President Putin Directs Government Attack on Bill Browder to Stop Magnitsky Sanctions Being Enacted in Europe

March 5, 2013

In a fur­ther esca­la­tion of the per­se­cu­tion of Her­mitage exec­u­tives and lawyers by the Russ­ian author­i­ties, this morn­ing the Russ­ian Inte­ri­or Min­istry announced new spu­ri­ous alle­ga­tions tar­get­ing William Brow­der, CEO of Her­mitage Cap­i­tal Man­age­ment. The retal­ia­to­ry cam­paign of state slan­der, posthu­mous pros­e­cu­tion and intim­i­da­tion gained momen­tum in Rus­sia after Pres­i­dent Putin’s per­son­al attack on Mr Brow­der two months ago at a nation­al press con­fer­ence. This morn­ing, the Russ­ian Inte­ri­or Min­istry made fur­ther accu­sa­tion against Mr. Brow­der alleg­ing “theft” of Gazprom shares by com­pa­nies affil­i­at­ed with the Her­mitage Fund ten years ago and accus­ing Bill Brow­der of attempt­ing to inter­fere with Gazprom’s strate­gic direc­tion through requests for finan­cial infor­ma­tion and for cam­paign­ing for a seat on the board of the com­pa­ny between 2001 and 2004. The Russ­ian Inte­ri­or Min­istry also threat­ened to use inter­na­tion­al search and arrest war­rants in their “inves­ti­ga­tion” into Browder.

“The Inte­ri­or Ministry’s alle­ga­tions against Her­mitage are spu­ri­ous and with­out any foun­da­tion. The only log­ic that sup­port the alle­ga­tion of “theft” of Gazprom shares would be to think that the assets of the com­pa­ny belong to the company’s man­age­ment who also hap­pens to run the coun­try, not to its investors and share­hold­ers,” said a Her­mitage Cap­i­tal representative.

“These absurd alle­ga­tions are clear­ly moti­vat­ed by the retal­i­a­tion to our glob­al cam­paign for jus­tice for Sergei Mag­nit­sky. Our cam­paign angers and scares the Russ­ian offi­cials who want to keep their crim­i­nal­ly obtained wealth abroad. But this intim­i­da­tion and harass­ment will not stop the cam­paign that is car­ried out by many peo­ple and orga­ni­za­tions around the world,” said William Browder.

Mr Brow­der has been run­ning a glob­al cam­paign for jus­tice seek­ing sanc­tions against Russ­ian offi­cials involved in the killing in Russ­ian police cus­tody of his lawyer Sergei Mag­nit­sky. The cam­paign has also traced sig­nif­i­cant amounts of the mon­ey that had been paid by Her­mitage in tax­es to the Russ­ian Gov­ern­ment and sub­se­quent­ly stolen by the Russ­ian offi­cials and crim­i­nals through a sophis­ti­cat­ed fraud scheme, which is now being inves­ti­gat­ed across a num­ber of EU coun­tries at Hermitage’s request.

“The Russ­ian author­i­ties are now des­per­ate to extend their abuse out­side their own ter­ri­to­ry and use the inter­na­tion­al crim­i­nal jus­tice chan­nels to fur­ther harass Her­mitage and stop jus­tice from being done, —  said a Her­mitage Cap­i­tal rep­re­sen­ta­tive. — These efforts have already been con­demned in 2009 by the Coun­cil of Europe of which Rus­sia is a mem­ber which issued rec­om­men­da­tions to all mem­ber coun­tries to reject any requests of assis­tance from the Russ­ian gov­ern­ment in rela­tion to Her­mitage exec­u­tives and lawyers.” 

The recent esca­la­tion in the Russ­ian government’s attack on Her­mitage fol­lows direct­ly from Pres­i­dent Vladimir Putin’s 20 Decem­ber 2012 press con­fer­ence, where he was con­front­ed sev­en times by jour­nal­ists about the Mag­nit­sky Act adopt­ed in the Unit­ed States. Pres­i­dent Putin promised to “delve deep­er” into this case. 

Four days lat­er, in an unprece­dent­ed U‑turn, the Russ­ian pub­lic pros­e­cu­tor asked for an acquit­tal of Dmit­ry Kra­tov, the only Russ­ian offi­cial brought to a tri­al for the death of Sergei Mag­nit­sky. As a result, no one has been con­vict­ed for Mr Magnitsky’s death.

The fol­low­ing month, Russ­ian state-con­trolled media began a cam­paign to slan­der Sergei Mag­nit­sky and his colleagues.

In Feb­ru­ary, Sergei Magnitsky’s broth­er-in-law and col­leagues received sum­mons­es for inter­ro­ga­tion from the Russ­ian Inte­ri­or Min­istry and were intim­i­dat­ed with threats of crim­i­nal prosecution.

Yes­ter­day, the posthu­mous tri­al against Sergei Mag­nit­sky began, which is the first posthu­mous tri­al in the his­to­ry of Russia.

This morn­ing, the Inte­ri­or Min­istry put for­ward more spu­ri­ous alle­ga­tions against Bill Brow­der and Sergei Mag­nit­sky in rela­tion to Gazprom shares.

“The own­er­ship of Gazprom shares was com­plete­ly legal. It was approved by the Russ­ian author­i­ties and the Russ­ian Fed­er­al Secu­ri­ties Com­mis­sion as well as Gazprom itself. If one took these accu­sa­tions seri­ous­ly then every for­eign investor in Rus­sia should be under arrest,” said a Her­mitage Cap­i­tal representative.

Her­mitage was the largest for­eign investor in Rus­sia until 2005, but had to wind down its oper­a­tions in Rus­sia when the Russ­ian gov­ern­ment revoked the visa of its Bill Brow­der, Hermitage’s CEO, on “nation­al secu­ri­ty” grounds. Hermitage’s Moscow offices were then raid­ed by the Russ­ian Inte­ri­or Min­istry who seized doc­u­ments, which were used in the expro­pri­a­tion of three of its invest­ment com­pa­nies and the theft of $230 mil­lion of tax­es paid by Her­mitage to the Russ­ian gov­ern­ment. The Inte­ri­or Min­istry then launched retal­ia­to­ry crim­i­nal cas­es against Her­mitage exec­u­tives and lawyers who exposed the mul­ti-mil­lion thefts from the Russ­ian bud­get. After Sergei Mag­nit­sky tes­ti­fied about offi­cial involve­ment in the crimes, he was arrest­ed, tor­tured and killed in Moscow police cus­tody. The Russ­ian gov­ern­ment has now tried to posthu­mous­ly blame the theft on Mr Mag­nit­sky, who paid with his life for expos­ing their crimes.

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