Sergei Magnitsky, Bill Browder, Hermitage Capital Management and Wondrous Metamorphoses

Uncle Volodya says, “I went to buy a new toaster, and it came with a bank!”

Yet again, from his secret cell somewhere among the labyrinthine streets of a Russian city, kovane speaks. This is heartening, as it means Putin’s goons haven’t gotten him yet.

Actually, that’s kind of a joke between us, proceeding from the logic offered by the most virulent russophobes: that Putin kills everyone who opposes him. Since kovane has stipulated to the existence of corruption in Russia – although he’s not particularly proud of it – and written at length on the strengths and weaknesses of the various political forces at work in Russia, he has arguably made himself a target. Word from him means that he has once again eluded the goon squad.

I hope nobody gets the impression I’m making fun of the dissident bloggers who really do take serious risks by speaking out against the government, because I’m not. I admire their courage and the strength of their conviction, although I think the notion that Putin is having them roughed up or bumped off is nonsense; it’s far more likely to be someone closer who disagrees with them. We’ve seen that happen other places as well, recently, and I don’t think I need go into that any further.

Anyway, today’s offering discusses the dissolution of Hermitage Capital Management’s operation in Russia, once the biggest foreign investment fund there. The company came to grief, but exactly how depends on who tells the story. So far, about 90% of the publicity favours Bill Browder’s side, the former CEO of HCM. I say 90% purely as a guess; in fact, I had seen only one other source defend the Russian viewpoint before what follows. Bill Browder has an awesome PR machine – is it telling the truth? I don’t know. But if the story that follows makes you say to yourself, “the Russians could have easily done it, and fabricated all the evidence – but then, so could Hermitage Capital Management”, it will have been worth the effort. There’s no law I’ve ever heard of that says a man in a suit and tie can’t lie. Let’s take a look…

“Changes are an inevitable part of life; people are used to that. But within the constant turmoil of our lives, we prefer to have small islands of stability, places that we expect to find in the state we left them. All areas of human activity require a different approach to this matter. Some solely rely on complete trust and immutability, like the job of a notary public, others are less so. Probably the harshest occupations in that respect are crime and politics, where misguided or overextended loyalties can ruin careers overnight. Success there depends upon the ability to move nimbly and constantly reevaluate the disposition of forces. But even within the cruelest gangs, those who switch sides too easily are regarded with nothing but contempt.

The aftermath of Hermitage Capital Management’s exploits in Russia reached an international scale with the involvement of the European and Canadian Parliaments – who made a truly unprecedented decision to deny visas to allegedly involved Russian officials, whilst Canada took the issue a bit further, announcing the intent to freeze any of their assets. Similar measures are being considered by the US. The accusations, leveled at Russian law-enforcement authorities by Bill Browder, one of the two founders of HCM, are mind-boggling:  a seizure of the fund’s assets, a theft of 230$ million of tax rebate money, the murder of a lawyer and, basically, a cover-up of these crimes by the government. Despite the seeming gravity of the allegations, the decisions of the European and Canadian Parliaments can hardly be called prudent – such generally accepted norms as presumption of innocence, jurisdiction and the principle of considering opinions of all parties are clearly lost on their members. Meanwhile, the relationships with Russia, hardly cloudless earlier, eroded even further. Why is this not reason to look at the matter more closely? What fascinates in the story about HCM’s turbulent affair with Russia is the surreal pile-up of lies, media campaigns, strange deaths and about-turns taken by various participants. In order to get to the bottom of it, we should sweep away all the layers of half-truths and empty statements drifted by the media, and examine the subject matter in development.

This story began in 1992, when a large-scale voucher privatization program was launched in Russia. Big enterprises of formerly one of the largest world economies were put up for sale at giveaway prices. The process itself was rife with manipulations, fraud and crime, but as a result, large joint-stock companies were created. Despite high political and operational risks, Russia opened up an enormous pool of opportunities for anyone who had got past the first 10 pages of an investment textbook. Our main protagonist, Bill Browder, certainly did a lot better than just that – he graduated from Stanford Business School and worked as an investment banker. Ties with Russia run deep in his family; his grandfather was General Secretary of the US Communist Party and, according to documents released in 1995, worked for the NKVD, running a spy ring. Bill himself specialized in Eastern European markets, and when he felt the time was right, he founded Hermitage Capital Management in 1996, along with the main investor, Edmond Safra.

Having to make their way through the muddy waters of the Russian law system, HCM hired Firestone Duncan, a Moscow-based provider of legal, tax and accounting services. Its founder and managing partner, Jameson Firestone, also plays an important role in subsequent events.  Browder’s first successes were truly tremendous – the fund grew by 40% in the first month, and they didn’t remain unnoticed. The New York Times profiled him in the business section, and droves of investors brought money to HCM – by the beginning of 1998 the fund was worth around $1 billion. The financial crisis of 1998 hit Browder pretty hard – whilst Russian assets depreciated by 88%, the fund shrank to just $120 million – but that didn’t take the wind out of his sails. Meanwhile, that wasn’t HCM’s only big problem – Russia was hardly the most hospitable place for minor shareholders, and heavy hitters routinely pulled off tricks that would have made Jay Gould blush; one can simply read about Kenneth Dart’s ordeals with Khodorkovsky. Browder’s first encounter with the realities of free-for-all capitalism happened in 1997, when one of the most powerful oligarchs (at the time), Potanin, tried to issue new shares in Sidanco, an oil company in which HCM held a 2% stake. The move was clearly aimed at diluting minority shareholders, as the possibilities for buying the additional share issue were limited to the main owner only. But Browder refused to back down without a fight and was determined to protect his investment. Using Safra’s numerous connections in the business world, they launched a media campaign, intending to draw attention to the scam. A flurry of publications in the Western media provided enough pressure, and the Russian securities commission suspended the share issue. As a result, the price of the stock went up, and HCM not only protected their investment, but profited as well.

These events probably defined HCM’s modus operandi for the future. Their primary strategy was to buy shares of a big undervalued company (preferably energy and/or state-affiliated) and then start digging up information about what they perceived as ineffectiveness in the governance of the company. Upon discovering any irregularities, Browder used a wide array of methods to draw attention to his cause: articles in The Financial Times, The Wall Street Journal and its Russia subsidiary Vedomosti; lawsuits, even political influence in the Western countries. More often than not such action compelled the company to correct its policy, the market positively appraised those changes, and the worth of HCM’s stake would increase. Browder himself proudly dubbed that process the “Hermitage Effect”. But this is only one side of the story, the one which HCM prefers to spin. To understand the other, a clear view of what the Russian financial market was is required. With only a handful of major players, not bounded by any real laws against insider trading, it was the ideal muddy water for the boldest manipulations. Given the immaturity of the Russian legal system at the time, the majority of corporations often operated in “grey” areas and was extremely vulnerable to legal pressure. In 1999 Safra died under mysterious circumstances, having shortly before sold the ownership of HCM to HSBC, one the largest banking and financial services groups in the world. Lobbying and legal options at Browder’s disposal only increased. Unfortunately, he didn’t hesitate to use it, often overstepping the boundary between shareholder activism and greenmail.

During the fund’s operation in Russia, they filed more than 40 lawsuits, winning only 6 of them. Whilst some of them indeed contested obvious scams, as in Sidanko’s case, others were of a dubious nature at best. For example, in 2001 Sberbank, the biggest and state-owned bank in Russia, intended to issue additional shares by public subscription; HCM tried to block this decision. According to Russian law, the Central Bank must own no less than 50% plus one share of Sberbank. It was common knowledge that it would have to buy a part of the additional issue, in order to not violate this law. Immediately after the beginning of the offering, a group of minority shareholders led by Browder brought an action against Sberbank, demanding it be canceled. They claimed that: 1) since it was common knowledge that one of the owners had to participate in the subscription, therefore it was private, not public; and 2) that made the representatives of the Central Bank that were on the supervisory board an interested party, so the issue had to be approved by the general shareholders’ meeting. Browder lost this case, but it certainly negatively affected the offering. Another example: the fund filed a lawsuit against Surgutneftegas in 2003, demanding that the oil company buy shares owned by its subsidiary. While the law clearly forbids companies owning their own shares, it doesn’t say anything about subsidiaries. HCM argued that it’s basically the same thing, conveniently forgetting about the business entity convention.

By 2004, HCM became the biggest foreign investment fund in Russia; it was managing 3.5 billion dollars, representing more than 6000 investors. And it was very successful as well – the annual average return amounted to 34.5%, even factoring in the drop in 1998 (the Russian stock index RTS grew only half as fast). Browder himself earned more than $120 million by various estimates.  The fund also enjoyed enormous influence in Russia. HCM forced the change of energy giant RAO UES’s reform plans, participated in the ousting of Gazprom former all-powerful CEO Vyakhirev and even prevented Rosneft from consolidating the shares of its subsidiaries. Let’s recall that Rosneft is considered to be the realm of Igor Sechin, who – according to the Western media – destroyed YUKOS on a whim. So finally, every major player in Russia was running out of  toes that Browder hadn’t stomped yet. And it’s no wonder they decided to take a closer look at Hermitage’s activity as well.

Just in 2004, a case against HCM on tax evasion charges was opened 8 times in Kalmykia, but Browder’s lawyers managed to douse the fire. In November 2005, upon arriving at the airport, Browder learned that he was denied entry to Russia on the grounds of “national security”. Apparently, he was sure that he would manage to sort this problem out, because he kept the matter from the press for three months. Browder had been a staunch supporter of Russia throughout his stay in Russia – he was even called its cheerleader in the West – but that was simply part of his job, keeping investors’ confidence up.  And he probably decided that all the predicaments would go away if enough loyalty to Putin was demonstrated. In December, Browder gave a major interview on CNBC titled “Putin looks to the West”, where he once again expressed his confidence in Russia’s course and even broke what now seems to be the commandment “Thou shalt not speak ill of Khodorkovsky”. But to no avail.

To this day, it remains unknown who ordered Browder’s expulsion; he himself wouldn’t say, and Russian officials are understandably non-forthcoming. The usual suspects are Sechin and people affiliated with Surgutneftegaz, but those are just common journalistic hypotheses. In 2007, Browder met with Dmitry Medvedev at Davos, and asked him to look into the reason he wasn’t allowed to visit Russia. The fund already liquidated most of its assets in 2006, but Browder clearly intended to settle the issue amicably. Ironically enough, the Russian authorities did Hermitage a good turn, as Browder sold the fund’s portfolio before the 2008 crisis. By 2007, only a handful of employees remained at the Moscow office of HCM. And that’s where accounts of the story diverge sharply.

Given Browder’s aptitude for PR, It would probably be a great disservice to attempt presentation of his version here in detail – he himself did more than just a fine job. Here’s a couple of video clips, a neat website with a screaming name and a very detailed presentation in both Russian and English. In short, Hermitage claims that it became the victim of an organized crime group made up of high-ranking secret service agents. These supposedly opened a case against HCM on drummed-up tax evasion charges, raided HCM’s offices and got their hands on the seals of three subsidiary companies that paid a large amount in taxes the previous year. Using those seals, (according to HCM’s story) they re-registered the subsidiaries to figurehead criminals, and then filed false lawsuits against the companies in a Kazan court. Having lost the case, the subsidiaries became eligible for a large tax rebate, as they incurred substantial losses as a result of the court proceedings. Shortly after, the applications for the tax rebate were filed and, with a speed quite uncharacteristic of the Russian tax office, were approved. Thus, the organized crime group stole around $230 million of taxpayers’ money. Meanwhile, one of the Firestone Duncan lawyers who worked with HCM account, Sergey Magnitsky, found out about the scheme, did some research on his own and notified the police. But instead of investigating the fraud, the police threw Magnitsky in jail and accused him of the very crime he tried to expose. There, he was tortured and denied medical aid, but Magnitsky staunchly refused to sign the confession. As a result, he died in prison, but that didn’t stop the crime group, as they continued trying to frame Browder. Pretty startling story, and it doesn’t exactly evoke desire to invest in Russia, huh? Well, let’s take a closer look at the circumstances of these events.

What really strikes the eye, when looking for material in the press, is the glaring disparity between Hermitage’s coverage of this story and that of the Russian Investigative Committee.  Browder and Firestone seem to have appeared on every TV-channel and every programme and were featured in articles in the most widely-read magazines, while in order to learn about the Investigative Committee’s version, one has to glean information only from Russian newspapers. A rather revealing example happened when popular Russian newspaper MK made a short tear-jerking video challenging Browder’s version and put in on Youtube. It was promptly taken down first from Youtube due to “violations of Hermitage Capital Management’s rights”, then from other hosting services, and now is accessible only on MK’s website, although with broken sound. Makes one wonder what HCM right was violated: perhaps the sacred right to one-sided coverage. Even in Russia, Firestone usually demanded publication of a disclaimer to the articles that he didn’t like, so the media war was won by a huge margin.

Hermitage worked in Russia through a network of around 20 companies that were scattered throughout Russia. The attention of the police was drawn to those registered in Kalmykia, a local offshore zone at the time. All foreign investors encountered the same problem in 1997, when they were forbidden from trading in Gazprom stock on the Russian stock exchange. They could still buy it legally, as Gazprom ADR were traded in London, but the difference between quotes was more than 333% when the ADR were initially issued. The ban was imposed in order to help the government consolidate ownership of the gas giant. Such a promising profit margin made foreign investors look for alternatives, and they were easily found. “Grey” schemes of cross-ownership were widely used, and Hermitage was no exception. They opened two companies, “Saturn Investments” and “Dalnaya Step”, in Kalmykia; Browder was appointed CEO of both the companies. In order to minimize taxes they hired 4 disabled persons as financial analysts, 2 for each company, which made the companies eligible for additional tax remissions. One of the analysts turned out to be mentally handicapped – apparently this is the secret to beat Wall Street, I’m just little surprised that Goldman Sachs and Bank of America don’t use this winning strategy. As a result, companies paid only a 5.5% tax rate, instead of a full 35%. Thus, Hermitage violated the following laws: 1) the ban on trading in Gazprom stocks; 2) the requirements of the special tax zone, as none of the profits were invested in Kalmykia; 3)the application of the tax remissions, as all the disabled persons were on the payroll nominally (here are their testimonies: 1,2,3,4). The whole scheme was developed by Magnitsky himself; all entries in disabled persons’ employment record books were made in his handwriting, and signed by Browder (1,2). Later, the description of the scheme was found in Magnitsky’s seized computer. Hermitage claims that they weren’t involved in tax evasion, providing as a proof the stamp of the local tax office on their tax declaration. But that doesn’t make the scheme they were using legal, it simply meant that taxes were calculated correctly, according to the rate chosen by the taxpayer.

Another case of tax evasion with which Hermitage was charged is linked to the “Kameya” company, owned by a Cyprus holding company affiliated with Hermitage. The company paid a 5% dividend tax rate, which is legal according to the (then) double taxation avoidance agreement between Russia and Cyprus only if a Cypriot business invests in Russia, having no representative office there. But since the Cyprus holding acted in Hermitage’s interests, which operated in Russia, the correct rate should have been 15%. Browder counters this charge with the Ministry of Finance’s letter that says the 5% tax rate was applied correctly. But once again, that is not much in the way of proof – taken out of the whole picture, the company indeed could use the lower rate. The Russian Investigative Committee estimates that HCM totally underpaid around $150 million in taxes.

In this unbelievably cheesy article in the Tatler magazine, Browder managed to throw in almost every imaginable stereotype about Russia: mafia, the now non-existent but always trendy KGB and secret agents, topped with an incorrect translation of Magnitsky’s words, a quote from The Godfather and general affectation of pathos. He also mentioned that in the beginning of 2007, a certain Artem Kuznetsov called Hermitage’s office and said “The sooner we meet and you provide what is necessary, the sooner your problem will disappear”. Browder assumed it was an attempt to extort a bribe, and just ignored the call. Having more than enough material on their hands, the group of investigators naturally wanted to get some explanation from Hermitage, and calling suspects up is a common practice. When they ignored the request, Kuznetsov (the operative who worked on Hermitage’s case) conducted a search in HCM’s and Firestone Duncan’s offices several months later – also a standard practice. During the search, heaps of documents were seized; among them, seals of another three fund entities: Makhaon, Rilend and Parphenion. These companies posted around $1 billion in profit a year before, and had no assets at the moment of the search. Having probably realized that the police’s actions smelled like trouble for him, Browder urgently recalled all key employees of Firestone Duncan and Hermitage to London. The only one who stayed behind in Moscow was Magnitsky – he had to finish some work. He had already made photos for a UK visa and booked tickets to Kiev, but the police were able to arrest him on 24th of November 2008, before departure.

Browder and his entourage now try to window-dress Magnitsky as a lawyer or even attorney who struggled against corruption in Russia and fell victim to it. But that’s not true; he graduated with a degree in accounting and audit, and had worked all his life in that sphere. But the idea of a tortured activist attorney sells so much better! Arresting him was a tremendous success for the police – they got their hands on a trump ace. His testimony that all the tax evasion schemes he conceived were implemented by Browder’s direct order could have landed the gallant shareholder activist in prison for many years. Considering other accomplices’ flight to London and the daunting history of extraditing criminals from the UK, bail wasn’t an option. After physical examination, he was found healthy and placed into a pretrial detention center, and then transferred to Matrosskaya Tishina. Browder claims that he was subjected to tortures, but that’s a lie; Magnitsky wrote a diary, and never mentioned any physical duress; besides, he regularly met with his lawyers and never mentioned anything of the kind . He refused to testify, likely hoping that Hermitage’s expensive lawyers would get him out, and wrote a number of complaints, mostly about living conditions. While in prison, he was diagnosed with Cholecystitis and scheduled for an ultrasonic scan. But before the planned procedure, Magnitsky was transferred to another pretrial detention center, Butyrka. Conditions there were much harsher; the prison hospital was understaffed and without even essential equipment and medicine. Magnitsky’s health continued to deteriorate, and he was suffering from abdominal pain. Browder also claims that he was denied medical aid, but that’s a lie too. Prison doctors prescribed him medicine, consulted with him what his relatives should get him, and Magnitsky’s mother passed the missing medicine. The problem was that everything was done with terrible hold-ups, and he needed other medical procedures more than medicine. True, his treatment wasn’t adequate by any standards, but that’s the awful reality of Russian prisons – it’s the last place on earth to be ill. By November 2009, he got worse, and doctors decided to transfer him back to Matrosskya Tishina for a more qualified treatment. Magnitsky got to the ambulance on his feet, and was feeling fairly well. Upon arrival, he suddenly fell into a fit of paranoid delusion; his condition quickly deteriorated. After unsuccessful resuscitation attempts, he was declared dead at 21.50, 16th November, 2009. Autopsy revealed that the cause of death was heart disease, Hypertrophic Cardiomyopathy, of which he had never complained or been diagnosed before, and may not have known.

Magnitsky’s death is certainly an awful tragedy, and an indictment of the Russian penal system. As a result of the subsequent investigation, 16 high-ranking officials of the penitentiary system were fired. But he wasn’t tortured or deliberately left without medical aid. Here’s a very detailed report of the public commission about the circumstances of Magnitsky’s death. He was certainly subjected to pressure – frequent transfers from cell to cell are a favourite tactic of prison operatives. But they are quasi-legal and usually arranged without any violations. For example, the transfer from Matrosskaya Tishina to Butyrka before the planned medical procedure was covered up as a maintenance requirement, although it was most likely veiled blackmail. Anyway, it’s clear that only HCM benefited from the death of Magnitsky. While investigators lost potentially the key witness, Browder turned the boring tax evasion case into an histoire noir about the Russian mafia, which is a hot commodity in the Western press. Well, Butyrka’s prisoners gained something too – tan booths and Skype are results of another fitful campaign.

But what about the stolen $230 million? Unfortunately, the money indeed was returned on false tax rebate claims. Browder blames some crime syndicate among law enforcement agencies, citing as incontrovertible evidence the slightly more extravagant lifestyles of the officers (1,2) who investigated the case against him than it is expected on a $850 monthly salary. Such facts certainly can impress law-abiding Westerners, but will only evoke a wry smile in Russia. A lieutenant-colonel of one of the most lucrative law enforcement agencies has ONLY a couple of flats in Moscow and three expensive cars? Someone should track him down and give him the “most incorruptible Russian policeman” medal right away! Of course he’s corrupt, but almost everyone is at this level. Does anyone expect an obviously well-connected – otherwise he wouldn’t have got such a prominent case – 32-year-old man to live on a salary less than the average for Moscow? But does that mean that he killed Kennedy, orchestrated Watergate or stole the 230 million? In my opinion, not necessarily. Besides, as the Investigative Committee shamefully admitted, all that property belongs to Kuznetsov relatives – there may be some ring to it. And the state clearly showed their support, both Kuznetsov and Karpov were promoted after the investigation.

Back in 2006, when HCM was liquidating their assets, for the first time they paid 24% in taxes rather than the usual 5%. It’s unclear why they did it – maybe in order to part on good terms with Russian authorities, or maybe it was difficult to come up with new schemes under the stare of the police. In 2007, it became evident that amicable separation was unlikely, and that aroused some regret about the overpaid money. Actually, the scheme that was used to get back $230 million of Hermitage’s taxes sprang into action at least a year before. Another large investment fund, Renaissance Capital, used it to return $106 million. Or more precisely, someone stole Renaissance’s entities and used them to cheat the budget out of that amount of money. Except that Renaissance raised absolutely no fuss about that. It is interesting that the applications for the tax rebate were filed through the same tax offices, the companies lost similar cases in court and even several of the same people appeared in the process. So representatives of HCM approached one Oktay Gasanov, whose acquaintance Semyon Korobeynikov specialized in that sort of tax scam. They created duplicates of seals (later, an expert examination showed that the stamps on the false tax rebate applications had NOT been made with the ones seized during the search of Hermitage’s office), and reregistered all three companies to Korobeynikov’s associates. One of them, Markelov, later testified that he had once met with Magnitsky, who prepared the false tax rebate applications and stamped them with the duplicate seal. HCM wanted some insurance and refused to open new accounts in Korobeynikov‘s bank, insisting on using old accounts, opened in HSBC Bank. The companies then went on with losing the bogus cases in court, creating losses. And that’s where Hermitage made an egregious blunder that ruined their entire ruse. The court fees were paid from the accounts in HSBC bank already AFTER Hermitage’s claim about the hijacking of Makhaon, Rilend and Parphenion. Everyone was in a bit of hurry – the tax rebate applications had to be filed before the end of the year, when suddenly in October 2007 Gasanov died of a heart attack. He was the single liaison between Hermitage and Korobeynikov, and the latter had everything he needed to organize the scam. So he decided it would be much merrier to go on without Hermitage. Such a turn of events couldn’t have made Browder happy, and HCM started ringing all the alarm bells. They quickly “investigated” the scam and wrote letters to the Investigative Committee, Prosecutor General’s Office and MVD on the 7th of December, 2007, revealing all details. But it was too late – on the 24th the tax rebate applications were filed, and on the 26th all $230 million were transferred to the accounts opened in Korobeynikov’s bank beforehand. Later, Korobeynikov died in an accident – he fell from the balcony of his country house, tying the single loose end in this case. Browder tried to force Renaissance Capital to reveal the information about the circumstances of their entities’ involvement in the similar scam, but it seems without result. The Russian police investigation only revealed additional evidence that Hermitage had had something to do with the tax fraud – the constituent documents of allegedly hijacked companies were found in possession of one of Hermitage’s lawyers. And part of the money was recovered later: only $25 million of the whole $230 million, but that’s it.

A loop in the Russian law that made the fraud possible is the rather uncommon situation when companies that posted giant profits are liquidated the year after that. That largely limits its applicability to the financial industry only. Various scams with tax rebates on Russia’s VAT tax is very common, so every one has to be approved by a special commission. On the contrary, there were no special clauses, governing profit tax rebates, so the fraudsters pulled the scam by obtaining the signatures of a single tax office’s heads of department. Clearly, the mastermind behind this operation has enough influence in the Federal Tax Service, but identifying him is very difficult. The money was laundered through numerous proxies, and all interactions with other participant of the scam were conducted by Korobeynikov.

Certainly, all other versions can’t be ruled out. Falsifying of evidence by the police is not in any way uncommon in Russia, so some omnipotent crime syndicate could have indeed implicated innocent Browder. The main problem with Hermitage’s version of the event was accidently highlighted by Hero Journalist Yulia Latynina. In her trademark conspiratorial manner, she wondered that the syndicate must have been able to coordinate the efforts of the Investigative Committee, the Federal Tax Service, the Penal system and even conduct secret ops. What she forgot to mention was that they also obviously could pull the wool over Putin’s eyes, since it would otherwise mean he chose to side with them, sacrificing Russia’s reputation abroad in the process. And all that for a measly $230 million; seems kind of far-fetched to me. The other version, espoused by some ultra-patriots in Russia, that Hermitage both organized and was the ultimate benefactor of the scam is even more flawed. While Browder demonstrated more than enough ballsy behavior, warning the police about the crime you’re about to commit is just too brazen and not prudent. Although, given the slowness of bureaucracy, it would have been a relatively safe move anyway. But the only version that has a fighting chance to survive Occam’s razor is the above-mentioned one.

The grandson of the NKVD spy / US communist leader turning into an uber-capitalist, an accountant organizing tax evasion schemes turning into a corruption-fighting attorney, investigators turning into the embodiment of Al Capone – all that is just too many metamorphoses for my liking. The only undisputed winner that emerged after all the twists and turns is Browder. He earned himself a name, a heap of money and a lot of free advertising. After the EU Parliament’s decision, the possibility of Interpol issuing an international arrest warrant on him is zero. On top of everything, he keeps harming Russia’s reputation without even trying very hard, and there’s a chance that the Russian authorities will have to start negotiating with him. And he will ends up earning even more money. Congratulations, Bill; well played.

The saddest part of this story is the uncanny ability of the Russian government to shoot itself in the foot from any position.  I mean, how hard is to hire some callow student to put together a lucid presentation of the investigators’ stand in English? How many billions has Russia lost, just because some honest investor read Browder’s unchallenged blaring and vowed never to invest a single penny in Russia? How much longer will any Russian investigation be maligned by the fact that the policemen drive a car worth more than their 10-year salary? How come millions of dollars just disappear from the budget, never to be found, while some talented doctor is pulling a night shift for a respectable $300 a month? Those are the questions I don’t know the answer to. Does anyone?”

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81 Responses to Sergei Magnitsky, Bill Browder, Hermitage Capital Management and Wondrous Metamorphoses

  1. Tim Newman says:

    How many billions has Russia lost, just because some honest investor read Browder’s unchallenged blaring and vowed never to invest a single penny in Russia?

    In all likelihood, very few. There are an good number of reasons why people would be wary of investing in Russia, anything Browder said would unlikely be decisive.

  2. Giuseppe Flavio says:

    Thanks for this interesting piece, Kovane. I’ll try to answer the questions at the end.
    I mean, how hard is to hire some callow student to put together a lucid presentation of the investigators’ stand in English?
    It isn’t hard at all, but it would be useless. Such a piece would be ignored at best by Western MSM, or censored like the MK video on youtube. Also, don’t underestimate the “we against them” tribal instinct among westerners.
    How many billions has Russia lost, just because some honest investor read Browder’s unchallenged blaring and vowed never to invest a single penny in Russia?
    I agree with Tim on this question, very few. Do you remember all the fuss about TNK-BP “takeover” by the evil Russians against the pure and honest BP? It didn’t stop BP investments in Russia, as the recent BP-Rosneft agreement shows. Moreover, you have to consider how many crooks will stay out of Russia.
    How much longer will any Russian investigation be maligned by the fact that the policemen drive a car worth more than their 10-year salary?
    As long as the policemen will drive a car worth more than their 10-year salary. When (and if) they’ll stop driving such expensive cars something else will be found or outright invented.
    How come millions of dollars just disappear from the budget, never to be found, while some talented doctor is pulling a night shift for a respectable $300 a month?
    Unfortunately, finding where these millions disappear, doesn’t mean that they can be recovered. Because it can be made legally and in the open. US taxpayers know very well that part of the federal budget is used to pay fat bonuses to AIG executives, but what can they do about it? Nothing, besides listening to Obama that cries “it’s outrageous!!”.
    Finally, I have an OT question. On Jan. 17 Italian news agency ANSA reported that a Russian journalist named Roman Nikirov working for Red Media agency was stabbed to death near the Ostankino TV center. ANSA cites Rosbalt as the source. Now the strange thing about this event is that no media reported it outside of Italy, and all Italian news sources got it from ANSA. In other word I suspect that ANSA invented the news. Can someone confirm or deny?

    • Misha says:

      Will try to look into.

      Can be analytically noteworthy on what does and doesn’t get picked up as worthy news.

      On your point about Western mass media not likely to pick up certain replies: at least let there be an earnest attempt on record. It’s an uphill effort that can get altogether ditched out of frustration.

      Rhetorically put: whose purpose does that serve?

      A bit off topic and concerning Mark’s native Canada:

      http://www.lucorg.com/about-luc_173.htm

      Bigoted lobbying

      • marknesop says:

        Until I got to the creepy portrait shot of Bandera, it didn’t look particularly alarming; Canada has a proportionately large Ukraininan population, and to date I’ve never met one who was a nutty nationalist like some of the fruitcakes at LR. There’s no Russian community venue where I live, but there’s a Ukrainian Cultural Centre, and they regularly rent it out to Russian groups for Children’s Christmas parties and things of that nature. My wife and I went to one the first year she was here, and she made a lot of Russian connections to people who are still friends.

        Asians are the dominant minority here, by a significant margin. But there are large pockets of Ukrainians in the prairie provinces, and I wouldn’t be at all surprised if there were a fire-breathing militant or two in that region. On the whole, it’s my observation that Russian-Canadians and Ukrainian-Canadians get along fairly well.

        • Misha says:

          In line with my own experiences and polling done on how most Ukrainians are in reality.

          However, that other element gets around:

          http://www.kyivpost.com/news/opinion/op_ed/detail/95159/

          As one Canadian put it to me:

          “Yes, Oksana is a wild one.”

          • marknesop says:

            Wow. Is she a piece of work, or what? I’ll keep an eye on her for a future post – her piece is riddled with russophobic I-just-know-because-everyone-knows cliches.

            • Misha says:

              Can I pick em?

              On your other point about the Ukrainian-Canadian link: it’s IMO bigoted in its negative characterization of “Soviet Russia.” The name of the country was the Soviet Union. Hence another example of how a certain kind of bigotry gets downplayed, unlike when the Soviet Union is collectively and negatively associated with Jews.

              That link in question erroneously characterizes the present and past relationship between Russia and Ukraine.

              While we’re the subject, here’s another abomination:

              http://www.opendemocracy.net/od-russia/roman-kabachiy/ukrainian-nationalism-are-russian-strategies-at-work

              Two private views from some astute individuals who I’m glad to know:

              “Muddled and convoluted, but the same old BS…”

              &

              “Typical misguided use of a conspiracy theory.”

              ****

              Yushchenko and his wife are committed Bandera supporters.

              Yushchenko has a pattern of seeking unreasonable goals like putting Ukraine in NATO, ASAP and seeking just one UOC church independent of the MP. On the latter, he would’ve been practically better off with a free to choose (UOC-KP, UOC-MP, UAOC) stance.

              Note the mischievous Russia behind the scene line in the above linked oD article.

              That site has run two recent gems from someone else, who suggests that Yanukovych’s PoR might be backing the nationalist Svoboda movement. That author’s main beef with Svoboda seems to be its xenophobia at Western orgs. He has nothing to say of that org’s. anti-Russian stances.

              On a related note, these recent news items weren’t (pardon if mistaken somewhat) a great priority at RT, InoSMI, JRL and RFE/RL among others (Instead, the likelihood is greater to see stories on pro-Stalin sentiment in Russia and claims of Ukraine becoming more censored under its current presidency.):

              http://newsru.com/world/12jan2011/bandera.html
              http://newsru.com/world/14jan2011/jushenko_oun.html

              Unlike post-Soviet Ukraine under Yushchenko, post-Soviet Russia (far from perfect on a number of matters) hasn’t seen arbitrarily approved government “Hero” designations to historical figures which conjure up some negativity.

              On a different and more pleasant note:

              http://isportsweb.com/2011/01/20/prokhorov-slams-door-on-melo-deal-nets-respond-with-win-over-utah/

              Excerpt:

              “As mentioned up top, tonight was ‘An Evening of Russian Culture’ night at The Rock, as Prokhorov picked this night intentionally since Utah has Russians Andrei Kirilenko and Kyryl Fasenko on their roster. Both FSN Utah and the YES Network simulcast the game in Russia. Events included traditional Russian dance, dress, and Russian food was part of the menu at the concession stands.”

    • kovane says:

      Giuseppe,

      It isn’t hard at all, but it would be useless.

      I don’t agree with you here. It certainly wouldn’t change the balance of forces, but those few who are interested in the Russia’s version could learn about it without any problem then. A simple website and a good presentation are really everything that is required. How much will it cost? $500? I would call it money well-spent. You just won’t believe how hard it was to find all the information even for me, a Russian who knows where to search.

      I agree with Tim on this question, very few

      Be that as it may, it wouldn’t hurt at least to try improving the investment climate.

      When (and if) they’ll stop driving such expensive cars something else will be found or outright invented.

      That can be true, but giving more pretexts is not the wisest course of actions, especially since cops driving too expensive cars is not such a great thing to begin with.

      Unfortunately, finding where these millions disappear, doesn’t mean that they can be recovered.

      Yes, you’re right, that money was laundered long time ago

      On Jan. 17 Italian news agency ANSA reported

      No, they didn’t invent it, just distorted. It’s not Roman Nikirov, but Nikiforov; and he just worked on television as an editor. Here’s the original news.

      • Giuseppe Flavio says:

        OK, “useless” isn’t the right word, I should have said of limited usefulness. Limited to the niche of people interested in more than one point of view, but still worth the limited effort. I’m surprised that there isn’t a summary of the HCM affair in the Russian internet.
        Thanks for answering my question about the ANSA report, it’s not the first time they grossly distort news.

  3. Tim Newman says:

    It certainly wouldn’t change the balance of forces, but those few who are interested in the Russia’s version could learn about it without any problem then. A simple website and a good presentation are really everything that is required.

    Erm, what do you think Russia Today represents?!!

    • kovane says:

      Well, a good program on RT would also be nice. But a presentation is better in the sense that it’s possible to put together a lot of related documents and other hard evidence there. It’s more convincing that way.

      • marknesop says:

        What I found most striking about this case is the way it cast doubt on the accuracy of everything. Each side accuses the other of fabricating its evidence, but what I got out of it is that you now pretty much have to see it happen with your own eyes to know what the true circumstances were. It is now possible to fake just about anything, so suspicion of guilt now devolves to credibility. In the western media market, Russia will always lose that fight, some of which Russia has brougfht upon itself owing to widespread petty corruption and clumsy evidence fakery. But there’s nothing clumsy about this.

        Bill Browder is a powerful symbol in western eyes – a child raised with Communist principles (at least when he was very young) who grew up as an “average American kid” and who “rebelled against Communism by putting on a suit and tie and becoming a businessman”. For such a man to turn out a fraud, a cheat and a party to grand larceny would send all the wrong messages; that solid American values had failed to breed out his inherent criminality. I’m not saying that’s the way it is, because I wasn’t there, and it seems increasingly to be – as I just mentioned – that eyewitness capability is the last reliable truth; I’m saying that the Browder version serves western interests, while the Russian version would be disastrous if accurate. That’s a solid motivation for Bill Browder to be right, because it hits all the sweet spots – Bill Browder carves out a position for himself as a self-starting anti-corruption gun, cleaning up rotten Russian business practices, sacking the corrupt management, dragging Russia into the 21st century single-handed while making a pile of cash in the process. What’s not to like about that? Onward, corporate soldiers!

        Contrast that with Bill Browder using office gossip, rumor and innuendo to gut senior and middle management of companies – in which HCM was a shareholder – in order to catapult the value of HCM shares, letting the Russian government do all the wet work and adding tax evasion to his unsavoury business practices. That wouldn’t play anywhere near as well.

        The part that still remains a mystery to me is why the Russian government and business apparatus would fire all the people Browder suggested were corrupt, just on his say-so, without a proper investigation that might have exonerated them. There are a couple of possibilities. One, of course, is that they actually were corrupt, and Browder’s story – whether by luck or the sheer pervasiveness of mid-level corruption – was accurate. Another is that some or all of the evidence was fabricated, although that would have required considerable effort and some degree of risk. For me, the most likely explanation is that Browder’s method – letting foreign and selected domestic media sources put out the squeal for him based on his tipoffs – put such immediate and direct pressure on the government to do something that investigations were perfunctory and based on a preconception of guilt.

        Either way, you can easily see why Browder was considered a threat to national security. Picture a foreign businessman in the USA, gutting the management of General Motors, Bank of America and United States Steel Corporation, and then riding that wave to billions in net worth. I can’t see that being allowed to go on for too long before “visa problems” cropped up.

        • kovane says:

          To be honest, Hermitage Capital doesn’t fabricate evidence that much, it just uses what’s at hand strategically to create the picture that suits their purposes. You’re right that’s definitely a fight that Russia can’t possibly win, the dice are loaded. Even if the Investigative Committee presented Browder’s written confession, it would be dismissed as fabricated or obtained under duress. You have to give it to Browder, he is very skilled at working with the media and has irreproachable image as well. I see nothing surprising that his accusations were used by someone else, it’s just was expedient at the time; Putin used Browder as a spearhead to topple down former Gazprom master Vyakhirev for example. And yes, I consider Browder’s expulsion to be beneficial for Russia, it just was done in the clumsiest way possible.

        • Giuseppe Flavio says:

          I have the impression that with the current crisis and bailouts the image of businessmen with a tie and suit has been seriously tarnished in the US, especially for those in the financial industry. Perhaps it still applies to Browder because he screwed foreigners, not his compatriots.

          • marknesop says:

            Even had he screwed his compatriots, it would only have blown up in his face if he had been publicly sorry about it. The image of the swashbuckling corporate raider is a romantic one for Americans who have not been personally stung by such a personality, and “Never apologize, never explain” remains a popular business maxim. Not to mention its political disciples.

  4. Misha says:

    RT isn’t quite what some make it out to be. Much of its programming deals with global issues.

    As noted in the last thread, a recent RT show on anti-Semitism is valid. Ditto a show on anti-Russoism, which to my knowledge hasn’t been covered in a single half hour or more RT segment.

    • Igor says:

      IMHO: RT is for English speaking countries. One does not win the auditorium by telling them that they are racists & Russophobes … even if it s true. At least this is not a topic for a foreign channel.

      • Misha says:

        It can and should be doing more to address the kind of inaccurate anti-Russian slants often getting the nod.

        Perhaps they’ve marketing folks stressing other matters for the benefit of ratings. I think there’s still room for shows like a half hour one on anti-Russoism – that need not be dull – relative to the recent RT show on anti-Semitism.

        On international feeds, the BBC and DW frequently make it a point to highlight the concerns of their respective country.

        • Igor says:

          In fact, what you say is , probably, true. As long as the information is presented in a sort of detached form eg. as “this is how we see you treat us” and not,/b> as ” how you should NOT treat us” – it can have the desired effect &, probably, be interesting as well.

          • Misha says:

            Here’s a recent Latynina piece:

            http://www.themoscowtimes.com/opinion/article/raising-patriots-rather-than-physicists/429192.html

            I suspect there might be some misleading comments in it.

            Of course, such commentary rarely addresses the anti-Russian nationalism of others, which can be quite dubious in its views. Note how the English language Kyiv Post frequently runs views in line with anti-Russian/Ukrainian nationalists. In contrast, The Moscow Times doesn’t seem as willing to run patriotically responsible pro-Russian views.

            I continue to maintain that there’s a need for an effectively communicated and responsible Russian patriotism – which (in accordance with Latynina’s article) shouldn’t take away from education in the hard sciences.

            Hence, a two prong approach is helpful inside and outside Russia.

            Kudos to Leos Tomicek and Mark for being among the limited group of non-Russian English language bloggers who sympathize with such tasks.

            The situation is improved by utilizing new and qualitatively sound ideas and sources.

            • Igor says:

              Thanks for the link, Mike. If she did not distort the information, and eg. mathematics becomes an elective subject, then the school reform indeed is a Total Debuilding, Phase II. But I read an argument (not an opinion) by one generally very clever guy who thinks that not having “excessive” education might make people happier & the country – richer🙂 I guess, more “patriotic” too.

              • Misha says:

                Igor, in the US, home education has a good deal of support.

                On the other hand, there’s something to be said in favor of the every day life interaction which (at least comparatively and generally) seems more likely gained thru a good public school education.

                A public school education shouldn’t completely eliminate a good home school education. On a personal note, this point relates to my understanding of history and foreign policy – inclusive of sensing when something might appear off from reality.

                A friend of mine took his kid out of a posh upscale private school and put him in a highly regarded public school for two reasons, having to do with budget and wanting his son to be better experienced with (for lack of a better description) the rougher elements of society.

                • marknesop says:

                  “…in the US, home education has a good deal of support.”

                  Boy, I’ll say. I had my ass handed to me by an angry commenter after a short duel in the comments section of the Washington Post, quite a long while back. It was my impression he (I assume it was a man) was an opinionated boob because of some of his other comments, in which he was plainly guided by misinformation. He mentioned homeschooling, and I jumped down his neck about how it was a tiny movement supported mostly by hillbillies who had difficulty telling the difference between a prospective student and a jug of corn liquor.

                  Looking up information that I don’t already know well is a lesson I never seem to learn, at least not for long. This was such a case. However, things I learn in that way (by having my nose rubbed in them) are things that tend to stick with me afterward. For example, not only is homeschooling big and gaining every year in the USA, grades achieved by recognized state testing tools indicate it is generally at least as effective as public school and superior in some respects.

                  I don’t know where parents find the time or the money to homeschool their children, but by God, it works.

                • Misha says:

                  School daze:

                  Mark, I’ve been of the impression that home schooling is popular among some of the more wealthy who can afford to make the time.

                  In such an instance, it’s important that the kid also gets personal interaction among his/her peers.

                  Offhand, if I’m not mistaken, (could be) in the US, some home schooled kids are allowed to play on public school athletic teams.

                  That issue touches on another crisis in American public schools. The decrease in physical education classes is one of several examples concerning the US becoming more hefty.

                  Leads to an off record remark about some wonk having cholesterol of the brain.

                • Misha says:

                  On that last link, a within reason PC follow-up.

                  There were some Little Rascal/Our Gang episodes that went beyond the pale of decency, that was a reflection of the times. I recall one episode (viewed in the 1960s) where the gang buy a doll for a needy girl. Upon opening up the box with the doll, they see the doll is Black and seek to return it for a White one. The store owners are depicted as having made the change to screw over the buyers. Not exactly the kind of stuff you want a six year old to watch. That particular sequence was later edited out.

                  It has been rumored that Bill Cosby bought the rights to the episodes with that premise in mind:

                  http://www.answerbag.com/q_view/2112953

                  Most of the Little Rascals/Our Gang episodes were decent and enjoyed by many.

                • marknesop says:

                  I loved that show. After I finished school I played in a band for a few years; that often meant late nights, but I was always up the next day in time to watch The Little Rascals. Eddie Murphy’s skit on “The Attempted Assassination of Buckwheat” and his promotion of the album “Buckwheat Sings” cracked me up. But I never thought about the racial component of The Little Rascals, because race was never a big issue for me.

                • Igor says:

                  ..yes, it can be a (libertarian) way – let parents to decide which subjects they can teach themselves & which their kids will learn at school & then let “market” decide what level & which subjects are sufficient. Probably, would mean the death of public education too. ITR, I doubt that “patriotism” is something learned at school. It will be learned automatically, when the living standards become “standard” & the country can demonstrate its a world leader in something other than corruption.

                • Misha says:

                  Mark on the subject of raising kids right, an ongoing issue concerns childhood movie and TV stars. Besides others in more modern times, it has been noted that a good number of the Rascals/Our Gang cast had problems in adulthood. Like yourself, I enjoyed watching them as a kid.

                  Igor, “patriotism” should ideally include an awareness and matter of fact knowledge of anti-Russian BS and how to best effectively answer back. Such patriotism should also be able acknowledge Russia’s shortcomings.

                • Igor says:

                  >Igor, “patriotism” should ideally include an awareness and matter of fact knowledge of anti-Russian BS ‘

                  No arguing with that – just make English a compulsory subject in Russian schools – and teach it well🙂

                • Misha says:

                  Mark

                  A movie with a bit of a Little Rascal/Our Gang flavor that I saw for the first time this past weekend:

                  http://movies.amctv.com/movie/101934/Mayor-of-Hell/details

                  http://movies.nytimes.com/movie/review?res=9801E5DF1338E333A25752C0A9619C946294D6CF

                  The online reviews I’ve seen don’t mention the rather emphasized ethnic stereotyping which is done in an across the board even-handed kind of way – that doesn’t make it especially offensive, as when one group is clearly targeted. Some of the scenes can fit for the kind of ethnic skits done on shows like In Living Color and Dave Chappelle.

                  Regarding the above linked movie in question, James Cagney is great as usual.

                  This comedy he starred in is probably the best Cold War comedy movie of all time:

                  http://www.amazon.com/One-Two-Three-James-Cagney/dp/B00005JKH5

                  Let me know if you feel that there’s a better one.

            • Misha says:

              Minus neocon and neolib leaning views getting the upper hand.

              I support their views being critically discussed in an objective as possible pro and con way.

  5. marknesop says:

    “…reached an international scale with the involvement of the European and Canadian Parliaments – who made a truly unprecedented decision to deny visas to allegedly involved Russian officials…”

    I don’t know if you noticed, but everyone’s favourite jailbird, Boris Nemtsov, called for government to deny entry to the U.S. and EU of the highest levels of the Russian government, in protest of the detention of this Prisoner of Conscience.

    I particularly appreciated his passionate declaration, “They will stop at nothing to preserve their power and money”. He didn’t explain how his 15 days in the jug preserved Medvedev’s and Putin’s fortunes, and he’s a multimillionaire himself. Not to steer the topic back onto Boris Nemtsov, because that was certainly not my intention; it’s just funny.

    • kovane says:

      Yes, and now the EU Parliament is considering the similar measures (bank account freezing and denying entry visas) against Putin and Sechin in connection with their alleged involvement in Khodorkovsky’s case.

      • Yalensis says:

        If they do that, then Russia will need to find some way to retaliate. Maybe cut off their natural gas supplies in the middle of winter? That would teach them a lesson to mind their own business.

  6. Igor says:

    Thank you, kovanne. Looking at this story I now feel that Browder’s PR skills are not that good because the background story itself deserves full budget Hollywood screening – billions dollars “earned”, hundreds of millions stolen only in tax, Russian mafia, bribery, industrial espionage, KGB officers on Lamborghinis, police investigation – all but one of the key witnesses in the criminal case suddenly & conveniently die of heart attacks or they voluntary jump from the balconies… The single surviving one at the same time is desperate to get back to Russia. And until the end of the movie, nobody knows why. Only Browder and a mysterious all-powerful man in Russia, who on the one hand tries to keep Browder away from his target by all possible and impossible means and on the other – does not want to see him dead.

    Maybe Mosfilm should seize the opportunity? Then they could offer Nemtsov the main role.

  7. Nils says:

    This story got me thinking about the Lenta case. Did you read about that Kovane?

    Last year, TPG (Texas Pacific Group) bought a 30 percent stake in the major retail chain Lenta (you know, from the Carrefour like supermarkets). Wihin a few months the people from TPG captured the entire Lenta holding by fabricating a special protocol which stated that minority shareholders had the right to dismiss the current CEO and appoint a new one. After the Russian shareholders started to object (because they brought in a Dutch man who even did not have a work permit in Russia), the Americans even brought in the Russian police to force the issue.

    In the same article, Belkovsky (u know the man who published about Putin’s wealth) accuses the French Vinci group (which is heavily involved in building the road through the Khimki forest) of having a(n) (indirect) hand in the beating of the journalists and continues to defend the project despite of the demonstrations.

  8. peter says:

    So representatives of HCM approached one Oktay Gasanov………… So he decided it would be much merrier to go on without Hermitage.

    kovane, what exactly is the source of this version of events? Could you give a link or two?

      • peter says:

        The second and third articles you linked don’t even mention Korobeynikov, while the relevant part of the first one is based entirely on information from “наш источник, близкий к следствию.” Have I missed something?

        Besides, I couldn’t find in any of these articles any trace of what you claim to be the smoking gun: “The court fees were paid from the accounts in HSBC bank already AFTER Hermitage’s claim about the hijacking of Makhaon, Rilend and Parphenion.” Where does that come from?

        • kovane says:

          Have I missed something?

          Yes, the fact that it’s just the version voiced by the Investigative Committee at a special press conference and then rehashed by journalists, not some gospel truth. And I would certainly love to see the criminal case itself, but for now have to content myself with just that.

          I couldn’t find

          Maybe you wasn’t looking hard enough?

          Quote”После выемки юридических дел этих ООО, произведенных в HSBC банке, было установлено, что право подписи на банковских карточках имеют… все те же якобы ограбленные граждане М. Уилсон, Пол Ренч и господа из их же команды – бежавший из России господин Черкасов и госпожа Бокова. И именно эти лица, заявляя о том, что фирмы у них якобы «украдены», по версии следствия, на деле вовсю продолжали распоряжаться денежными средствами «похищенных» компаний. Во всяком случае, арбитражные пошлины оплачивались со счетов названных организаций даже после «смены собственников».”

          • peter says:

            it’s just the version voiced by the Investigative Committee at a special press conference and then rehashed by journalists

            Please note that the article in “Деловой вторник” (the one with the smoking gun) is dated 23 Sept. 2008, that is a year before Magnitsky’s death and two before Dudukina’s briefing. Isn’t it bizarre that such an important piece of the puzzle has since disappeared without a trace?

            Either way, just to be sure, do I get it right that your version of events is merely an unattributed rehash of the official story? And if so, how does such a bizarre approach to journalism squares with your commitment to “presumption of innocence, jurisdiction and the principle of considering opinions of all parties.”

            • kovane says:

              Isn’t it bizarre that such an important piece of the puzzle has since disappeared without a trace?

              What makes you think that it’s just disappeared? As far as I understand, the case is still under investigation so some new facts may appear. Besides, it doesn’t change much and still doesn’t decisively tie Hermitage to anything criminal.

              your version of events is merely an unattributed rehash of the official story

              No, it’s my version of the events, based on what I gleaned from the official story

              approach to journalism

              And what so bizarre about this approach? By the way, I’m not a journalist, forgot to pay my membership dues.

              presumption of innocence, jurisdiction and the principle of considering opinions of all parties You really don’t see the difference, do you? The EU Parliament already took punitive measures against people involved in the investigation without proving their guilt or even listening to their version. I merely cited all the known facts in the case and threw in my opinion. And I don’t appeal for lynching Browder based only on that. Talk about ГСМ…

              • peter says:

                You really don’t see the difference, do you? The EU Parliament…

                Let’s not get ahead of ourselves, shall we? We’re discussing the difference between what you preach and what you practice, right? How does anything the EU Parliament does excuse your clumsy attempt to pass off one side’s story as fact?

                But OK, if you insist, let’s talk about the EU Parliament too. Parliaments are not criminal courts, they are not bound by the presumption of innocence. Perhaps you should avoid using big words whose meaning you don’t quite understand.

                • kovane says:

                  discussing the difference between what you preach and what you practice, right?

                  Could you describe that difference?

                  They are not bound by the presumption of innocence.

                  Yes, they are not courts, but those principles are universally accepted as good and just. So it’s not a crime, but rather an unsavory action.

                • marknesop says:

                  Speaking of a clumsy attempt to pass one side’s story off as fact, I see Tony Blair is back in court for…uh…trying to pass one side’s story off as fact. It’s heartening to see the British at least pursuing the matter, instead of just waving it off as water under the bridge.

                  I suppose everybody gets something different out of a story, but what I got out of Kovane’s piece was that one side’s version is just as likely to be true as the other’s. As alluded to in the mention of Blair, above, it wouldn’t be the first time a huge demographic fell for a mix of lies and slick PR.

                  For Yalensis, Sinotibetan and others interested in languages, genetics and historical population movement, there’s another new message on “Are Slavs Stupid?”, from a commenter named szopeno. Looks interesting and, as usual for the subject, introduces more questions than it answers.

      • peter says:

        Sorry, my bad, I have found your smoking gun in the third article — but it too seems to be based on unnamed sources.

  9. Yalensis says:

    Back to the topic of Nemtsov, here is an article I saw this morning in DNI.RU:

    http://www.dni.ru/polit/2011/1/24/205426.html
    Summary: Wikileaks published secret telegrams written by American ambassador to Russia (John Beyrle), detailing his meetings with Nemtsov and other political dissidents. These meetings occurred throughout 2010. Most discussions concerned “how to prevent Putin from returning to power.” Most scandalous point raised in article was that dissidents seemed to beg Washington to bring about some kind of “extraordinary situation” or catastrophe within Russia. Only then could Putin be gotten rid of; otherwise, he was impregnable. Americans advised dissidents that it was not their job to create such a situation; that was the job of the NGO’s themselves, given that they had taken so much $$$ from American taxpayers. American diplomats sternly lectured opposition: “De-Putinization” is a job for Russians themselves.

    • Misha says:

      “Americans advised dissidents that it was not their job to create such a situation; that was the job of the NGO’s themselves, given that they had taken so much $$$ from American taxpayers.”

      *****

      The American government is involved in allocating such grants that come via taxes. Be interesting to see a survey breakdown on the amount given to such orgs – inclusive of funding from corporate and individual donations.

    • Giuseppe Flavio says:

      Hi Yalensis,
      on this issue there is an interesting article by Gleb Pavlovsky on RT.

      • marknesop says:

        Hey, Giuseppe; a new comment addressed to you is in the comments for the “Breaking the Apple-Pie Ceiling; Russia’s Accession to the WTO” post. Appears to be from a fellow Italian, who would like further discussions on genetics and origin of races.

        • Giuseppe Flavio says:

          Hello Mark,
          I’d noticed it already, because of my subscription to the comments on every post I’ve commented. Initially, I was undecided between ignoring his comments or just troll a little with him. I can’t take a black supremacist seriously and his “evidence” is questionable. It is like taking a portrait of Pushkin grand-grand father and claiming that Russians are of sub-Sahara descent.
          But then I realized that the link to his name in the second comment goes to a site that promotes a Ponzi scheme, and concluded that he is just trying to involve people in it.
          One last note. The name “Antoniu Ribbillarisi” is of Sicilian origin. The Italian name Antonio becomes “Antoniu” in Sicilian dialect and “Ribbillarisi” means “to rebel”.

    • cartman says:

      If they are seeking support to “shock” citizens so they can take power, Nemtsov et al should be arrested and tried as terrorists.

      • marknesop says:

        Sounds a little like something out of Project For a New American Century’s PDF report, “Rebuilding America’s Defenses – Strategy, Forces and Resources For a New Century”. From page 51; “Further, the process of transformation, even if it brings revolutionary change, is likely to be a long one, absent some catastrophic and catalyzing event – like a new Pearl Harbor.” Many suggested the neoconservatives who aspired to political power at the time the report was submitted were advocating for such an event – sort of a “you can’t make an omelette without breaking eggs” philosophy that would likely see some deaths and destruction, but would make the country get off its lazy ass and lead the world as it was destined to do. In any case, 9-11 was embraced for the opportunity it was.

        Wikileaks, though – however interesting – isn’t a particularly reliable source for policy decisions. Often it just reflects hopeful speculation in which officials were engaging at the time.

        • cartman says:

          People who are very orthodox about the free market are not concerned with democracy or freedom itself. They used the violence in Chile to force their own experiment on that country. Nemtsov and his alliance must be aware of their unpopularity, so it would seem their only recourse is violence and terror (like Yeltsin’s was). Neoliberals are on the same branch level as the Bolsheviks, even if they come from different trees.

  10. Giuseppe Flavio says:

    I’ve just read the news about the terrorist attack at Moscow’s Domodedovo airport. I would like to express my sincere condolences to the Russian people and hope that none of the commenters of this blog or their relatives was a victim of the blast.

    • marknesop says:

      My niece went through Domodedovo on their way back to St Petersburg just a few days ago, but she’s home now. What a terrible thing! Some sources say a suicide bomber, some say the explosion originated in a baggage carousel. It’ll take a day or so before the reports begin to be based on investigation instead of hysteria. It’ll be interesting, in light of the recent riots and the sharp divisions on race which followed, to see who claims responsibility.

      • Yalensis says:

        @Mark, I am very relieved that your niece is okay. Many innocent people were torn apart in Domodedovo attack by shrapnel such as ball bearings, etc. I was just scanning through the latest, and the newspapers are now saying they think the suicide bomber was a female, probably one of the Caucasian “Black Widows”. The case will be easier to solve if they are able to find the bomber’s body parts. If you recall, the Moscow metro bombings were mostly solved, and they were able to identify the perps based on the fact that the head of one of the bombers survived the explosion intact. Authorities showed photographs of the head of this woman, and her father identified her. Then it turned out that this father had raised a whole family of jihadists, both daughters and sons, and authorities were able to get at least a partial handle on this particular cell, based on their inter-relationships. Re. Domodedovo, Medvedev has just pointed out some glaring security lapses there that need to be fixed ASAP. Liberasti press were very quick to jump in and claim that this attack shows Russia is not qualified to host Olympics or FIFA, because cannot guarantee security of foreign guests. I don’t want to get paranoid and say liberasti are in cahoots with the Caucasian jihadists; but it can be said that they do take advantage of every criminal act to incessantly hammer home their own ideological points…

        • Misha says:

          While showing little if any fondness for their country.

          This has been done while uncritically repeating the standard lines among neolibs and neocons that downplay some flaws to be found in the West.

        • marknesop says:

          The report I read (MSN) said they had found the head of the bomber (heads appear to be pretty durable, don’t they? In the case of the subway bombers, if I recall correctly, the head of one was also found) and it was a male who “walked into a loosely guarded area”. It also reported Medvedev would cancel his visit to Davos today, where he had planned to promote Russia as a safe and profitable foreign investment alternative. So, in that respect, it was a successful terrorrist action, since it disrupted the business of governance and progress. I hope the family and relatives of the tool who is now just a head think it was worth it. As terrible as the Chechen wars were, they seem to be agitating for another one as soon as things begin to settle down.

          I agree that there is no evidence to suggest the liberal opposition figures are involved in a “Pearl Harbor” collusion with Islamic jihadists to seize power. For one thing, it hasn’t a hope of succeeding. For another, I don’t doubt their own brand of patriotism, and I’m confident they wouldn’t do such a disgusting thing. But you’re right that they will almost certainly take advantage of it, and hope to profit politically by it. Something along the lines of, this was a terrible thing, and I grieve with the Russian people, but it’s just another example of (insert undesirable quality here) in Medvedev/Putin’s Russia.

          My niece actually went through Domodedovo only the day before, returning from India.

  11. Pingback: It’s Not What You Know, It’s Who You Know: Deconstructing William Browder | The Kremlin Stooge

  12. moskandogg says:

    very interesting. yet another interpretation. I guess, we’ll never know the real truth…. coz it’s too complicated and /// well, whatever. nevertheless, Magnitsky Act is going to be ratified soon, in less then a month. I analyze some of the things connected with MA in my blog, pls comment, read etc:
    http://moskandogg.livejournal.com/131618.html

    so far, I’ve found this: In a new wild twist of my investigative blogging I uncover possible (!) connection of Sen. Ben Cardin (D), sponsor of Magnitsky Act in US Congress, with US shale gas extraction companies. I do that by a simple googling of ‘cardin shale gas’ which results in finding of a recent interview of Cardin, where he mentions an importance of some new gas shale in PA, USA. How can this be possibly connected with Magnitsky Act and US shale gas extraction companies wish to export gas to EU, where Gazprom has already strong market position? Also, why is Cardin-Magnitsky List became so trendy all of a sudden, 3 years after it was introduced internationally and could this, perhaps, has to do something with the upcoming US presidential race? Interesting, ain’t it? 8-)))) Stay tuned to find out!

    Earlier in this blog:
    Russian government takes stupid “retaliative” action ahead of Magnitsky Act adoption /
    What Russia can trade for Magnitsky Act block in US Congress: Syria, Iran, Rosneft
    http://moskandogg.livejournal.com/131363.html
    Will Magnitsky Act become a reason for regime change in Russia?
    http://moskandogg.livejournal.com/130876.html
    News on Magnitsky Case, new PR attack on Navalny, Magnitsky List
    http://moskandogg.livejournal.com/131222.html

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  14. Pingback: Propaganda & Mystery in Russia’s Browder-Magnitsky Case · Global Voices

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  18. bothandeach says:

    Worth reading, and from a few other pieces, close to the truth. Certainly the US / Canadian / d’autres sanctions against Russia are stupid.

  19. Pingback: THE BROWDERS FROM US COMMUNIST PARTY CHIEF TO HEDGE FUND MULTI MILLIONAIRE | Wide Awake Gentile

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  21. Pingback: MR BROWDER, IL NEMICO NUMERO UNO DI PUTIN | micheletocci

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