NOT to be missed by those who have an interest in people of goodwill working to move immoveable pardigms. May 9, 2014 7:07 PM The Man Who Stood Up to Putin How Russias biggest cheerleader became the Kremlins fiercest critic and persuaded Congress to roll the White House on sanctions. By MATTHEW KAMINSKI Two members of the Russian punk band Pussy Riot hit Capitol Hill this week. Nadezhda Tolokonnikova and Maria Alyokhina, who were jailed for nearly two years after performing an anti-Kremlin punk prayer in a Moscow cathedral in 2012, charmed senators and called for stronger U.S. sanctions on Russia. Making the introductions was a bald, 50-year-old, London-based fund manager in rimmed glasses. Even in a gathering of U.S. lawmakers and Russian provocateurs, William Browder is arguably the most effective foe of Russian President Vladimir Putin. Two years ago he was the one-man force campaigning for the Magnitsky Act, which Congress passed over White House objections. Named after Mr. Browders lawyer, Sergei Magnitsky, a corruption whistleblower who died in a Moscow prison cell, the law bans gross abusers of rights in Russia from banking in or visiting the U.S. Mr. Browder is now lobbying other countries to follow the American example, and he wants the Obama administration to expand the Magnitsky list of those banned. Yet he seems almost surprised by his advocacy. If someone had asked me at Stanford Business School 25 years ago, can I imagine being a full-time human-rights activist? he says, I would have looked at them like they were out of their minds. He understates the ironies. Less than a decade ago, his Hermitage Capital managed the largest pool of foreign money invested in Russia, $4 billion at its peak. He was called Russias biggest cheerleader (Associated Press) and one of the most outspoken supporters among foreign investors of President Putin (this newspaper). He endorsed, loudly, the 2003 arrest, subsequent trials and expropriation of Yukos oil-company boss Mikhail Khodorkovsky, then the countrys richest man, an episode that heralded Mr. Putins descent into political repression. Then there is his presence on Capitol Hill: Raised in Chicago, Mr. Browder gave up his U.S. passport in 1998 and took British citizenship. Many assumed he did it to save on taxes. He insists that he simply felt estranged from the U.S. over its treatment of his family. His grandfather Earl Browder led the Communist Party in the U.S. throughout the Roosevelt era and landed before McCarthy-era congressional committees and in jail twice. Mr. Browder isnt a man prone to public intro- or retrospection. In his current fight against the Putin regime, he shows the same monomaniacal focus and brusque manner that he did in selling investors on Russia. He brought Pussy Riot to Washington to help break a deadlock over implementing the Magnitsky law. The Obama administration originally sanctioned 18 Russians implicated in his lawyers death but refused to add names to the list by a December deadline. Administration officials quietly told vexed Hill staffers they wanted to avoid a clash with Mr. Putin before the Sochi Winter Olympics. But Sochi is over, Mr. Browder notes. Russia starts a war [in Ukraine], invades a foreign country, starts repressing the hell out of everybody in their own country—and theres still no list. By law the administration has until May 17 to reply to a congressional request to expand the roster of the banned. White House opposition to Magnitsky reflected both the habitual presidential distrust of congressional meddling in foreign policy and this administrations support for a reset in relations with Russia. On the right and left, the realist case against sanctions is that they dont work. After Magnitsky passed, Mr. Putin retaliated by banning Americans from adopting Russian children. Mr. Browder says the sanctions skeptics dont understand the cost-and-benefit calculations of the people doing this stuff in Moscow: Russian elites fear of Magnitsky can improve their behavior. Its like saying, What makes you think that bonuses make people work harder? he says. Viewed through his prism, the global economy is a mixed blessing for activists. As wealthy Russians throw money toward London and Germany, he says, a lot of Westerners are prostituting themselves to try to protect their interests. Witness the European Unions reluctance to adopt serious sanctions against Moscow over Ukraine. Yet the flood of Russian money moving out of the country also makes a law like Magnitsky a 21st-century tool for fighting human-rights abuses. Elites in most authoritarian states are hooked on holidays, houses and banks in the West. This is a tool thats come as a result of living in a globalized world, he says. It used to be that the Khmer Rouge didnt travel to St. Tropez, but now some equivalent does. In his family, Mr. Browder calls himself the dummy. His father Felix and uncle William are acclaimed mathematicians. His brother, Thomas, is a physicist. Repeating what has become standard Browder lore, he says: I became a capitalist to rebel against a family of communists and left-wing academics. Around the dinner table it was thought that all businessmen are crooks. After business school, he landed in Eastern Europe in 1989. He saw opportunities through the chaos of destroyed communist economies. He worked briefly in consulting and for the late Robert Maxwells private equity business before running Salomon Brothers Russia equities team. With $25 million from the late banker Edmond Safra and Israeli mining tycoon Benny Steinmetz, he set up Hermitage in 1996. The fund gained 794% in the first 18 months. Mr. Browder gritted out the 1998 Russian financial crisis and adopted a different strategy. He took minority stakes in inefficient behemoths like gas monopolist Gazprom and Sberbank, the savings bank, and sought to raise the share price by advocating better governance. We did forensic research about how they went about the stealing, and then exposed it, he says, through his contacts in the Western press. He found an ally in Russias new president, Vladimir Putin. The former KGB man used Hermitages work to change the management at Gazprom and Unified Energy System, the electric utility. The Russian leader wanted to neuter the business barons from the 1990s and bring in his own. Hermitage played by the new rules and did well. Then Mr. Browders luck ran out. In late 2005, he was denied entry into Russia. He pulled every possible string to get his visa restored, even lobbying the Bush White House. Aware of his passport switch to Britain, a senior official advised: Ask your own government for help. At the Davos economic forum in early 2006, Mr. Browder continued to talk up Russias economic prospects. But by the end of that year Hermitage had liquidated most of its assets in Russia and Mr. Browder had moved his staff to London. He says Gazprom was behind his expulsion. Mr. Putin, having secured his own place atop the business and political pyramid in Russia, had no more use for Hermitages minority-rights campaigns. Mr. Browders critics say his success went to his head and he pushed too far. Over breakfast in New York this week, Mr. Browder turns uncharacteristically frank about his past support for the Russian regime. Everybody always looks at others and sees what they want to see, he says. Mr. Putin, little known before Boris Yeltsin tapped him as his successor, seemed a reforming kind of president who is bringing some order back to a crazy disordered place dominated by oligarchs, Mr. Browder says. Now he says he realizes that the Russian leader was creating this more lopsided oligarchy. Back in London, Mr. Browder turned Hermitage into a global emerging-markets fund. The results were mixed. But troubles in Moscow continued. In June 2007, the interior ministry raided what remained of his companys and his lawyers Moscow offices, seizing computers and documents. A few months later, Moscow authorities used these materials to engineer a complex scheme to claim a $230 million tax refund for themselves. Sergei Magnitsky, a lawyer at tax firm Firestone Duncans Moscow office, looked into the matter for Hermitage. When he uncovered the fraud against the Russian state, he went public. The Russian state didnt appreciate it. A few weeks later Magnitsky was arrested by the same interior-ministry officials he had implicated. He spent over a year in jail, in appalling conditions, before dying in 2009 of untreated pancreatitis after a severe beating at age 37. Mr. Browder had a new cause. He put his own and his staffs experience in digging up dirt about financial shenanigans in Russia to document what happened. Hermitage released easy-to-follow, detailed pamphlets such as the 75-page The Torture and Murder of Sergei Magnitsky and the Cover Up by the Russian Government. Names were named. A tireless campaigner, Mr. Browder lobbied the U.S. and Europe to sanction those officials and worked his media contacts. When the State Department gave him the runaround, Mr. Browder talked to Sen. Ben Cardin, the Maryland Democrat. Mr. Cardin introduced the first Magnitsky Act in 2010 with bipartisan support. For four years Mr. Browder has devoted nearly all of his time to being a kind of guerrilla warrior for human rights. Now Hermitage only manages his investments. At his recent 50th-birthday party in London, a number of friends stood up to say they thought he was crazy to fight Russia over the Magnitsky case. He worries about his security. Last year, a Russian court found him—and the dead Sergei Magnitsky—guilty of tax evasion and sentenced Mr. Browder to nine years in prison. The Russians issued an international warrant for his arrest. He says this work is a hundred times more gratifying than fighting for money, likening it to an awakening. Mr. Browder brought Magnitskys widow and child to London and looks after them. Others see the same old Bill of Moscow days, looking to get his way—this time to take his revenge against the Putin Kremlin. Hes not evasive or barbed, as sometimes in the past, and considers the charge seriously. How do you separate one emotion from another? Grief. Indignation. Revenge. Guilt. There are a thousand different emotions that are mixed up in this quest for justice, he says. Everyone wants to simplify and demonize and look for all the wrong motivations. They can do that all they want. It doesnt really matter what people think it is. Sens. Cardin and John McCain have introduced a global Magnitsky bill to extend the punishments to human-rights abusers anywhere in the world. Canada may soon adopt its own Magnitsky legislation. The Europeans arent close. Is Mr. Browder close to winning the justice he says hes seeking for Sergei Magnitsky? Justice, no, he says. I believe weve pricked the bubble of impunity. Meaning that people didnt get away with it. But justice, the way Id like to see justice, is prosecution for torture and murder. Were not going to get that while Putin is in power. But my hope—and I think weve succeeded in this—is that when they have the tribunals of crimes of the previous regime in Russia, the first tribunals will be the Magnitsky tribunals. Mr. Kaminski is a member of the Journals editorial board.
Posted on: Sat, 10 May 2014 19:54:02 +0000
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