provide the precise details about money flows that backed up the story. And in Browder, it had a figure who could present the case with fluency and energy. In 2009, Ben Cardin, a Democratic senator from Maryland, chaired a hearing on human rights issues in Russia, with the Magnitsky case given top billing. Browder presented his case to great effect. “He is very good at telling his story,” says the aide. “That makes all the difference up here.”
Yet even as Browder gathered support on the Hill, his campaign could easily have languished. The fact that the US Congress is now on the verge of passing a law based around the Magnitsky case revolves around three further factors – the behaviour of the Russian government, the response of the State department and a liberal dose of political luck.
The recent harassment of US envoy Michael McFaul “could be the prelude to a much rougher phase in relations with Russia if the Magnitsky law is passed,” Thornhill and Dyer suggest:
The Russian authorities have already promised they will retaliate in kind. …But Browder argues that there is a lot of support for the legislation among ordinary Russians. He says that 2.35 million people have viewed his films on the Russian Untouchables website, 95 per cent of them in Russia. The site encourages “citizen investigators” to submit evidence of corruption. Much of the evidence amassed by Browder’s team has been provided by whistle-blowing Russians fed up with the lawlessness of their own system.