For
a time, this naming and shaming campaign worked remarkably well and led
to less corruption and increased share prices in the companies we
invested in. Why? Because President Vladimir Putin and I shared the same
set of enemies. When Putin was first elected in 2000, he found that the
oligarchs had misappropriated much of the president’s power as well.
They stole power from him while stealing money from my investors. In
Russia, your enemy’s enemy is your friend, and even though I’ve never
met Putin, he would often step into my battles with the oligarchs and
crack down on them.
That all changed in July 2003, when Putin
arrested Russia’s biggest oligarch and richest man, Mikhail
Khodorkovsky. Putin grabbed Khodorkovsky off his private jet, took him
back to Moscow, put him on trial, and allowed television cameras to film
Khodorkovsky sitting in a cage right in the middle of the courtroom.
That image was extremely powerful, because none of the other oligarchs
wanted to be in the same position. After Khodorkovsky’s conviction, the
other oligarchs went to Putin and asked him what they needed to do to
avoid sitting in the same cage as Khodorkovsky. From what followed, it
appeared that Putin’s answer was, “Fifty percent.” He wasn’t saying 50
percent for the Russian government or the presidential administration of
Russia, but 50 percent for Vladimir Putin personally. From that moment
on, Putin became the biggest oligarch in Russia and the richest man in
the world, and my anti-corruption activities would no longer be
tolerated.
The
results of this change came very quickly. On November 13, 2005, as I
was flying into Moscow from a weekend away, I was stopped at
Sheremetyevo airport, detained for 15 hours, deported, and declared a
threat to national security.
Eighteen months after my expulsion a pair
of simultaneous raids took place in Moscow. Over 25 Interior Ministry
officials barged into my Moscow office and the office of the American
law firm that represented me. The officials seized all the corporate
documents connected to the investment holding companies of the funds
that I advised. I didn’t know the purpose of these raids so I hired the
smartest Russian lawyer I knew, a 35-year-old named Sergei Magnitsky. I
asked Sergei to investigate the purpose of the raids and try to stop
whatever illegal plans these officials had.Sergei went out and
investigated. He came back with the most astounding conclusion of
corporate identity theft: The documents seized by the Interior Ministry
were used to fraudulently re-register our Russian investment holding
companies to a man named Viktor Markelov, a known criminal convicted of
manslaughter. After more digging, Sergei discovered that the stolen
companies were used by the perpetrators to misappropriate $230 million
of taxes that our companies had paid to the Russian government in the
previous year.I had always thought Putin was a nationalist. It seemed
inconceivable that he would approve of his officials stealing $230
million from the Russian state. Sergei and I were sure that this was a
rogue operation and if we just brought it to the attention of the
Russian authorities, the “good guys” would get the “bad guys” and that
would be the end of the story.
We
filed criminal complaints with every law enforcement agency in Russia,
and Sergei gave sworn testimony to the Russian State Investigative
Committee (Russia’s FBI) about the involvement of officials in this
crime.
However, instead of arresting the people
who committed the crime, Sergei was arrested. Who took him? The same
officials he had testified against. On November 24, 2008, they came to
his home, handcuffed him in front of his family, and threw him into
pre-trial detention.Sergei’s captors immediately started putting
pressure on him to withdraw his testimony. They put him in cells with 14
inmates and eight beds, leaving the lights on 24 hours a day to impose
sleep deprivation. They put him in cells with no heat and no
windowpanes, and he nearly froze to death. They put him in cells with no
toilet, just a hole in the floor and sewage bubbling up. They moved him
from cell to cell in the middle of the night without any warning.
During his 358 days in detention he was forcibly moved multiple times.They
did all of this because they wanted him to withdraw his testimony
against the corrupt Interior Ministry officials, and to sign a false
statement that he was the one who stole the $230 million—and that he had
done so on my instruction.Sergei refused. In spite of the grave pain
they inflicted upon him, he would not perjure himself or bear false witness.After
six months of this mistreatment, Sergei’s health seriously
deteriorated. He developed severe abdominal pains, he lost 40 pounds,
and he was diagnosed with pancreatitis and gallstones and prescribed an
operation for August 2009. However, the operation never occurred. A week
before he was due to have surgery, he was moved to a maximum security
prison called Butyrka, which is considered to be one of the harshest
prisons in Russia. Most significantly for Sergei, there were no medical
facilities there to treat his medical conditions.
At
Butyrka, his health completely broke down. He was in agonizing pain. He
and his lawyers wrote 20 desperate requests for medical attention,
filing them with every branch of the Russian criminal justice system.
All of those requests were either ignored or explicitly denied in
writing.
After more than three months of untreated
pancreatitis and gallstones, Sergei Magnitsky went into critical
condition. The Butyrka authorities did not want to have responsibility
for him, so they put him in an ambulance and sent him to another prison
that had medical facilities. But when he arrived there, instead of
putting him in the emergency room, they put him in an isolation cell,
chained him to a bed, and eight riot guards came in and beat him with
rubber batons.That night he was
found dead on the cell floor.Sergei Magnitsky died on November 16, 2009,
at the age of 37, leaving a wife and two children.I received the news
of his death early the next morning. It was by far the most shocking,
heart-breaking, and life-changing news I’ve ever received.Sergei
Magnitsky was murdered as my proxy. If Sergei had not been my lawyer, he
would still be alive today.That
morning I made a vow to Sergei’s memory, to his family, and to myself
that I would seek justice and create consequences for the people who
murdered him. For the last seven and a half years, I’ve devoted my life
to this cause.Even though this
case was characterized by injustice all the way through, the
circumstances of Sergei’s torture and death were so extreme that I was
sure some people would be prosecuted. Unlike other deaths in Russian
prisons, which are largely undocumented, Sergei had written everything
down. In his 358 days in detention, Sergei wrote over 400 complaints
detailing his abuse. In those complaints he described who did what to
him, as well as where, how, when, and why. He was able to pass his
hand-written complaints to his lawyers, who dutifully filed them with
the Russian authorities. Although his complaints were either ignored or
rejected, copies of them were retained. As a result, we have the most
well-documented case of human rights abuse coming out of Russia in the
last 35 years.
When
I began the campaign for justice with this evidence, I thought that the
Russian authorities would have no choice but to prosecute at least some
of the officials involved in Sergei Magnitsky’s torture and murder. It
turns out I could not have been more wrong. Instead of prosecuting, the
Russian authorities circled the wagons and exonerated everybody
involved. They even went so far as to offer promotions and state honors
to those most complicit in Sergei’s persecution.
It became obvious that if I was going to get any justice for Sergei Magnitsky, I was going to have to find it outside of Russia.But
how does one get justice in the West for a murder that took place in
Russia? Criminal justice is based on jurisdiction: One cannot prosecute
someone in New York for a murder committed in Moscow. As I thought about
it, the murder of Sergei Magnitsky was done to cover up the theft of
$230 million from the Russian Treasury. I knew that the people who stole
that money wouldn’t keep it in Russia. As easily as they stole the
money, it could be stolen from them. These people keep their ill-gotten
gains in the West, where property rights and rule of law exist. This led
to the idea of freezing their assets and banning their visas here in
the West. It would not be true justice but it would be much better than
the total impunity they enjoyed.In
2010, I traveled to Washington and told Sergei Magnitsky’s story to
Senators Benjamin Cardin and John McCain. They were both shocked and
appalled and proposed a new piece of legislation called The Sergei
Magnitsky Rule of Law Accountability Act. This would freeze assets and
ban visas for those who killed Sergei as well as other Russians involved
in serious human rights abuse.
Despite
the White House’s desire to reset relations with Russia at the time,
this case shined a bright light on the criminality and impunity of the
Putin regime and persuaded Congress that something needed to be done. In
November 2012 the Magnitsky Act passed the House of Representatives by
364 to 43 votes and later the Senate 92 to 4 votes. On December 14,
2012, President Obama signed the Sergei Magnitsky Act into law.
Putin was furious. Looking for ways to
retaliate against American interests, he settled on the most sadistic
and evil option of all: banning the adoption of Russian orphans by
American families.This was
particularly heinous because of the effect it had on the orphans. Russia
did not allow the adoption of healthy children, just sick ones. In
spite of this, American families came with big hearts and open arms,
taking in children with HIV, Down syndrome, Spina Bifida and other
serious ailments. They brought them to America, nursed them, cared for
them and loved them. Since the Russian orphanage system did not have the
resources to look after these children, many of those unlucky enough to
remain in Russia would die before their 18th birthday. In practical
terms, this meant that Vladimir Putin sentenced his own, most vulnerable
and sick Russian orphans to death in order to protect corrupt officials
in his regime.Why did Vladimir Putin take such a drastic and malicious step?
For
two reasons. First, since 2012 it’s emerged that Vladimir Putin was a
beneficiary of the stolen $230 million that Sergei Magnitsky exposed.
Recent revelations from the Panama Papers have shown that Putin’s
closest childhood friend, Sergei Roldugin, a famous cellist, received $2
billion of funds from Russian oligarchs and the Russian state. It’s
commonly understood that Mr. Roldugin received this money as an agent of
Vladimir Putin. Information from the Panama Papers also links some
money from the crime that Sergei Magnitsky discovered and exposed to
Sergei Roldugin. Based on the language of the Magnitsky Act, this would
make Putin personally subject to Magnitsky sanctions.
This is particularly worrying for Putin,
because he is one of the richest men in the world. I estimate that he
has accumulated $200 billion of ill-gotten gains from these types of
operations over his 17 years in power. He keeps his money in the West
and all of his money in the West is potentially exposed to asset freezes
and confiscation. Therefore, he has a significant and very personal
interest in finding a way to get rid of the Magnitsky sanctions.The
second reason why Putin reacted so badly to the passage of the
Magnitsky Act is that it destroys the promise of impunity he’s given to
all of his corrupt officials.There
are approximately ten thousand officials in Russia working for Putin
who are given instructions to kill, torture, kidnap, extort money from
people, and seize their property. Before the Magnitsky Act, Putin could
guarantee them impunity and this system of illegal wealth accumulation
worked smoothly. However, after the passage of the Magnitsky Act,
Putin’s guarantee disappeared. The Magnitsky Act created real
consequences outside of Russia and this created a real problem for Putin
and his system of kleptocracy.
For
these reasons, Putin has stated publicly that it was among his top
foreign policy priorities to repeal the Magnitsky Act and to prevent it
from spreading to other countries. Since its passage in 2012, the Putin
regime has gone after everybody who has been advocating for the
Magnitsky Act.
One of my main partners in this effort
was Boris Nemtsov. Boris testified in front of the U.S. Congress, the
European Parliament, the Canadian Parliament, and others to make the
point that the Magnitsky Act was a “pro-Russian” piece of legislation
because it narrowly targeted corrupt officials and not the Russian
people. In 2015, Boris Nemtsov was murdered on the bridge in front of
the Kremlin.Boris Nemtsov’s
protégé, Vladimir Kara-Murza, also traveled to law-making bodies around
the world to make a similar case. After Alexander Bastrykin, the head of
the Russian Investigative Committee, was added to the Magnitsky List in
December of 2016, Vladimir was poisoned. He suffered multiple organ
failure, went into a coma and barely survived.The
lawyer who represented Sergei Magnitsky’s mother, Nikolai Gorokhov, has
spent the last six years fighting for justice. This spring, the night
before he was due in court to testify about the state cover up of Sergei
Magnitsky’s murder, he was thrown off the fourth floor of his apartment
building. Thankfully he survived and has carried on in the fight for
justice.
I’ve received many death threats from Russia.
The most notable one came from Russian Prime Minister Dmitry Medvedev
at the World Economic Forum in Davos, Switzerland, in 2013. When asked
by a group of journalists about the death of Sergei Magnitsky, Medvedev
replied, “It’s too bad that Sergei Magnitsky is dead and Bill Browder is
still alive and free.” I’ve received numerous other death threats from
Russian sources through text messages, emails, and voicemails. U.S.
government sources have warned me about a planned Russian rendition
against me. These threats were in addition to numerous unsuccessful
attempts that the Russian government has made to arrest me using
Interpol or other formal legal assistance channels.
The Russian government has also used its
resources and assets to try to repeal the Magnitsky Act. One of the most
shocking attempts took place in the spring and summer of last year when
a group of Russians went on a lobbying campaign in Washington to try to
repeal the Magnitsky Act by changing the narrative of what had happened
to Sergei. According to them, Sergei wasn’t murdered and he wasn’t a
whistle-blower, and the Magnitsky Act was based on a false set of facts.
They used this story to try to have Sergei’s name taken off of the
Global Magnitsky Act that passed in December 2016. They were unsuccessful.Who
was this group of Russians acting on behalf of the Russian state? Two
men named Pyotr and Denis Katsyv, a woman named Natalia Veselnitskaya,
and a large group of American lobbyists, all of whom are described
below.
Pyotr
Katsyv, father to Denis Katsyv, is a senior Russian government official
and well-placed member of the Putin regime; Denis Katsyv was caught by
U.S. law enforcement using proceeds from the crime that Sergei Magnitsky
uncovered to purchase high-end Manhattan real estate (the case recently
settled with the Katsyv’s paying $6 million to the U.S. government).
Natalia Veselnitskaya was their lawyer.
In addition to working on the Katsyv’ s
money laundering defense, Ms. Veselnitskaya also headed the
aforementioned lobbying campaign to repeal the Magnitsky Act. She hired a
number of lobbyists, public relations executives, lawyers, and
investigators to assist her in this task.Her
first step was to set up a fake NGO that would ostensibly promote
Russian adoptions, although it quickly became clear that the NGO’s sole
purpose was to repeal the Magnitsky Act. This NGO was called the Human
Rights Accountability Global Initiative Foundation (HRAGI). It was
registered as a corporation in Delaware with two employees on February
18, 2016. HRAGI was used to pay Washington lobbyists and other agents
for the anti-Magnitsky campaign. (HRAGI now seems to be defunct, with
taxes due.)Through HRAGI, Rinat Akhmetshin, a former Soviet intelligence
officer naturalised as an American citizen, was hired to lead the
Magnitsky repeal effort. Mr. Akhmetshin has been involved in a number of
similar campaigns where he’s been accused of various unethical and
potentially illegal actions like computer hacking.
Veselnitskaya also instructed U.S. law firm Baker Hostetler and
their Washington, D.C.-based partner Marc Cymrot to lobby members of
Congress to support an amendment taking Sergei Magnitsky’s name off the
Global Magnitsky Act. Mr. Cymrot was in contact with Paul Behrends, a
congressional staffer on the House Foreign Affairs Committee at the
time, as part of the anti-Magnitsky lobbying campaign.
