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29 January, 2014  ▪  Bohdan Tsioupine

William Browder: Many people in London or Geneva have blood on their hands from handling blood money from former Soviet states

William Browder, the Founder and CEO of Hermitage Capital Management, turned campaigner and began to wage war for justice after one of his lawyers, Sergei Magnitsky, was killed in a Moscow prison.

As a result of Browder’s relentless campaign, the US adopted the so-called Magnitsky Act which imposes restrictions against a number of Russian citizens allegedly involved in Magnitsky’s tragic death.  Magnitsky’s "crime" was that he uncovered a huge corruption scheme with trails leading to Russian official circles.  In an interview for The Ukrainian Week, William Browder spoke about his fight for justice.

UW: What was the Magnitsky case all about?

Effectively what happened in the Magnitsky case is that the Russian government has refused to hold anyone accountable for the false arrest, torture and death of Sergey Magnitsky, or for the crimes that he uncovered. As a result the only way that we could get any measure of justice was to look outside of Russia in the form of different sanctions passed in different countries, freezing the assets of people who did this and so on. In order to do that, we had to tell the story of what happened to Sergey Magnitsky. The Russian government has been trying to thwart our every step of the way in terms of our objective of getting sanctions. 

One of their options was through this latest High Court case in London which was filed by an unemployed ex-police officer, Pavel Karpov, in which he accuses us of libel. The objective of this was also to get an injunction so we could not say things about him or others. The High Court threw the case out saying that it was an abuse of the courts and that the whole approach here was artificial and incredible. As a result, the main tool they were trying to use to silence us failed and so, a big barrier to our speaking the truth and seeking justice has been taken away.

UW: The Magnitsky list was approved in the United States. Does this mean that your main aim has been achieved? 

At the end of the day, real justice would be to prosecute the people who tortured and killed Sergey in Russia and send those people to jail for that. Obviously, this is not going to happen in the short term, so in the meantime what we hope to do is to make sure that these people cannot enjoy the money they have stolen, that they cannot travel and enjoy life outside of Russia.

We have made a small dent in that by making it impossible for them to take the money to America and travel to America but the world is a big place and we want to achieve this in Europe as well. 

We also think that there are a lot more people who should be sanctioned than have been sanctioned in America so we’re going to work on that. The bottom line is that these people killed Sergey Magnitsky in order to cover up the theft of $230mn from the Russian government and we want to make sure that they cannot enjoy that money.

We have been going aggressively and tenaciously around the world and working with different law enforcement agencies to freeze and seize that money. So far we succeeded in four countries: the United States, Switzerland, Estonia and Lithuania. My hope is that we will go forward - freezing and seizing this money on behalf of different government law enforcement agencies in other countries.

UW: In the British press, Karpov’s case was cited as an example of libel tourism in Britain. Would you agree that the whole British legal system and maybe western legal system is too ready to serve oligarchs from Russia, Ukraine and other post-Soviet countries?

I would say that in this particular case it’s horrible. The basis of my whole case was that a lawyer had been murdered by the Russian state for representing me. And effectively we had lawyers in London as mercenaries working, trying to shut me up for getting justice for this lawyer. It could not have been starker than that. Thankfully, they did not succeed but they received a lot of money for trying. I have to wonder what they were thinking when they took this case. 

READ ALSO: Eastern Gangstership

UW: Is the British court system open for abuse?

It’s reasonable to argue that everybody is entitled to legal representation, but the way we were harassed by lawyers here in London and the amount of money they were paid for doing that certainly seemed wrong to me. 

UW: Recent research by the Legatum Institute in London claims that not only the justice system but western financial systems readily serve people from post-Soviet countries who are criticised by the West for corruption and authoritarianism. Would you agree?

It is hugely hypocritical and really, I would argue that many people in London, Geneva and various other places are effectively complicit and have blood on their hands from handling blood money from many of these awful criminals that came out of Russia and other former Soviet states. 

UW: The international system of offshore zones makes it possible to hide money and set up shell companies with untraceable owners. Would you agree that the West provides financial mechanisms to launder money?

One of the things going on here is that authorities in the UK have refused to investigate it – because of lack of resources or because they are just cravenly corrupt. But for one reason or another, when we have made a number of complaints to the British Serious Fraud Office, FSA, the City of London police and the HMRC about different aspects of the Magnitsky crime which touched British soil, this was one of the very few countries that refused to open up an investigation. Countries like Cyprus, Moldova and Latvia have all opened criminal investigations, but the UK hasn’t. 

They pretend that this is a very upstanding place, but here we have a criminal complaint right in front of the law enforcement agency here and yet they do nothing. 

UW: Do you see any reason for the existence of offshore zones? Does it help business or just crime? 

Well, I think there could be perfectly legitimate reasons to set up a company - to sell books, computers and so on. But every company should be transparent and its directors should be responsible. If they are involved in something that is nefarious, they should go to jail. The way to deal with it is not that you wouldn’t have companies without directors but that you would have law enforcement agencies that punish and prosecute people who are breaking the law so that lawbreakers would not want to come here.

UW: We know that your investment fund uses offshore instruments as well. Why?

There is a legitimate use of offshore and illegitimate use of offshore. Legitimate uses would be for things like investment funds. So, for example, when I take money for investments from 30 different countries and my investment fund is, let’s say, in the United States, a French investor would have to pay US taxes. That does not make sense. If I have an investment fund that is based in Jersey, the French investor pays French taxes and the American investor pays US taxes. All we are doing is investing. But if you have a bunch of criminals who are hiding behind the nominee directors in Cayman Island shell companies etc., then that’s bad, illegal and it should be stopped. There should be proper law enforcement. 

UW: By changing the whole system or by shutting down parts of the system?

I think we need to regulate the system and we need to make the system entirely transparent but to say that the system should not exist is like talking about a body with infected blood. It does not mean that you have to stop the heart. What you need to do is to take the medicine in order to get rid of the infection. The medicine in this case is transparency and regulation.

UW: Is the United States financial system regulated better than Britain's?

The main difference between the United States and Britain is not that the American system is better but that there is a proper law enforcement that actually prosecutes people who do bad things. As a result, people are more afraid of doing bad things because they go to jail. In Britain we have sort of a big sign saying “open for business for crooks”.

UW: The International Consortium of Investigative Journalists says that money from offshore zones, often dirty money, ends up in the City of London. Doesn’t it mean that Britain is dependent on it and can’t apply the regulations and rules that you are talking about?

I think you are absolutely right and there is a huge conflict of interests between government officials who are asked to do the right thing regarding the blood money on one hand. But these are the same people who are either benefiting directly or get political contributions from those who are benefiting directly from this stuff on the other hand. It’s like a libel reform. The people who are doing the libel reform are the libel lawyers who would be putting themselves out of business if they did the proper libel reform here.   

UW: How can you force a government to do the right thing given this conflict of interest?

I think you should create consequences for people who do bad things. It is as simple as that. What we're trying to do in the Magnitsky case is not just going after the people whole killed Sergei but going after the people who enabled them and the people who laundered money. They should see that they cannot just make money off all this terrible stuff and live free.

READ ALSO: What Kind of Europe Do We Need?

UW: Should the Magnitsky campaign become global in order to be applied to countries like Ukraine?

Of course. We will never be able to bring Sergey Magnitsky back, but I’ve got two objectives in my work in his memory: one is to get justice for Sergey himself and the second one is to create a legacy so that his death was not a meaningless death. The legacy would be to use the tools that we have developed for many other cases not just in Russia but in other evil, authoritarian regimes as well. I think that would be a true and fitting tribute to a brave man who gave his life for the right cause.


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