“In the US, it’s called The
Magnitsky Act, formally known as the Russia and Moldova
Jackson–Vanik Repeal and Sergei Magnitsky Rule of Law
Accountability Act of 2012. “The law is named after Sergei
Magnitsky, a Russian lawyer and auditor who in 2008 untangled a dense
web of tax fraud and graft involving 23 companies and a total of $230
million linked to the Kremlin and individuals close to the
government. Magnitsky was the target of investigations, arrested by
authorities and kept in jail without charges. He was beaten and later
died under mysterious circumstances in jail just days before his
possible release.”
(https://www.washingtonpost.com/news/the-fix/wp/2017/07/14/the-magnitsky-act-explained/?utm_term=.3ed67795fba5)
A similar law was enacted in Canada in
October and what it does is ban corrupt officials of foreign
governments from doing business in Canada, freezes any assets they
have in Canada and prohibits their obtaining of visas to visit
Canada. In Canada, the list includes mostly Russians but the current
president of Venezuela is also on the list.
There’s considerable evidence that
the Trump Tower meeting among Donald Trump Jnr. and others was
primarily about the hated Magnitsky Act, suspicion being that a
trading of help in electing Trump could end up making the Act go
away.
Bill Browder was central to the story
of Magnitsky’s death and to the enactment of Magnitsky Acts in the
USA and Canada (as well as a few other countries.) Red Notice: A
True Story of High Finance, Murder and One Man’s Fight for Justice
is Browder’s version of
events, a version in which he is the one man fighting for justice for
Sergei Magnitsky.
Browder’s Russia
involvement began when he discovered that in the privatization of
Russian corporations, shares were being offered at ridiculously low
prices. He set up a hedge fund named Hermitage Investments,
drew in investors and bought up shares in the prospect of enormous
profits when they would edge up to their true value. The fund grew
into billions, but in comparison to what the “oligarchs,” (the
wealthy Russian market manipulators that Browder alleges include
Putin) could command, it was probably never more than a small player.
It was
the attack on Hermitage
that drew Magnistsky, a Russian lawyer and accountant, into a drama
that would result in his demise. Browder had incorporated a number of
shell companies in Russia to do his business and at one point, these
were raided by police, assets seized (or would have been had not
Browder already moved them off shore) and Magnitsky was hired to
represent Hermitage
since Browder had been banned from entering Russia. In his
investigations, Magnitsky discovered (according to Red
Notice) that the actions against
the shell companies gave Russian oligarchs an opening to have the
taxes paid previously by these companies—to the tune of 230 million
dollars—refunded, and the money distributed among members of the
cadre that set up this whole phoney scam.
Magnitsky was
charged then with fraud and tax evasion, jailed and tortured in hopes
of obtaining a confession on trumped-up charges. He died just before
his scheduled release, the assumption being that no real evidence
could be found against him.
And so began
Browder’s campaign to punish those benefiting from this fraud on
the Russian people through the tax system.
Browder’s
convincing narratives could easily lead to an impression that
cheating and fraud, money laundering and the accumulation of vast
wealth by a few is endemic to the Putin regime and his cohort. What
isn’t documented in Red Notice
is the ethics of high finance generally. In a pristine world, would
speculation on currency, hedge fund operations, short-selling and the
many other tricks that allow people to amass wealth without ever
producing a product or service of value even be permitted? Canadians
are finding out to what degree their own wealthy and powerful are
able to hide their incomes to avoid carrying a fair tax burden. It’s
generally accepted that there exists in virtually every
country—democratic and
totalitarian—elites with the ability to profit on the backs of
workers whose taxes are deducted before they ever cash their pay
checks.
The
fall of the Soviet Union and the opening of the doors to capitalism
created an avalanche of opportunities in Russia. Much as citizens
might relish the lifting of restrictions on travel, religion, speech,
private ownership, etc., trading political hegemony for capitalist
free enterprise can come to look more like license
than freedom. Wealth
is power, and in the Western world today, the amassing of wealth in
the hands of a few has clearly demonstrated the folly of allowing
that to happen. There inevitably comes a time when a few citizens
have accumulated such a preponderance of wealth-power that they can
effectively hold even elected governments by the short and curlies.
Witness the freshly passed tax bill in the USA and the Canadian
governments stalling on the issue of off-shore tax cheating.
Red Notice
is a fascinating read; literate for the most part and intriguing—if
the machinations of high financial dealing is your cup of tea. But
can a story told by an involved principal ever be trusted? There have
been so many incidents of perfidy coming out of the Putin government
that Browder’s characterization of that regime seems plausible. The
poisoning with plutonium of Alexander Litvinenko, the Olympic doping
scheme and the occupation of Crimea are just a few glaring examples
of the style of governance presided over by a former KGB operative.
On the other hand, Russia has a large, well-educated citizenry . . .
and secret ballot elections. They must have made a judgment as they
cast their ballots, and that judgment has to carry some weight.
What
is it about Russia that Browder leaves out, probably doesn’t have
even an inkling of? I would like to balance Red Notice
with an account of these events by a Russian journalist.
Nevertheless,
there is no doubt that Sergei Magnitsky was found dead, bruised and
emaciated in a Russian prison. That’s probably enough evidence to
draw a safe conclusion about the Russian regime; all is not well over
there and being wary in our dealings with Putin is probably a good
idea.