Interview of Hermitage Capital Investment Fund head William Browder on the case of Sergey Magnitsky and its aftereffects for the Russian economy

WPS: What the Papers Say

Vladimir Putin has failed to justify the hopes of investors on the establishment of clear rules of the game; he has created a terrible and destructive class of nomenclature oligarchy.

The case of the Hermitage Capital Investment Fund and the death of lawyer Sergey Magnitsky in a preliminary detention cell are similar to the case of YuKOS as viewed in terms of public response. Below is an interview of William Browder, head of Hermitage Capital.

Q. – We would like to set the record straight regarding the exposing videos and the freezing of certain personal bank accounts of Russian officials by the Prosecutor’s Office in Switzerland. Did Hermitage initiate those actions, and why were they launched?

A. – It was Hermitage Capital lawyers that filed an appeal to the prosecutor in Switzerland, and that appeal initiated the criminal investigation of money laundering of some Russian officials and members of their families – I believe it speaks for itself. “The Untouchables”, a film uploaded at youtube.com and released by friends and colleagues of Magnitsky, highlights in detail information of the enrichment by millions of dollars of the families of those officials, their real estate property abroad, and their personal bank accounts in Switzerland. The Swiss authorities have already launched a criminal case based on that information.

…All necessary and sufficient evidence for that was presented to law enforcement agencies, so that a criminal case could be initiated against those and other individuals involved in the theft and so that during the investigation they were barred from work and, possibly, were kept in custody. Basically, evidence gathering is a function of the investigating authorities, primarily the Russian Investigation Committee and Prosecutor General’s Office, which they have consistently been trying to forbear for over three years already. But we are always ready to assist them, if only they would agree to accept that assistance. The only thing that interferes is the absence of an efficient law enforcement system, court and prosecutor’s office in Russia. As soon as these institutions start functioning, all participants in the crime will incur legal penalties.

Q. – Are you not afraid that eventually you may find yourself in a Russian jail?

A. – The activities of the IAM Investigation Committee are openly politically motivated and illegal. That illegitimate action was directed primarily at the provision of psychological pressure. Persons attempting to evade responsibility by providing pressure on us and hiding the real criminals are already turning into pariahs in the civilized world.

…Today Western nations have been introducing and will introduce sanctions against specific officials, who are involved in the documented torture and death of Sergey Magnitsky. This year the list of these officials will expand at the expense of those, who grossly violate the rights and freedoms of citizens and thus act contrary to international obligations accepted by the Russian Federation.

Q. – In your opinion, why foreign investors are not fleeing in great numbers from Russia due to the YuKOS affair, the case of Magnitsky and other similar cases?

A. – This question can be put differently: How many investors do not come to Russia because of the case of YuKOS, Magnitsky and the like? We know dozens of investors who have decided not to invest or abandon the plans of investing in Russia exactly because of the Magnitsky case. Most importantly, the Russians are currently actively withdrawing their funds abroad. In 2010, the capital outflow from Russia amounted to USD 38 billion, while in Q1 2011 alone it amounted to USD 21 billion.

Q. – At one time you were quite complimentary about Vladimir Putin; you supported his fight against oligarchs, including Mikhail Khodorkovsky. Has your attitude towards Putin changed?

A. – When Vladimir Putin came to power, I, like many people in Russia, waited for the end of the era of regulatory anarchy and hoped that the new leader will ensure the establishment of clear and fair laws and their enforcement. When Putin launched his attack on the oligarchs, I naively thought that was his main goal. However, a new class of nomenclature oligarchs – even more terrifying and destructive than the one that existed before Putin – appeared in Russia. These people wear shoulder straps and hold public offices. As a result, corruption in the country only increased. Today’s Russia not only occupies one of the first places in the world in terms of corruption (along with Papua New Guinea and the Congo), but its last year figure, according to Transparency International, was the lowest since the beginning of the index measurement.

Q. – In your opinion, are Vladimir Putin and Dmitry Medvedev in a position to change for the better the investment climate in the country, or does Russia simply need new leaders?

A. – We can judge about it by the Magnitsky case. Eighteen months ago our society raised and put before both President Medvedev and Prime Minister Putin the issue of illegal persecution and death in the detention center of Sergey Magnitsky, imprisoned by law enforcement officers whom he had convicted of embezzlement. Eighteen months later an official investigation failed to yield any results. The officials in question did not only fail to be held responsible; they were even promoted to higher posts and received national awards. And today, taking advantage of their impunity, they are trying to illegally harass me and my colleagues. Thus, they only demonstrate the current chaos and the country’s lack of law, and damage the reputation of this country in the world. However, this is no reason for pessimism. I have always admired the high intellectual potential and limitless talents of Russian people. Without exaggeration, many Russians with whom I had the opportunity to communicate are very intelligent, hospitable and decent people. Under honest leadership Russia could become a great power again.

Q. – More than a dozen foreign investment funds are currently working in Russia, but it was Hermitage that became victim of an attack of force structures. Why?

A. – The Hermitage Capital Fund attracted investors with it being leader in the fight for transparency and decreased corruption in Russian companies, primarily those companies that are controlled or significantly influenced by the state. The activity of Gazprom and Surgutneftegaz was subject of its investigations. The current problems of the Fund are directly linked to these and several other investigations. Later those, who were ordered to ‘squeeze’ the Fund out of Russia, decided also to expropriate the assets of the Fund and capitalize on this. The fact that the Fund was the largest international investor in the stock market of Russia, and the Russian companies of the Fund were among the largest taxpayers in this country played a significant role in their making that decision. That is what made the Fund object of the attack. In his testimony Sergey Magnitsky said about that selfish motivation of officials. Having failed to get access to basic assets of the Fund, the criminals stole the taxes the Fund had paid. When the theft came to light – largely thanks to Sergey Magnitsky – there was nowhere to retreat, and the criminals started to literally liquidate staff and lawyers of the Fund. Only those who managed to go abroad saved their lives.

Q. – Did you ever come to believe that the Russian employees of the Fund were playing a double game, about which you simply might not know?

A. – We have never doubted the honesty of Fund employees. We admire the honesty and courage of Sergey Magnitsky, like all concerned people in the world.

Q. – What new information and legal actions are expected from Hermitage in the near future?

A. – New actions on our part will depend on the reaction from the government of Russia on the appeals of the international community to punish those responsible for the death of Magnitsky and stop persecuting his colleagues. займ на карту срочно без отказа микрозайм онлайн https://zp-pdl.com/fast-and-easy-payday-loans-online.php zp-pdl.com займы без отказа