{"id":126636,"date":"2019-01-28T12:00:01","date_gmt":"2019-01-28T12:00:01","guid":{"rendered":"https:\/\/www.transcend.org\/tms\/?p=126636"},"modified":"2019-02-04T11:53:15","modified_gmt":"2019-02-04T11:53:15","slug":"how-bill-browder-became-russias-most-wanted-man","status":"publish","type":"post","link":"https:\/\/www.transcend.org\/tms\/2019\/01\/how-bill-browder-became-russias-most-wanted-man\/","title":{"rendered":"How Bill Browder Became Russia\u2019s Most Wanted Man"},"content":{"rendered":"

The hedge-fund manager has offered a fable for why the West should confront Putin.<\/em><\/p><\/blockquote>\n

\"\"<\/a>

Bill Browder was a subject of the Trump Tower meeting and the Helsinki summit.
Illustration by Tyler Comrie; photographs by (from left to right): Mikhail Klimentyev \/ Russian Presidential Press and Information Office \/ TASS \/ Getty; Bertrand Guay \/ AFP \/ Getty; Brooks Kraft \/ Getty<\/p><\/div>\n

20 Aug 2018 – <\/em>Shortly after Presidents Donald Trump<\/a> and Vladimir Putin<\/a> wrapped up their recent summit at the Finnish Presidential Palace, in Helsinki, around two hundred journalists gathered in the building\u2019s neoclassical ballroom. It was July 16th, three days after the special counsel Robert Mueller<\/a> published an indictment charging twelve members of the G.R.U., Russia\u2019s military-intelligence service, with hacking into Democratic Party servers and disseminating e-mails during the 2016 election. As Trump started answering questions about the interference, and it became clear that he would not accept the assessment of U.S. intelligence agencies over the denials offered by Putin, the frenetic sense of anticipation in the room turned to silent confusion.<\/p>\n

Trump claimed that Putin had made \u201can incredible offer\u201d during their meeting: investigators working with Mueller could come to Russia to interview the twelve indicted intelligence officers. In exchange, Putin explained to the gathered press, Russian investigators would question certain Americans who the Kremlin believes \u201chave something to do with illegal actions on the territory of Russia.\u201d<\/p>\n

Putin singled out William Browder, an American-born hedge-fund manager who had worked in Moscow in the nineties and early aughts. Putin falsely claimed that Browder\u2019s business associates had earned more than $1.5 billion in Russia and \u201cnever paid any taxes,\u201d and that Browder had donated some four hundred million dollars of this money to Hillary Clinton\u2019s Presidential campaign. (Browder has said that he has \u201cnot given Hillary Clinton\u2019s campaign or anybody else\u2019s campaign a single penny ever.\u201d) Browder watched the press conference on his computer: Putin\u2019s \u201cforehead was getting all twisted and furrowed, and you could just tell\u2014he was not playing poker,\u201d he said. \u201cHe was pissed.\u201d<\/p>\n

At the lectern in Helsinki, Putin did not speak of what is surely the true source of his animus: Browder\u2019s decade-long campaign against Russian corruption. In 2009, Browder\u2019s tax adviser Sergei Magnitsky testified that the Russian police and tax authorities had attempted to steal two hundred and thirty million dollars in Russian taxes paid by Browder\u2019s Moscow-based investment firm, Hermitage Capital. Magnitsky was arrested, and died in a pretrial detention center in Moscow. In the years that followed, Browder strenuously lobbied for a law that would punish those responsible. The Magnitsky Act, which sanctions Russian human-rights violators and other officials implicated in corruption and abuse-of-power cases, was passed by Congress in 2012 and has been a subject of furious preoccupation for Putin ever since.<\/p>\n

The law has made Browder, if not quite a household name, then a central figure in the Trump-Russia drama. Last summer, news broke of a meeting that took place at Trump Tower in June, 2016, at which members of the Trump campaign team, having been offered damaging information on Hillary Clinton<\/a>, met with Natalia Veselnitskaya<\/a>, a Russian lawyer with close ties to Russian government officials. In Donald Trump, Jr.,\u2019s initial statement about the meeting\u2014which the President\u2019s lawyers later admitted had been dictated by the President himself\u2014he insisted that he, Jared Kushner<\/a>, and Paul Manafort<\/a>, who was then Trump\u2019s campaign chairman, had attended simply hoping for \u201cinformation helpful to the campaign.\u201d The main topic of the meeting was \u201cthe adoption of Russian children,\u201d he said, although Veselnitskaya had also \u201cmentioned the Magnitsky Act.\u201d According to Veselnitskaya, she talked mostly about Browder and his alleged misdeeds, to the disappointment of the Trump team, which was, she said, hoping for \u201csome sort of grenade.\u201d<\/p>\n

The President has maintained that he was not aware of the meeting at the time, despite recent claims of his former lawyer Michael Cohen to the contrary. Earlier this month, Trump tweeted, \u201cThis was a meeting to get information on an opponent, totally legal and done all the time in politics\u2014and it went nowhere. I did not know about it!\u201d Mueller\u2019s investigation is almost certainly exploring the question of whether the meeting was, in fact, \u201ctotally legal,\u201d or an attempt to collude with a foreign government, and whether the Administration\u2019s initial version of events and the actions of the President constituted an obstruction of justice.<\/p>\n

Since the Magnitsky Act passed, the Russian government has charged Browder with myriad crimes, and has periodically tried to lodge warrants for his arrest via Interpol. \u201cTheir main objective is to get me back to Russia,\u201d Browder has said. \u201cAnd they only have to get lucky once. I have to be lucky every time.\u201d In 2012, in Surrey, England, Alexander Perepilichny, one of Browder\u2019s chief sources of information on the movement of the stolen funds, collapsed while jogging near his home and died. The case is still under investigation. Browder, who has taken to relating to as large an audience as possible the danger he faces, has called this \u201ca perfect example of why you don\u2019t want to be an anonymous guy who drops dead.\u201d<\/p>\n

In Helsinki, Trump\u2019s apparent openness to handing Browder over seemed to play into Browder\u2019s fears. (It also raised practical questions: in 1998, Browder, who lives in the U.K., acquired a British passport and renounced his American citizenship.) The next day, Russian prosecutors added Michael McFaul, a top adviser on Russia policy in the Obama Administration and, later, the U.S. Ambassador to Russia, to the list of those they wanted to question. That the White House considered the proposal was an extraordinary breach of diplomatic protocol. \u201cI couldn\u2019t believe it,\u201d McFaul told me. \u201cSo being involved in a policy process is now somehow considered criminal behavior?\u201d The State Department\u2019s spokesperson Heather Nauert called the notion \u201cabsolutely absurd,\u201d and, after lawmakers from both parties raised an outcry, the White House rejected Putin\u2019s offer. Browder was reassured by the bipartisan response. \u201cThe whole world knows that Vladimir Putin hates me, Vladimir Putin wants to get his hands on me, and, if anything happens to me, Vladimir Putin is going to be blamed,\u201d he told National Review<\/em>.<\/p>\n

Browder, who is fifty-four, with a dusting of silver hair and rimless eyeglasses, has a forceful yet understated authority and a talent for telling a coolly suspenseful tale. In 2015, he published a memoir, \u201cRed Notice,\u201d which sold three hundred and fifty thousand copies in the U.S. and was described by a reviewer in the Times<\/em> as \u201criveting\u201d and \u201cmarred only by Browder\u2019s perhaps justifiable but nevertheless grating sense of self-importance.\u201d He is a persuasive speaker, and careful in selecting the details of the story he presents. (He declined to talk to me for a profile.) As an anti-corruption activist, Browder has spoken out against the exploitation of offshore tax havens\u2014for example, the ones detailed in the documents that were leaked from the Panamanian law firm Mossack Fonseca, in 2016. Many companies listed in the so-called Panama Papers were entirely legal. Still, Browder tends not to mention that Mossack Fonseca set up at least three firms for him and Hermitage.<\/p>\n

In April, 2016, Robert Otto, a top intelligence official at the State Department, wrote in one of many e-mails that were later leaked online, in a hack widely linked to Russia, \u201cI am beginning to feel we are all just part of the Browder P.R. machine.\u201d That machine has been singularly effective, allowing Browder to turn his experiences into a fable for why the West should confront Putin\u2014a tale he has told as a frequent guest on cable news shows and as a speaker at congressional hearings. Browder is obviously nothing like the cartoon villain that Putin portrays him to be, and yet his political influence means that his every move, past and present, has global reverberations. Putin\u2019s actions, too, can seem to prove Browder\u2019s case about the need to combat the Russian state\u2019s corruption and malfeasance. His singling out of Browder in Helsinki, McFaul told me, \u201conly gives Bill a bigger global platform\u2014it was a huge public-relations coup, which of course Bill will use.\u201d<\/p>\n

As Browder often points out, he has an improbable background for a millionaire hedge-fund manager. His grandfather Earl Browder became active in socialist politics during the First World War and lived in the Soviet Union for five years before becoming the secretary-general of the Communist Party of America. Earl\u2019s son Felix was a noted mathematician. William Browder took an interest in business while in boarding school in the seventies. \u201cI would put on a suit and tie and become a capitalist. Nothing would piss my family off more than that,\u201d he writes in \u201cRed Notice.\u201d<\/p>\n

Browder studied economics at the University of Chicago, and then did a stint at the management-consulting firm Bain & Company. In 1989, he got his M.B.A. at Stanford before going to Poland as a consultant for the Boston Consulting Group. He became entranced by the opportunities in the country\u2019s newly privatized industries and bought up shares of formerly state-held enterprises. In the early nineties, he spent several years in London as a trader at Salomon Brothers, and met his first wife, who is British. In 1996, Browder moved to Moscow and founded Hermitage Capital.<\/p>\n

This was the peak of the chaotic post-Soviet \u201cWild East,\u201d a time of lawlessness and speculation. Over the next two years, Hermitage\u2019s portfolio grew to more than a billion dollars, but it was nearly wiped out in August, 1998, when Russia defaulted on its sovereign debt, causing widespread panic. Browder was one of the few Western financiers who chose to remain in the country. Between 1998 and 2005, the price of oil quadrupled and the Russian stock index went up by nearly three thousand per cent.<\/p>\n

Browder gained attention for publicly criticizing the management of companies in which his fund had invested as a minority shareholder, in an effort to goad them into being more efficient and transparent. He held combative press conferences outlining Russian corporate malpractice and passed along to journalists dossiers that described the way venal oligarchs engaged in asset stripping, wasteful spending, and share dilutions. Bernie Sucher, a prominent American banker in Moscow throughout the nineteen-nineties and the aughts, told me, \u201cLooking back, I think he was absolutely right. The government needed that harsh spotlight.\u201d But, he added, \u201cI don\u2019t think Bill started out with a passion for corporate governance. He found it to be an instrument that helped him and his investors make a lot of money. Ultimately, it became a sincere crusade.\u201d According to Steven Dashevsky, then the head of research at a Russian investment bank, Browder\u2019s anti-corruption stance was a kind of \u201cfree marketing\u201d for Hermitage.<\/p>\n

Despite his public campaign, Browder was not immune to the era\u2019s spirit of financial adventurism. One of the most attractive investments for Western funds and banks operating in Russia was Gazprom, the state-owned natural-gas behemoth. Regulators had instituted a dual price structure for the company\u2019s shares: one class of shares, priced relatively cheaply, could be held only by Russian citizens and firms; the second class, priced much higher, could be purchased by anyone. Hermitage got the cheaper price by buying Gazprom stock through companies it registered in Russia. It was a work-around used by a number of Moscow-based investment funds that, as Dashevsky put it to me, \u201cfell into a gray zone: it was clearly against the spirit of the law, but never prosecuted or pursued.\u201d<\/p>\n

Browder also minimized how much Hermitage paid in Russian taxes. The government, in an effort to stimulate regional investment, had established a special zone in Kalmykia, a republic north of the Caucasus, that offered a lower tax rate. The rate went down even more if disabled workers made up a majority of a company\u2019s employees. To take advantage of this, Hermitage hired disabled people for its companies in Kalmykia. A banker who managed a number of Russian funds said, \u201cWe\u2019re not generally disciples of Mother Teresa, but Bill was singularly bottom-line focussed.\u201d Other investors, the banker said, considered tax-avoidance measures like Hermitage\u2019s hiring of disabled people \u201ctoo risky, and borderline illegal, with the possibility of too much danger if revealed.\u201d (A spokesperson for Browder said, \u201cThe use of Kalmykia and disabled-employee tax incentives were standard practice at the time and fully in compliance with the law.\u201d)<\/p>\n

Browder received a British passport in 1998 and, rather than become a dual citizen, renounced his U.S. citizenship. He has explained that he had been motivated by the discrimination that his grandparents faced in America during the McCarthy era as a result of their political activism for the Communist Party: his grandfather was forced to testify in front of the House Un-American Activities Committee, and his grandmother was threatened with deportation to Russia. \u201cThis type of thing could never happen in Britain, and that was the basis of my decision to become British,\u201d he recently told an audience in Colorado. But those I talked to who knew Browder in the nineties assumed that the reasons were financial. U.K. tax rules governing foreign income are less stringent than those in the United States. A person who was friendly with Browder at the time said, \u201cHe told me he didn\u2019t want to pay U.S. taxes.\u201d He added, \u201cIf there has been a consistent passion in Bill\u2019s life over the last twenty or thirty years, it is not wanting to pay taxes.\u201d<\/p>\n

Vladimir Putin assumed the Presidency in 2000, and at first Browder was an ardent supporter. He believed that Putin\u2019s predecessor, Boris Yeltsin, had allowed Russia\u2019s oligarchs to manipulate the economy for their own profit. \u201cYeltsin let the animals get out of the cages and start running the zoo in Russia,\u201d Browder told a trade publication for investors in 2000. \u201cI think Putin\u2019s going to put them back in, and that\u2019s good for business.\u201d In 2003, when the billionaire head of the Yukos oil company, Mikhail Khodorkovsky, was arrested and charged for fraud and tax evasion, many saw it as evidence that Putin was becoming uncompromisingly authoritarian. But Browder welcomed the prosecution of Khodorkovsky, with whom he had clashed in the past. In 2004, he told the Times<\/em>, \u201cWe want an authoritarian\u2014one who is exercising authority over mafia and oligarchs.\u201d He added that Putin \u201chas turned out to be my biggest ally in Russia.\u201d<\/p>\n

Business was going well for Browder until one day in November, 2005, when Russia\u2019s border guards denied him entry at Moscow\u2019s Sheremetyevo International Airport. He was told that his Russian visa had been annulled on national-security grounds. In 2006, Celeste Wallander, a program director at the Center for Strategic and International Studies (she later worked as an adviser to President Obama on the National Security Council), ran into Browder at a conference. She recalled that he was convinced his visa problems could be resolved if he could only explain his predicament to Putin himself. Browder expressed the incongruity of his plight to The Economist:<\/em> \u201cLogic dictates that it\u2019s not in the national interest to ban the biggest investor in Russia and one of the biggest supporters of the government\u2019s policy.\u201d<\/p>\n

In July, 2006, Putin was asked at a press conference about Browder. Putin said that he didn\u2019t know the particulars of the case, but added, \u201cI can imagine this person has broken the laws of our country, and if others do the same we\u2019ll refuse them entry, too.\u201d Browder instructed his Hermitage colleagues to sell off the firm\u2019s Russian assets and moved key staff to London.<\/p>\n

As Browder tells it in his book, on June 4, 2007, while he was on a business trip to Paris, he got a call from Moscow. The offices of Hermitage and its law firm were being raided by dozens of police officers as part of a tax-fraud investigation into Kameya, which, in \u201cRed Notice,\u201d Browder describes as \u201ca Russian company owned by one of our clients whom we advised on investing in Russian stocks.\u201d (Kameya was, in fact, one of the companies that Hermitage had initially set up in Kalmykia.) The allegations were curious: Hermitage had been under investigation for tax avoidance in previous years, but it was not in arrears at the time, and the Russian authorities had no active tax claims against it. During the search, police officers seized thousands of documents. They also made off with Hermitage\u2019s original corporate seals and stamps, bureaucratic instruments needed to register a new company and to act on its behalf.<\/p>\n

Browder has often said that, in response to the raid, he went out and hired Sergei Magnitsky, \u201cthe smartest lawyer I knew in Moscow.\u201d Actually, Magnitsky, then thirty-five, was a tax adviser who worked for the firm that had advised Hermitage for a decade. Magnitsky, Browder, and others at Hermitage began to piece together what they believed had happened next: police had used the impounded seals and stamps to reregister Hermitage\u2019s companies in the name of low-level criminals, and those companies then applied for tax refunds totalling two hundred and thirty million dollars, the amount that Hermitage had paid in capital-gains tax. Two state tax offices in Moscow appeared to have approved the refunds the next day.<\/p>\n

Hermitage filed criminal complaints, some of them more than two hundred pages long. Magnitsky testified to Russian state investigators in June, 2008, after which his lawyer advised him to leave the country. He refused, and gave further testimony that October. Several weeks later, he was arrested on charges of abetting tax evasion through Hermitage, and held in pretrial detention. Over the next eleven months, he was transferred from one Moscow prison to another, held in increasingly foul and torturous conditions. He developed gallstones and pancreatitis; a doctor ordered surgery, but he was not treated. On November 16, 2009, he felt deeply unwell, and was brought to Matrosskaya Tishina, or Sailor\u2019s Rest, a notorious prison in northeast Moscow that had a medical wing. According to Magnitsky\u2019s lawyer and Russian human-rights advocates who later investigated the case, Magnitsky was put in a holding cell, handcuffed to a bed, and beaten. By 10 P.M.<\/em>, he was dead.<\/p>\n

In \u201cRed Notice,\u201d Browder describes getting the news of Magnitsky\u2019s death, at home in London. \u201cThe pain I felt was physical, as if someone were plunging a knife right through my gut,\u201d he writes. A few low-level officials were admonished for Magnitsky\u2019s maltreatment, but no one in Russia faced criminal punishment. Browder and his colleagues at Hermitage conducted their own investigation. In 2010, Browder went to Washington with a list of Russian officials he said were to blame. The Obama Administration placed sanctions on some of them, a routine procedure that barred them from entering the United States. McFaul, then in charge of Russia policy at the National Security Council, recalls, \u201cBill, to his credit, said, \u2018That\u2019s not enough. You didn\u2019t make it public. You didn\u2019t seize any assets.\u2019\u00a0\u201d In \u201cRed Notice,\u201d Browder calls the Russia policy of the Obama Administration at the time \u201cappeasement.\u201d<\/p>\n

Browder then approached the Helsinki Commission, an independent federal agency in Washington that monitors human rights, where he met Benjamin Cardin, a Democratic senator from Maryland. Cardin told me that visitors routinely bring him tales of injustice and atrocity. \u201cBut what was unique here was Bill Browder,\u201d he said\u2014in particular, Browder\u2019s ability to tell the story of Magnitsky\u2019s suffering. \u201cWe were as outraged as he was,\u201d he told me. David Kramer, who was the president of Freedom House at the time and sat in on a number of congressional meetings and hearings where Browder gave testimony, said, \u201cI think it boils down to one phrase I heard him use numerous times: \u2018They killed my guy.\u2019 He feels a responsibility and obligation to make sure Sergei didn\u2019t die in vain, and it\u2019s hard to argue with that.\u201d<\/p>\n

Even so, the Magnitsky Act might have languished had it not been for the fact that, in 2012, Russia was about to become a member of the World Trade Organization. In order to grant Russia what the group calls \u201cpermanent normal trade relations\u201d status, Congress would have to repeal the Jackson-Vanik amendment, a 1975 measure aimed at the Soviet Union that penalized trade with countries that had restrictive emigration policies. Legislators did not want to rescind the law without sending the Kremlin a message about American toughness on human rights. Stephen Sestanovich, who worked on Russia policy in the Reagan and Clinton Administrations, explained to me that, more than the legislation\u2019s particular merits, \u201cthe real question was whether Congress and the White House could find any substitute for Jackson-Vanik other than Magnitsky. The answer turned out to be no, they couldn\u2019t.\u201d<\/p>\n

Go to Original \u2013 newyorker.com<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

The hedge-fund manager has offered a fable for why the West should confront Putin.<\/p>\n","protected":false},"author":4,"featured_media":126637,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[65,56,139,55,48,146],"tags":[],"class_list":["post-126636","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-anglo-america","category-asia-pacific","category-justice","category-capitalism","category-in-focus","category-economics"],"_links":{"self":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/126636","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/users\/4"}],"replies":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/comments?post=126636"}],"version-history":[{"count":0,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/posts\/126636\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media\/126637"}],"wp:attachment":[{"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/media?parent=126636"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/categories?post=126636"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.transcend.org\/tms\/wp-json\/wp\/v2\/tags?post=126636"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}