Arrest of Russian Opposition Leader Raises Tough Questions for Country’s Legal System
Russian prosecutors charged anticorruption lawyer and blogger Alexei Navalny, one of President Vladimir Putin’s harshest critics, with embezzlement Tuesday in connection with a 2009 timber deal in which he participated as an unpaid adviser.
The criminal charges, which carry a five-to-10 year prison term, are the latest to be lodged against a vocal Kremlin critic and have some U.S. lawyers with Russian expertise skeptical about the country’s commitment to the rule of law.
“Russia is falling into a dictatorship and [Navalny’s] arrest is entirely political,” says Jamison Firestone, the cofounder and managing partner of Moscow-based law and accounting firm Firestone Duncan, who fled Moscow for London in 2010 after he discovered that someone was trying to obtain a $21.5 million fraudulent tax refund by forging his signature on client documents and the authorities refused to act. “At its best, the indictment says to Navalny that if you continue to open your mouth, you’re going to prison. At its worst, he’s already going to prison.”
The Investigative Committee of the Russian Federation—a body akin to the Federal Bureau of Investigation—filed the charges against Navalny under Article 160 of Russia’s criminal code, according to a press release outlining the allegations. Prosecutors claim Navalny embezzled roughly $500,000 from the regional government of Kirov, a province just west of the Ural Mountains, by participating in a scheme to steal timber from a state-owned company.
Navalny, who has publicly described the charges as “strange and absurd,” has been released by Russian authorities and agreed not to leave Moscow while his case is pending. Regional prosecutors in Russia previously investigated similar charges against Navalny before dropping the matter, according to news reports. But as a leading Putin and anticorruption crusader—Time once called Navalny “Russia’s Erin Brockovich” for taking on corporate greed—Navalny continued to draw the interest of those loyal to the government.
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No House Vote on Bill to Lift Trade Barriers With Russia
House Republican leaders won’t bring legislation that would permanently lift trading restrictions with Russia before the congressional summer recess, a House Republican leadership aide said, delaying until the fall a debate on whether to lift one of the remaining Cold War-era economic barriers with the former American foe.
There had been a strong push to bring the legislation forward before the month-long recess begins next week. Ultimately the momentum fell short after several major labor unions, including the AFL-CIO, urged lawmakers to oppose the legislation in a concerted messaging effort last week.
The bill would permanently lift the Jackson-Vanik amendment, a measure that places trading restrictions on countries that seek to place controls on emigration. It initially became law in 1974 and was aimed squarely at Russia.
Since the end of the Cold War, the bill has been repealed annually by Congress. But with Russia set to join the World Trade Organization in August, the U.S. must permanently strike the measure from its books in order for American exporters to be able to compete for a larger share of Russian trade.
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Business groups worry that Congress will leave Russia trade bill hanging
Business groups supporting Russian trade legislation are increasingly worried Congress will leave for its five-week recess before completing the measure.
If Congress does leave before removing Russia from the terms of the 37-year-old Jackson-Vanik law, U.S. exporters will be the ones that suffer, the groups say.
Russia in August is expected to join the World Trade Organization (WTO), a move that requires the United States to repeal Jackson-Vanik, a U.S. law originally aimed at encouraging the emigration of Russian Jews with the threat of higher tariffs on Russian products.
If the United States does not lift Russia from Jackson-Vanik, the world’s sixth-largest economy will be able to raise tariffs on U.S. goods under the WTO’s rules.
“This is a mess and it is why the USA Engage and the National Foreign Trade Council are urging this Congress and this president to get their act together right now and enact Russia PNTR [permanent normal trade relations],” Dan O’Flaherty, NFTC’s vice president, wrote in a Monday blog post.
“Otherwise, American companies will not have the advantages that our negotiators have spent 19 years gaining for them in the Russian market,” he wrote.
House and Senate committees have both approved legislation to graduate Russia from Jackson-Vanik, but they disagree over a human-rights bill that has become the price for moving the Russia trade legislation.
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Prosecuting the Dead: Part III
Recently I have written two items for JURIST related to the case of Sergei Magnitsky, a Russian lawyer who was tortured to death in prison between 2008 and 2009 for revealing a $250 million tax fraud scheme perpetrated by the Russian government in 2005. His death has triggered worldwide condemnation and censure by various governments along with the European Parliament. Even the US Congress has taken up the banner of condemnation by introducing the Sergei Magnitsky Rule of Law Accountability Act, a bi-partisan effort that looks for passage this year, hopefully prior to the general election in November.
My first comment addressed the Russian government’s plans to prosecute Magnitsky on trumped-up charges even though he is dead. They are prosecuting a dead man. Though not unprecedented over the past 1000 years, it is simply not done in modern criminal practice. My second comment dealt with the “acquittal” of one of the doctors who was complicit in the torture.
The regime of Vladimir Putin, so concerned about the actions by the US Congress (and the rest of the world) seeking justice for Sergei Magnitsky, has made it one of its top foreign policy objectives to quash this international protest, including the legislation pending in Congress. The recent debacle of a Russian Federation legislator coming to the US to “lobby” Congress against adopting the Magnitsky Act underscores the desperation of Putin and his henchmen. (As an aside, the legislator is barred from entering Canada due to his association with the Russian Mafia.)
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The Russia Trade Pile-Up
So how can legislation supported by business groups, democracy activists, Senate Democrats, House Republicans and the Obama Administration be in danger of failing? Answer: Only in Washington.
That’s where things stand with a bill to normalize trade with Russia that includes a provision to sanction gross abusers of human rights. Early last week all looked good. Montana Democrat Max Baucus and Arizona Republican Jon Kyl crafted a compromise in the Senate Finance Committee that’s ready for a floor vote. Ways and Means Chairman Dave Camp and ranking Democrat Sander Levin knocked together a House version in a few hours.
Then on Monday every House Member received a letter from the United Steelworkers and the Communication Workers of America. The unions called the bill “woefully deficient” in enforcing Russian compliance with World Trade Organization rules. This is false, since Russia will join the WTO on August 22 no matter what, and failure to adopt “permanent normal trade relations” would only hurt U.S. companies in Russia. Yet Democratic support notably softened.
Meanwhile, the Administration has been missing in action. President Obama hasn’t pressed Members, while Secretary of State Hillary Clinton isn’t lobbying the Hill. We’re told that when he met with House Democrats on Thursday, Treasury Secretary Timothy Geithner stressed taxes but not this ostensibly high trade priority.
White House enthusiasm has ebbed since the Senate overrode its objections and added the Magnitsky Act, which bans Russian rights abusers from visiting or banking in the U.S. Mr. Obama also may not want to push a bill disliked by unions and that some criticize unfairly as rewarding Russian President Vladimir Putin’s bad behavior. Senate Majority Leader Harry Reid hasn’t committed to a floor vote before the August recess.
If Democratic leaders won’t lead, then some Republicans ask why they should. After the Ways and Means voice vote, Speaker John Boehner scotched quick House floor action. “If the president really thinks this is an important issue that we have to deal with, then maybe he ought to be out there making the case for it,” he said. “I haven’t seen that as yet.”
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U.S. human-rights measure puts Russia on notice
Finally, there is good news for politically disenfranchised liberals in Russia and for U.S.-Russian relations in the long run.
And that’s not because of Russia’s long-coveted admission to the World Trade Organization next month or the expected scrapping of a Cold War-era law restricting Russian trade with the United States.
Under the boot of Russian President Vladimir Putin for most of the past 12 years, Russian liberals looked with hope to the U.S. Congress to approve a new human-rights bill that would replace the old.
A bill that ties up the scrapping of the old provision — the Jackson-Vanik Amendment — with the adoption of the new one — the Sergei Magnitsky Rule of Law Accountability Act — was approved in a 24-0 vote earlier this month by the Senate Finance Committee, which gives hope that it will sail through the full Congress.
The 1974 Jackson-Vanik Amendment that denies Russia normal trade relations has been routinely waived by U.S. presidents since 1992, following the downfall of the Soviet Union in 1991. The Sergei Magnitsky Rule of Law Accountability Act would deny American visas to corrupt officials and human-rights violators and freeze their U.S. bank accounts. Prompted by a notorious quarter-billion-dollar corruption scandal in Russia, the Magnitsky bill would cover all foreign nations.
A lawyer for Hermitage Capital Management, once the largest foreign investor in Russia, Mr. Magnitsky died in police custody on false charges of tax avoidance after he was arrested for alleging a $230 million state-orchestrated fraud that he had uncovered.
It is critical that the bill is passed despite opposition from the Kremlin and the White House, which is interested in keeping up appearances in this election year.
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The Home Stretch: the Magnitsky Act in Congress
On July 26, 2012 the U.S. House Ways and Means Committee approved the repeal of the Jackson-Vanik Amendment, which had been passed in 1974. Last month, key Congressional committees had unanimously passed the Magnistky Act, a law imposing severe sanctions on those who have violated human rights in Russia and elsewhere. Vladimir V. Kara-Murza, a leading Russian journalist, activist, and, until recently, the RTVi Washington Bureau Chief, reports on the repeal of the historic amendment and the passage of the Magnitsky Act. As he explained to IMR, Kara-Murza was forced out of his position at RTVi precisely because of his participation in the preparation and advocacy for the expansion of the Magnitsky Act.
It took the U.S. House Ways and Means Committee only forty minutes on Thursday, July 26th, to mark up the repeal of the well-known Jackson-Vanik Amendment. For forty years, the latter has been an irritant in the relations between the White House and the Kremlin, and had come to symbolize a rare victory of a principled approach over realpolitik. The amendment to the 1974 Trade Act, proposed by Democrats Senator Henry Jackson and Congressman Charles Vanik, restricted U.S. trade with Moscow in protest of the restriction to the freedom to emigrate from the USSR. The Nixon-Ford-Kissinger administration opposed the amendment unanimously with Brezhnev’s Politburo. It took Andrei Sakharov’s open letter, in which he urged Congress to “rise above the transitory group interests of profit and prestige” to convince hesitant lawmakers. “Abandoning a principled policy would constitute a betrayal of the thousands of Jews and non-Jews who want to emigrate, of the hundreds in camps and mental hospitals, of the victims of the Berlin Wall,” wrote Sakharov. “It would amount to a total surrender of democratic principles in the face of blackmail and violence.”
For two decades now there has been talk of repealing the amendment, which had long since fulfilled its historical mission. Presidents Boris Yeltsin and Bill Clinton announced an agreement to that end at their very first meeting in April 1993. A repeal in the early 1990s would have been most logical, especially since, in addition to the freedom of emigration, post-Communist Russia has attained many other democratic freedoms, including freedom of the press and free elections. At first, it was the U.S. Congress that could never quite get around to repealing the amendment; later, events in Russia (the Chechen wars, Vladimir Putin’s rise to power, the take over of NTV, the Yukos case) were not conducive to inspiring a grand gesture from Washington. In any case, the status quo had no effect on trade, since the application of the Jackson-Vanik Amendment toward Moscow has been waived since 1989.
In the best traditions of realpolitik, a repeal of the amendment was necessitated by U.S. economic interests. After Russia was officially invited into the World Trade Organization at the December 2011 Geneva ministerial conference, American businesses (large and small) and the agricultural lobby dramatically increased pressure on Congress to repeal the act. The retention of formal restrictions on trade with Russia would have prevented U.S. exporters from reaping the benefits of Russia’s WTO membership (including lower tariffs and conflict-resolution mechanisms), thus giving a competitive advantage to Moscow’s trading partners from the European Union and China. Economists predict that as a result of Russia’s WTO accession and the establishment of permanent normal trade relations (PNTR) with the U.S., American exports to Russia will double (from the current $9 billion a year) in the next five years. In Congress, Democrats and Republicans alike declared their support for repealing the amendment. The Obama Administration marked this issue as one of its priorities.
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The Magnitsky law
After Sergei Magnitsky was beaten to death in a Moscow jail for uncovering fraud by Russian authorities, investor Bill Browder devoted himself to publicising the case. As a result, the US is close to passing a dramatic human rights law.
Browder remembers receiving the phone call at his London home at 7am informing him of Magnitsky’s fate. “When I learnt of his death it was like a knife going right into my heart. And I can’t say that I’ve even begun to recover from the shock, trauma and outrage that I felt on that day,” he says. “The only thing that gives me any comfort is spending my days single-mindedly pursuing his killers.”
From that day, Browder has devoted the same near-manic energy he once spent on cheerleading investment opportunities in Russia to exposing the country’s darker side. He has travelled widely in Europe and North America, publicising Magnitsky’s case and lobbying politicians and diplomats to raise the issue with their Russian counterparts. He and a team of five dedicated researchers have published reports forensically describing Magnitsky’s detention and death, financed several films highlighting the links between Russian officials and the criminal underworld, and, with the lawyer’s family and friends, helped set up a website, called Russian Untouchables, which airs the videos and documents corruption.
His campaign may soon result in the US Congress adopting a law naming the 60 Russians identified by Browder as being responsible for the false arrest, torture and death of the 37-year-old lawyer. The act, which has been ferociously resisted by the Kremlin and the US administration and some business interests, would freeze the foreign assets of, and deny visas to, those named individuals.
A decade ago, Bill Browder was flying high as one of the most successful foreign investors in Russia. With $4.5bn under management, Browder had committed his career and a lot of his investors’ money to proving his proposition that the shares of Russia’s newly privatised, resource-rich companies were absurdly cheap.
The cocksure, US-born fund manager aggressively argued to anyone prepared to listen – and to many who weren’t – that President Vladimir Putin had been unfairly maligned in the western press and was intent on bringing prosperity and order to the biggest country in the world, after the rapacious criminality of the 1990s. To the disgust of many, Browder declared himself delighted when Mikhail Khodorkovsky, once Russia’s richest and most powerful oligarch, was arrested in 2003 and jailed. “Who’s next?” Browder asked cheerfully.
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The Kremlin’s blacklist
On July 12, as I stopped at the gate of the Russian Embassy compound in northwest Washington, the on-duty officer had some unexpected news. “I cannot let you in,” he said through an intercom. “You are forbidden to enter the embassy.” Being a Russian citizen and a credentialed Russian journalist, and having been to my country’s embassy on numerous occasions, I was naturally curious. Yevgeny Khorishko, the embassy’s press secretary, whom I called for an explanation, was brief: The directive to “strike” my name from the list of credentialed Russian journalists came from Ambassador Sergei Kislyak. No reason was given. In an interview later with Slon.ru, a Moscow news Web site, the press secretary explained that the decision reflected the fact that I am “no longer a journalist.”
The explanation would seem passable, except for one detail: The ambassador’s directive came before it was publicly announced that I had been dismissed as Washington bureau chief of RTVi, as Russian Television International is known, effective Sept. 1. How Kislyak could have known this in advance remains a mystery.
Around the same time, two trustworthy sources in Moscow informed me that my name has been placed on a “blacklist,” making me unemployable not only by RTVi but also by other, even privately owned, Russian media outlets. This was quickly verified, as one editor after another indicated that cooperation at this stage is impossible. From his own sources, opposition leader and former deputy prime minister Boris Nemtsov found out the name of the Kremlin official who has supposedly blacklisted me: Alexei Gromov, President Vladimir Putin’s first deputy chief of staff. As for the reason for the Berufsverbot, my interlocutors were unequivocal: It was my advocacy for the Sergei Magnitsky Rule of Law Accountability Act, currently being considered by the U.S. Congress.
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To learn more about what happened to Sergei Magnitsky please read below
- Sergei Magnitsky
- Why was Sergei Magnitsky arrested?
- Sergei Magnitsky’s torture and death in prison
- President’s investigation sabotaged and going nowhere
- The corrupt officers attempt to arrest 8 lawyers
- Past crimes committed by the same corrupt officers
- Petitions requesting a real investigation into Magnitsky's death
- Worldwide reaction, calls to punish those responsible for corruption and murder
- Complaints against Lt.Col. Kuznetsov
- Complaints against Major Karpov
- Cover up
- Press about Magnitsky
- Bloggers about Magnitsky
- Corrupt officers:
- Sign petition
- Citizen investigator
- Join Justice for Magnitsky group on Facebook
- Contact us
- Sergei Magnitsky