The hedge-fund manager has offered a fable for why the West should confront Putin... 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. “Their main objective is to get me back to Russia,” Browder has said. “And they only have to get lucky once. I have to be lucky every time.”.. In 2012, in Surrey, England, Alexander Perepilichny, one of Browder’s 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 “a perfect example of why you don’t want to be an anonymous guy who drops dead.”.. 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... As an anti-corruption activist, Browder has spoken out against the exploitation of offshore tax havens—for 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... His singling out of Browder in Helsinki, McFaul told me, “only gives Bill a bigger global platform—it was a huge public-relations coup, which of course Bill will use.”.. 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’s son Felix was a noted mathematician. William Browder took an interest in business while in boarding school in the seventies. “I would put on a suit and tie and become a capitalist. Nothing would piss my family off more than that,” he writes in “Red Notice.”.. This was the peak of the chaotic post-Soviet “Wild East,” a time of lawlessness and speculation. Over the next two years, Hermitage’s 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... 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.
.. “I don’t 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.”
.. Steven Dashevsky, then the head of research at a Russian investment bank, Browder’s anti-corruption stance was a kind of “free marketing” for Hermitage.
.. Regulators had instituted a dual price structure for the company’s 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, “fell into a gray zone: it was clearly against the spirit of the law, but never prosecuted or pursued.”
.. 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’s 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, “We’re not generally disciples of Mother Teresa, but Bill was singularly bottom-line focussed.” Other investors, the banker said, considered tax-avoidance measures like Hermitage’s hiring of disabled people “too risky, and borderline illegal, with the possibility of too much danger if revealed.”
.. 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. “This type of thing could never happen in Britain, and that was the basis of my decision to become British,” he recently told an audience in Colorado. But those I talked to who knew Browder in the nineties assumed that the reasons were financial
.. “If there has been a consistent passion in Bill’s life over the last twenty or thirty years, it is not wanting to pay taxes.”
.. Vladimir Putin assumed the Presidency in 2000, and at first Browder was an ardent supporter
.. 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, “We want an authoritarian—one who is exercising authority over mafia and oligarchs.” He added that Putin “has turned out to be my biggest ally in Russia.”
.. He was told that his Russian visa had been annulled on national-security grounds.
.. “Logic dictates that it’s not in the national interest to ban the biggest investor in Russia and one of the biggest supporters of the government’s policy.”
.. In July, 2006, Putin was asked at a press conference about Browder. Putin said that he didn’t know the particulars of the case, but added, “I can imagine this person has broken the laws of our country, and if others do the same we’ll refuse them entry, too.” Browder instructed his Hermitage colleagues to sell off the firm’s Russian assets and moved key staff to London.
.. Actually, Magnitsky, then thirty-five, was a tax adviser who worked for the firm that had advised Hermitage for a decade.
.. police had used the impounded seals and stamps to reregister Hermitage’s 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.
.. 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.
.. 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, “Bill, to his credit, said, ‘That’s not enough. You didn’t make it public. You didn’t seize any assets.’ ” In “Red Notice,” Browder calls the Russia policy of the Obama Administration at the time “appeasement.”
.. “But what was unique here was Bill Browder,” he said—in particular, Browder’s ability to tell the story of Magnitsky’s suffering. “We were as outraged as he was,”
.. Browder gave testimony, said, “I think it boils down to one phrase I heard him use numerous times: ‘They killed my guy.’ He feels a responsibility and obligation to make sure Sergei didn’t die in vain, and it’s hard to argue with that.”
.. 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 “permanent normal trade relations” 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.
.. “the 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’t.”
.. “It means his krysha doesn’t work,” Celeste Wallander explained. Krysha is Russian for “roof,” and in criminal jargon means the protection that a powerful figure can offer others. “It screws up his social contract with those inside the system,” she said.
.. But Canada, the Baltic states, and the U.K. have passed their own Magnitsky-style bills, and, last year, Congress passed the Global Magnitsky Act, which targets human-rights abusers worldwide. McFaul told me it had long struck him that “the spectre of the Magnitsky law and the noise around it are much more important than the law itself.”
.. The main evidence that the law is having an effect is how obsessed Putin is with it. I don’t get why he’s so obsessed, but the fact remains that he is, and that suggests it’s had a tremendous impact.
.. I met Veselnitskaya last fall in Moscow, at a café in the center of town; she is an imposing, glamorous woman with an exhaustive memory for dates and facts. She doesn’t speak English, is not licensed to practice law in New York, and, at the time the charges were filed, had never been to the United States.
.. She and the Baker Hostetler lawyers wanted Browder deposed as part of pretrial discovery. This would require a court subpoena; Browder had not voluntarily agreed to testify and, having given up his U.S. citizenship, was not immediately liable to the jurisdiction of a U.S. court.
.. According to multiple sources familiar with the Katsyv family’s legal strategy, the legal work on the Prevezon case and Veselnitskaya’s related lobbying carried costs of up to forty million dollars—a vast sum, considering that the U.S. government was trying to seize, at most, fourteen million dollars’ worth of property.
.. Veselnitskaya downplayed any ties she had to Yuri Chaika, Russia’s general prosecutor, but a researcher on the Prevezon case told me that she often took his calls.
Vladimir Putin is a powerful ideological symbol and a highly effective ideological litmus test. He is a hero to populist conservatives around the world and anathema to progressives. I don’t want to compare him to our own president, but if you know enough about what a given American thinks of Putin, you can probably tell what he thinks of Donald Trump.
.. Vladimir Vladimirovich is not the president of a feminist NGO. He is not a transgender-rights activist. He is not an ombudsman appointed by the United Nations to make and deliver slide shows about green energy. He is the elected leader of Russia—a rugged, relatively poor, militarily powerful country that in recent years has been frequently humiliated, robbed, and misled. His job has been to protect his country’s prerogatives and its sovereignty in an international system that seeks to erode sovereignty in general and views Russia’s sovereignty in particular as a threat.
.. Putin would count as the pre-eminent statesman of our time.
.. When Putin took power in the winter of 1999-2000, his country was defenseless. It was bankrupt. It was being carved up by its new kleptocratic elites, in collusion with its old imperial rivals, the Americans.
.. His voters credit him with having saved his country.
.. they assume there can never be legitimate historic reasons why a politician would arise in opposition to it. They denied such reasons for the rise of Rodrigo Duterte in the Philippines. They do the same with Donald Trump. And they have done it with Putin.
.. he restrained the billionaires who were looting the country, and he restored Russia’s standing abroad
.. Russia retains elements of a kleptocracy based on oligarchic control of natural resources. But we must remember that Putin inherited that kleptocracy. He did not found it.
.. The transfer of Russia’s natural resources into the hands of KGB-connected Communists, who called themselves businessmen, was a tragic moment for Russia. It was also a shameful one for the West. Western political scientists provided the theft with ideological cover, presenting it as a “transition to capitalism.”
.. Khodorkovsky and fellow investors paid $150 million in the 1990s for the main production unit of the oil company Yukos, which came to be valued at about $20 billion by 2004.
.. they acquired a share of the essential commodity of Russia—its oil—for less than one percent of its value.
.. Putin said: “We will not tolerate any humiliation to the national pride of Russians, or any threat to the integrity of the country.”
.. The degradation of Russia’s position represented by the Serbian War is what Putin was alluding to when he famously described the collapse of the Soviet Union as “the greatest geopolitical catastrophe of the century.” This statement is often misunderstood or mischaracterized: he did not mean by it any desire to return to Communism. But when Putin said he’d restore Russia’s strength, he meant it. He beat back the military advance of Islamist armies in Chechnya and Dagestan
.. There is no country, with the exception of Israel, that has a more dangerous frontier with the Islamic world.
.. Half a century ago, for instance, the Zeitgeist was about colonial liberation.
Think of Martin Luther King, traveling to Norway to collect his Nobel Peace Prize, stopping on the way in London to give a talk about South African apartheid. What did that have to do with him? Practically: Nothing. Symbolically: Everything. It was an opportunity to talk about the moral question of the day.
.. We have a different Zeitgeist today. Today it is sovereignty and self-determination that are driving passions in the West.
.. The United States was offered the chance to lay out the rules of the world system, and accepted the offer with a vengeance. Russia was offered the role of submitting to that system.
.. According to the Russian view, Ukraine’s democratically elected government was overthrown by an armed uprising backed by the United States. To prevent a hostile NATO from establishing its own naval base in the Black Sea, by this account, Russia had to take Crimea, which in any case is historically Russian territory.
.. “Most Russians have come to believe that democracy is what happened in their country between 1990 and 2000, and they do not want any more of it.”
.. Reagan’s gift as a foreign policy thinker, he said, was not his idealism. It was his ability to set priorities, to see what constituted the biggest threat. Today’s biggest threat to the U.S. isn’t Vladimir Putin.
.. why are people thinking about Putin as much as they do? Because he has become a symbol of national self-determination. Populist conservatives see him the way progressives once saw Fidel Castro, as the one person who says he won’t submit to the world that surrounds him.
Mr. Sechin is not just the chief executive of Rosneft, he is also one of the heroes of contemporary Russian politics. He is believed to have served as a K.G.B. agent in Africa and had no real experience in the business world until he was over 40. He didn’t come to lead the state oil company because of his business acumen; he earned his position through his loyalty to Mr. Putin.
.. Mr. Sechin was working as Mr. Putin’s deputy chief of staff, and though he had no formal judicial or investigatory authority, Mr. Khodorkovsky accused him of initiating his arrest — and the campaign that followed to nationalize Yukos. It’s impossible to know, but it seems likely. Following Mr. Khodorkovsky’s arrest, Rosneft absorbed Yukos’s assets. In 2004, Mr. Sechin was appointed to head Rosneft’s board.
.. The arrest last month of Aleksei Ulyukayev, the minister of economic development, on charges of bribery was widely viewed as an act of revenge by Mr. Sechin. With the arrest, the first of an active government minister in post-Soviet Russia, he again confirmed his image as the most sinister man in the president’s inner circle.