Stop the Untouchables. Justice for Sergei Magnitsky.

Putin Plays Hardball

New York Times

This week marks the fifth anniversary of Sergei Magnitsky’s death in a Russian prison. He was 37 years old, a member of the emerging middle class who worked as a lawyer for a man named Bill Browder, the leader of the largest Russia-only investment firm in the world. Browder’s company, Hermitage Capital Management, started with $25 million during the Wild West-era of early Russian capitalism and had $4.5 billion in assets by the early 2000s.

Over time, Browder became an activist investor of sorts, exposing corruption in Russian companies and trying to make Russian capitalism more transparent. In doing so, he thought, he could both steer Russian companies a little closer to the Western model while also making money for his firm.

But, when Vladimir Putin became the president of Russia in 2000, he and his cronies were not interested in corporate transparency. How could they line their pockets if everything was transacted out in the open? So Browder became persona non grata. After a trip to Britain in 2005, he was refused re-entry. A few fictitious documents later, and Hermitage had $1 billion in “liabilities.” Then, a handful of officials involved in a takeover of Hermitage requested — and received within 24 hours! — a $230 million tax refund. It was a textbook example of the kind of corporate pillaging for which the Putin kleptocracy became infamous.

Browder pleaded with Magnitsky to flee the country, as his other lawyers had done. But Magnitsky insisted on investigating — and speaking out about — the fraud that had taken place. For his troubles, he was imprisoned in 2008. By summer of 2009, he had developed pancreatitis, which went untreated despite his pleas. He died that November. Browder says that when he learned of Magnitsky’s death, it was “the worst news I had ever received in my life.”