Top Putin Critic Discusses the Legacy of Sergei Magnitsky

By David Michael Newstead.

SWITZERLAND - JANUARY 25: HermitageCapital Chief Executive Bill Browder speaks an interview in Davos, Switzerland, Wednesday, January 25, 2006. The World Economic Forum opened Wednesday in Davos. (Photo by Adam Berry/Bloomberg via Getty Images)

Bill Browder is at the center of one of the most well-documented human rights cases in history. The 2009 death of his attorney, Sergei Magnitsky, galvanized the former investor into becoming an activist and a staunch critic of the Kremlin. Since then, his work has led to the passage of the Magnitsky Act in the U.S. and similar efforts in the E.U., which ban the 32 Russians implicated in Sergei’s death from traveling to or banking in those countries. Currently, a proposed expansion to that law is being debated in Congress, which would place the same restrictions on human rights abusers from all over the world through targeted sanctions.

But Browder’s campaign has also unleashed increasingly bizarre reactions from the Russian government. In 2012, authorities in Moscow put Sergei Magnitsky on trial despite the fact that he died in 2009 – making this the first trial of a dead person since the medieval Catholic Church prosecuted a corpse in the year 897. Russia would further retaliate for the U.S. Magnitsky Act by banning American couples from adopting Russian orphans, even those already assigned to parents. Meanwhile, Putin’s government has issued so many arrest warrants against Bill Browder that they are now ignored by Interpol, citing that such charges are predominantly political.

Browder recently wrote about these experiences in his book, Red Notice: A True Story of High Finance, Murder, and One Man’s Fight for Justice. At one time, he was the single largest foreign investor in Russia. Now, he’s considered a top enemy of Vladimir Putin and he frequently comments on the war in Ukraine, the murder of Boris Nemtsov, and more. Today, Bill Browder joins me to discuss the current situation in Russia and the legacy of Sergei Magnitsky.

David Newstead: I want to start by asking about Sergei Magnitsky, the man. How would you describe him and how do his loved ones remember him today?

Bill Browder: The best way to describe him is that he was one of the most principled, moral, reliable people I’ve ever met. You generally only know a person when they’re faced with some type of duress. And when Sergei Magnitsky was faced with the most horrendous duress, his true colors of integrity showed through in an amazing way.

David Newstead: The corrupt officials responsible for Sergei’s death stole $230 million from Russian taxpayers. Recently, you said $15 million of that money was seized in the United States in the form of luxury apartments in Lower Manhattan. Is that correct?

Bill Browder: Yes. The U.S. Department of Justice has seized $15 million of property in New York, which was purchased using some of the money from the crime that Sergei Magnitsky exposed.

David Newstead: So without the restrictions that you helped put in place through the Magnitsky Act, Sergei’s murderers could hypothetically be walking around New York or traveling anywhere throughout the U.S.?

Bill Browder: There’s actually two separate things going on. The apartments were not frozen under the Magnitsky Act. They were frozen under just more generic money laundering laws in America. The Magnitsky Act itself has sanctioned 32 people, taken away their visas, and frozen their assets. And those people certainly can’t go to America. They can’t use the U.S. banking system. And they will have a pretty hard time using the global banking system, because almost no bank in the world would open an account for somebody who’s on the U.S. Treasury sanctions list. But the New York case is actually a case that would have gone through with or without the Magnitsky Act.

David Newstead: Are there specific human rights abusers from other countries who are good examples of why we need a Global Magnitsky Act?

Bill Browder: I think I could spend all week listing human rights abusers around the world who should be sanctioned under the Global Magnitsky Act. But one case in particular, which has really touched me and many others, is a case in Azerbaijan of Khadija Ismayilova. Khadija was an investigative reporter who was working on corruption in the Azerbaijani ruling family. And in retaliation for some hard-hitting reporting that she did, they arrested her, tried her for a mutating list of bogus allegations, and sentenced her to 7 years in prison. I can’t think of a more deserving bunch of people to be sanctioned than those people who arrested her and imprisoned her.

David Newstead: So because the Magnitsky Act only applies to Russia right now, human rights abusers from other countries are still able to come to the United States and use our banking system if they haven’t violated other U.S. laws?

Bill Browder: Correct. That’s why the Global Magnitsky Act is such an important next step. Russia doesn’t have a monopoly on human rights abusers.

David Newstead: Who opposes this law exactly? Because it seems straight forward.

Bill Browder: Well, there are the people I describe as the real-politickers who oppose it. These people say, “If we do a Global Magnitsky Act, that might sanction the ‘good’ human rights abusers.” Meaning those human rights abusers who are seen to be allies of the United States. You know, for example, Turkey and even Azerbaijan are considered to be strong allies of the United States in various geopolitical squabbles. So, the thought is that you can’t walk and chew gum at the same time. I believe you can have a mature relationship where you have diplomatic relations on one side and sanction certain corrupt officers on the other.

David Newstead: Besides that, are there any major roadblocks to the law’s passage and when do you think that might happen?

Bill Browder: The law is very quickly moving its way through the Senate. The Senate Foreign Relations Committee has already approved it, which is the last bottleneck in the Senate. In the House, there is very strong bipartisan support. There’s also strong support from many different human rights groups from all around the world.

It’s very hard to say the timing of legislation in Washington, because it doesn’t just depend on the virtue of one’s legislation. It depends on the environment in which there’s a relatively limited amount of time for the lawmaking process to deal with all sorts of other issues. So, it all depends on priorities and politics. And as we get closer to the U.S. presidential election, you’re going to see much less bipartisan cooperation on anything as people want to score points. So, I think it’s either going to happen this year or probably after the presidential election, but before this Congress is dismissed.

David Newstead: You’ve said that Russian President Vladimir Putin is evil and probably a sociopath. If that’s true, how do you think Western governments should behave towards a sociopath who runs a major nation-state?

Bill Browder: I think that the simple answer is that he’s not a man who can be engaged with under normal rules of diplomatic engagement. Don’t expect any word that he says to be true or that any promises he makes will ever be honored. So in a situation like that, you have to deal with him in terms of containment not in terms of engagement.

David Newstead: What do you think the explanation is for Putin’s constant need to project strength and manliness? A cult of masculinity, if you will. Last week, for instance, there was a video of him lifting weights with Dmitri Medvedev. What’s behind that?

Bill Browder: Well, lack of strength and lack of manliness. You know, he’s kind of like an athlete who cheats. Imagine the scenario of a soccer player dribbling the ball towards the goal. Someone comes up to him to try to take the ball away and Putin pulls out a gun and shoots the person. Then, Putin gets close to the goal and the goalie is sitting there trying to guard the goal, so Putin shoots him as well. And then, Putin kicks the ball in and raises his hands in victory like this great soccer player when, in fact, he’s just cheated all the way through the game. That analogy is what he does in all aspects of his political life. And he’s cheating by eliminating all of his opposition by either putting them in jail, sending them to exile or killing them.

David Newstead: Is it accurate to say that Sergei Magnitsky and Vladimir Putin are complete opposites as men?

Bill Browder: Well, Sergei Magnitsky was a patriot – an honest patriot who wanted to help Russia. Putin is a dishonest kleptocrat who wants to steal all the resources of Russia for himself. So, they’re exactly the opposite.

David Newstead: Whenever I talk to people unfamiliar with the Magnitsky case, you know they’re always struck by the fact that he was put on trial years after he died. Do legal scholars ever comment on this to you? I mean, what was your reaction at the time, because this hasn’t happened since the Middle Ages?

Bill Browder: Absolutely. One of my most trusted advisers is the former chief prosecutor for the U.N. War Crimes Tribunal for Sierra Leone. He’s a professor named David Crane at Syracuse University. He wrote a whole series of articles in the legal academic press about the posthumous trial. He said he’s never gotten more feedback. In the legal world, it’s something that nobody can conceive of.

David Newstead: Everything ends someday. If you had to speculate, how do you think Putin’s presidency will end?

Bill Browder: I think that there’s 3 different political scenarios. The first is what I call the Mugabe scenario, which is that he somehow holds it all together for decades through further hyperinflation, destroying institutions, and driving the Russian people into poverty. And I think that could be the most likely scenario. The second is the Palace Coup scenario, which is the oligarchs and secret police officers at some point decide Putin’s a liability. And they gang up to overthrow him.

And the third is what I call the Maidan scenario, which is the name of the square in Kiev where the people of Ukraine overthrew President Yanukovich. I think that the Mugabe scenario probably has a 65% probability. The Palace Coup scenario maybe a 20% probability and the Maidan scenario 15% probability.

David Newstead: Is there any hope that opposition figures like Alexei Navalny, Gary Kasparov, or Mikhail Khodorkovsky might one day succeed, because that wasn’t on your list?

Bill Browder: Well, they would be part of the Maidan scenario. Those would be the people who become the new government of Russia once the people overthrow Putin. Having said that, all these men are either in exile or effectively in jail. Putin doesn’t allow any oxygen for the opposition. It’s like the cheating in sports analogy. If you don’t have an opposing team, it’s easy to win.

David Newstead: In your view, what will Russia be like in 10 or 20 years?

Bill Browder: I think if everything is status quo, it would be a Venezuela or Zimbabwe type of scenario. Hyperinflation. Mass poverty.

David Newstead: In addition to discussing Sergei’s imprisonment, your book Red Notice is really an autobiography with a good amount of personal detail, family history, and the progression of your career right up to the present. Do you plan on writing follow-up books as the campaign for a Global Magnitsky Act moves forward or if the political climate in Russia changes?

Bill Browder: The next step in my campaign is to find a way to adapt the book into a Hollywood feature film. Film is a very emotive median by nature. I think by bringing it into popular culture our campaign will be more effective. That will make the Magnitsky Act more well-known, broadening it in Europe, and also globalizing it as it applies to other human rights abusers.

David Newstead: Is that effort still in the early stages?

Bill Browder: Movies take a long time to make, because there are so many different people involved. We just started that process and we’ll see where it goes.

David Newstead: In the book, you’ve said that you have to take elaborate counter-measures based on death threats and harassment from Russian authorities or their proxies. Without commenting on the specifics of your counter-measures, can you say more about how they go after you?

Bill Browder: Well, the objective is to destroy me either physically, legally, or reputationally. So in their perfect world, if they could just get away with it, they would kill me. But so far they haven’t, probably because they haven’t figured out a way they could get away with it. And so, the next step is to try to destroy me legally. In other words, to try to get me arrested and extradited back to Russia. Through Interpol red notices or bilateral extradition requests. So far, that hasn’t succeeded. Then, the third thing they try to do is to destroy me reputationally by putting shows about me on their television, accusing me of crimes of murder and massive fraud in Russia. They provide dossiers of fake information to foreign governments and parliamentarians. So far, none of this has worked, but it’s a constant fight with the Russians to make sure they don’t succeed.

Question from a Reader: What’s your opinion on investing in Russia today? And what would it take for you to re-enter the market as you did 20 years ago during the fall of communism?

Bill Browder: It’s an un-investable country today. You have a regime that’s hostile to business and hostile to the West. And so you can’t bring in any money at any price level, because it’s absolutely uncertain what the next political decision will be. You know if you owned a media company before and they changed the media laws, your company was basically destroyed completely. And they do that all the time with all sorts of businesses and all sorts of rules. All sorts of arbitrariness. So, what would make me go back in? Well, I went in after the fall of the Soviet Union. I guess I would probably go in after the fall of the Putin regime, depending on who followed.

David Newstead: Final question. If people are interested in helping to pass the Global Magnitsky Act, what should they do?

Bill Browder: They should get in touch with me. There’s lots of very specific tasks to do in our campaign. There’s no petition or some easy thing to do. But if someone’s seriously interested, we want people to join the effort.

Read Red Notice by Bill Browder