Putin’s Hunger for Money

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S1: Bill Browder wanted to make lots of money, but not for the usual reasons.

S2: It was a strange motivation. I. I come from an unusual American family. My grandfather was the head of the Communist Party of America, and my father was a left wing, left leaning professor. And so in my teenage rebellion, I decided to put on a suit and tie and become a capitalist to upset my family.

S1: He went to Stanford Business School and he happened to graduate the same year that the Berlin Wall got torn down.

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S2: And I had this epiphany one day, which is that if my grandfather was the biggest communist in America and the Berlin Wall has come down, I’m going to become the biggest capitalist in Russia. And that’s what I set out to do.

S1: He eventually did just that. Over about a decade, Browder made billions and became the largest foreign investor in Russia by buying up cheap shares in newly privatized, wildly corrupt Russian companies. His strategy was to expose the companies corruption and then watch their valuations rise as they went legit. This worked great for a while until powerful people in Russia, in particular, Vladimir Putin, decided they didn’t want Browder shining a spotlight on them and getting rich in the process. In 2005, Browder got booted from Russia permanently. Not long after, Browder’s lawyer, a Russian named Sergei Magnitsky, who helped Browder expose corruption, was arrested, jailed, tortured and eventually killed by Russian authorities. Browder has since made it his life’s calling to avenge Magnitsky’s death. Along the way, he’s become such a thorn in Putin’s side that the Russian president took a moment during a 2018 Helsinki press conference with President Trump to suggest that America should hand Browder over to Russian authorities.

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S2: For instance, we can bring up the mister Mr. Browder in this particular case.

S1: President Trump had no objection to that plan. I think that’s.

S2: An incredible offer. Thank you. I thought, my God, the most powerful man in the free world. President of the United States. Trump was offering to hand me over and I expected that, you know, any moment for blacked out Suburbans from the Department of Homeland Security would pull up and grab me and put me on a rendition flight to Moscow. And I would then be tortured for a while to get me to confess to various crimes I didn’t commit. And then after they got those confessions, they would then kill me.

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S1: For years, Bill Browder has been telling the world that Vladimir Putin and his oligarchs are a scourge on humanity. But a lot of the world didn’t pay much heed until Putin invaded Ukraine.

S2: I would say that I’m beyond furious. I believe that if governments, Western governments, the U.S. government, the British government, the European Union had been tougher on Putin for all sorts of terrible things that he did, that he might have had a different calculation about doing this unbelievably sadistic mass murder of Ukrainian civilians.

S1: Today on the show, Bill Browder got an early up close look at the evil Vladimir Putin could do. What does he think Putin with his back against the wall will do next? I’m Seth Stevenson filling in for Mary Harris. You’re listening to What Next? Stick around. The murder of Bill Browder lawyer Sergei Magnitsky in 2009 has been the catalyst for Browder’s activism against Russian elites for years. Magnitsky came to the attention of the Russian state when he uncovered a scheme that funneled hundreds of millions of dollars in taxes that Browder had paid away from the Russian government and into the pockets of corrupt officials. Magnitsky didn’t keep quiet about it.

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S2: And Sergei was a very smart guy, smartest lawyer I knew in Russia. And he discovered this. And he was really shocked because it wasn’t just a crime against me. I mean, I was the client. He was my lawyer. But he discovered that a crime had been committed against his own country. Nearly a quarter of $1,000,000,000 stolen. And that really upset him. He was really shocked by that. And so he did something which almost no other Russian would do. He went and gave sworn testimony against these corrupt police officers to the Russian state investigative committee, which is their version of the FBI. And he named all the names and somehow he believed that this must be a rogue operation, that Putin would have never allowed this. And what he discovered was that it wasn’t just a rogue operation. It was Vladimir Putin was was involved. And he ended up getting arrested after he testified. He was thrown in jail. He was then tortured maliciously and horribly for 358 days. He got very sick in prison. He was refused medical attention. He ended up losing £40 and developing pancreatitis and gallstones. And on the last night of his life, on November 16, 2009, he went into critical condition. And that night the authorities put him into an isolation cell that chained him to a bed and eight right guards with rubber batons beat him until he was dead. That was he died at the age of 37, 12 years ago. And that’s, you know, the the unbelievable bravery that he demonstrated when he was in prison. They they constantly wanted to get him to sign a false confession, saying he stole the $230 million and did so in my instruction. And he constantly refused. He was just this, you know, for him, the idea of perjuring himself and bearing false witness was more painful than whatever physical pain they were subjecting him to. And that cost him his life.

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S1: How quickly after he died did you decide that you were going to avenge, that you were going to make sure that it meant something?

S2: Well, it took me about an hour. The first hour, I was in a state of shock and just panic and heartbreak and hysteria. And then when it finally settled in that he was killed and he was killed because he was my lawyer and he’d be alive today if he hadn’t been my lawyer, I made a vow to his memory, to myself, to his family that I was going to put aside all of my other activities and stop doing business. And just about all of my time, all my resources and all of my energies to going after the people who killed him to make sure they face justice. And that’s what I’ve been doing for the last 12 years.

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S1: You’ve been described as an accidental activist. Do you think it was accidental that you’ve made this your life’s calling?

S2: Absolutely. If I hadn’t if Sergei Magnitsky hadn’t been murdered, I would be doing something different. I would probably just be, you know, a conventional businessman, as I had been before. But his murder completely broke my heart and changed my life.

S1: You pushed for a bill in the United States called the Magnitsky Act as a way of honoring him and maybe avenging him. What does the Magnitsky Act do and why is it a fitting way to punish the people who are responsible for Sergei Magnitsky death?

S2: Well, originally I wanted to get the people responsible for killing him to face justice for murder and torture. But the Russian government circled the wagons and they exonerated everybody involved. Vladimir Putin even got involved in the cover up personally, and it became obvious that there was never going to be any chance of justice inside of Russia. So I said, Well, how do we get justice outside of Russia? And I came up with this idea, which is that these people killed Sergei Magnitsky for $230 million. This was this tax rebate fraud and the money that they stole they don’t like to keep in Russia because as easily as they stole it, it could be stolen from them. And so I went to Washington and I met two senators, a Democrat from Maryland named Benjamin Cardin and a Republican from Arizona, the late John McCain. And I told them the story of what happened to Sergei. And I said, can we freeze their assets and ban their travel? They said, yes. And that became known as the Magnitsky Act, named after Sergei Magnitsky. And it passed in the Senate two years later in 92 to 4, that passed the House of Representatives with 89% and became a federal law on December 14th, 2012. And it’s now been expanded to become a global Magnitsky Act, applying not just to Russian human rights violators, but others. It’s now been adopted by 33 other countries. It’s remarkable, even more so, that it was the template that’s now being used to sanction all the killers from the Putin regime and for their murders in Ukraine.

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S1: Why should ordinary Americans care about the Magnitsky Act? Why shouldn’t they think this is a personal crusade? You trying to avenge the death of a friend?

S2: Well, that is what drove me to pass the legislation. But the legislation goes way, way, way beyond. Sergei Magnitsky now applies to the Chinese officials involved in the weaker genocide in Xinjiang. It applies to the generals in Myanmar that are responsible for the Rohingya genocide. It applies to various African warlords. It applies to all sorts of bad people. Every American should love this. It’s like good versus evil. There’s really nobody who can think that there’s anything wrong with the Magnitsky Act because it’s the one tool that exists to right wrongs. And it might be named after Magnitsky because I was the one who pushed it. But every victim, everywhere in the world is just so happy to have some outlet, some way of writing a wrong. I don’t think anyone would doubt that.

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S1: The Magnitsky Act popped up in the news here in the U.S. when the story broke about that infamous meeting in Trump Tower during the 2016 presidential campaign where Donald Trump, Jr Jared Kushner and Paul Manafort all met with a Russian lawyer and they were maybe hoping to get dirt on Hillary Clinton. But it turned out that what the Russian lawyer wanted to talk about was the Magnitsky Act. Is the Magnitsky Act sort of a Rosetta Stone for understanding Russia’s interference in the 2016 election?

S2: It was the main driver. So after the Magnitsky Act was passed, Vladimir Putin went out of his mind. He just got apoplectic. A ban, the adoption of Russian orphans by American families as one way of protesting, effectively killing some orphans, because these are orphans that are often sick and needing medical attention, which they would get from these American families and wouldn’t get in Russia. So killing his own orphans to protest piece of legislation, he made it the single largest foreign policy priority to repeal the Magnitsky Act. And as you mentioned, he then sent this strange woman who represented his interests to the Trump Tower right before Trump was elected, to ask if Trump will repeal the Magnitsky Act. I mean, what’s so important to him? And I think we’re now seeing why it was so important to him, because he knew that his own money would be frozen someday. And this is happening now. And so he probably knew in advance he was going to do something so heinous and so horrific that this legislation was going to be existentially threatening to him. And here we are and it is.

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S1: We’ll be right back. Vladimir Putin is obsessed with repealing the Magnitsky Act because according to Bill Browder, the sanctions it’s created are hitting Putin in his pocketbook. That’s because with the patronage system Putin imposes on Russia’s elite. Any seizure of oligarch cash ultimately means less cash for Putin.

S2: Every oligarch who exists in Russia, and I should say who’s allowed to exist at the pleasure of Vladimir Putin, is required to give 50% of their winnings to him. And if they refuse, then then he takes 100%. And so he has become far and away the richest man in the world because of his ownership of all the oligarchs or half of the oligarchs assets, I should say that’s been his big project for the last 20 years, is just getting as rich as he possibly can.

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S1: How did you learn this story about Vladimir Putin taking half the winnings? How did you get the details of that?

S2: Well, so what happened was the way he created this scenario, was he arrested the richest oligarch in Russia at the time this is 23, was a man named Mikhail Khodorkovsky. He was the owner of an oil company called Yukos. He arrested him off his private jet in Siberia, puts him on a trial. And in Russia, when you go on trial, you sit in a cage. And then he allowed the television cameras to come in and film the richest man in Russia sitting in a cage. So imagine you’re one of these other oligarchs and you watch this on TV. What’s your natural reaction going to be? You know, you don’t want to sit in that cage yourself. It’s a one by one by one. All these oligarchs went to Putin and said, what do we have to do to not sit in the cage? And he said, 50% now. And to answer your question, how do we know that it’s a not well-kept secret? Everybody who was in this world talked about it and acted on it. And we can see many different evidence based examples of them acting on it. There’s a palace that Putin owns, one of many. This was on the Black Sea. And this one, all the financial arrangements have been exposed. And what we see is that oligarchs of different shapes and colors paid for it, paid for his $1.3 billion house. There’s another great example comes from the Panama Papers, where in Russia there is a person who plays the cello. His name is Sergei Roldugin. And according to the exposé in the Panama Papers, this Sergei Roldugin got a net worth of $2 billion. And obviously, it raises some very serious questions where and why does a musician have so much money? Cellist I mean, the next richest cellist, Yo-Yo Ma, has got 15 million. How does this guy get 2 billion? And then what we discover is that all these payments came through from oligarchs and Russian state banks. Huge amounts of money. $2 billion. And then the question is, why were these people be giving all this money to to this cellist? And the answer is because this cellist happens to be Putin’s best friend from childhood, that he introduced Putin to his first wife, godfather of Putin’s daughter. And so this cellist is owning the money in his own name. He’s just a front man for Putin, Putin’s nominee, his proxy.

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S1: You’ve studied Putin as much as maybe anybody. This war in Ukraine, it seems to have sprung kind of from the aid of Vladimir Putin. Why did he want this war?

S2: Vladimir Putin uses war as a way of solidifying his power so he doesn’t get overthrown. If you look back over the years, he’s fought three wars, one in Georgia in 2008, one in Crimea in eastern Ukraine in 2014, and one now. And if you look at his approval ratings, pre-war, post-war, pre-war, what we saw is his approval ratings were flagging to such an extent that I think he was genuinely worried that he might be overthrown. Now, these numbers are not that low. Even when they’re flagging, they’re like 61%. But one has to understand that when someone is approached by a stranger saying, do you support President Putin, you’re not going to say no. But after these invasions and it’s just uncanny, looking at the charts, the numbers go up into the eighties. And so I believe that the main purpose of this war and reason why Putin is motivated to do it has nothing to do with NATO enlargement, has nothing to do with Ukraine wanting to join the European Union. This is all about Vladimir Putin desperately trying to stay in power.

S1: Do ordinary Russians bear any responsibility for letting Putin become so powerful and or for the things that he does with that power?

S2: Well, a lot of Russians now, with their high approval ratings, are genuinely excited by all of this brutality that he’s perpetrating. It’s hard to say, though, you know? I mean, they don’t the Russians are fed a diet of misinformation and all sorts of un factual things about what’s going on. And so it’s kind of hard in a certain. Way to blame Russians, but at the same time one can blame them because if you listen to some interviews being done to regular people on the street and the terrible things they say by Ukrainians, it’s kind of hard to be sympathetic at all. But there is one point, which is Russia was supposed to be a democracy where people had a choice. And Putin eliminated that choice by either killing, imprisoning or exiling anybody who was possibly popular against him. And so the Russian people have never had a choice in their kind of had Putin forced down their throat by Putin himself.

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S1: You’ve been very prescient about a lot of things when it comes to Russia. Can you tell us how you see this war in Ukraine ending? Maybe you can give us a best case scenario in a worst case scenario.

S2: Well, there’s definitely a different scenarios. The very best case scenario, which I don’t think has a huge probability but has some probability, is some Ukraine winning the war. Ukraine decisively beating back Russia so that they have to cross over their borders. And that means getting them out of Crimea and that means getting them out of eastern Ukraine. And that means killing all the the soldiers that are sort of occupying different parts of the country. If that were to happen, then I think Vladimir Putin would end up losing power. The Russians demand a strongman. They demand a winner. They have no tolerance for a loser, particularly one that’s cost them so much money. And that has to be our big objective in the West is to support Ukraine in winning this war. And the other possibility is Russia wins the war. And if that were to happen and that could happen even with all these terrible things we see on TV, if Russia brutally uses nuclear weapons or chemical weapons, he might somehow succeed. And if he does, that’s not the end of our problems. Putin It just means he moves on to Poland or Estonia, and then we’re at war with him because we’re members of NATO. And so that also has a I think it’s a low likelihood scenario because Ukrainians are fighting so well. I think the most likely scenario is more of the same, that this is like an unending conflict with all sorts of horrible things all the time. And sadly, that’s the highest probability scenario. And I think this thing could go on for a long time. Years, years and years. I mean, we all think of the invasion as starting on February 24th. But the reality is that the invasion started in 2014. They had a different name for these people. They call them Russian separatists. But for all intents and purposes, they were just Russians invading eastern Ukraine. And so that’s been going on for eight years. There’s no reason to think that anything less than that will be happening here.

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S1: What would it take to get Vladimir Putin out of power?

S2: I think the main thing is a decisive victory of the Ukrainians. That’s the one thing that could get them out of power. I don’t think the oligarchs will get them out of power because they’re all too scared of being killed by them. And I don’t think that there will be a palace coup that will take him out of power because he’s constantly looking for these disloyal people. I think what will get him out of power, as if the Russian people have had enough of him because he’s a loser. And that’s what we have to help help them create the image of Putin as loser.

S1: One thing that’s happened as a result of your activism against Putin and the Russian oligarchy is that you’ve put yourself at risk. You’ve had Interpol warrants issued on you by Russia. You’ve been arrested. You’ve had some concerns about being assassinated. What kind of security do you need for you and your family to be safe these days?

S2: Well, the kind of security that I won’t discuss on an open channel, because I don’t want to have my adversaries learn my means and methods for staying alive. But the answer is that a lot of things I have to do which are different than what most people have to do in order to not give them an opportunity. There’s this expression I’ve got to be lucky every day. They only have to be lucky once. I’ve been lucky up until this point. I they haven’t got me, even though they’ve tried. But that doesn’t mean that they won’t be lucky at some point.

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S1: Given that doing this kind of activism can put your life in danger, maybe even put your family’s lives in danger. Why is it worth that extreme risk? Why is it that important to you to continue doing this?

S2: Here’s what they did to Sergei Magnitsky was so unforgivable. He was fighting fighting on my behalf. They were trying to get him to confess and write a false confession and to name me. And he stood strong. And I can’t, you know, in a much more dangerous situation. And there’s no way I can live with myself if I were to capitulating. What kind of man would I be? Not not the kind of man that I want to be.

S1: Bill Browder, thank you for coming on the show.

S2: Thank you.

S1: Bill Browder is the founder and CEO of Hermitage Capital Management. His new book is Freezing Order A True Story of Money Laundering, Murder and Surviving Vladimir Putin’s Wrath. That’s the show. What next is produced by Mary Wilson Carmel Delshad and Elena Schwartz with major help from Anna Rubanova and Sam Kim. We are led by Alicia montgomery and Joanne Levine. I’m Seth Stevenson filling in for Mary Harris. Lizzie O’Leary will be in your ears tomorrow and I’ll be back in this feed on Monday. Talk to you then.