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For the mathematician, see [[:William Browder]].
Bill Browder
Browder at the Annual Meeting 2011 of the World Economic Forum in Davos, Switzerland, January 27, 2011
Born
William Felix Browder

(1964-04-23) April 23, 1964 (age 60)
Chicago, Illinois, United States
NationalityBritish (formerly American)
EducationStanford, MBA; Chicago, BSc Economics; University of Colorado Boulder (transferred)
EmployerHermitage Capital Management
TitleCEO
ChildrenJoshua Browder
Parent(s)Felix Browder (father)
Eva Browder (mother)
RelativesEarl Browder (grandfather)
William Browder (uncle)

William Felix Browder (born 23 April 1964) is an American-born British financier. He is the CEO and co-founder of Hermitage Capital Management, an investment fund that at one time was the largest foreign portfolio investor in Russia.[1] He gave up his U.S. citizenship in 1998 to avoid paying taxes related to foreign investment.[2] After having business in Russia for 10 years, Browder was refused entry to Russia in 2005 as a threat to national security; he has said it was because he exposed corruption.

After the death in prison in 2009 of Sergei Magnitsky, a Russian lawyer and auditor who had represented his company and conducted an investigation into massive tax fraud related to it, Browder lobbied for Congress to pass the "Magnitsky Act", a law to punish Russian human rights violators, which was signed into law in 2012 by President Barack Obama.[3][4] In 2013, Browder was tried in absentia in Russia for tax fraud, jointly in a posthumous prosecution of Magnitsky. He was convicted and sentenced to nine years in prison. Interpol rejected Russian requests to arrest Browder, saying the case was political. In 2014, the European Parliament voted for sanctions against 30 Russians believed complicit in the Magnitsky case; this was the first time it had taken such action.

In July 2017, Browder testified to the U.S. Senate Judiciary Committee on Russia’s alleged interference in the 2016 US presidential election through use of persons in Washington, DC.

On October 19, 2017, Canada enacted its own Magnitsky Act, which allows for the freezing of assets and visa bans on officials from Russia and other nations considered to be guilty of human rights violations, and prohibits Canadian firms from dealing with foreign nationals who have grossly violated human rights.[5] Other countries including Estonia, Lithuania, and the United Kingdom, have also enacted their own version of the Magnitsky Act.

On October 21, 2017, in retaliation for the Canadian Magnitsky Act, Putin attempted to place Browder on Interpol's arrest list.[6] That same day, Browder's U.S. visa was revoked, effectively banning him from the United States.[7][8][6] After a protest by U.S. Congressional leaders, his visa was restored the following day.[9] Putin's arrest-warrant request was rejected by Interpol on October 26, 2017.[10]

Early life and education

William Felix Browder was born into a Jewish family in Chicago, Illinois. He attended the University of Colorado, Boulder before transferring to the University of Chicago, from which he graduated with a degree in economics. He earned an MBA from Stanford Business School[11] in 1989 and entered the financial sector.[12]

Family background

Browder's paternal grandfather was Earl Browder, who had lived in the Soviet Union for several years from 1927 and married a Russian woman while living there. After his return to the United States, Earl Browder became the leader of the Communist Party USA, and ran for US president in 1936 and 1940.[13] He was recruited to spy for the Soviets in the 1940s.[14]

Bill Browder's parents were Eva (Tislowitz) and Felix Browder. His father was a mathematics prodigy who had graduated from MIT at 18. But during the McCarthy era, he could not find work because he was the son of the onetime head of the Communist Party USA.[15][16] After a series of job rejections in the 1950s, Browder gained a position at Brandeis University. He was championed by Eleanor Roosevelt, the former First Lady who was then chairman of the board of Brandeis University; she had overridden the rest of the board who were afraid to hire him.

Felix Browder was renowned in the field of nonlinear functional analysis — a branch of mathematics with wide applications to such fields as physics, engineering and finance. He later was instrumental in establishing a science and technology center in conjunction with Princeton University and Bell Labs, and chaired the mathematics department at the University of Chicago. In 1999, he was awarded the National Medal of Science by President Bill Clinton.

Early career and new citizenship

In 1998, Browder gave up his U.S. citizenship and became a British citizen, partly to avoid paying U.S. taxes on foreign investments.[2][17] At the time, he was working in the Eastern European practice of the Boston Consulting Group in London,[18] and managed the Russian proprietary investments desk at Salomon Brothers.[19] In October 2017, when answering a question about the decision to renounce his U.S. citizenship, he cited "a legacy of bad feeling about the rule of law" as a result of his family having been "viciously persecuted" by the U.S. authorities in the 1950s.[20]

Hermitage Capital Management

Browder and Edmond Safra (1932–1999) founded Hermitage Capital Management in 1996 for the purpose of investing initial seed capital of $25 million in Russia during the period of the mass privatization after the fall of the Soviet Union. Beny Steinmetz was another of the original investors in Hermitage.[21]

Following the Russian financial crisis of 1998, Browder remained committed to Hermitage's original mission of investing in Russia, despite significant outflows from the fund. Hermitage became a prominent activist shareholder in the Russian gas giant Gazprom, the large oil company Surgutneftegaz, RAO UES, Sberbank, Sidanco, Avisma and Volzhanka.[22] Browder exposed management corruption and corporate malfeasance in these partly state-owned companies.[23] He has been quoted as saying: "You had to become a shareholder activist if you didn’t want everything stolen from you".[13]

In 1999, Avisma filed a RICO lawsuit against Browder and other Avisma investors including Kenneth Dart, alleging they illegally siphoned company assets into offshore accounts and then transferred the funds to US accounts at Barclays. Browder and his co-defendants settled with Avisma in 2000; they sold their Avisma shares as part of the confidential settlement agreement.[24]

In 1995–2006 Hermitage Capital Management was one of the largest foreign investors in Russia,[25] and Browder amassed millions through his management of the fund. In both 2006 and 2007, he earned an estimated £125-150 million.[26][27]

In March 2013, HSBC, a bank that serves as the trustee and manager of Hermitage Capital Management, announced that it would end the fund's operations in Russia. The decision was taken amid two legal cases against Browder: a libel court case in London and a trial in absentia for tax evasion in Moscow.[28]

Conflict with Russian government

In 2005, after ten years of business deals in Russia, Browder was blacklisted by the Russian government as a "threat to national security" and denied entry to the country. The Economist wrote that the Russian government blacklisted Browder because he interfered with the flow of money to "corrupt bureaucrats and their businessmen accomplices". Browder had earlier supported Russian president Vladimir Putin.[29]

As reported in 2008 by The New York Times, "over the next two years several of his associates and lawyers, as well as their relatives, became victims of crimes, including severe beatings and robberies during which documents were taken".[13] In June 2007, dozens of police officers "swooped down on the Moscow offices of Hermitage and its law firm, confiscating documents and computers. When a member of the firm protested that the search was illegal, he was beaten by officers and hospitalized for two weeks, said the firm’s head, Jamison R. Firestone."[13] Hermitage became "victim of what is known in Russia as 'corporate raiding': seizing companies and other assets with the aid of corrupt law enforcement officials and judges". Three Hermitage holding companies were seized on what the company's lawyers insist were bogus charges.[13]

The raids in June 2007 enabled corrupt law enforcement officers to steal the corporate registration documents of three Hermitage holding companies. They perpetrated a fraud, claiming (and receiving) a rebate of $230 million in taxes paid by those companies to the Russian state in 2006.[30] In November 2008 one of Hermitage's auditors, Sergei Magnitsky, was arrested. He was charged with the very tax evasion that he was investigating.[30] Magnitsky died on November 16, 2009 in prison, after eleven months in pretrial detention, nearly the limit allowed under the law.[31]

As a result of the controversy related to his arrest and evidence of mistreatment and abuse, his death aroused international coverage and outrage. Magnitsky's death was the catalyst for passage by the U.S. Congress, of the Magnitsky Act, signed into law by President Barack Obama on December 14, 2012. The act directly targeted individuals involved in the Magnitsky affair by prohibiting their entrance to the United States and their use of its banking system. The Russian government too retaliated by prohibiting adoption of Russian children by American citizens, and prohibiting certain individuals from entering Russia.

In February 2013, Russian officials announced that Browder and Magnitsky would both be tried for evading $16.8 million in taxes. In March 2013, Russian authorities announced that they would be investigating Hermitage's acquisition of Gazprom shares worth $70 million. The investigation was to focus on whether Browder violated any Russian laws when Hermitage used Russian companies registered in the region of Kalmykia to buy shares. (An investigation by the Council of Europe's Committee on Legal Affairs and Human Rights cleared Browder of the accusations of improprieties that surfaced at this time.)[32] At the time, according to the Russian law, foreigners were barred from directly owning Gazprom shares. Browder was also charged with trying to gain access to Gazprom's financial reports.[33]

Browder admitted having sought influence in Gazprom but denied any wrongdoing.[34] He said that purchasing Gazprom shares was an investment in the Russian economy, and the desire to influence the Gazprom management was driven by the need to expose a "huge fraud going on at the company". He also said that the scheme of using Russian-registered subsidiaries entitled to tax advantages was practised by other foreign investors at the time and was not illegal.[35] He also said that he believed the trial was a response to the United States passing the Magnitsky Act, which had blacklisted Russian officials involved in Magnitsky's death from entering the U.S. The Financial Times reported that this trial was the first in Russian history that included a dead defendant.[36]

Amnesty International described the trial as "a whole new chapter in Russia’s worsening human rights record" and a "sinister attempt to deflect attention from those who committed the crimes Magnitsky exposed".[37] The American weekly magazine The Nation had said in December 2012 that the Magnitsky Act "recklessly and needlessly jeopardized US-Russian cooperation in vital areas from Afghanistan and the Middle East to international terrorism and nuclear proliferation".[38]

On 11 July 2013, Browder was convicted in absentia by a district criminal court in Moscow on charges under article 199 of the RF Criminal Code (tax-evasion by organisations), and sentenced to nine years. Magnitsky was posthumously convicted of fraud.[39][40] In May 2013 and again in July 2013, Interpol rejected requests by Russia's Interior Ministry[41] to put Browder on its search list and locate and arrest him, saying that Russia's case against him was "predominantly political".[42]

In April 2014, the European Parliament unanimously passed a resolution to impose sanctions on more than 30 Russians complicit in the Magnitsky case; the first time in the parliament's history that a vote was held to establish a public sanctions list.[43]

External videos
video icon Browder's testimony on the Foreign Agents Registration Act before the Senate Judiciary Committee, July 27, 2017, C-SPAN

2017 testimony to the US Senate Judiciary Committee

On July 27, 2017, Browder testified to the U.S. Senate Judiciary Committee on Russia’s alleged interference in the 2016 US presidential election in regards to the Foreign Agents Registration Act (FARA) and Fusion GPS. The latter is the opposition research firm based in Washington D.C. that commissioned former MI6 staffer Christopher Steele to collect information on Donald Trump's ties with Russia. The hearing was set up to examine the firm’s separate work on a legal case involving the Magnitsky Act. He directly discussed the President of Russia Vladimir Putin. Browder testified that President Putin is "the biggest oligarch in Russia and the richest man in the world", building a fortune by threatening Russian oligarchs and getting a 50% cut of their profits:

I estimate that he has accumulated $200 billion of ill-gotten gains from these types of operations over his 17 years in power. He keeps his money in the West and all of his money in the West is potentially exposed to asset freezes and confiscation. Therefore, he has a significant and very personal interest in finding a way to get rid of the Magnitsky sanctions.

Browder concluded his statement by reviewing the circumstances that led to US passage of the Magnitsky Act:

I hope that my story will help you understand the methods of Russian operatives in Washington and how they use U.S. enablers to achieve major foreign policy goals without disclosing those interests. I also hope that this story and others like it may lead to a change in the FARA enforcement regime in the future.[44][45]

Red Notice

In February 2015, Browder published a book about his career, Red Notice: A True Story of High Finance, Murder, and One Man's Fight for Justice, focusing on his years spent in Russia and the Russian government's attacks on Hermitage Capital Management. Browder's responses to Russian corruption and his support of the investigation into the death of his attorney Sergei Magnitsky are at the heart of the book.[43][46] A film adaptation written by William Nicholson is in the works.[47]

Prevezon Civil Asset forfeiture case

In 2013, the US Attorney's Office for New York's Southern District filed a civil asset forfeiture case against Prevezon Holdings Limited, a real estate holding company belonging to Russian businessman Denis Katsyv. The case was based on information from Browder.[48] Prevezon and the Department of Justice settled the case in May 2017 for $5.9 million.[49]

Browder attempted to resist subpoenas that would force him to reveal his sources for information he gave to federal prosecutors. The court ruled that Browder was not required to comply with a subpoena served in Aspen, Colorado, because he "does not live or conduct business transactions regularly in Aspen", but he was required to comply with a subpoena served in New York, where he had been discussing his new book on a TV show. He was deposed in April 2015.[50][51]

Criticism

A 2016 documentary by Andrei Nekrasov, The Magnitsky Act — Behind the Scenes, "absolves the Russian government of any responsibility for Magnitsky's death"[52] and claims that Browder himself was behind the $230-million tax-rebate fraud.[53] The film was promoted in Europe and the US by a group that included Natalia Veselnitskaya.[54] Some European theater screenings and a television broadcast of the film were canceled after threats of libel suits from Browder.[53] Over Browder's objections, the Newseum in Washington held a screening in June 2016 hosted by Seymour Hersh.[52] Dana Rohrabacher (R-CA)'s office actively promoted the screening, sending out invitations from the office of the House Foreign Affairs Subcommittee on Europe, Eurasia and Emerging Threats, which Rohrabacher chairs.[54]

References

  1. ^ "The Weekend Interview: The Man Who Stood Up to Putin". The Wall Street Journal. May 9, 2014.
  2. ^ a b Jason McCormick, "5 Citizens Who Left the US to Avoid Paying Tax", CBS News, 11 July 2012
  3. ^ "Magnitsky Act Supporter Bill Browder On Russia, Putin And American Security". 1A. July 25, 2017. Retrieved August 12, 2017.
  4. ^ Jacob Weisberg (July 21, 2017). "Why Exactly Does Putin Hate the Magnitsky Act?". Slate. Retrieved August 12, 2017.
  5. ^ "Canada Passes Version Of Magnitsky Act, Raising Moscow's Ire". Radio Free Europe/Radio Liberty. October 19, 2017. Retrieved October 23, 2017.
  6. ^ a b Vankin, Jonathan (October 22, 2017). "Trump Russia News: U.S. Revokes Visa Of Top Vladimir Putin Enemy Bill Browder, Who Was Born In The United States". Inquisitr. Retrieved October 23, 2017.
  7. ^ Palmer, Bill (October 22, 2017). "Donald Trump revokes visa of key witness who testified against him in Trump-Russia scandal". Palmer Report. Retrieved October 23, 2017.
  8. ^ Nordlinger, Jay (October 22, 2017). "Why Is Bill Browder Banned from America?". National Review. Retrieved October 23, 2017.
  9. ^ Kramer, Andrew E. (October 23, 2017). "U.S. Clears Bill Browder to Enter, Rebuking Russia". New York Times. Retrieved October 29, 2017.
  10. ^ Baker, Stephanie (October 26, 2017). "Interpol Blocks Russia Request to Arrest Hermitage's Browder". Bloomberg. Retrieved January 6, 2018.
  11. ^ "Hermitage CEO Browder: Don't Invest in Russia Today". November 4, 2009. Retrieved 2009-12-15.
  12. ^ Maria Shao (October 1, 2009). "Bill Browder: A Warning Against Investment in Russia". Stanford Business. Retrieved August 12, 2017.
  13. ^ a b c d e Levy, Clifford J. (July 24, 2008). "An Investment Gets Trapped in Kremlin's Vise". The New York Times. Retrieved 2008-07-24. For Mr. Browder, 44, Russia was more than a place to do business. His grandfather Earl Browder was a Communist from Kansas who moved to the Soviet Union in 1927, staying for several years and marrying a Russian. He returned with her to the United States to lead the Communist Party for a time, even running for president.
  14. ^ Alexander Vassiliev (1999). The Haunted Wood: Soviet Espionage in America--the Stalin Era. Random House. {{cite book}}: |access-date= requires |url= (help)
  15. ^ Matt Schudel (December 15, 2016). "Felix Browder, mathematician shadowed by his father's life as a Communist, dies at 89". The Washington Post. Retrieved August 12, 2017.
  16. ^ Thomas Lin (December 20, 2016). "Remembering Felix Browder, A Nonlinear Genius in a Nonlinear World". The New Yorker. Retrieved August 12, 2017.
  17. ^ Kaminsky, Matthew (9 May 2014). "The Man Who Stood Up to Putin". Wall Street Journal. Retrieved 30 June 2015.
  18. ^ Laroche, Julia (3 February 2015). "The man who was once Russia's largest foreign investor says he should've 'never gone there in the first place'". Business Insider. Retrieved 2 February 2016.
  19. ^ Shao, Maria (1 October 2009). "Bill Browder: A Warning Against Investment in Russia". GSB.Stanford.EU. Retrieved 24 February 2016.
  20. ^ Matthew Cooper. WHO IS BILL BROWDER, VLADIMIR PUTIN’S ENEMY NUMBER ONE? Newsweek, 27 October 2017.
  21. ^ Joshua Yaffa (May 2015). "Putin's Hard Turn". Foreign Affairs. Retrieved August 12, 2017.
  22. ^ "The Hermitage Fund: Media and Corporate Governance in Russia," Harvard Business School Case 703-010, 2002 (26)
  23. ^ "Gazprom and Hermitage Capital: Shareholder Activism in Russia", Stanford Graduate School of Business Case IB-36, 2002
  24. ^ "Russian Sanctions Highlight Role of Western Enablers". 100 Reporters. May 21, 2014. Retrieved August 12, 2017.
  25. ^ "Magnitsky case: Russia accuses Browder over Gazprom". BBC News Europe. 5 March 2013. Retrieved 23 March 2013. In 1995-2006 Hermitage Capital Management was one of the biggest foreign investors in Russia. Mr Browder campaigned for the rights of minority shareholders, criticising the governance of Russia's partly state-owned corporations.
  26. ^ "World's top-earning traders (2006)". London: Guardian News and Media Limited. Archived from the original on 13 July 2008. Retrieved 2008-07-24. {{cite news}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  27. ^ "London boasts 25% of best paid traders". Daily Mail, The Mail on Sunday & Metro Media Group. Retrieved 2008-07-24.
  28. ^ Henry Meyer & Jason Corcoran (26 March 2013). "HSBC Shuts Russia's Hermitage as Browder Sued in London". Bloomberg L.P. Retrieved 27 March 2013. HSBC Holdings Plc (HSBA) is closing Hermitage Capital Management Ltd.'s flagship Russia fund just as its co-founder, William Browder, is being sued for libel in London and tried in absentia for tax evasion in Moscow. "It was too small to continue as a viable concern," Browder, 48, said by phone yesterday from London, where he's based. Browder said the closing is "completely" in the hands of HSBC, which is the trustee and manager of the fund.
  29. ^ "An enemy of the people: The sad fate of a loyal Putinista". The Economist. March 25, 2006. Archived from the original on 2 August 2008. Retrieved 2008-07-24. As the manager of a big Russian investment fund, Bill Browder has contributed to the circulation of the first kind of money--as well as making a packet for himself, and making his rich clients even richer. But he has also interfered with the supply of the second sort of money--and been ... {{cite news}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  30. ^ a b Matthews, Owen (October 17, 2009). "Where Vultures Prey". Newsweek. Archived from the original on 8 December 2009. Retrieved 2009-12-15. Retaliation came quickly. Clearly, the conspirators hadn't reckoned on publicity and so decided to cover their backs. In January, Sergei Magnitsky, one of Firestone Duncan's top lawyers and auditors, was unexpectedly arrested as he arrived to give evidence to a prosecutor assigned to investigate the case. {{cite news}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  31. ^ Browder, William (December 22, 2009). "They Killed My Lawyer". Foreign Policy. Archived from the original on 27 December 2009. Retrieved 2009-12-26. Sergei Magnitsky was our attorney, and friend, who died under excruciating circumstances in a Moscow pre-trial detention center on Nov. 16, 2009. {{cite news}}: Unknown parameter |deadurl= ignored (|url-status= suggested) (help)
  32. ^ Council of Europe's Committee on Legal Affairs and Human Rights. "Refusing impunity for the killers of Sergei Magnitsky" (PDF). Parliamentary Assembly, Council of Europe. Retrieved 10 August 2014.
  33. ^ "Police Set to Charge Browder for Buying Gazprom Stock". The Moscow Time. Associated Press. Retrieved 17 March 2013.
  34. ^ Charles Clover, "Russia alleges $70m fraud against Browder", Financial Times, 5 March 2013.
  35. ^ "Magnitsky case: Russia accuses Browder over Gazprom". BBC News Europe. 5 March 2013. Retrieved 23 March 2013. He said he had bought Gazprom shares in order to invest in the Russian economy and influence the Gazprom management because 'we noticed that there was huge fraud going on at the company'. Mr Browder insists that the way he bought the shares - through Russian-registered subsidiaries entitled to tax advantages - was legal and used by other foreign investors at the time.
  36. ^ Clover, Charles; Courtney Weaver (February 17, 2013). "Dead lawyer to go on trial in Russia". The Financial Times. Retrieved 26 February 2013.
  37. ^ Taylor, Jerome (February 17, 2013). "Russia set for posthumous Magnitsky trial". The Independent. London: The Independent. Retrieved 4 March 2013.
  38. ^ "Is Congress's Magnitsky Bill a New Blacklist?", The Nation, 14 December 2012
  39. ^ "Russia finds Magnitsky posthumously guilty of fraud", BBC, 11 July 2013.
  40. ^ Суд приговорил Браудера к девяти годам, а дело признанного виновным Магнитского прекратил NEWSru, 11 July 2013.
  41. ^ "Россия объявила в международный розыск Уильяма Браудера". mvd.ru.
  42. ^ "N20130726 / 2013 / News / News and media / Internet / Home - INTERPOL". www.interpol.int.
  43. ^ a b Browder, Bill (2015). Red Notice: How I Became Putin's No. 1 Enemy. Bantam Press. ISBN 978-0593072950.
  44. ^ Rosie Gray: "Bill Browder's Testimony to the Senate Judiciary Committee". The Atlantic, July 25, 2017.
  45. ^ "Forget Jeff Bezos, Putin Is World's Richest Man, Senate Told", Newsweek, 28 July 2017
  46. ^ William Grimes. "To Russia, With Capitalist Ambitions". The New York Times, 1 February 2015.
  47. ^ "Hedge Fund Manager Teams With Oscar-Winning Screenwriter to Take on Vladimir Putin".
  48. ^ Jose Pagliery (May 13, 2017). "Russian money-laundering details remain in the dark as US settles fraud case". CNN. Retrieved August 12, 2017.
  49. ^ "Acting Manhattan U.S. Attorney Announces $5.9 Million Settlement Of Civil Money Laundering And Forfeiture Claims Against Real Estate Corporations Alleged To Have Laundered Proceeds Of Russian Tax Fraud". United States Department of Justice. May 12, 2017. Retrieved August 12, 2017.
  50. ^ Nicle Hong (March 9, 2015). "Federal Judge Orders Browder to Comply with Suboena in Money-Laundering Case". The Wall Street Journal. Retrieved August 12, 2017.
  51. ^ "Videotaped Deposition of William F. Browder" (PDF). United States District Court Southern District of New York. April 15, 2015. Retrieved August 12, 2017.
  52. ^ a b Zavadski, Katie (July 25, 2017). "How an Anti-Putin Filmmaker Became a Kremlin Stooge". The Daily Beast. Retrieved September 26, 2017. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  53. ^ a b Landler, Mark (June 9, 2016). "Film About Russian Lawyer's Death Creates an Uproar". The New York Times. {{cite web}}: Italic or bold markup not allowed in: |publisher= (help)
  54. ^ a b Hines, Nico (July 19, 2017). "GOP Lawmaker Got Direction From Moscow, Took It Back to D.C." The Daily Beast. Retrieved September 26, 2017. {{cite news}}: Italic or bold markup not allowed in: |publisher= (help)
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