Turning the Tables on Russia

The New York Times. The Opinion Pages
By JOE NOCERA
Published: April 16, 2012

Who knew that what corrupt Russian officials care about, more than just about anything, is getting their assets — and themselves — out of their own country? They own homes in St. Tropez, fly to Miami for vacation and set up bank accounts in Switzerland. They understand the importance of stashing their money someplace where the rule of law matters, which is most certainly not Russia. Besides, getting out of Russia is one of the pleasures of being a corrupt Russian official.

As it turns out, a man named William Browder knows this. As does Senator Benjamin Cardin, a Democrat from Maryland. As do plenty of other senators, on both sides of the aisle.

As a result, the Senate Foreign Relations Committee will likely report out a bill in the next few weeks that would force the State Department to deny visas, and freeze the assets, of Russian officials who are labeled “gross human rights abusers.” After that, it will be attached to an important trade bill that the Democratic-led Senate and the Republican-controlled House need to pass later this summer. Which would make it a rare and welcome moment of bipartisanship in this rancorous political season.

Browder’s involvement in this bill is deeply personal. His hedge fund, Hermitage Capital, was once the largest Russia-only fund in the world. But, in 2005, he was essentially run out of the country after criticizing, once too often, the theft of corporate assets by henchmen of Vladimir Putin, the Russian strongman. A small group of officials fraudulently “took over” his company, and landed a phony $230 million tax refund, which they pocketed.

One of Browder’s lawyers, Sergei Magnitsky, insisted on investigating these crooked transactions. In 2008, he was arrested and jailed. Placed in brutal conditions, his health deteriorated, but he was deprived of medical assistance. He died in 2009 at the age of 37. Autopsy photographs revealed that he was badly beaten shortly before he died.

Most businessmen would have moved on. But Browder became obsessed with avenging Magnitsky’s death. His primary tactic has been to push for a law named for his deceased lawyer. It was originally aimed at preventing the 60 or so Russian officials who played a role in Magnitsky’s persecution from traveling to the West.

I have to confess that when I first began receiving press releases about this effort, which has gained traction in Europe as well as the U.S., I didn’t take it very seriously. Visa restrictions didn’t seem like much of a price for allowing an innocent lawyer to die in prison. But after watching the reaction of the Russian government, which has repeatedly and vehemently denounced the bill — and which is now, out of pure spite, prosecuting Magnitsky posthumously — I’ve come to see that it really does hit these officials where it hurts them most.

In America, the prime mover behind the bill has been Senator Cardin, who is deeply involved in human rights issues. (He is co-chairman of the Helsinki Commission, which monitors human rights.) Three years ago, he sent a letter to the Obama State Department, asking it to prevent those involved in Magnitsky’s imprisonment from traveling to the U.S. The State Department brushed him off. He then published the list of the Russian officials, which created a firestorm in Russia.

Ever since, he has pushed hard for the bill — while also broadening it to include other Russian human rights abusers, and asset freezes along with visa denials. The administration has consistently opposed him. But both Democrats and Republicans have now come on board, and the momentum seems nearly unstoppable.

It would be nice to say that the bill has gained this momentum because it is an obvious and right thing to do. But it’s never that simple. This summer, Russia is going to enter the World Trade Organization. In order for America to receive the full benefits of a trading relationship with Russia, Congress needs to eliminate the Jackson-Vanik Amendment, which links trade with Russia to the free emigration of Russian Jews. Back when it was signed into law in 1975 — despite the opposition of both the Soviets and the Ford administration — Jackson-Vanik addressed a serious problem. That problem no longer exists, thanks in no small part to Jackson-Vanik.

In effect, Jackson-Vanik will be replaced by the Sergei Magnitsky bill — and, with any luck, it will be every bit as effective as its predecessor. Republicans who don’t like handing the president any victory will be able to say they forced the new bill down the throat of his State Department. Democrats can say they did something to improve the rule of law in a place where it scarcely exists. Bipartisanship will reign.

Now if they could only get together to do as much for the American people as they’re about to do for the good citizens of Russia.

* Russia Plans to Retry Dead Lawyer in Tax Case
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