Who is Bill Browder? (Updated)

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Bill Browder

This much is clear: Vladimir Putin hates Bill Browder.

Browder was once the largest foreign investor in Russia and, it needs to be said, a great admirer of the Russian president. Today, he is perhaps the Putin’s regime’s fiercest critic, and Browder must derive some satisfaction in the way he grates on the Kremlin.

Browder’s change of heart came well after he was kicked out of the country in 2005. It was the death of an accountant who worked for Browder named Sergei Magnitsky that did it. Magnitsky was thrown in prison, where he was beaten and left to die in 2009 from lack of medical treatment. His crime? Magnitsky had had the temerity to expose  a massive $230 million tax fraud perpetrated by Russian officials.

In response, Browder lobbied Congress to draft legislation imposing sanctions on the Russian officials responsible for Magnitsky’s death. The Magnitsky Act was signed into law by President Obama in 2012.  Browder has continued his campaign in Canada, the United States, and Europe —  and it has driven Russian officials bat-shit insane.

Russian legislators responded to the Magnitsky Act by banning adoption of Russian children by Americans — harming their most vulnerable citizens for what, political retaliation? A year later, in a shameful display of injustice, a Moscow court convicted Magnitsky of tax evasion in a posthumous trial. (Browder was found guilty of fraud in absentia.) The Trump campaign was drawn into a June 2016 meeting with Russians on the Magnitsky Act when the future president’s son was promised dirt on Hillary Clinton.

In the latest hysterical response, now it’s Browder who is suspected of murdering Magnitsky. According to Russian prosecutors, Browder colluded with a British intelligence agent to convince Russian prison doctors to withhold care for Magnitsky. The evidence is comical: poorly written communications that were allegedly intercepted from Western spy agencies.

Russia managed to get Browder briefly banned from entry to the United States by putting him on an Interpol wanted list. His visa privileges were restored by the Trump administration on Monday after members of Congress and the press leaped to Browder’s defense.

The reason the Magnitsky Act drives the Kremlin nuts is that it hits the kleptocrats in their unprotected flank. Russian oligarchs and the kleptocrats who steal from the state store their assets in the West. And what is the point of stealing a fortune from the Russian people if you can’t buy condos in Miami or Manhattan or send your kids to exclusive British schools because of some lousy sanctions?

Browder has rightly been praised for his courage in standing up to the Putin regime. And his book, Red Notice, is an excellent read.  However, the laudatory coverage Browder regularly receives from a press corps he has skillfully cultivated and his star treatment before a US Congress he lobbies require a selective reading of events.

The fact is that Browder was once one of Putin’s biggest cheerleaders, as he admitted during deposition:

Q: So in 2005, you were quite a supporter of Vladimir Putin’s, right?

A: Correct.

Most gallingly, he defended the 2003 arrest of Mikhail Khodorkovsky, the head of Yukos, one of the world’s biggest oil producers. Stalin would have approved of the way Khodorkovsky was convicted, imprisoned in a gulag at Russia’s border with China, and then put on trial and convicted again. His  company was seized and acquired by the state.

It wasn’t exactly clear what Khodorovsky had done wrong except he had criticized Russia’s corruption during a televised meeting with President Putin a few months before his arrest and funded a movement promoting the rule of law and democratic values called Open Russia.

Khodorkovsky’s arrest and the seizure of Yukos wasn’t democracy; it was Mafia tactics. But Browder hailed Khodorkovsky’s arrest as progress toward Russia’s return to greatness:

Putin, was only doing “what any leader would do to further his nation’s interests,”  Browder wrote. “While there may be some things about Putin that we disagree with, we should give him the benefit of the doubt in this area and fully support him in his task of taking back control of the country from the oligarchs.”

As for Khodorkovsky, Browder said he was hiding something. “Khodorkovsky collected an enormous pile of cheap assets from the government and minority shareholders, and then embarked on an impressive charm and lobbying offensive to legitimize himself and his wealth. He has been very successful in getting people to forget his not-so-distant past,” Browder wrote.

Now, it’s Browder who has been very successful in getting people to forget his not-so-distant past. Putin’s No. 1 enemy, as he describes himself, was once Putin’s No. 1 fan. (To his credit, he did expose corruption at the companies in which he invested such as the gas giant Gazprom, and this made powerful enemies.)

Here is part of a presentation by Browder in April 2005 titled Seven Big Myths About Russia

Screen Shot 2017-10-25 at 11.06.33 AM

Consider how The Wall Street Journal described Browder in 2006 after he had been kicked out of Russia:

Browder has been one of the most outspoken supporters among foreign investors of Russian President Vladimir Putin. He argued tirelessly that the western media and critics of the Kremlin were misreading the situation and that Putin’s administration was good for investors. He was defending the Kremlin as recently as January, when Browder spoke at the World Economic Forum in Davos, Switzerland.

That’s right. Browder was still defending Putin even after he was denied entry to the country.

Why such love for Putin? In deposition, Browder says the two men never met. The answer: It was just business. Investing in Russia was very profitable. His fund, Hermitage Capital Management, recorded $1 billion in profits and Browder pocketed $130 million in 2006.

When Browder was denied entry to Russia, ostensibly as a threat to national security, his Hermitage Capital Management was the country’s largest foreign investor with $4 billion in Russian equities. Like Khodorkovsky before him, Browder appeared to have made the mistake of believing that he was untouchable. Who in their right mind would ban the man who brought billions into the Russian economy?

Browder’s lobbying of US politicians and courts would sit better with me had he not given up his U.S. citizenship. In 1998, Browder obtained a passport from the more Russophilic United Kingdom. Published reports say he did this for tax reasons but he gave a different explanation during deposition:

Q. So why did you give up your U.S. citizenship?

A. Personal reasons.

Q. And what are those personal reasons?

A. My family was persecuted during the McCarthy era….

 Q. What kind of persecution did you face?

A. My grandmother was sick with cancer and the U.S. Government tried to deport her to Russia when she was dying. [Browder’s grandfather, Earl Browder, led the Communist Party in the United States.]

Q. What year was that?

A. In 1950 something.

Q. I see. And so 1998, this all came back as a rush of emotion and you decided to give up your U.S. citizenship?

A. No.

Interestingly, Britain, Browder’s new home, has been much slower to take up the Magnitsky cause. (A bill passed the House of Commons this year and is now being considered in the House of Lords.)  The Brits have a conflicted relationship with Russian rubles: They have to come to depend on them.  London is where Kremlin insiders like to stash their money. It’s where they buy homes through shell companies, go shopping and send their children to posh schools.

Billions of pounds have washed through Britain since the fall of the Soviet Union, (although nobody knows exactly how much). A group even offers kleptocracy tours of London. The imposition of sanctions by Great Britain against Mother Russia would drain that swamp but it might also drain the balance sheets of some powerful banks.

Browder has been demanding justice for Sergei Magnitsky — and rightfully so — but, at least in one instance, he literally ran away from an American court.  Here is what happened when a process server tried to serve Browder with a subpoena in New York following his 2015 appearance on The Daily Show:

The case involved a Russian financier named Denis Katsyv. At the time, Katsyv was accused in federal court of laundering money that was part of the fraud that Sergei Magnitsky uncovered. The case that was based on information Browder provided  to prosecutors in New York.¹   Browder eventually did have to testify and I’ve posted Browder’s Deposition.

Am I wrong in thinking that it’s grossly unfair and somewhat suspicious for Browder to demand justice for Magnitsky while fleeing a subpoena in the case he instigated?  Shouldn’t he be proud to stand up for his late friend and colleague?

Please don’t mistake what I’m saying here. I’m no fan of Putin, but Browder is undermining his own cause when he selectively uses the law and the press to serve only his own interests.

1. Katsyv’s case, U.S. v Prevezon Holdings, was settled for $5.9 million before trial.

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