Witness: Putin in the business of creating chaos 03:15
Story highlights
- Michael Weiss: Like his grandfather, Bill Browder was once a supporter of a Kremlin boss
- But Browder's experience in Putin's Russia has turned him into the Russian president's arch foe, Weiss writes
Michael Weiss is an international affairs analyst for CNN and author of "ISIS: Inside the army of terror."
(CNN)No
quintessential New York argument was ever ended so conclusively as in
1950, when a public debate took place on whether or not the Soviet Union
then constituted a "socialist community." Max Shachtman, a witty and
charismatic American Trotskyist, was of the opinion that any state which
kept its workers in penury and servitude and paranoically devoured its
own political class could qualify as no such thing.
Michael Weiss
To
demonstrate his point, he recited a litany of names of loyalist Eastern
European Communist leaders who had recently been purged and condemned
to death by Stalin. Directly addressing his debate opponent, Earl
Browder -- then only recently dismissed as general secretary of the
Communist Party USA, but still an apparatchik of the regime that had
disavowed him -- Shachtman declared: "There but for an accident of
geography stands a corpse!"
I'm
not quite sure what it is about the American-born Browder family that
has made its fate for nearly a century quite so dependent on the dark
machinations of the Kremlin.
But by odd coincidence, Earl Browder's grandson Bill, a Red diaper baby turned capitalist, addressed a US congressional committee Thursday on a wholly different question about Russia: how, in Browder's view, Vladimir Putin and his cronies stole billions in order to enrich themselves, with the regime allegedly engaging in crimes including money laundering and assassination to get away with it. All accusations the Russian president vehemently denies, of course.
Bill Browder's full interview on CNN 05:28
You'll
have noticed that this is plainly now America's problem, too, because
of the international reach of Russian racketeering and the unending Page
1 controversy of whether or not Donald Trump's campaign may have been
susceptible to it on his unlikely march into the White House.
But
back when the Donald was barking at Gene Simmons on "Celebrity
Apprentice," Browder was experiencing the depravities of Putin's mafia
state at first hand -- becoming, like his grandfather, a victim of the
very dictatorship he once defended.
Short-lived alliance
As the CEO of the hedge fund Hermitage Capital, once the largest foreign investment vehicle in
Russia, Browder spent the early 2000s as minority shareholder activist
and avowed admirer of an inscrutable KGB case officer who'd unexpectedly
risen to the Russian presidency in the wake of a severe economic
crisis, promising to put an end to the corruption and the boyar
governance of the Yeltsin period.
As
he noted in his testimony Thursday before the Senate Judiciary
Committee, Browder's enemies in Russia -- the oligarchs defrauding their
shareholders and the Russian taxpayer -- were for a time Putin's
enemies, too. But alliances of convenience have a relatively short life
in this part of the world.
As he
tells it, in 2005, for reasons of "national security," Browder was
deported from Moscow. Eighteen months later, he said, Hermitage Capital,
along with the offices of its law firm Firestone Duncan, were raided by
officers of the Russian Interior Ministry. He said they confiscated
corporate documents tied to various Hermitage subsidiaries on a spurious
tax evasion pretext .
Now
domiciled in London (he gave up his American citizenship and became a
Brit in 1998), Browder hired a 35-year-old tax attorney back in Moscow,
Sergei Magnitsky, to investigate why he and his holdings were being
targeted. What Magnitsky uncovered was
what the US government has alleged was a shockingly vast criminal
conspiracy to defraud not Browder and Hermitage, but the Russian
public, of $230 million using the purloined Hermitage corporate
documents.
It was an elaborate but common scheme
-- and one whose ramifications are still coming to light almost a
decade later. It involved re-registering those Hermitage subsidiaries
under new ownership, the dummying-up of civil litigation against the
subsidiaries by outside parties which were also, not coincidentally,
controlled by the same people who stole the subsidiaries. Russian courts
then levied massive damages against the subsidiaries, which were now
eligible for equally massive tax refunds.
Even
more remarkable than the nine-figure haul was the Tolstoyan cast of
characters behind it: the same Interior Ministry policemen who organized
the raids
on the hedge fund and law firm; an officer of the Federal Security
Service (FSB), the successor organ of the Soviet KGB; and tax ministry
officials. All moonlighted as payrolled gangsters of a "dangerous
transnational criminal organization," as Sen. John McCain has described it, known as the Klyuev Group. Airline records, whose authenticity was confirmed by a US government source, would later show that the cops and robbers even vacationed
together before and after the Hermitage heist, and purchased, either in
their own names or the names of their immediate relatives, properties
and cars that enormously exceeded their declared annual incomes.
More
recently, the leaked personal emails of the Klyuev Group's alleged
consigliere make a persuasive case that he colluded with an ex-official
from the Interior Ministry to retroactively tamper with evidence in the
case. That lawyer, by the way, confirmed the authenticity of the emails,
but says their contents only prove "that a lawyer and an investigator
do know each other and discuss criminal cases," but there was no
wrongdoing.
Magnitsky
tried to bring documentary proof of the conspiracy to the attention of
Russian law enforcement, believing that compromised public servants were
the exception rather than the rule in a new Russia avowedly dedicated
to the "dictatorship of the law." He was wrong.
Not
only was his forensic sleuthing dismissed, he himself was accused by
the very perpetrators he exposed of being a tax cheat -- projection
being the only real ideology to which Putinists subscribe. Magnitsky was
thrown into Butyrka, one of the most notorious prisons in Moscow, kept
in gulag-like squalor, denied urgent medical care and -- if Browder,
multiple arms of the US government and Russia's own presidential human
rights council are to be believed -- tortured and left to die in 2009. Russia says he died of "heart failure."
The Magnitsky Act
Like
a good number of Soviet dissidents, Magnitsky documented his own
politicized travails: he kept a diary in real time of his ordeal behind
bars and his vain attempts to overturn his scapegoating, or at least get
medical treatment for gallstones and acute pancreatitis. After his
demise, his government put him on trial
for tax crimes posthumously in an imaginative perversion of justice
that not even Stalin contrived for Old Bolsheviks in the Great Terror.
All
of this might have made for a tragic but minor footnote in the annals
of contemporary Russian history but for what Browder has done over the
past seven and a half years to tend to Magnitsky's flame -- and how
furious he has made Russian officialdom in the process.
In 2012, the financier got a landmark US human rights law
named in his slain lawyer's honor, sanctioning an ever-lengthening list
of the Russian conspirators behind the $230 million theft and cover-up
and Russian human rights abusers. Parallel laws have since been passed
in Estonia and the United Kingdom, and one is set to pass in Canada.
Since
state-indulged mobsters cannot be brought to book credibly in Russia,
this legislation at least strips them of the ability to spend their
ill-gotten gains in the West, which is arguably a harsher punishment.
As
such, it has prompted a raft of hysterical countermeasures from the
Kremlin, and obstreperous commentary from everyone from Russia's
Prosecutor General to the spokesman of the President. Possibly this owes
to the fact that one of Putin's closest confidants may have profited
personally from the Magnitsky affair, as disclosures in the Panama
Papers suggest. Putin, naturally, denies having profited from his
presidency; he once famously described his role in government as that of
a "galley slave."
The cruelest of
countermeasures is a ban on Americans seeking to adopt Russian orphans
-- a number of them stricken with HIV or Spina Bifida who might
otherwise find loving families in America and are now destined to
languish in substandard institutions as wards of the Russian state. This
is the price society's most vulnerable must pay so that the elite can
steal with impunity.
Nor have Putin
and his surrogates been especially subtle in their extortionate
attempts to use this gratuitous proscription as leverage for dismantling
of the Magnitsky Act. A good rule of thumb: whenever you read that
"adoption" has been discussed in any US-Russian bilateral meeting, what
you're actually reading is a cynical quid pro quo on offer from Moscow
for ending US sanctions on criminals.
Browder a tireless activist
I've
known Bill Browder for about six years. We met when I was living and
working in London and he was beginning what would become a tireless
activist campaign to exonerate and vindicate Magnitsky, for whose death
he feels a personal responsibility. He has been monomaniacal in this
regard. Never have I had an interview subject in journalism so immune to
pleasantries and so reluctant to discuss anything outside of the news
item of the day on which he was discoursing.
Does
Browder have an agenda? Of course he does, as he'll be the first to
admit. But the facts, I've come to believe in the last half decade, are
solidly on his side. I have been reporting on these events for six
years, examining court records and Russian government documents and
interviewing people investigating the Magnitsky affair, including and
especially Browder himself.
What
impresses me the most about him is that he does not ask you to take him
on faith. Rare for those of us who toil in international affairs, hoping
to shine a light on the occluded parts of the unfree world, Browder
substantiates almost all his allegations with documentation, much of it
produced by the Russian government itself or by whistleblowers involved
in the $230 million expropriation.
One
of the latter, Alexander Perepilichnyy, another exile in Britain, who
identified himself as the former money launderer for the Klyuev Group
before becoming a whistleblower, was almost certainly also the victim of
foul play in an as-yet unsolved death, mostly likely by poison. As
documents obtained by CNN show, money from one of Perepilichnyy's
offshore companies was transferred to a company owned by an agent for the Syrian chemical weapons program.
While
Russian authorities may not like what Browder has to say and show,
Western governments have found him reliable. In the past few months
alone, I have spoken to several officials in different parts of the US
executive branch who have consulted him over the years, receiving
evidence he and his team have compiled. When asked if Browder has ever
steered them wrong with respect to the merits of the Klyuev Group or the
Magnitsky affair, they have not hesitated to answer with a resounding
"no."
The proof is in the frozen
funds. About $40 million of the stolen $230 million has been located and
seized in multiple countries since 2009, according to Browder. In May,
the US Justice Department settled a case
in New York in which it alleged that Prevezon Holdings, Ltd., a
Cyprus-registered company, had laundered several million from the tax
fraud into Manhattan real estate. Prevezon paid nearly $6 million but
admitted no wrongdoing.
The lawyer for that company was Natalia Veselnitskaya,
the "Russian government lawyer" who met with Donald Trump, Jr., Paul
Manafort and Jared Kushner in June 2016, ostensibly to peddle dirt on
Hillary Clinton. According to Don Jr., her stuff on the Democratic
nominee was thin gruel, and Veselnitskaya instead spent the bulk of the meeting haranguing Team Trump "about the adoption of Russian children," in what former CIA director Michael Hayden has described
to the New Yorker as a "soft approach" by Russian intelligence.
Veselnitskaya has denied acting on behalf of the Russian government. But
she and a Washington, DC-based former Soviet military officer, Rinat
Akhmetshin, engaged in a lobbying campaign to refute the substance of
Magnitsky and Browder's accusations -- the better to stop any US asset
forfeiture of money that might have been laundered therefrom. They've
failed.
Needless
to say, because he has helped democracies go after a kleptocracy's
money, Browder has been labeled an enemy of the Russian state, which has
resorted
to a number of crude propaganda campaigns to portray him as a British
or American spy-- or, at the very least, a fugitive financial criminal
with a unique power of persuasion in western parliaments. He has been found guilty in absentia in Russia for tax fraud, and sued
(unsuccessfully) in British civil court for defamation by one of the
Interior Ministry cops allegedly behind the Magnitsky affair. In spite
of earning a state salary of no more than $1,000 per month, the cop
managed to retain the counsel of a white-shoe UK law-firm for these
purposes.
Browder has been the subject of a series of Kremlin-issued "red notices" orders -- extradition orders -- which have been struck down
by Interpol at great personal cost to himself. He has had innumerable
death threats leveled against him, and the former placeholder President
of Russia, Dmitry Medvedev said to journalists at Davos, "It's a shame
that Sergei Magnitsky died and Bill Browder is still running free and
alive," according to what Browder said he was told by people who were there.
Yet he shows no sign of wavering or abandoning his cause.
There
but for an accident of geography stands another corpse. Unlike his
grandfather, Browder needs no instruction on what Russia ha
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