From Hedge Funds to Human Rights: Bill Browder at The Cambridge Union

Felicity Garvey 13 February 2020
Image Credits: The Telegraph

Bill Browder might not a celebrity in popular culture, except perhaps for those few fans of hedge fund management out there – indeed, his most famous work, the Magnitsky Act – does not bear his name. However, he is well known by one Vladimir Putin and has even been called ‘Putin’s number one enemy’.

However, he is well known by one Vladimir Putin and has even been called ‘Putin’s number one enemy’.

Making an enemy of Vladimir Putin is, by all accounts, a dangerous move. This was not always the case, however. Indeed, for a period of time, Mr. Browder’s interests in unravelling corruption and fraud in some of Russia’s biggest corporations were both to the benefit of his dealings on the stock market and to Mr. Putin’s goal of reducing oligarchic power in the country. From cautiously hopeful about Putin’s rise to power, to his enemy number one is a significant shift. There wasn’t a single ‘penny dropping’ moment, Browder explained – rather, “There was a period of time over which my confidence in Vladimir Putin slowly degraded.” He went on to explain that “The thing that really shocked me is, after the arrest of Khodorkovsky, the largest oligarch in Russia, after they arrested him, stripped him of his oil company and went after all of his colleagues, shortly after that, the second richest oligarch in Russia, Roman Abramovich, was paid 13 billion dollars for his oil company and given a government position. And I thought – this is not a consistent approach to oligarchs. Something is up here. And that began my loss of confidence in Vladimir Putin.”

That ‘loss of confidence’ was soon to take a much darker turn. Since 1995, Hermitage Capital Management – of which Mr. Browder is the founder and CEO – had been one of the largest foreign investors in Russia and yet in 2005, Mr. Browder was suddenly denied entry to the country on the grounds of being a ‘threat to national security’. According to a report by The New York Times in 2008, ‘over the next two years … several of his associates and lawyers, as well as their relatives, became victims of crimes, including severe beatings and robberies during which documents were taken’ and these documents were used by the Russian government to seize corporations and assets. These events culminated in the arrest in 2008 of Mr. Browder’s friend and lawyer, Sergei Magnitsky, who would, in 2009, die in prison in conditions ruled by the European Court of Human Rights to be ‘inhuman and degrading’, having suffered negligence, lack of adequate medical care and ill-treatment.

Magnitsky’s death spurred Mr. Browder into action, and his campaigning meant that in December 2012, a law was passed to punish those Russian officials culpable, banning them from entering the US and using its banking system. Since initially being passed into US law, many other countries have introduced their own versions of it.

Mr. Browder spoke of the significance of this kind of targeted sanctioning: “If you target individuals… let’s start out by saying, most of the people in Russia are victims of the same individuals that killed Sergei Magnitsky or did other things like that. Therefore, if you were to sanction the country, the people would be victimised twice. First by the dictators and then by the sanctions. However, if you sanction the individuals then you’re going straight to the problem as opposed to creating unexpected consequences among the victims.”

“The purpose of having this type of law is not just for the people who are sanctioned, but also for those who are afraid that they might be sanctioned. So, if you look at the way in which a human rights violator behaves, they’re saying that there’s an incentive to violate people’s rights – probably a financial incentive. And in most of these countries, up until recently, there’s never been a consequence. There’s never been a disincentive. So, anybody who is looking at costs and benefits of certain actions, they’ll say there’s a benefit and no cost. By having a Magnitsky Act in place, we now create a cost.”

“I think that the Magnitsky Act is just in its infancy.” Mr. Browder explained, hopeful that more is yet to come. “Many other countries need to pass it, and then everybody who’s passed it needs to enforce it vigorously. And there needs to be thousands of people on the Magnitsky List, not hundreds. That’s the first thing. And I think it will be. I think it will become the new tool for dealing with human rights violators, dictators, kleptocrats. And I think it will really cause great harm to people who are doing terrible things. And I think, secondly, that there needs to be grave consequences for people who enable these types of activities. And the Magnitsky Act probably doesn’t cover that, but I think that the current legislation does. Money laundering legislation, anti-fraud legislation, anti-bribery legislation should be enforced vigorously against the enablers so that anybody does that realises that they could go to jail. You know, right now they wear fancy suits and go to the same clubs as everybody else, send their kids to the same schools, and they need to be pulled out of the respectable life and given a choice: You can either be part of the respectable world or you can be a criminal, and be with criminals in jail.”

Mr. Browder considers the bipartisan nature of the bill to be a great success – and to be something that protects it.

“The Magnitsky Act is an act of congress. In order to put it in place it required a majority of congress and if it was ever to be taken away, it would require a majority of congress. I know for sure that congress is not going to repeal the Magnitsky Act.” He did consider the issue of who the act could be used to target, however. “The decision of who gets added to the sanction list, or who gets subtracted from the sanctions list, that’s an executive decision. […] And that could be politicised. I am hoping nothing untoward happens – and so far it has held perfectly. More people have been added to the Magnitsky List. Russians have been added to the Magnitsky List. But it’s a total unknown what could happen in a second term of Trump.” Indeed, the Magnitsky List has expanded far beyond the initial group of Russian officials implicated in Magnitsky’s death, and since 2016 been used to sanction individuals globally who are suspected of human rights abuses – notably, this has recently come to include various Saudi Arabian officials deemed to have been involved in the murder of Jamal Khashoggi.

The decision of who gets added to the sanction list, or who gets subtracted from the sanctions list, that’s an executive decision. […] And that could be politicised. I am hoping nothing untoward happens – and so far it has held perfectly.

The events of Mr. Browder’s life read something like a novel – and indeed, he has recorded them in a thriller-like memoir called ‘Red Notice’. “In most countries, there’s a publisher willing to publish my book. And we published it I think in 26 different languages.” However, perhaps unsurprisingly, “The only country where we could never find a publisher was Russia.” He went on to explain, “Basically, the government just called up and said to every publisher, ‘if you do this, you’re never going to publish another book again in your life’. So nobody would publish it. And I felt like the story was particularly important for Russians to know, and the Russian government has spread so much misinformation, and propaganda and personal attacks against me and Sergei Magnitsky, so it’s really important for our story to be out there. And so, we didn’t have a publisher, so we found a Ukrainian publisher to publish it, and we paid the translator and paid for the books to be manufactured and you can download the book for free on the website or you can even get the book for free just by writing in, and many people have. And so, it’s like, there was a time during the Soviet period called, where illegal political ideas were produced, something called ‘Somozot’, which were these like black market newspaper, and this is like the modern-day equivalent of ‘Somozot’.”

No fewer than eight Interpol arrest warrants have been submitted by the Russian security services against Mr. Browder. None of them, however, have succeeded in slowing him down. “I am pushing as hard as I’ve always pushed. And they’re pushing just as hard as they’ve always pushed against me. I was arrested in Madrid last summer. At the Helsinki summit between Trump and Putin, Putin asked for me to be handed over by Trump. There were these ‘plumbers’ in Davos…” Indeed, Mr. Browder was warned only earlier this month by British security services that his safety was at risk should he travel to Davos – and while he was in Davos, two suspected Russian agents posing as plumbers were arrested. “It just never stops.” He says, with a shrug. “It never stops, and I’m never going to stop.”