Putin's World (16/03/13)
Boris Johnson - the Mayor of London - likes to play the court jester, but underneath all the tomfoolery aimed at the cameras he is a serious journalist - with an eye for a good story.
Like this one written for The Telegraph newspaper recently which tells a remarkable tale about the Russian authorities putting on trial a man - Sergei Magnitsky - who is already dead and who died is police custody under suspicious circumstances.
I wish I knew more about life in modern Russia - from the outside looking in it appears as if the country has been hijacked - by the very people whose job it is to uphold law and order.
"Justice is put to the sword by Moscow’s greed and corruption"
The ludicrous 'trial’ of a whistleblower killed for his pains ranks among Russia’s darkest hours, writes Boris Johnson
Today, in Moscow, there begins the trial of a 37-year-old accountant by the name of Sergei Magnitsky. Mr Magnitsky is accused of tax offences dating back perhaps 10 years.
What is astounding about this case is that Magnitsky is not only innocent of all charges. He is also dead. He died in prison in November 2009, after almost a year in which he was kept in squalor, denied family contact and deprived of medical treatment — detention that culminated in a savage and fatal beating by his captors.
It says something about the Russian state that it should now put this ghost on trial, in what must be the most grotesque parody of legal proceedings since the animal trials of the Middle Ages. It says something about Russian justice that Magnitsky — and his family — are now being persecuted by the very legal establishment whose corruption he exposed. And that message is that there are no lengths to which the Russian kleptocrats will not go to protect themselves and their ill-gotten loot, and to grind the faces of their enemies.
Magnitsky was a whistleblower. He uncovered a scam, a gigantic criminal conspiracy by which the Russian police and tax officials colluded with the judiciary and mafia to steal millions from the Russian state. When he refused to change his evidence and give in to his interrogators, they killed him – only eight days before they would have been legally obliged to bring him to trial or let him go.
Magnitsky’s tragedy was to be hired by a US-born British citizen called Bill Browder, who runs Hermitage Capital Management — a fund that used to be one of the biggest investors in Russia. Bill Browder’s misfortune was to fall out with Vladimir Putin, and in a big way. To understand the Magnitsky affair, you have to go back to the collapse of communism and the decision of a semi-inebriated Boris Yeltsin to allow the assets of the Russian people, and incalculable wealth, to fall into the hands of about two dozen more or less cunning and opportunistic businessmen — the oligarchs.
Back in the 1990s, Moscow was a kind of Wild West. Business deals would be terminated in restaurant massacres. It was a world of eye-popping swindles and bribes, and for a while Browder’s fund prospered. With a team of ace financial investigators, Hermitage Capital would dig up the pilfering and peculation that was rife in Russian capitalism, and expose it to the media. As the firms were cleaned up, the share prices rose, and so did the profits of Browder’s fund.
All went well, as long as this had the tacit support of Putin, who seemed initially content to allow dodgy Russian business practices to be laid bare. The turning point came in October 2003, with the Kremlin’s astonishing decision to arrest Mikhail Khodorkovsky, then the richest man in Russia and the cleverest oligarch of them all. As Browder puts it: “Imagine you are one of the lesser oligarchs, and you are on your yacht at the Cap d’Antibes, and you have just finished making love to your mistress and you turn on the TV and you see the number one oligarch in a cage. What do you do? You go to Putin, and you say, Vladimir Vladimirovich, what can I do to help you? And he says, 50 per cent. Not 50 per cent to the Russian government, but 50 per cent to me, Vladimir Putin.”
From that moment on, it was no longer cool for Browder to lift up the big flat rocks of Russian business. It was no longer safe to tweak the tails of people who had Putin’s protection. In 2005, he was stopped at the airport and deported. Browder liquidated his Russian businesses, paid his taxes — of about $230 million — and quit Moscow, leaving just an office and a secretary. He counted himself lucky to have escaped.
But someone important had been hacked off by Browder and Hermitage, and that someone began a bizarre revenge. First, the police raided his offices and seized all documentation relating to his now dormant companies. Next, they secretly and fraudulently re-registered the companies in the name of a former sawmill worker from Tatarstan — a man who had been convicted of manslaughter and was released two years early from prison in exchange for his help.
Then they hired lawyers — unbeknownst to Browder — to represent these companies, and sent them to court to claim that these companies were in fact massively in debt at the time that Browder had liquidated them and that the companies — now effectively owned by the tax police, the tax officials and their accomplices — should be reimbursed the taxes Browder had paid before he left.
Incredibly, the court agreed — though I suppose they had no one before them to dispute what the lawyers were saying. On Christmas Eve 2007, Browder’s ex-companies received a staggering $230 million tax rebate — thought to be the highest ever. No one would ever have known, had it not been for Sergei Magnitsky, who was hired by Browder to find out why his shell companies seemed to be in court.
Magnitsky went to the authorities — of course he did: the very authorities that were involved in the fraud; and in October 2008, they imprisoned him and threatened him until he eventually died of a “ruptured abdominal membrane” or a “heart attack” or — according to the Moscow Helsinki Group — from being beaten and tortured by several interior ministry officers. No one knows exactly where the stolen millions went — though some tax officials and prosecutors seemed to enjoy vast and unexplained increases in wealth.
No one knows who sanctioned the operation, or how high the conspiracy goes.
I don’t know if Browder is right to say that Russia is now a gangster state and that Putin is effectively the biggest thief in history. What is clear is that Magnitsky was a martyr trampled by a corrupt system. Barack Obama was right to sign the Magnitsky Act, and ban anyone associated with his death from entering the US. This country should follow suit. When I was a student we used to name buildings after those who had suffered in the fight against oppression — Biko, Sakharov, Mandela. Magnitsky deserves the same recognition.
Like this one written for The Telegraph newspaper recently which tells a remarkable tale about the Russian authorities putting on trial a man - Sergei Magnitsky - who is already dead and who died is police custody under suspicious circumstances.
I wish I knew more about life in modern Russia - from the outside looking in it appears as if the country has been hijacked - by the very people whose job it is to uphold law and order.
"Justice is put to the sword by Moscow’s greed and corruption"
The ludicrous 'trial’ of a whistleblower killed for his pains ranks among Russia’s darkest hours, writes Boris Johnson
Today, in Moscow, there begins the trial of a 37-year-old accountant by the name of Sergei Magnitsky. Mr Magnitsky is accused of tax offences dating back perhaps 10 years.
What is astounding about this case is that Magnitsky is not only innocent of all charges. He is also dead. He died in prison in November 2009, after almost a year in which he was kept in squalor, denied family contact and deprived of medical treatment — detention that culminated in a savage and fatal beating by his captors.
It says something about the Russian state that it should now put this ghost on trial, in what must be the most grotesque parody of legal proceedings since the animal trials of the Middle Ages. It says something about Russian justice that Magnitsky — and his family — are now being persecuted by the very legal establishment whose corruption he exposed. And that message is that there are no lengths to which the Russian kleptocrats will not go to protect themselves and their ill-gotten loot, and to grind the faces of their enemies.
Magnitsky was a whistleblower. He uncovered a scam, a gigantic criminal conspiracy by which the Russian police and tax officials colluded with the judiciary and mafia to steal millions from the Russian state. When he refused to change his evidence and give in to his interrogators, they killed him – only eight days before they would have been legally obliged to bring him to trial or let him go.
Magnitsky’s tragedy was to be hired by a US-born British citizen called Bill Browder, who runs Hermitage Capital Management — a fund that used to be one of the biggest investors in Russia. Bill Browder’s misfortune was to fall out with Vladimir Putin, and in a big way. To understand the Magnitsky affair, you have to go back to the collapse of communism and the decision of a semi-inebriated Boris Yeltsin to allow the assets of the Russian people, and incalculable wealth, to fall into the hands of about two dozen more or less cunning and opportunistic businessmen — the oligarchs.
Back in the 1990s, Moscow was a kind of Wild West. Business deals would be terminated in restaurant massacres. It was a world of eye-popping swindles and bribes, and for a while Browder’s fund prospered. With a team of ace financial investigators, Hermitage Capital would dig up the pilfering and peculation that was rife in Russian capitalism, and expose it to the media. As the firms were cleaned up, the share prices rose, and so did the profits of Browder’s fund.
All went well, as long as this had the tacit support of Putin, who seemed initially content to allow dodgy Russian business practices to be laid bare. The turning point came in October 2003, with the Kremlin’s astonishing decision to arrest Mikhail Khodorkovsky, then the richest man in Russia and the cleverest oligarch of them all. As Browder puts it: “Imagine you are one of the lesser oligarchs, and you are on your yacht at the Cap d’Antibes, and you have just finished making love to your mistress and you turn on the TV and you see the number one oligarch in a cage. What do you do? You go to Putin, and you say, Vladimir Vladimirovich, what can I do to help you? And he says, 50 per cent. Not 50 per cent to the Russian government, but 50 per cent to me, Vladimir Putin.”
From that moment on, it was no longer cool for Browder to lift up the big flat rocks of Russian business. It was no longer safe to tweak the tails of people who had Putin’s protection. In 2005, he was stopped at the airport and deported. Browder liquidated his Russian businesses, paid his taxes — of about $230 million — and quit Moscow, leaving just an office and a secretary. He counted himself lucky to have escaped.
But someone important had been hacked off by Browder and Hermitage, and that someone began a bizarre revenge. First, the police raided his offices and seized all documentation relating to his now dormant companies. Next, they secretly and fraudulently re-registered the companies in the name of a former sawmill worker from Tatarstan — a man who had been convicted of manslaughter and was released two years early from prison in exchange for his help.
Then they hired lawyers — unbeknownst to Browder — to represent these companies, and sent them to court to claim that these companies were in fact massively in debt at the time that Browder had liquidated them and that the companies — now effectively owned by the tax police, the tax officials and their accomplices — should be reimbursed the taxes Browder had paid before he left.
Incredibly, the court agreed — though I suppose they had no one before them to dispute what the lawyers were saying. On Christmas Eve 2007, Browder’s ex-companies received a staggering $230 million tax rebate — thought to be the highest ever. No one would ever have known, had it not been for Sergei Magnitsky, who was hired by Browder to find out why his shell companies seemed to be in court.
Magnitsky went to the authorities — of course he did: the very authorities that were involved in the fraud; and in October 2008, they imprisoned him and threatened him until he eventually died of a “ruptured abdominal membrane” or a “heart attack” or — according to the Moscow Helsinki Group — from being beaten and tortured by several interior ministry officers. No one knows exactly where the stolen millions went — though some tax officials and prosecutors seemed to enjoy vast and unexplained increases in wealth.
No one knows who sanctioned the operation, or how high the conspiracy goes.
I don’t know if Browder is right to say that Russia is now a gangster state and that Putin is effectively the biggest thief in history. What is clear is that Magnitsky was a martyr trampled by a corrupt system. Barack Obama was right to sign the Magnitsky Act, and ban anyone associated with his death from entering the US. This country should follow suit. When I was a student we used to name buildings after those who had suffered in the fight against oppression — Biko, Sakharov, Mandela. Magnitsky deserves the same recognition.
