[rad-green] The Case of Sergei Magnitsky: Questions Cloud Story Behind U.S. Sanctions (Der Spiegel)

*https://www.spiegel.de/international/world/the-case-of-sergei-magnitsky-anti-corruption-champion-or-corrupt-anti-hero-a-1297796.html
<https://www.spiegel.de/international/world/the-case-of-sergei-magnitsky-anti-corruption-champion-or-corrupt-anti-hero-a-1297796.html>Der
Spiegel          November 26, 2019  The Case of Sergei Magnitsky*





*Questions Cloud Story Behind U.S. SanctionsThe story of Sergei Magnitsky
has come to symbolize the brutal persecution of whistleblowers in Russia.
Ten years after his death, inconsistencies in Magnitsky's story suggest he
may not have been the hero many people -- and Western governments --
believed him to be.By Benjamin Bidder*
[image: Bill Browder at his office in London.]
Chris Gloag/ WirtschaftsWoche. Bill Browder at his office in London.



There's a tombstone in northeastern Moscow that bears the portrait of a man
with a friendly yet somewhat uneasy smile. His name is Sergei Leonidovich
Magnitsky. He was born in April 1972 in Odessa, Ukraine, and died in
November 2009 in Moscow. To this day, 10 years after the fact, the
circumstances of his death in a Russian pretrial detention facility remain
unclear.

There are two versions of what happened to Magnitsky. The more well-known
version has all the makings of a conspiracy thriller. It's been repeated in
thousands of articles, TV interviews and in parliamentary hearings. In this
version of the story, the man from the Moscow cemetery fought nobly against
a corrupt system and was murdered for it.

The other version is more complicated. In it, nobody is a hero.

The first version has had geopolitical implications. In 2012, the United
States passed the Magnitsky Act, which imposed sanctions against Russian
officials who were believed to have played a role in his death. The measure
was signed into law by then-President Barack Obama after receiving a broad
bipartisan majority. Back then, if there was one thing that politicians on
both sides of the aisle could agree on, it was their opposition to a
nefarious Russian state. In 2017, Congress passed the Global Magnitsky Act,
which enabled the U.S. to impose sanctions against Russia for human rights
violations worldwide.

The facilitator behind these pieces of legislation is Bill Browder,
Magnitsky's former boss in Moscow. "When he was put to the ultimate test,
he became the ultimate hero," Browder says of Magnitsky. Browder was born
in the U.S.. For years, his company, Hermitage Capital Management, was one
of the largest foreign investors in Russia. At the time, Browder was an
advocate for Russian President Vladimir Putin in the West. That is, until
he was prohibited from entering Russia in 2005.

Public Enemy No. 1

Today, Browder refers to himself as "Putin's No. 1 Enemy." From his office
in London's Finsbury district, Browder coordinates a campaign he calls
"Justice for Sergei Magnitsky." His goal is to get other countries to
impose sanctions against Russia for what happened to his former employee.
So far, four other countries have followed the U.S.' lead. For now, Browder
is concentrating on Europe. He has spoken to politicians in Norway, Sweden
and France. He came to Berlin in May and spoke with the chairman of the
Committee on Foreign Affairs in Germany's federal parliament, the
Bundestag. He also had an appointment at the Chancellery.

Browder tells a gripping story of how Magnitsky, the whistleblower, is
believed to have died. This narrative is his ticket into the political
sphere. It's why he's received by members of parliament, diplomats and
human rights activists alike, often with open arms. They support his push
for more legislation because they see it as setting an important precedent:
Corrupt regimes all over the world that are violating their citizens'
rights must be held accountable and made to suffer consequences in the form
of entry bans and frozen accounts as laid out by the Global Magnitsky Act.
The law makes it more difficult, if only slightly, for autocrats to sneer
at and ignore human rights.

But there's another version of the Magnitsky saga, one that is more
contradictory than Browder's telling and more difficult to summarize. The
legal documents that underpin it fill dozens of binders, not only in
Moscow, but also in London and New York. After sifting through thousands of
pages, one might begin to wonder: Did the perfidious conspiracy to murder
Magnitsky ever really take place? Or is Browder a charlatan whose story the
West was too eager to believe? The certainty surrounding the Magnitsky
affair becomes muddled in the documents, particularly the clear division
between good and evil. The Russian authorities' take is questionable, but
so is everyone else's -- including Bill Browder's.

The cases raises uncomfortable questions for the West. In Europe and the
U.S., critics of Russia often argue from a position of moral superiority.
But with the Magnitsky sanctions, it could be that the activist Browder
used a noble cause to manipulate Western governments.

One thing that stays the same no matter which version is told, is this:
Magnitsky is dead and he was the victim of a terrible injustice.

Magnitsky's Demise

On the evening of Nov. 16, 2009, Sergei Magnitsky died in a cell at
Moscow's "Matrosskaya Tishina" pretrial detention center. A prison doctor
had diagnosed him with an inflammation of the pancreas four and a half
months prior, but shortly before Magnitsky was scheduled to undergo
surgery, he was moved to another prison -- one without the necessary
medical equipment for such an invasive procedure. The reason given for the
move was that Magnitsky's cell needed to be renovated. Could that possibly
be true? Even after the whistleblower's death, work still hadn't commenced,
according to an investigative commission. It began looking into the case
shortly after Magnitsky's death because the outrage in Moscow was so huge.
The commission counted among its members respected human rights activists
and opponents of the Kremlin. They analyzed notes and complaints filed
while Magnitsky was in prison. They also interviewed the prison staffers
who, instead of helping Magnitsky, let him die.

The commission's 20-page report offered detailed insights into the
sadistic, cold-hearted nature of Russia's prison system. In the months
before his death, Magnitsky was constantly moved from one cell to another.
His mother brought him medications that took 18 days to reach him. In
September, he was forced to wear his jacket at night because his cell
window lacked a pane of glass. His cell toilet often backed up. One time
Magnitsky's abdominal pains became so acute that his neighbor began
desperately kicking against the door of his cell and calling for help. It
took prison staff five hours to get Magnitsky to a doctor.
[image: Sergei Magnitsky's grave at a cemetery in Moscow.]
Mischa Japaridze/ AP/ Picture Alliance/ DPA. Sergei Magnitsky's grave at a
cemetery in Moscow.

Magnitsky's condition worsened on his last day. He was transferred back to
the prison where he was originally supposed to be operated on months prior.
There, the dying man began to panic. He was sedated and restrained with
handcuffs. Records also note the "use of a rubber baton."* Magnitsky was
left alone in his cell, unobserved, without a doctor. "An ill person in
severe condition was effectively left without medical attention for 1 hour
and 18 minutes to die," the commission wrote in its report, a chronology of
merciless negligence. Yet it contains no evidence of a targeted murder.

According to Browder's more dramatic telling of the story, Magnitsky's
arrest and death were a targeted act of revenge by Russian authorities
against an anti-corruption activist. Browder says he tapped "my lawyer
Magnitsky," to investigate a case in 2007. Over the course of his research,
Magnitsky supposedly stumbled onto a crime of unprecedented proportions --
the biggest tax fraud in Russian history, perpetrated by a corrupt band of
police officers and government officials.

The fraud involved a sum of $230 million (208 million euros) and a complex
master plan, which, according to Browder, was run by two Moscow police
officers, Artyom Kuznetsov and Pavel Karpov. The duo had initiated a
fraudulent tax investigation against Browder's Hermitage Capital Management
and then seized three letterbox firms that had originally been founded by
Browder's people. With confiscated company deeds, the firms were
transferred to middlemen who fabricated massive losses and requested the
reimbursement of $230 million in taxes that Browder's company had
previously paid. Karpov, the policeman, denies any involvement in the fraud
or Magnitsky's death. "Browder is a liar," he says. Kuznetsov could not be
reached for a statement.

Browder's Story

According to Browder, Magnitsky was onto Kuznetsov and Karpov. He also says
the same officials had arranged for Magnitsky to be imprisoned and killed.
Browder has told this version of events countless times. He testified in
front of the U.S. Congress that Magnitsky had been "murdered." Browder told
Canadian parliamentarians: "Eight riot guards with rubber batons would beat
him for one hour and 18 minutes. He was subsequently found dead on the
floor of that cell."

When asked, Browder cites the investigative committee's report as evidence.
He does the same on his website, where he also says the same officials
incriminated by Magnitsky "intentionally tortured and ultimately murdered
him." The report, however, makes no such assertion of an intentional
killing. The names of the two police officers, Kuznetsov and Karpov, don't
even appear in the original Russian version of the commission's report.
Kuznetsov is only mentioned in an English translation on Browder's website.

By now, Browder's campaign has created its own frame of reference and its
own supposed evidence. Browder has often cited reports by the Council of
Europe in recent years, though these are largely based on his own accounts.
For instance, one Council rapporteur, former German Justice Minister Sabine
Leutheusser-Schnarrenberger, referred to Magnitsky as an "independent
lawyer." But one look at documents readily available online is enough to
discover that Magnitsky was employed as a tax expert at an auditing firm
and had worked for Browder for years.

Browder claims to be fighting for justice. One of the reasons he's so
successful may be because he's adept at aligning his story with the
devastating image that Russia has been projecting for years. And many media
outlets believe him. Browder has given countless TV interviews on the
subject. In some of the shots, viewers can see articles from prominent
international media Browder has hung on his office walls -- the *Washington
Post*, the *Financial Times *and Russia's *Novaya Gazeta*. The reports are
all framed and appear to lend credibility to Browder's story. DER SPIEGEL
has also written about Browder's campaign
<https://www.spiegel.de/international/world/financial-investor-bill-browder-takes-on-the-putin-regime-in-russia-a-845132.html>
and
conducted interviews with him. The *New York Times* won the Pulitzer Prize
for its reporting on Russia's legal system, including on the Magnitsky
case. There are films and plays too.

But the question remains: Just how solid are the facts upon which
politicians and the media are basing their judgements of this case? Various
inconsistencies and contradictions are apparent in some documents that
Browder's own people have published online. These include two photographs
of interrogation protocols that allegedly prove how Sergei Magnitsky
courageously reported the tax fraud of $230 million after discovering it.
In his book, Browder writes, "Sergei set up an appointment at the
Investigative Committee for 5 June 2008. (...) He sat in the chair,
provided the evidence and gave his witness statement, explicitly naming
Kuznetsov and Karpov."

Contradictions

The protocol itself tells a different story. Magnitsky does indeed mention
the names of the two police officers nearly 30 times and describes their
role during a search. But at no point does he make a concrete accusation
against them personally. In a second protocol of a statement made on Oct.
7, Kuznetsov and Karpov are not mentioned at all. The first document also
shows that Magnitsky did not make his statements entirely of his own free
will, but as a witness in an ongoing investigation. According to other
documents, the trial had been underway since February. This was confirmed
to DER SPIEGEL by Magnitsky's lawyer at the time, Dmitry Kharitonov, who
said his client had been summoned to testify.
Global Consequences

   Following Sergei Magnitsky's death, sanctions laws got passed in a
   number of countries placing travel bans on and freezing bank accounts of
   individuals suspected of having violated human rights.
   - 2012: The United States passed the Magnitsky Act, which imposed
   sanctions on the Russian officials named by Bill Browder in the context of
   Magnitsky's death.
   - 2017: The U.S. passed the Global Magnitsky Act, which allows sanctions
   against human rights abusers to be imposed by the country globally. They
   have since been imposed on the Burmese government in response to the
   massacre of the Rohingya minority, against the interior and justice
   ministers of Turkey for refusing to release an American pastor from custody
   and against the Saudi Arabian individuals who are believed to have been
   responsible for the murder of journalist Jamal Khashoggi.
   - The U.S. laws have also inspired similar legislation elsewhere, with
   Estonia passing a bill in 2016, Canada and Lithuania in 2017 and Latvia in
   2018.
   - In March, the European Parliament passed a resolution calling for the
   28 EU member states to pass laws similar to the Magnitsky Act.

Possible laws are currently being debated in Australia, Ukraine, the
Netherlands, France, Denmark, Britain and Sweden.

Browder has a well-documented talent for selling a set of facts so that it
supports his own version of events. In Moscow, this was part of his
business model as an investor. According to its own calculations, Hermitage
Capital Management generated a 1,500 percent return on its investments
within just a few years. According to Russian investigators, a company in
Browder's fund structure had wrongly paid only 5 percent in taxes, when in
fact 15 percent should have been due. A double taxation agreement with
Cyprus should not have been applied. Browder denies this.

One way or the other, Browder's business model was lucrative. Hermitage
bought cheap shares in Russian state-owned corporations, such as Gazprom or
Sberbank, from the late 1990s onward. Then he took on the conglomerates'
leadership, denounced the widespread corruption and demanded reforms. If
these came to fruition, the value of Browder's shares rose. If they didn't,
at least the publicity of his fund grew.

Browder had his eye on Gazprom especially. In 1998, the company was worth
$3.5 billion. Within seven years, that number had jumped to $160 billion.
Hermitage held many shares through shell companies. Several of them
perfunctorily hired mentally disabled people who they described on paper
as, "analysis division experts." In fact, the people had no knowledge of
this field, as several courts would later discover.

The companies took advantage of tax breaks that were intended for firms
with workplace disability rates of at least 50 percent -- and not as a
tax-saving model for Western investment funds. Over the course of their
years-long investigations into Hermitage, Russian authorities stumbled upon
a man who was helping Browder come up with his tax-saving models: Sergei
Magnitsky. Browder says the practice of skirting taxes was common at the
time.

When Browder talks about his fate in front of Western audiences, he makes
it sound as if the investigations into Hermitage were completely arbitrary.
In his book and during interviews, Browder claims that Kuznetsov, the
investigator, appeared out of nowhere in 2007. This is significant because
it appears to underscore that the trial was "politically motivated,
fabricated" and initiated for the sole purpose of obtaining the necessary
documentation for the long-planned $230-million fraud.

'A Measure of Vindication'

But the date Browder provided is incorrect. Kuznetsov's name appeared in
letters to Browder's company in June 2006. At the time, the police had
demanded the firm surrender its bank data. There is also proof that
Browder's team knew about the letters. Indeed, they were in Browder's
possession.

There is another interrogation protocol that Browder did not prominently
publish online like the other two. It is from October 2006, long before
Magnitsky is said to have first exposed the big tax fraud that Browder says
caused him to fall out of the authorities' good graces.

According to the protocol, Magnitsky was questioned by investigators about
one of the dubious letterbox firms that gave employment contracts to people
with disabilities. He claims that Browder's people asked him to "to 'be'
CEO for a period of reorganization." Other documents show that Magnitsky
was involved in the companies as early as 2002.

Some of the people accused by Browder have begun to fight back against the
allegations. The Moscow policeman Pavel Karpov, for one, who Browder claims
worked with Kuznetsov to have Magnitsky arrested and killed in retaliation
for his testimony, filed a defamation lawsuit against Browder in London in
2012.

The presiding judge, Justice Simon, ruled the British courts had no
jurisdiction over the matter. But in his written verdict, he also wrote
scathingly about Browder, calling him a "story-teller" who did "not come
close to pleading facts which, if proved, would justify the sting of the
libel." Simon also wrote that his assessment was to be explicitly
understood as "a measure of vindication" of Karpov.

The only problem was the judge's words hardly made it into the public
discourse at the time. The *Guardian* and other British media wrote about
Karpov's humiliating defeat in the courts. Some of the language they used
can be found in press releases from Browder's campaign.

A second trial in New York concerned the frozen accounts of a wealthy
Russian political clan, the Katsyv family. The U.S. government imposed the
sanctions because Browder had insisted that money from the million-dollar
fraud had wound up with the Katsyvs. In response, the Russians hired star
New York-based lawyers to defend themselves against the accusations.

Justice or Vendetta?

Browder, an otherwise talkative person, tried to avoid questioning. One
video shows him running away when someone tries to present him with a
subpoena. In April 2015, he was required to appear in court. Under oath and
confronted with numerous documents, he answered meekly -- quite differently
than during his public appearances. Lawyer Mark Cymrot, a surly litigator
with a moustache, spent six hours examining him. Cymrot asked: Was
Magnitsky a lawyer or a tax expert?

He was "acting in court representing me," Browder replied.

And he had a law degree in Russia?

"I'm not aware he did."

Did he go to law school?

"No."

How many times have you said Mr. Magnitsky is a lawyer? Fifty? A hundred?
Two hundred?

"I don't know."

Have you ever told anybody that he didn't go to law school and didn't have
a law degree?

"No."

DER SPIEGEL visited Browder in London and asked him to clarify some
inconsistencies and contradictions in his story. The result was a four
hour-long interview and a grudging search for information, facts and
details. The meeting, which took place in a glass conference room in
Browder's Finsbury office, provided insights into his tactics: Together
with his Russian partners Ivan Cherkasov and Vadim Kleiner, Browder laid
out dozens of documents that supposedly corroborated his version of events.
Not all of them would stand up to further scrutiny.

One of the documents was a previously unpublished email from Sergei
Magnitsky. It supposedly confirmed that he went to the authorities of his
own volition as a whistleblower. Yet the document also makes clear that
Magnitsky was instructed to come forward by a higher-ranking lawyer working
for Browder. This lawyer, a Russian, admitted during the interview in
London that Magnitsky had been sent as a stand-in for the CEO of a
letterbox company who investigators in Moscow had actually wanted to speak
to.

To further back up their story, Browder and his team also presented an
article by an American journalist who had spoken to Magnitsky shortly
before his arrest. The police officers Kuznetsov and Karpov had Magnitsky
arrested "immediately" after the publication of the article. But nothing in
the article would explain why Magnitsky was arrested. In it, he doesn't
mention Karpov or Kuznetsov. The author of the article, when contacted,
said he couldn't imagine that it was his piece that triggered Magnitsky's
persecution.
[image: Former U.S. President Barack Obama signing the Magnitsky Act into
law.]
Charles Dharapak/ AP/ Picture Alliance/ DPA. Former U.S. President Barack
Obama signing the Magnitsky Act into law.

Browder's campaign has turned him into a global celebrity. His publisher
advertises his book, "Red Notice," as a *New York Times* bestseller. In
interviews, he calls for Russia to be largely isolated. He attacks
politicians who disagree with him. He called John Kerry, the former U.S.
secretary of state, a "lapdog" and accused him of "appeasement." Browder
has also called for Russia's banishment from the SWIFT banking network,
which would have devastating consequences for the Russian population. But
is that really necessary to ensure "Justice for Sergei Magnitsky?" Or has
Browder's campaign turned into a personal vendetta?

Too Good Not to Be True

Another strange thing about this case is that those involved sometimes
change their stories completely and begin saying the opposite of what they
said before. Take Zoya Svetova, for instance: The Moscow-based human rights
activist co-wrote the investigative commission's report. She is a Kremlin
opponent and writes reports for MBKH News, the media project of the exiled
Russian oligarch Mikhail Khodorkovsky. Svetova has been intensively
involved with the Magnitsky case and published regular articles about it.
She is also planning to write a book.

In July, Svetova said in an interview with DER SPIEGEL that even 10 years
after Magnitsky's death, she didn't think much of the theory that he was
the victim of a murder plot. It was more likely that Magnitsky got into an
argument with the doctors and the staff because he wasn't being medically
treated. "They were beating him to pacify him," Svetova said, adding that
the beatings in and of themselves did not indicate a targeted murder. There
was no evidence of this, she said. "What sense would it make to murder
him?" So that he wouldn't talk about the $230 million fraud anymore? By
that point, news of the fraud was everywhere. "Magnitsky did not reveal any
secret," Svetova said in July.

The investigative commission report she helped co-write mentions that
pressure had been placed on Magnitsky while he was in prison. "They wanted
testimonies against Browder. That was the motivation. He should have
accused Browder of not paying taxes. Magnitsky was a hostage. He himself
was of no interest to them. They wanted Browder," she said.

Svetova also said that while Magnitsky's fate was dreadful, it wasn't
atypical. Failure to provide assistance as well as abuse are common in
Russian prisons, she said. She wrote an article on the subject in 2010.
According to information from the Council of Europe, around 4,000 prisoners
died in Russia in 2014. In Germany, 150 died. "You have to know," Svetova
said, "the Russian penitentiary system is very brutal."

Shortly before this article was published, however, Svetova suddenly
changed her story. Now she had the feeling "that he was moved deliberately
to the 'Matrosskaya Tishina' prison to kill him." She said that since July,
she had gone back and re-examined all the old documents and that she now
had a completely different view of things.

In August, the European Court of Human Rights announced its ruling in the
Magnitsky case: Russia must pay the deceased's relatives 34,000 euros
($37,500) because the state should have protected the prisoner's life and
health. Nowhere in its verdict was there any mention of murder. The judges
did, however, take apart the claim that the whistleblower had been
imprisoned out of revenge. Magnitsky's arrest was not without cause, they
wrote, nor were the authorities' actions malicious. The investigations into
Magnitsky began in 2004, long before he first approached the authorities,
it says on page 39 of the court's written verdict. But that didn't stop
Browder from describing the ruling as a "resounding victory."

His campaign has created a kind of perpetual motion. Browder was recently
received by diplomats in Finland, which currently holds the presidency of
the Council of the EU. They summoned him to discuss a European version of
the U.S.' Magnitsky sanctions. "This law will become a reality in the EU,"
Browder tweeted in mid-October. His chances of success aren't bad: His
story is simply too good not to be true.

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