Bill Browder

Communist operative Bill Browder has been trying to subvert Russian capitalism and democracy since the collapse of the Soviet Union.

Bill Browder is the grandson of CPUSA General Secretary Earl Browder. Browder made his fortune buying up assets of the former Soviet Union. Browder is the driving force behind the Magnitsky Act, or Russia sanctions bill.

In 1998 Browder renounced his American citizenship to avoid taxes and became a UK citizen. As a foreign citizen and global elitist, Browder has had direct, and some might say, undue influence on American Russia sanctions policy.

Family background

Browder is the grandson of general secretary Earl Browder of the American Communist party, which received its funding and directives from the Kremlin to execute Soviet foreign policy between 1919 and 1988. Earl Browder was the CPUSA presidential candidate in 1936 and 1940 who, like Putin's presidential opponents, was thrown in jail by President Franklin Roosevelt in 1941. When FDR made the unpopular and controversial decision to seek a fourth term, Browder was released from prison, stepped aside and made Roosevelt the candidate of the Communist Party. And enthusiastically supported him.

Earl Browder twice ran against FDR for president, until FDR threw him in jail. When he got out Browder was a full throated supporter of FDR's fourth term. Browder's goal was to bring the communist movement into the Democratic party. In an ironic twist, Vladimir Putin has been accused of employing FDR's same tactic - throwing presidential challengers in jail.

Throughout the New Deal depression era Earl Browder was a hardcore Stalinist, advocating the violent overthrow of the United States Government and Constitution. During World War II, when direct communication between American communists and their Kremlin masters became difficult, Browder sometimes had to improvise when articulating the communist viewpoint (responding to the Katyn massacre for example, or his claim that capitalism and communism could coexist). For this cause Earl Browder was accused of Marxist-Leninist deviationism and summarily deposed when the war ended.

Continuing a family tradition, Bill Browder is the sworn enemy of the global anti-communist movement, exemplified by Browder's rift with Vladimir Putin. Modern Russia is determined that the atheistic communist ideology will never dominate Russia again.

Hermitage Capital

Hermitage Capital was formed in 1996 for the purpose of investing in Russia. The firm benefited from the wave of privatization that occurred, ultimately becoming one of the largest foreign investors in Russia with assets of more than $4 billion.

Browder has billed himself as a shareholder activist and forensic accountant who fought against corruption in the Russian business world. Browder filed a number of lawsuits against several Russian companies. Some observers note that “the moral outrage he displayed during his corporate governance campaigns often appeared conditional on which side of the deal he was on.”

Browder remained a strong supporter of Putin while investing in Russia. Two separate fraud investigations into Hermitage were begun in 2004 and 2005. In November 2005, the Kremlin abruptly pulled his visa and banned him from Russia.

A search warrant was executed on Hermitage in June 2007. Company seals and corporate certificates were gathered and taken into custody as evidence. In what appears to have been a complex financial scheme, these documents were used to transfer ownership of some Hermitage shell companies.

Fraudulent lawsuits were then created demanding reparations for alleged contract violations, which in turn created fictitious losses for the subsidiaries. The subsidiaries then applied for a tax rebate from the Russian government. On December 24, 2007, Russian tax officials signed off on the rebate which amounted to a staggering $230 million. The loss was not to Hermitage, it was the Russian Treasury that saw the money siphoned off.

One of those accused of being involved in the scheme was Sergei Magnitsky, a tax consultant and auditor who worked for Browder since 2002. Magnitsky was arrested in November 2008 in relation to the tax rebates.

On December 29, 2017, a Russian court sentenced Browder to nine years in prison in absentia after finding him guilty of deliberate bankruptcy and tax evasion. The evasion of taxes appears to have been material:

“The tax evasion by Browder and co-defendant Ivan Cherkasov had caused some 3.4 billion rubles ($58.76 million) in damage to the Russian federal budget.”

On June 9, 2018, HSBC, a British bank that was affiliated with Browder's Hermitage Fund, was ordered to pay Russia £17 million for its part in alleged tax avoidance. HSBC held private discussions with Russian authorities in August 2018 to reach a settlement. Russia's Supreme Court rejected the settlement agreement on July 30, 2018. HSBC had been “seeking written assurances from tax authorities that it won’t face future charges or claims.”

Sergei Magnitsky

Browder said in his 2017 Senate testimony that following the Russian seizure of Hermitage's corporate seal and documents he:

“hired the smartest Russian lawyer I knew, a 35-year-old named Sergei Magnitsky. I asked Sergei to investigate the purpose of the raids and try to stop whatever illegal plans these officials had.”

Browder's subsidiary companies were falsely listing employees as meeting the definition of “handicapped individuals” when in fact they did not. In other cases, workers were listed as holding certain jobs on paper only. They worked in other positions and in some cases did not work for the company at all.

Browder claimed that he didn't recall listing certain employees as being disabled because he had contracted out management of these shell companies to the firm of Firestone and Duncan. Although Browder does not disclose the individual responsible, it's worth noting that Browder's primary point of contact was Sergei Magnitsky.

And despite Browder's claims of ignorance, it was Browder himself who signed the fraudulent tax forms. Browder failed to disclose that he had employed Magnitsky since 2002—admittedly through Firestone Duncan. He also failed to tell Congress of the ongoing tax investigations at Hermitage. And Browder again referred to Magnitsky as a lawyer, when that is not true.

Lucy Komisar states that

“Magnitsky did not uncover the December 2007 tax refund fraud that cheated the Russian Treasury of $230 million” and notes that “the three testimonies he gave before his November 2008 arrest did not reveal the fraud.”

Instead, Komisar's article notes that the

“first indication of the fraud was by the Russian, Rimma Starova, who worked for one of the implicated shell companies.”

Starova's testimony was taken on April 9, 2008. In translated testimony Starova details the re-registration of three Hermitage shell companies and the creation of fictitious losses that led to the fraudulent tax rebates. No individuals are specified as being responsible, but critical to note is the date of her testimony—April 2008.

Sergei Magnitsky would not be arrested for another seven months. It appears that at no point prior to his arrest had Magnitsky detailed or alleged fraud. In and of itself, this raises serious question over the entire series of events.

Magnitsky was arrested for tax fraud and died on the 356th day of a 365-day prison sentence. Details involving Magnitsky's role and subsequent death remain uncertain, despite the many media reports. As we have seen, the story surrounding actual events appears to be far more convoluted than Browder has led the public—or Congress—to believe. Hermitage was already under investigation for fraud years before Magnitsky's arrest, and Browder's 2015 deposition makes clear some significant differences from his public description of events.

Prevezon Holdings

Prevezon Holdings is an international Russian real estate holdings firm owned by the Katsyv family. Denis Katsyv is the son of Pyotr Katsyv, Vice President of ‘Russian Railways’, a huge Russian transportation company, in which the Russian government is the sole shareholder

Browder made allegations against Prevezon, accusing the company of using proceeds from the Hermitage tax rebate scheme to purchase New York real estate.

Prevezon was represented by Natalia Veselnitskaya, a Russian lawyer. In 2015 Veselnitskaya's lawyers from BakerHostetler deposed Bill Browder. Browder falsely described Magnitsky as his lawyer.

In their defense, Prevezon lawyers summed up the case against Browder and Hermitage:

"At the time that the search warrant was executed in June of 2007, the situation was that the courts had found that you [Browder] had taken advantage of the tax regime in Kalmykia, had taxes due, they were unpaid, the company was bankrupt.
"You’ve said that the investigative authorities had absolutely no basis for conducting an investigation of Hermitage Fund in 2007. What these decisions show is there were false statements on tax returns, there were taxes due, they went unpaid, and the company [Hermitage Capital] was placed in bankruptcy.”

FusionGPS

Denis Katsyv hired Natalia Veselnitskaya to represent Prevezon Holdings in an asset forfeiture case in the United States over a Manhattan building Browder won in U.S. courts. Once in the U.S., Veselnitskaya hired the law firm of BakerHostetler who hired Glenn Simpson, a professional smear campaigner, and his firm FusionGPS to refute Browder's claims about Sergei Magnitsky, and to lobby for repeal or revisions of the Magnitsky Act.

Veselnitsksya was allowed entrance into the United States on the approval of Loretta Lynch to settle the Prevezon asset forfeiture case. Veselnitskaya overstayed her visa, and engaged in unregistered lobbying with FusionGPS against the Russia sanctions bill. Veselnitskaya was used by Simpson in a counterintelligence sting operation intended to entrap Donald Trump, Jr. and other Trump associates in the Trump-Russia collusion hoax.

Magnitsky Act

Mikhail Khodorkovsky, along with Browder, lobbied heavily for passage of the Magnitsky Act. Khodorkovsky did so through his Corbiere Trust, which handles Khodorkovsky's remaining fortune. It also lobbied for passage of Senate Resolution 322, which provided express support for Mikhail Khodorkovsky and Platon Lebedev. The Corbiere Trust is one of APCO Worldwide's largest clients. APCO lobbied on behalf of the now-defunct Clinton Global Initiative and was involved, at least tangentially, in the Uranium One scandal.

Mikhail Khodorkovsky

Mikhail Khodorkovsky and Browder have both been supporters of the Magnitsky Act, which has directly targeted their political enemies and provided a shield from Russian retaliation for themselves.

Khodorkovsky and Browder knew each other from Browder's business dealings in Russia. Khodorkovsky is the former head of Russian oil giant Yukos. According to a New York Times article, Browder and Khodorkovsky had some acrimonious dealings over Yukos, and Browder “was happy when he was arrested.”

Browder cheered the arrest of Khodorkovsky and maintained support for Putin through 2006, hoping that Putin might eventually lift Browder's visa ban and allow him to return to Russia.

The relationship changed in 2010 or 2011 as both men began to lobby for the Magnitsky Act. Their relationship appears to have continued. In November 2016 the two men appeared together to testify on the UK’s relationship with Russia before the House of Commons. Browder continues to bring up Khodorkovsky in interviews. and he specifically noted Khodorkovsky's story during testimony before the Senate Judiciary Committee.

At the Helsinki Summit in July 2018, Putin noted during a joint press conference with President Trump that he wanted to interview 11 American citizens and several foreign nationals in relation to Bill Browder and the Magnitsky Act. In exchange Mueller's Special Counsel team would be able to interview the 12 Russian intelligence officials they had indicted. Included on Putin's list were Bill Browder, Michael McFaul, David Kramer and Christopher Steele.

It remains unknown if Khodorkovsky or Browder have involvement, direct or otherwise, in the production of the Steele Dossier. A common link running through the participants is Jonathan Winer, who has known Christopher Steele for years. Winer lobbied on behalf of Khodorkovsky and the Corbiere Trust. The Magnitsky Act, which had a material impact on relations with Russia, has stemmed primarily from the unsubstantiated narratives of two men: Mikhail Khodorkovsky and Bill Browder.

See also

• Marc Rich
• Oleg Deripaska
• Jonathan Winer
• David Kramer