The Kremlin starts punching
European Voice
Ways to respond to Russia’s efforts to prevent agreements between the EU and its eastern neighbours. Making friends is one thing. Influencing them is another. Russia has no desire to make friends out of its former empire. It settles for bullying them instead.
In startling form in recent weeks, the Kremlin has taken off the gloves in its dealings with its neighbours. It started trade wars with Moldova, Ukraine and Lithuania, and terrified Armenia into giving up, for now, its plans to do a deal with the European Union at the Vilnius summit in November.
A big Russian-Belarusian military exercise, Zapad-13, supposedly rehearsed counter-terrorism operations, but with warplanes and missiles – to intimidate the Baltic states and Poland. A Finnish lawyer, Kari Silvennoinen, who has written books denouncing Stalinist aggression, was detained at Moscow airport and deported.
The response so far has been modest. The EU is considering opening its market to Moldovan wine. Estonia’s President Toomas Hendrick Ilves hurried to Chisinau this week to lend support. The EU has protested about the treatment of Lithuania, which currently holds the presidency of the Council of Ministers, and of Ukraine. Ukraine is trying to buy gas from Slovakia, reversing the normal flow of the east-west pipeline, to get round the impending squeeze from Russia. But political considerations in Bratislava are slowing this down.
On the military front, NATO’s Steadfast Jazz exercise in early November is much smaller than Russia’s effort. And NATO is bending over backwards to insist that this drill, the first such exercise to be held in the new member states, is all about interoperability and certification, and absolutely nothing to do with showing the means and will to deter any Russian mischief on the alliance’s north-east flank.
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Sanctions refused against Russians
Sweden has refused to grant safety guarantees to a London-based businessman who has been lobbying Stockholm and other European capitals to impose sanctions and an asset freeze against some 60 Russian officials.
William Browder, co-founder of the investment fund Hermitage Capital, has been leading a campaign to punish the Russian officials for their part in the arrest, and death in custody in 2009 of his former associate Sergei Magnitsky.
The Russian lawyer blew the whistle on a $230 million embezzlement fraud. After his death, the Russian authorities bizarrely put Mr Magnitsky on posthumous trial and found him guilty of embezzlement. Mr Browder was also sentenced to jailed in absentia at the same trial.
Moscow promptly activated an Interpol arrest warrant against Mr Browder — hence his nervousness about travelling abroad and exposing himself to a possible extradition request. Britain has rejected Russia’s attempts to have Mr Browder brought to Moscow to serve his nine-year sentence.
“The Swedes say it is a police matter and the Government has no right to interfere,” said Mr Browder, who has been successfully persuading European Union governments to freeze the foreign assets of the Russian officials. “But this is a straightforward political decision to ensure that I don’t get arrested at Russian behest. The Germans and the Netherlands gave guarantees. This suggests that the Swedes are afraid of upsetting Russia.”
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Telephone Justice: Khodorkovsky, Magnitsky and Navalny
Recent attempts by the Kremlin to smear its political antagonists and critics mark a return to a pre-perestroika use of the judicial system. The Khodorkovsky, Magnitsky and Navalny court case decisions resemble the telefonnoye pravo or ‘telephone justice’ of the Soviet Union, an expression that references the custom of political leaders calling judges in order to instruct them on what rulings pleased them.
Though western critics tend to focus on the problems related to freedom of the press in Russia, the implications of rotten courts can be much more deep-rooted and harmful to Russian society as a whole. The legal system’s systemic disregard for the constitution in its entirety is an overreaching issue that deserves more attention.
Sadly, this alarming trend is not a recent development. In 2005 and 2010, Mikhail Khodorkovsky and Platon Lebedev were found guilty of fraud, money laundering and embezzlement. Before his trial, in 2004, Khodorkovsky was the wealthiest man in Russia and Lebedev was his close associate. A strong advocate for more democracy and freedom of the press, Khodorkovsky could have been a potential political alternative to Putin had he chosen to run for the Russian presidency. After the trial, US State Department commented on the case, saying it “raised a number of concerns over the arbitrary use of the judicial system.” After the 2010 trial, in which Lebedev was convicted and Khodorkovsky’s prison sentence was extended, Secretary of State Hillary Clinton commented that the case was symptomatic of the “rule of law being overshadowed by political considerations.”
Another Russian court case displaying a flagrant lack of reason or justice is the posthumous conviction of Sergei Magnitsky. Magnitsky was a Russian lawyer hired by the British and US-owned Hermitage capital group to research corruption in the Russian state and local government. He was accused of tax evasion in 2008, after his discovery of a $230 million tax scam implicating Russian police and government officials. Following his arrest and subsequent suspicious death in prison in 2009, the US Senate passed a bill named the Magnitsky Act. The act blocks the Russian officials deemed responsible for his death, though the officials were not convicted in Russia, from entering the US or using the US banking system. The Magnitsky Act is thought to be the reason for the Kremlin’s arbitrary decision to ban Americans from adopting in Russia earlier this summer.
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Sweden Won’t Guarantee Russia Critic Against Extradition
London-based investor William Browder cancelled a trip to brief Sweden’s parliament on his sanctions campaign against Russia after the justice ministry refused to protect him from Russian charges Interpol says are politically motivated.
Sweden’s parliament has cancelled a briefing on potential sanctions against Russian officials accused of corruption after the campaign’s leader, London-based investor William Browder, was refused safe passage by the country’s justice ministry.
Browder, once a major foreign investor in Russia, was sentenced in absentia to nine years in prison by a Moscow court this summer on charges widely seen as politicall motivated. Russia continues to seek his extradition.
He accused Sweden of bowing to pressure from Moscow by refusing him safe passage as he lobbies European governments to sanction officials involved in the prison death of his lawyer, Sergei Magnitsky, four years ago.
“This is a Russian appeasement strategy,” Browder told BuzzFeed. “They don’t want to do anything that will upset Russia. They’ve chosen the ease of diplomacy over the right thing to do.”
In a letter to Browder’s lawyers dated September 11 and seen by BuzzFeed, Sweden’s justice ministry said that Russia had not requested it extradite Browder and that it could not legally intervene prior to a request being filed. “Neither is the Government authorized to instruct an authority on how to act on individual cases,” State Secretary Martin Valfridsson wrote. Sweden restated its refusal last Monday after Browder appealed.
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Sweden declines safe passage to Magnitsky campaigner
Sweden has declined to guarantee the safety of a campaigner for EU sanctions on Russian officials despite Russian threats.
Bill Browder, a London-based businessman who is calling for EU countries to blacklist Russian officials suspected of fraud and conspiracy to murder, asked the Swedish government to promise him “safe passage” back in June.
He did it in order to speak at a Swedish parliament hearing in the context of Russian threats to have him arrested, extradited and jailed.
But a senior official in the Swedish justice ministry, Martin Valfridsson, in a letter in June and in a second letter on 23 September said No, leading Browder to cancel his trip.
Valfridsson hinted that Sweden would not help Russia to get its hands on Browder.
He spoke of the “appalling … lack of respect for human rights and rule of law in the Russian Federation.”
He also said Sweden “takes due note” of a decision by Interpol, the international police body based in Lyon, France, not to honour Russia’s request for a Browder arrest notice because it was made for “political” motives.
But he added that under Swedish law, he cannot promise to decline a Russian request before it has been made and he cannot instruct the police not to arrest people.
For Browder, the real reason is fear of upsetting Russia.
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The Power of the Magnitsky Act
In early September, American Interest publisher Charles Davidson spoke with Hermitage Capital co-founder and CEO William Browder about the origins, impact and future of the Magnitsky Act.
Charles Davidson: Welcome, Bill; we appreciate you talking with us. Our timing is good, given the news out of New York two days ago.
William Browder: Yes, the timing couldn’t be better.
CD: Why don’t we start by having you introduce yourself to our readers?
WB: I come from a strange American family. My grandfather was the general secretary of the American Communist Party. As often happens in American families, in my teenage years I went through a rebellion. I figured the best way to rebel against a family of communists was to become a capitalist and ended up going to Stanford business school. I graduated in 1989, the year the Berlin Wall came down. After graduation, as I was trying to figure out what to do with my life, I had an epiphany. I figured that if my grandfather was the biggest communist in America, it would be perfectly symmetrical that I become the biggest capitalist in Eastern Europe.
CD: That seems logical.
WB: So I moved to London in 1989 and tried to get involved in Eastern Europe. I ended up at Salomon Brothers at the beginning of the Russian privatization program. When Yeltsin became President, he thought the best way to go from communism to capitalism in the country was by giving away state property for free to all Russians; then they’d all be capitalists by virtue of owning property. The program was very ill thought-out and badly designed, so instead of creating 150 million capitalists, it created 22 oligarchs and left most Russians living in destitute poverty.
Having said that, there were opportunities for non-oligarchs to buy shares of these newly privatized Russian companies. When the program first started, the shares were trading at a 99.7 percent discount to the value of similar companies in the West. And as a newly minted Stanford MBA, I did the math and thought if you’re going to be an investor, why not invest in companies trading at a 99.7 percent discount to their Western comparables? So I initially convinced Salomon Brothers to invest some of the firm’s own money in Russia. We invested $25 million and very quickly turned it into $125 million.
On the back of that success for Salomon Brothers I decided to set up my own company. I founded Hermitage Capital in 1996 and moved to Moscow full time to invest in the Russian stock market. My investments initially did very well. In the first 18 months, my portfolio went up more than 800 percent, and then in 1998 it went down 90 percent, basically back to square one.
After that, I discovered that the oligarchs had no incentive to behave themselves after Russia defaulted and devalued, because Wall Street was effectively closed for business for them. At the same time, there was no disincentive to misbehaving because the laws that exist in other countries didn’t exist in Russia. So the oligarchs embarked on an orgy of stealing that was unprecedented in the history of business.
I had to choose whether to allow everything to get stolen or to try to stop the stealing in the hope of recovering some of the lost money. Even though I was in completely uncharted territory and very dangerous, I decided to fight the stealing and become the first shareholder activist in Russia. I did so by researching how the thefts were occurring in big companies like Gazprom, Unified Energy Systems, and Surgutneftegaz, and then I shared my research with the international media.
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Interview: McCain On Russia, Putin, And His Pravda.ru Op-Ed
(RFE/RL – rferl.org – NEW YORK, September 20, 2013) U.S. Senator John McCain (Republican-Arizona) has defended an opinion piece he wrote this week that was critical of Russian President Vladimir Putin, telling Yuri Zhigalkin of RFE/RL’s Russian Service that his remarks were based on the facts about rights abuses in Russia.
RFE/RL: Senator, I had the feeling that critics and supporters of your op-ed in Pravda.ru — and this is kind of surprising — are about evenly split. Some say that McCain is basically saying what a good Russian human rights activist should say. Others say he is just an old man outside Russia who doesn’t understand a thing about Russia. Your reaction to that?
John McCain: The comments I make are based on facts — about repression, about [Sergei] Magnitsky [the whistle-blowing Russian lawyer who died in custody in 2009], about total control of the media, and the human rights abuses that continue.
RFE/RL: Why did you decide to write this article? What was your goal, what were you trying to achieve?
McCain: The truth is always an important thing, and the comments that Mr. Putin made [in his “New York Times” op-ed] about the United States of America and events here were directly contradicted by the situation in Russia, and if I ever have a chance to speak to the people of Russia, no matter how insignificant it will be, I will seize that opportunity because I am pro-Russian, and the abuses that are being heaped upon them by the Putin autocracy is, in my view, something that deserves our sympathy and our opposition.
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Crusade against the Kremlin
Bill Browder has a stark warning for western investors eyeing opportunities in Russia. “They are not only taking a financial risk – they are taking a very serious personal risk of being arrested or dying,” he says. The same applies to educated Russians: “Even Russians who have the ability and language skills should get out of Russia, because it is only going one way and that is in a very horrible direction.”
Browder should know: his experience over the past two decades provides a spectacular example. During that time, the head of Hermitage Capital Management – at one point one of the largest foreign investors into the country – has gone from staunchly rejecting what he once called western myths about Russia to being a crusader against President Vladimir Putin’s regime.
In return, the Russian authorities have branded him a criminal. In July, a Moscow court found Browder guilty of tax evasion in his absence, a charge he denies. Russia has also twice requested that Interpol provide it with information on his whereabouts. The second time around, it was with a view to extradition in relation to a charge of “qualified swindling”. Both times, the international police organisation rejected the requests on the grounds that they were predominantly politically motivated.
Browder’s story is as convoluted as a classic Russian novel. However, there are broadly two ways to read it. His critics point out he avidly supported Putin until the regime turned against him. Browder accepts he once backed the Russian leader, who he saw as bringing necessary order, but argues it was Putin who did the U-turn. In Browder’s view, Putin moved from campaigning against the oligarchs to becoming the biggest oligarch of all.
Whichever interpretation is preferred, Browder has taken on a dual life as a hedge fund manager and campaigner against Russian corruption. He has taken British citizenship and runs Hermitage from London. The firm long ago became a general emerging markets specialist rather than having a particular focus on Russia.
The story begins with Browder’s grandfather. Earl Browder, born in Kansas, was the head of the Communist Party USA in the 1930s and early 1940s, and twice ran for president. Earl Browder spent several years in the Soviet Union, where he met and married Raisa Berkman, a Russian Jewish intellectual. Together they had three sons, including Bill Browder’s father Felix, all of whom became top-flight mathematicians.
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Thieves of Putin’s gang ‘FSB of Russia’ thriving in London
The Daily Mail reported in two issues (here and on this link) about a gang of Putin’s thieves from the “FSB of Russia”, attempting to buy up Britain. A documentary film about these Russian criminals will be shown on Sept. 25 on channel Fox:
An early evening party is taking place in a trendy Mayfair boutique in London. Champagne flutes are raised as platinum blondes in skin-tight Cavalli coo over sparkly Swarovski clutch bags and shiny Jimmy Choos. Everyone is speaking Russian. For everyone is Russian. Guests, owners, staff, even the drivers hovering outside in their armour-plated Maybachs.
The article’s author writes that he understood the head-master of an elite prep school who refused to take Russians, calling their parents “thugs”.
Indeed, there are so many Putin’s thieves in London that, rather than just outspending everyone at British establishments, they’ve set up their own ultra-bling city within a city. It all started with a few well-known oligarchs who moved to London in order to escape tax or bloody retribution from the regime or their business rivals.
Now, more rich Russian KGB thugs are coming, as the country that boasts the youngest millionaires in the world – with an average age of 46 to our 55 – has decided London is the world’s most fashionable city. There are said to be 300,000 Russians here, though some put the figure nearer 400,000.
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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
