Red Notice

Red Notice: A True Stroy of High Finance, Murder and One man’s Fight for Justice

By Bill Browder

Bantam Press (London 2015) 374 pages

 

During the 1990s, international capitalism discovered the dysfunctional society of post-Communist Russia. Privatization offered Western investors the opportunity of unheard of profits in hitherto unknown territory. In Russia itself die-hard Communist functionaries suddenly discovered their inner capitalist – and switched sides overnight. Playboy yachts, 20-something mistresses, huge mansions and private jets were the symbols of these indolent men in suits. At the top of the tree were the oligarchs – some of whom were Jewish. But looking on with greedy eyes were the FSB, the successor of the KGB. Ostensibly the servants of the state, but increasingly the servants of themselves.

In Soviet times, the wealthiest citizen had been six times as rich as the poorest one. By 2000, the gap between the haves and the have-nots in the new Russia had increased exponentially such that the newly spawned well-to-do were 250,000 times as rich as those at the bottom of the pile.

Bill Browder was a young Jewish venture capitalist who sought out eastern European markets. A US citizen, living in London, he was the grandson of Earl Browder, a past leader of the Communist Party USA – someone of independent NieWS who had fallen out with both Stalin and McCarthy. Browder established the Hermitage Capital Management in Russia and soon attracted the financial support of figures such as the Diaspora philanthropist Edmond Safra and the Israeli billionaire Betty Steinmetz. Browder became probably the most successful investor in Russia of the period – everything he touched turned to gold. Yet the succeeding years transformed him once more – into the unlikely role of a fighter for human rights.

In the anarchic conditions of early 21st-century Russia during the era of the enigmatic Vladimir Putin, the oligarchs were brought to heel. Some were imprisoned on nonsensical charges, others fled to Britain and Israel. Russia was returning to the centralized authoritarian control or Tsarist and Soviet times. Journalists were killed on the street, dissident politicians were tried and sentenced, the independent media shrank to the point of¬† invisibility and vibrant companies were stolen. The rule of law reverted once more to the interpretation of a small controlling group – and ordinary people were faced with either burying their heads in the sand or defying an increasingly arrogant state machine, which believed it could simply grind its opponents into the ground. This book, Red Notice: A True Story of High Finance, Murder; and One Man’s Fight far Justice, is essentially about two who chose the latter path – Bill Browder and Sergei Magnitsky.

Browder believed that because he was a foreigner, he was relatively immune to the heavy hand of the FSB. By 2005, his incisive and intelligent campaigns against corruption now began to conflict with the personal economic ambitions of Putin and his coterie. If previously Browder’s work had been seen as an asset in helping Putin concentrate power in his own hands, now he was viewed as a threat, a stubborn person who would not close his eyes. Browder was now refused entry to Russia on grounds of “national security.”

Browder surreptitiously withdrew his assets and his personnel to the safety of I.ondon. ‘I’he inevitable police raids on the Hermitage offices and its lawyers in Moscow produced absolutely nothing. The victimizers had been outwitted by the victims – and there was nothing to steal. Another strategy had to be devised by the expropriators. One company, Mahaon, was subsequently re-registered to another company in Tatarstan, owned by one Viktor Markelov who had been convicted of manslaughter in 2001. Backdated documents were forged to claim that Mahaon owed $71 million. The case taken to court and a quiescent defense lawyer admitted Mahaon’s guilt in the affair – except that all this took place without Browder’s knowledge and he had not even appointed the lawyer.

Sergei Magnitsky, one of Browder’s tax lawyers, worked out the convoluted details of the scam. This resulted in the rebate of $230m. from the tax authorities to the enrichers – money stolen from Russian taxpayers. Unlike the other lawyers, Magnitsky refused to decamp to London. A religious man, he was incensed by the blatant dishonesty of the theft and decided to remain in Russia. Like Browder, Magnitsky believed that as a lawyer upholding the rule of law, he was relatively untouchable.

“This is not 1937,” he proclaimed – the height of Stalin’s Great Purge in which hundreds of thousands were killed or served long terms in the Gulag. Yet Magnitsky was arrested, placed in inhumane conditions, denied hospital treatment and then beaten to death at the age of 37. Since then, Browder has conducted a focused and intelligent campaign to secure justice for Magnitsky and to send his torturers, operating under legal guise, to long terms of imprisonment. Unfortunately¬† for the ringleaders, Magnitsky, despite his suffering, refused to be broken and meticulously filed scores of complaints about his treatment in prison. It formed a detailed body of evidence that could not be hidden away. The killing of a middle-class tax lawyer in Putin’s kingdom resulted in the passing of the Magnitsky Act by the US Congress in 2012. This imposed visa restrictions and asset freezes on all those deemed to have been responsible for Magnitsky’s death.

This book tells a compelling story in a racy, dramatic, often sugary style – in order to reach the consciences of as wide an audience as possible. While the writing of this hook has a political purpose, even for skeptics, the many examples of corrupt officials, compliant judges, self-censoring journalists and the very conditions of Magnitsky’s prisons has a Soviet feel to it. For many Diaspora Jews who fought for the liberation of Soviet Jewry, there will be an identification with the Magnitsky saga and a recognition that not too much has changed.

Yet Putin could have distanced himself from this group of embezzling, empowered officials. He did not. Was this because he could not afford to alienate them? Was it because the orders came from up on high, from Putin himself? Was it because Putin could not hear to see the good name of Russia besmirched – and national pride trumps all else?

Browder has become the fly in Putin’s ointment. The Russian state continues to conduct an insidious campaign of vilification against Browder. This is symptomatic of l’utin’s weakness. He prefers to retreat into an imaginary past than to forge a Russia that takes its rightful place amongst the nations. Andrei Sakharov must be turning in his grave.

Jerusalem Post  26 April 2015

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