The Huffington Post: Open Season on Lawyers in Russia

February 19, 2010

Russia has become a pretty scary place for lawyers to work, and not for any lack of power lunches, major dealmaking, or luxury retailers. While we most often hear about the scores of journalists who pay a high price for their criticism of the Kremlin, the legal profession has come under attack as well, in both political cases as well as run-of-the-mill corruption. In recent years, dozens of lawyers have been forced into prison, out of the country, or worse.

The most famous lawyers to fall victim to these preying forces would be Stanislav Markelov, the human rights lawyer who was shot dead on a Moscow sidewalk; Vasily Alexanyan, the Yukos general counsel who was refused medication for AIDS and tuberculosis; and Sergei Magnistky, the corporate lawyer who most recently died in prison following abusive treatment in relation to the Hermitage case.

The most recent name to make the headlines is Jamison Firestone, the 44-year-old American founding partner of the law firm Firestone Duncan in Moscow, who has been forced to flee Russia for his own safety. Firestone was the former employer of Magnitsky, and represented Hermitage in their recent travails against state corruption.

his afternoon I had the opportunity to catch up with Mr. Firestone for a telephone interview, which is available in full over on my blog.

It is somewhat complicated to explain to the average reader the complexity of the fraud schemes that have been perpetrated against Firestone’s firm, his employees, and their clients by elements of the Russian Interior Ministry (MVD), but in summary it involves the theft of important corporate charters, seals, and signatures in order to forge a “corporate identity theft” to illegally transfer ownership of businesses to third parties, and then have them apply for historically unprecedented tax rebates from the state budget. Firestone realized that he had to flee Russia immediately when a second theft attempt of $21 million was being made against another company under his direction.

So not only do the foreign investors get robbed of their companies, but the Russian people themselves are also robbed from the treasury by their own police. Yet despite these outrages, even considering the national and international scandal that was the murder by torture of Sergei Magnitsky, not a thing is being done to stop this.

“As far as protecting lawyers, it’s open hunting season on us right now,” Firestone told me today in our phone interview. “It used to be that when you wanted something in Russia, you grabbed the guy who owned it and put him in a terrible position, giving him the choice of freedom for handing over the assets, and he’d usually hand over the assets. Now it has expanded to the legal team. So now they grab the lawyers and say, ‘alright, we need some bad stuff on your client,’ and the lawyer may say ‘I don’t have any bad stuff on them’ or ‘I have it but I can’t give it to you.’ So then they throw you in prison, and tell you that you have to make up some bad stuff, and until you do, you aren’t going to see your family, that you are going to live very badly, and then you are going to die.”

Firestone pointed out to me just how far things had gone … he used to feel safer than his Russian colleagues, because as a foreign national with 20 years experience working in the country, and six years spent on the board of the American Chamber of Commerce, he used to be politically protected – but now all bets are off.

What has happened to both Magnitsky and Firestone are not isolated cases, but rather reflect another symptom of the national systemic disease Russia is suffering from with its near total lack of rule of law. This is different from lawlessness, mind you, as these thieves are very fond of using and abusing the courts to paper over their thefts. But sooner or later, Firestone comments, Russia is going to have to start taking this problem seriously before even more damage is done to her economic future. Just how much longer will people continue to put money into developing business and economic growth in Russia when they can never be sure they will be allowed to keep their investment or even their lives?

Perhaps the worst outcome will be proven correct – that it is already too late for Medvedev’s Kremlin, if he has any real power after all, to assert any control over the proliferation of fiefdoms which have consumed the various institutions of the Russian government. Nevertheless, I certainly hope that they try.

Published on The Huffington Post.

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