One of the main aims of Russian foreign policy is to stop Bill Browder. The pugnacious financier has developed a devastating way of parting Putin’s gangsters from their money. I cannot tell you how much they hate him for it.
At the instigation of Browder’s researchers in London, parliaments are passing “Magnitsky laws”, named after his lawyer, Sergei Magnitsky, who died in prison after revealing how criminals had taken $230m (£143m) from the Russian taxpayer. The US, Britain and other EU countries are considering or have already implemented a ban on entry to, and the freezing of the assets of those responsible for his detention and death, those who benefited from the conspiracy Magnitsky uncovered.
The Kremlin crime gang fears revolution. Maybe there will be a democratic uprising. Maybe a new bunch of thieves will replace the old bunch of thieves. In either event, they would want to flee abroad and enjoy their loot. Now, thanks to a novel human rights campaign, they may not be able to enjoy uncontested possession of stolen goods.
What would you do in their position? Ideally, you would want outwardly respectable people and institutions to discredit the campaign against you; to make it seem as if you were the victim of unwarranted smears. The willingness of the English law to help on these occasions has led to organisations as varied as the United Nations and the Obama White House to treat England as a global threat to freedom of speech.
True to form, England is now stepping forward to defend Major Pavel Karpov, a police officer at Putin’s Ministry of the Interior. Karpov hired PHA Media, a PR outfit run by Phil Hall, a former editor of the News of the World, no less, to deal with the media. To handle his libel action against Browder, a naturalised Briton, he has retained the services of Andrew Caldecott QC, one of the most expensive libel barristers around, and Geraldine Proudler of the corporate law firm Olswang.
To my surprise, I find that I must declare an interest. Proudler is on the board of the Scott Trust, which, in the words of CP Scott, the Manchester Guardian‘s great editor, exists to promote “honesty, cleanness, courage, fairness and a sense of duty to the reader” at the Guardian and Observer.
Scott’s remarks echo down the years. For the honesty and cleanness of the English law will be as much on trial when this case comes to court as the reputation of Bill Browder.
Browder is a remarkable and admirably tenacious man. Until 2005, his Hermitage Capital Management invested billions of dollars in Russian companies. Such wealth brought envious gazes. The Russian authorities revoked Browder’s visa and raided Hermitage’s Moscow office. Browder had rebelled against the politics of his leftwing family – his grandfather Earl Browder had been a leader of the American Communist party. Rightly suspecting that the beast of Russian authoritarianism was not dead yet, Browder got his staff out of Moscow.
Magnitsky believed that Russia had changed. He stayed and claimed that the police who raided Hermitage’s offices had stolen the seals to its Russian subsidiaries and passed them to the Klyuev crime gang. The gang re-registered the companies and claimed to be Hermitage’s rightful owners, then told the Russian authorities they owed Hermitage a tax rebate. And within a blink of an eye, the tax authorities handed over £143m – just like that.
Magnitsky complained to the Russian equivalent of the FBI. The sequel destroyed what few illusions he possessed about Russia’s mafia state. The interior ministry police arrested him for speaking out. They held him for a year in cold and overcrowded prisons. In June 2009, he developed pancreatitis and cholecystitis. The prison authorities denied him treatment. They probably tortured him, too. When civilian doctors finally came to see him at the moment of his death, the guards would not let them into his cell for an hour. They were to find him dead on the floor, lying in a pool of urine with bruises on his wrists. His tormentors never broke him, however. Magnitsky died rather than retract his testimony. Now English lawyers are being used to discredit Magnitsky. Browder says Karpov is going for him because he stuck by his friend; suing because, as well as campaigning around the world for Magnitsky laws, Browder and his researchers have created a website, russian-untouchables.com, which alleges Karpov was one of the interior policemen who organised the tax scam.
The case raises all the old questions about English libel law. Why should a Russian policeman enjoy the services of a libel system that, contrary to the principles of natural justice, places the burden of proof on the defendant? More pertinently: how on earth can Karpov, whose monthly salary was about £300, afford Caldecott, Proudler and, until recently, Hall’s PR agency?
In his defence at the high court, Browder uses Russian records to allege Karpov and his mother spent hundreds of thousands of dollars on property, fast cars and foreign holidays. “He has acquired very substantial assets and enjoyed an upmarket lifestyle which it would be impossible for him to have earned legitimately through his official position,” the defence claims.
Proudler says there is “not a shred of evidence against Karpov”. He had nothing to do with Magnitsky’s death, nor was he involved in prosecuting him. As for his conspicuous consumption, he bought his cars and properties before the Hermitage fraud.
If it is true that Karpov is an unfairly maligned man, no one will object. I’ve always rather liked Proudler and a side of me hopes she is right. But if it transpires that Karpov has been exploiting the English legal system to protect the Putin kleptocracy it will not be forgiven – or forgotten.
Earl Browder was on the receiving end of one of the most withering putdowns in the history of the American left. Stalin expelled him from the American Communist party for various ideological deviations. Because Browder lived beyond his reach, that was all Stalin could do. Like a true communist, Browder stayed loyal to the system that denounced him and defended Soviet communism during a debate with the brilliant Trotskyist Max Shachtman at New York’s Webster Hall in 1950. After Browder’s craven performance, Shachtman listed all the purged communist leaders Stalin had been able to reach in the Soviet bloc. He described how they had been shot or garrotted. With blazing eyes, he then swivelled round, pointed at Browder and boomed: “There, there but for an accident of geography, stands a corpse!”
If they are wrong about the Magnitsky affair, we may soon be saying the same of England’s sleek lawyers.
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