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Q&A: Bill Browder

How the hedge fund manager became a leading human rights activist.

Bill Browder in 2015. Photo by Roger Askew/REX/Shutterstock

After the fall of the Soviet Union, it seemed only slightly ironic that William Browder would become one of the most prominent foreign investors in Russia. His grandfather, labor organizer Earl Browder, had spent years in the country, then became the head of the U.S. Communist Party in the 1930s and early ’40s. The family was shunned during the McCarthy era, and Bill Browder determined early in life he would take the opposite path. “I would put on a suit and tie and become a capitalist,” he wrote in a memoir about his time in Russia, Red Notice. Browder earned an MBA from Stanford, joined the Boston Consulting Group with a focus on Eastern Europe and moved on to investing in Russia for Salomon Brothers. In 1996, he founded the hedge fund Hermitage Capital Management in Moscow.

Maybe more unexpected is the fact that Browder has become one of the biggest thorns in the side of Russia president Vladimir Putin—and possibly a key reason Russia interfered in the 2016 U.S. presidential election.

When several Russians, including Kremlin-linked lawyer Natalia Veselnitskaya, met with Trump campaign officials in a now-infamous meeting at Trump Tower in June 2016, they weren’t simply there to talk about adoptions, as Donald Trump Jr., a participant, initially claimed. They were there to try to kill the Magnitsky Act, passed by the U.S. Congress in 2012. The legislation punishes Russian officials Browder says are responsible for the 2009 death of Hermitage’s lawyer, Sergei Magnitsky, in a Russian prison. The Magnitsky Act has become part of a broader human rights movement called the Global Magnitsky Justice Campaign.

Hermitage grew to $4.5 billion at its peak, but Browder faced challenges in Russia soon after Putin came to power in 2000. Browder’s attempts at shareholder activism threatened the oligarchs, eventually leading Russia to refuse him entry to the country in 2005. Magnitsky, a Russian citizen, stayed behind and uncovered a plot by law enforcement officers to take control of Hermitage and steal the taxes it had paid the government. Held for 11 months without a trial, he was jailed for the very tax evasion he was investigating.

Magnitsky’s death outraged Browder and turned him into a human rights activist. Learning of his death “was by far the most shocking, heart-breaking and life-changing news I’ve ever received,” Browder recalled in testimony before the U.S. Senate Judiciary Committee last year.

Browder’s campaign has now gone global, with 14 other countries either enacting versions of the Magnitsky Act or close to doing so. Browder’s investigative team has located funds that Magnitsky “exposed and was killed over,” he says, going to about 15 countries, with criminal cases open in 12 of those countries. Law enforcement agencies have frozen or seized about $40 million of that money.

Worth recently spoke to Browder about his transition from hedge fund manager to human rights activist, why his work is such a threat to Putin and how the Magnitsky campaign has become a powerful tool for seeking justice for victims of human rights abuses around the globe.

“Magnitsky has become the face of victims of impunity, and his name has become associated with the policy of dealing with that,” says Browder.

Q: Can you explain what the U.S. Magnitsky Act does?

A: In very simple terms, it freezes assets and bans visas and puts on the U.S. Sanctions List people who are involved in gross human rights abuse.

And you think that this act was so important that Putin wanted to interfere with our presidential election?

It seems to be his primary motivator. Vladimir Putin declared overturning the Magnitsky Act his single largest foreign policy priority in 2012. He banned adoptions of Russian orphans by American families in retaliation for the Magnitsky Act. He then deputized Natalia Veselnitskaya to run an operation in Washington to try to overturn the Magnitsky Act, which started in 2016.

We know about the meeting during the summer of 2016 in Trump Tower that Veselnitskaya attended with Donald Trump Jr., Jared Kushner and Paul Manafort that dealt with the Magnitsky Act. Did the lobbying start there, or was it already going on?

It started earlier than that, in Washington, D.C., where Veselnitskaya and Rinat Akhmetshin were able to convince Dana Rohrabacher, a member of Congress from Orange County, to run an anti-Magnitsky campaign on Capitol Hill.

Before that, had you been working with members of Congress to extend the Magnitsky Act?

I had spent two years going to Washington every six weeks and meeting three-fourths of the members of Congress to tell them the Magnitsky story and explain the virtues of the Magnitsky Act. Everybody came to the conclusion that this was the new technology for dealing with atrocity and human rights abuse. And then in the spring of 2014, after the invasion of Crimea by Russia, it didn’t take very long for the people in Washington to figure out what the right tool was to use, and they basically took the Magnitsky template and applied it almost word for word to the people in the Russian government who were involved in invading Crimea. Then Russia interfered in the U.S. election and after interfering in the U.S. election, it was involved in a chemical weapons attack in the UK. In retaliation, the U.S. government recently sanctioned a bunch of Russian oligarchs, using the exact same template.

And Putin hated this.

Putin understood this was going to become the template that was going to eventually go after his money. Putin is actually one of the people who benefited from the crime that Sergei Magnitsky was killed over. We’ve traced some of the money to a person named Sergei Roldugin, who is a cellist, and is one of Putin’s trustees. As a result, Putin, under the terms of the Magnitsky Act, would be subject to U.S. Magnitsky sanctions. In addition to that, I believe he’s the richest man in the world. I believe he’s worth $200 billion. He keeps his money not in his own name but in the name of Russian oligarchs, who are what I call oligarch trustees. And now that we’ve started sanctioning Russian oligarchs, using the Magnitsky template, it also captures Putin’s money.

How do you calculate that $200 billion?

I believe that he did a deal with the oligarchs after the arrest of Mikhail Khodorkovsky (the former owner of Yukos Oil, imprisoned in 2003 for 10 years on fraud and tax charges) where he basically said, “Hand over 50 percent of your assets.” So that number is a calculation of 50 percent of the wealth of Russian oligarchs. It’s common knowledge among people in the Russian business community that that was the deal.

So going after the oligarchs hits Putin hard.

The U.S. government has crippled the business operations of seven major Russian oligarchs who are some of the most important economic players in Russia. Putin has been laughing up until now that he can do anything he wanted to and the consequences would be relatively meaningless. If they sanction a bunch of generals, it means nothing. But the moment that they started sanctioning Russian oligarchs, it completely destroyed their businesses. And that’s something that everybody in Moscow is completely stunned by.

You have said you are Putin’s enemy number one, and that many people associated with you and your work have been murdered or poisoned. Are you afraid?

Is my life at risk? Yes, definitely. If the question is, do I live in fear, the answer is, I do not. If I allowed them to make me feel fearful, then they would have already achieved half of their objective, and I don’t want to let them do that.

“I don’t drink tea with Russian strangers in London.” —Bill Browder

Do you have bodyguards?

I generally don’t outline my security protocol, but I can say a few things. I don’t drink tea with Russian strangers in London.

Were you surprised when you learned Russia’s role in the last U.S. presidential election?

I wasn’t surprised. Vladimir Putin has allocated an enormous amount of money to interfere with open societies all over the world, particularly their politics and foreign relations. However, I am surprised that he was able to succeed in influencing that outcome.

With your knowledge of how Russia operates, and all the research you’ve done, has special counsel Robert Mueller interviewed you as part of his investigation into Russia’s role in the U.S. presidential election and possible collusion with Trump?

I can’t comment. But Russia takes advantage of our open society in a way that’s asymmetric. However, let’s not overstate the power of Russia. Russia has an economy the size of New York state, and Russia has a military budget 5 percent of the U.S. military budget. We may be slow to anger, we may be slow to react, but when we do, Russia has no chance whatsoever and it will be devastating. You know, all their huffing and puffing meant nothing when we decided that we wanted to go in and do something about the chemical weapons plant in Syria.

It’s very unusual to find a hedge fund manager who’s doing this kind of work. In your book Red Notice, you talk about your grandfather being the head of the Communist Party in the U.S. and you wanting to be very different. Have you changed your thinking on that?

My grandfather’s original motivation for his foray into communism was social justice. He was brought up in Kansas during the dust bowl. And his rise in communism happened during the Great Depression. It was all about social justice and inequality and injustice. I’m sure there is some revulsion to injustice gene in our family. On the political side, however, I don’t think that our philosophies are any way similar in that I’ve seen how communism is a fully discredited form of government and he believed in communism until his last day. But I don’t run a hedge fund anymore, and it feels a lot better to do what I’m doing now than it did to be a hedge fund manager. I’m a much happier person fighting for justice than fighting for money.

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