Alex Krainer (AK), who is also a hedge fund manager, wrote the book "The Killing of William Browder” deconstructing Browder’s narrative. Alex has kindly agreed to be interviewed for the Strategic Culture Foundation (SC) and present his opinion overall Magnitsky-Browder affair.
SC: In September Canada’s House of Commons passed its version of the Magnitsky Act by a vote of 277 to 0. Prior to that a pretty similar version of this Act passed the US Congress and the Council of Europe. What is your take on it? Can you tell us why Mr. Browder is spending so much time and money to lobby this act around the world?
AK: Indeed, Bill Browder has been remarkably prolific and efficient with his political lobbying to get these laws passed in Canada as well as through the US Congress and the Council of Europe before that. But the truly extraordinary aspect of his lobbying is that it is based on a narrative which appears very dubious, to put it politely. Browder claims that he and his Moscow lawyer Sergei Magnisky uncovered tax fraud conspiracy perpetrated by a network of corrupt Russian government officials, that Mr. Magnitsky blew the whistle on this conspiracy and that to silence him, these officials had him imprisoned and ultimately killed. Browder claims that his lobbying is a crusade for justice for Sergei Magnistky and for human rights in general. Accordingly, the sanctions imposed by the US and Canada on Russian officials allegedly responsible for Mr. Magnitsky’s plight were ostensibly motivated by human rights concerns. But that whole strange business entirely hinged on Mr. Browder’s story and next to no due diligence on the part of these western law-makers. Even a rudimentary fact-checking should have uncovered numerous problems with Mr. Browder’s narrative.
SC: Could you please elaborate?
AK: Sure. Firstly, Browder continues to insist that Mr. Magnitsky was his lawyer, but Mr. Magnitsky was an accountant. Second, Mr. Browder alleged that Magnistky was the whistleblower in a government tax fraud conspiracy but this also turned out not to be the case. Thirdly, Mr. Browder continues to claim – falsely – that he was not under investigation for large scale tax evasion in Russia and instead characterized investigations against him as politically motivated persecution. He had been investigated for tax evasion since 2004 and those investigations found him guilty of illegally using a tax-avoidance scheme that Sergei Magnistky helped him set up. He further claimed – as he described in his book, that Magnitsky was murdered by a group of eight policemen in full riot gear who beat him with batons for more than an hour. This also turned out to be false and Browder subsequently changed his story to claim that Magnitsky died chained to a bed. Also, Browder falsely claims that Sergei Magnitsky was posthumously tried on trumped up charges and convicted in Russia together with Mr. Browder himself. In truth, only Bill Browder was convicted of fraud and tax avoidance.
SC: But it was widely reported at the time, in 2013, that Magnitsky was posthumously convicted of masterminding a massive tax evasion scheme?
AK: This was indeed widely reported, but incorrectly. We need to be precise here. Under Russian law, an investigation of a deceased suspect may only continue for posthumous acquittal and not for conviction. That is, unless the suspect’s immediate family petitions to have the case closed due to death. But this is effectively the opposite of acquittal. In Mr. Magnitsky’s concrete case, it seems that his mother, Natalia Magnistkaya – at her lawyers’ advice – declared in writing that she did not want the case against her son closed. The case thus remained open but the investigators’ findings were not in Mr. Magnisky’s favor so he did not obtain an acquittal. Western newspapers interpreted this absence of acquittal as a conviction, but these are two very different things. In fact, the court convicted only Bill Browder and not Sergei Magnistky.
SC: If all this is true, how is it possible that US Congress, the Council of Europe and Canadian Parliament all failed to investigate Browder’s story?
AK: Well, this is the mystery. Perhaps it is a grave case of willful blindness. Somehow, Bill Browder has been able to persuade them and at the same time suppress those who pointed out the flaws in his narrative. First, Russian film maker Andrei Nekrasov made the film titled "Magnistky Act – Behind the Scenes,” which was initially produced with Browder’s support and cooperation. But in the process of making his documentary Nekrasov, who had become famous for being critical toward Putin’s government, started uncovering major flaws in Browder’s tale. Upon his own investigation, his film ended up a devastating and highly convincing takedown – not of Vladimir Putin’s government but of Bill Browder himself. However, heavily lawyered-up Browder managed to suppress Nekrasov’s film so that many of its public and private screenings ended up cancelled. To this day the film remains unavailable.
SC: This is all rather amazing – how can one man have such power to censor content that doesn’t suit him in the West that prides itself on freedom of expression.
AK: I believe that this may be because Browder in fact is doing the bidding of a larger network of powerful players who have participated in the wholesale pillaging of Russia during the 1990s. Through investing, tax evasion, and activities – legal or illegal – Browder may have made a hundred, or a few hundred million dollars. But overall, at least $200 billion and possibly triple that, was taken out of Russia, much of it illegally. Likely, the whole point of Browder’s efforts today is to lobby Western governments to enact legislation that will effectively impede the operation of international laws and institutions through which Russian authorities might investigate some of these crimes and initiate lawsuits that could shed light on that sordid episode. Lawsuits in western courts would inevitably trigger numerous freedom of information petitions, put depositions of key witnesses and actors on the record, and much of what is hidden today might have to come out in the open. Behind the ostensible crusade for human rights, the main purpose of Magnitsky legislation might be to frustrate such investigations and legal processes.
Interviewer Edward Lozansky