Sunday, January 25, 2015

Bill Browder: the Kremlin threatened to kill me

The former banker claims Vladimir Putin runs Russia like a crime syndicate. He should know: corrupt officials seized his assets and stole $230m. His lawyer was beaten to death in jail. And now sinister text messages warn he might be next

Putin’s ruling system unviable, Browder thinks. “It’s based on 90% bribery and 10% repression. He has now run out of money for bribery, so he has to flip it over to 90% repression. I don’t think he [Putin] has got the infrastructure to be a proper repressive dictator.”.. Interestingly, Browder says he opposes western sanctions on ordinary Russians, regarding them as an imprecise tool that punishes the wrong people. Rather, he would like to see the top 1,000 Russian government officials banned from Europe and the US. Of London, he says: “Every Russian wants to come here. It’s their bolthole, their escape valve.”

I’m due to meet Bill Browder at Mari Vanna, a favourite hangout for rich Russians in Knightsbridge. But when we get there the restaurant, with its rustic dacha-style Russian decor, leaves us both feeling slightly spooked. So we wander across the road to an anonymous sushi bar. Browder’s reluctance to avoid bumping into anyone with Kremlin connections is understandable. As he explains, matter-of-factly: “They [the Kremlin] threatened to kill me. It’s pretty straightforward.”

American-born Browder is one of Vladimir Putin’s most prominent critics. For over a decade he lived in Moscow and ran the most successful investment fund in Russia. Initially, he was a fan of Putin’s. But in 2005 he was deported from the country. A corrupt group of officials expropriated his fund, Hermitage Capital, and used it to make a fraudulent tax claim. They stole $230m (£153m).

Stuck in London, Browder hired a team to fight his case. The same Russian officials arrested his lawyer, Sergei Magnitsky, after Magnitsky uncovered the money trail and made a complaint. They put Magnitsky in jail and refused him medical treatment. (Magnitsky suffered from pancreatitis and gall stones.) After he had spent almost a year behind bars, guards beat him to death. He was 37 and married with two small boys.

The incident had a transforming effect on Browder. “If Magnitsky had not been my lawyer he would still be alive,” he says. He describes Magnitsky’s death as “absolutely heartbreaking”. “If he hadn’t taken on my case he’d still be enjoying his life, being a father, looking after his wife. A young man whom I was responsible for died in the most horrific way because he worked for me.”

Browder’s memoir, published next week, recounts how Magnitsky’s death changed him from entrepreneur to global human rights crusader. Its title is Red Notice: How I Became Putin’s No.1 Enemy; and it reads like a non-fiction version of a Mario Puzo thriller. There’s a ruthless crime syndicate, a mafia boss – for Michael Corleone read Putin – and a growing tally of bodies.

Ever since Magnitsky’s murder in 2009 Browder has waged an extraordinary campaign to bring the officials to justice. Not in a court of law – there’s no prospect of a trial inside Russia – but in the wider court of international public opinion...

This may seem a little fantastical, but the Kremlin has a track record of silencing those it dislikes. Our Japanese lunch venue is a short stroll away from Mayfair and the Millennium hotel. It was there in 2006 a KGB squad allegedly poisoned the former Russian intelligence officer Alexander Litvinenko. A public inquiry into Litivineko’s radioactive murder opens this week. Given the threats against him, I wonder why Browder is dining without bodyguards? “Bodyguards offer fake security. The real security comes from having your enemies know nothing about you,” he replies.

According to Browder, the west is embroiled in a new cold war with Russia. The most visible manifestation of this is the worsening conflict in Ukraine. But unlike in communist times, he says, the west isn’t dealing with a hostile ideology. His thesis – which I share – is that Putin and his law enforcement and spy agencies are in effect running Russia as a “criminal enterprise” for their own financial gain. Anyone who stands up to them – such as Magnitsky – faces being shot, arrested or penalised.

For those who don’t know Russia, this might sound a bit gloomy. Is it also Russophobic, the charge made by pro-Kremlin online commentators against anybody who dares to criticise Putin? Browder says his problem isn’t with Russia as such but with the powerful clique of ex-KGB spies who have grabbed the state. “I think Russia is an occupied country. There are 140 million good people and a million bad people,” he says. He points out that he is married to a Russian, Elena, (they met and fell in love in Moscow) and they have two children together. His “longest serving and most trusted” colleagues are Russian, he says, and adds: “Among the 140 million are some of the most loyal, generous and intelligent people you can find in the world.”

Browder’s own backstory is fascinating. His grandfather was the head of the American communist party in the US. As a teenager, outshone by his prodigy brother, Browder decided he would rebel by becoming a capitalist. He found himself initially drawn to London, where he worked briefly for Robert Maxwell, and later became a British citizen. He says he feels little loyalty to the US, which persecuted his leftwing family. (Senator McCarthy dragged his grandfather before the House Committee on Un-American Activities.) Browder harboured a “romantic notion” the UK was synonymous with the rule of law and freedom.

After Magnitsky’s death, Browder says the policy of western governments disillusioned him. The Obama administration was deeply relectant to impose sanctions on corrupt Russian officials for fear of annoying Putin – a stance Browder calls “appeasement”. The Foreign Office treated Browder politely. But Downing Street stubbornly refused to enact its own version of the Magnitsky Law, despite strong cross-party support and worsening relations following Putin’s Crimea putsch.

The bad guys in Browder’s book are vividly painted. One of them is a senior interior ministry official called Major Pavel Karpov. Karpov sued Browder for libel in the high court and lost – the judge ruled that he had no standing in Britain. Karpov has since failed to pay £250,000 in costs. Browder says he’s dismayed at the way corrupt Russians can abuse the British legal system.

Much of Red Notice reads like a detective novel, with Browder and his lawyers trying to figure out what happened to the stolen cash. Gradually, they put together the clues. They discovered that Karpov was part of a wider group of dodgy bureaucrats. It included another interior ministry official, Lt Col Artem Kutznetsov. And the head of a Moscow tax office, Olga Stepanova... Read more: