Hermitage Reveals $230 Million Stolen From Russian People

October 8, 2009

Today, Octo­ber 8, 2009, inves­ti­ga­tors from the Russ­ian Inte­ri­or Min­istry announced charges against Her­mitage Cap­i­tal Management’s legal advis­er, Sergey Mag­nit­skiy, and alle­ga­tions against Hermitage’s CEO, William Browder.
These charges and alle­ga­tions have been fab­ri­cat­ed and brought direct­ly in response to Her­mitage and Mag­nit­skiy impli­cat­ing cer­tain Inte­ri­or Min­istry offi­cials in the theft of $230 mil­lion from the Russ­ian budget.

Due to the high lev­el of cor­rup­tion in the Russ­ian Inte­ri­or Min­istry, along with the arbi­trary pow­ers they poss­es, many Russ­ian news­pa­pers have been afraid to write about the Inte­ri­or Min­istry’s role in this fraud. In an envi­ron­ment like this, where the free­dom of the press is com­pro­mised, it is nec­es­sary to use new chan­nels of com­mu­ni­ca­tion to fight cor­rup­tion in Rus­sia. In order to avoid putting Russ­ian jour­nal­ists at risk, we are, there­fore, releas­ing the fol­low­ing YouTube video to lay out sto­ry in full.

Politically-motivated abuses of the criminal justice system

August 7, 2009

Excerpts from the report, pub­lished by the Com­mit­tee on Legal Affairs and Human Rights on alle­ga­tions of polit­i­cal­ly-moti­vat­ed abus­es of the crim­i­nal jus­tice sys­tem in Coun­cil of Europe mem­ber states with rec­om­men­da­tions on series of steps to strength­en the inde­pen­dence of judges and pros­e­cu­tors across Europe to end polit­i­cal­ly-moti­vat­ed inter­fer­ence in indi­vid­ual cases.

Inter alia the Com­mit­tee calls for a series of reforms to reduce the polit­i­cal and hier­ar­chi­cal pres­sures on judges and put an end to the harass­ment of defence lawyers in order to com­bat “legal nihilism” in the Russ­ian Fed­er­a­tion, as a pre­con­di­tion also for suc­cess­ful co-oper­a­tion between Russ­ian and oth­er Euro­pean law enforce­ment authorities.

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Testimony of William Browder. Commission on Security & Cooperation in Europe the U.S. Helsinki Commission.

June 23, 2009

”Mr. Chair­man and Dis­tin­guished Mem­bers of the Com­mis­sion, thank you for invit­ing me to appear before you today.

I have been asked to share my thoughts on the rule of law in Rus­sia. Unfor­tu­nate­ly, my own per­son­al expe­ri­ence shaped by fif­teen years of invest­ing in that coun­try con­firms to me that the sit­u­a­tion in Rus­sia is not a pret­ty pic­ture, and it is get­ting worse.

When I first start­ed Her­mitage in the mid-1990’s, my clients would ask me about the Russ­ian hor­ror sto­ries they had heard of share­hold­ers get­ting wiped off cor­po­rate reg­istries, hav­ing assets stolen by crooked man­age­ment or being the tar­gets of cor­rupt gov­ern­ment offi­cials seek­ing bribes. What I was able to tell my investors back then is that while cor­po­rate gov­er­nance was ter­ri­ble, val­u­a­tions were cheap, and investors would make mon­ey as Rus­sia evolved from “hor­ri­ble” to just “bad.” I am here today to tell you that Rus­sia is revert­ing. The investor hor­ror sto­ries that were large­ly fan­tas­tic in the 1990’s are now com­mon­place. The sit­u­a­tion in Rus­sia is going from “bad” back to “hor­ri­ble” ­ and it will be more than just investors who lose out in this process.

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