William Browder’s Opening Statement to the Senate Judiciary Committee – July 26, 2017
Disclaimer: This is a summary of William Browder’s testimony before the Senate Judiciary Committee on July 26, 2017. The information below was presented by William Browder in his testimony, and is not being represented here as either fact or as the opinion of the webmaster unless specifically stated. All statements and assertions should be read as if prefaced by “William Browder states that …” Any content that I add will be surrounded by [brackets] and will likely include a link or reference to the source.
Browder was born in Chicago, and is now a British citizen. He has lived in London and Moscow for the past 28 years. He founded Hermitage Capital Management, a major investment advisory firm in Russia, which in 1996-2005 had over $4 billion in Russian stocks.
As owner of a major finance firm, he began learning that Russian oligarchs steal from shareholders, including from Browder’s fund, the Hermitage Fund. To fight this corruption, he began researching how these oligarchs were stealing the money. He would then pass the information on to the Russian news media.
Although Browder never met Putin personally, Browder’s efforts were supported and even assisted by Putin, because the oligarchs had “misappropriated much of the president’s power as well,” and Putin was just beginning to consolidate his own power.
In 2003, Putin arrested and jailed Russia’s richest man, Mikhail Khodorkovsky, and staged a dramatic and humiliating televised show trial to make a public example of him. After that, the other Russian oligarchs came to fear Putin. Putin began demanding a 50% cut of the money that they were stealing, and Putin was no longer supportive of Browder’s anti-corruption efforts, which would now negatively impact Putin’s intake.
On November 13, 2005, Browder was detained and deported from Russia as a “threat to national security.” Eighteen months later, the Russian Interior Ministry raided the Moscow office of Hermitage Capital Management and Browder’s attorney and seized “all the corporate documents connected to the investment holding companies of the funds that I advised.”
Browder hired attorney Sergei Magnitsky to investigate what the officials were doing with these documents. Magnitsky determined that the documents were being used to re-register Browder’s holding companies to a convicted murderer named Viktor Markelov, and $230 million in taxes paid to the Russian government by Browder’s companies had been diverted elsewhere. [Note: Prevezon Holdings was accused by the U.S. Department of Justice of laundering millions of dollars in New York real estate, using money from a $230 million Russian tax fraud scheme. Prevezon settled out of court for $5.9 million without admitting guilt.]
Browder and Magnitsky notified the Russian authorities of what was going on, but instead of arresting those responsible, the authorities arrested and jailed Magnitsky. He was in prison for nearly a year under unusually horrible conditions, during which time, he was pressured to withdraw his testimony and sign a statement that he had stolen the money on instruction from Browder. Magnitsky refused.
Magnitsky’s health deteriorated dramatically in prison. He developed pancreatitis and gallstones which required surgery, but was instead transferred to an extremely harsh prison called Butyrka where no such treatment was available. His condition became critical. Magnitsky was transferred to another prison, was chained in an isolation cell, and was beaten to death by eight guards on November 16, 2009.
Browder, feeling responsible because Magnitsky had died defending him, vowed to avenge Magnitsky’s death. Magnitsky had documented all of the abuse during his time in prison in handwritten notes secretly passed to his attorneys. When this evidence was brought to Russian authorities, nobody was prosecuted. Instead, many responsible were given promotions.
Browder believed that the $230 million was likely in the west, where other Russians could not steal it. He decided to seek justice by getting the western assets of Magnitsky’s tormenters frozen and their visas to enter the United States denied.
In 2010, Browder began lobbying Senators Benjamin Cardin (D -MD) and John McCain (R-AZ) to create the Magnitsky Act, to freeze the western assets of specific Russian individuals and ban their visas. In late 2012, the act passed both houses of Congress and was singed into law by President Obama.
Putin responded with various retaliatory measures, including imposing a ban on American adoption of Russian orphans. Browder believes that Putin’s outrage was in part because Putin had ultimately been the personal recipient of Browder’s missing $230 million. Putin’s closest childhood friend, Sergei Roldugin, who Browder believes was acting as an agent for Putin, was shown in the Panama Papers to have received $2 billion from various Russian oligarchs. Part of this money was Browder’s $230 million. Because this particular money ultimately led to the death of Sergei Magnitsky, Putin is subject to the restrictions of the Magnitsky Act. Putin’s wealth is estimated at $200 billion, and much of it is in western countries, so Putin has a personal reason to want the Magnitsky Act repealed. The act also weakens Putin’s control over wealthy Russian oligarchs.
A Russian named Boris Nemtsov helped Browder advocate for the Magnitsky Act. In 2015, Nemtsov was murdered on a bridge in front of the Kremlin. Another Magnitsky Act advocate, Vladimir Kara-Murza, was poisoned in December 2016 and barely survived. Another Magnitsky Act advocate, the lawyer for Magnitsky’s mother, Nikolai Gorokhov, was thrown from the fourth floor of his apartment building in early 2017 but survived. Browder himself has also received multiple death threats from Russia, and the Russian government has also tried to arrest him multiple times using Interpol and other law enforcement.
Browder believes that wealthy Russians Pyotr Katsyv and Denis Katsyv, Natalia Veselnitskaya (the lawyer who met with Trump Jr., Manafort and Kushner at Trump Tower) and a group of “American lobbyists” began a campaign in the U.S. to repeal the Magnitsky Act or to have Magnitsky’s name removed from the Act.
Pyotr Katsyv is a high level Russian government official. His son Denis was caught using what Browder believes was part of his $230 million to purchase Manhattan real estate to launder the money. Veselnitskaya is the Katsyv’s attorney.
Veselnitskaya also created a “fake NGO” called Human Rights Accountability Global Initiative Foundation (HRAGI) to advocate repeal the Magnitsky Act by focusing on Russian adoption. Veselnitskaya brought on Rinat Akhmetshin – a U.S. citizen and former Soviet intelligence officer – to help with HRAGI’s efforts.
Veselnitskaya hired New York law firm Baker Hostetler to lobby Congress to remove Magnitsky’s name from the Magnitsky Act. Through that law firm, she also hired Fusion GPS to “conduct a smear campaign against me and Sergei Magnitsky in advance of congressional hearings on the Global Magnitsky Act.”
Fusion GPS told U.S. media that Magnitsky “was not murdered, was not a whistle-blower, and was instead a criminal.” Veselnitskaya hired marketing firm Potomac Group to create a fake documentary to discredit Browder and Sergei Magnitsky, a huge screening of which was held at the Newseum in Washington DC. Howard Schweitzer of Cozzen O’Connor Public Strategies and former Congressman Ronald Dellums – both of whom had been hired by Veselnitskaya to lobby Congress to repeal the Magnitsky Act – funded the screening and invited members of Congress to attend.
Browder believes that all of these activities were violations of the Foreign Agent Registration Act, requiring entities engaged in political or quasi-political activities in the U.S. on behalf of foreign governments to register and disclose their activities, finances, and their relationship with the foreign government. Browder has filed a complaint with the U.S. Department of Justice stating that many of the groups and individuals above violated FARA.
Browder’s testimony paints an overall image of rampant corruption in Russia, where oligarchs scam investors and Putin takes a cut of the oligarchs’ illicit gains. The testimony also makes clear that Browder is at the center of the creation of the Magnitsky Act, which currently prevents Putin and a number of other wealthy Russians from accessing their assets in the west. Putin had retaliated for the Magnitsky Act by, among other things, banning adoption of Russian orphans by Americans.
Given that the obscure subject of Russian adoption seems to come up repeatedly in interactions between Trump’s people and Russians, it is reasonable to assume that there are efforts to persuade Mr. Trump to repeal the Magnitsky Act so that Putin can once again access his frozen U.S. assets.
- When Russian lawyer Veselnitskaya met with Donald Trump Jr., Paul Manafort, and Jared Kushner at Trump Tower with the promise of dirt on Hillary Clinton, Trump Jr. later claimed that the discussion was merely about Russian adoption
- Similarly, when Trump spoke with Putin at the G20 meeting [Vox] , Trump claims that they primarily talked about Russian adoptions.
Browder’s testimony also brings Prevezon Holdings into the forefront of the issues surrounding the Magnitsky Act, accusing them of helping launder $230 million in taxes that he claimed he paid to Russia, but which the Russian government later claimed was not paid by Browder. Russian attorney Sergei Magnitsky died in prison trying to help Browder prove his case. Part of Browder’s efforts to allegedly avenge Magnitsky involved informing the U.S. Department of Justice that Prevezon was engaged in money laundering in New York.
Browder claims that law firm Baker Hostetler (hired to defend Prevezon), Fusion GPS (hired by Baker Hostetler to gather research supporting Prevezon’s court case), and a number of other organizations were involved in a campaign to repeal the Magnitsky Act. He also claims that those organizations, as well as Natalia Veselnitskaya, were operating on behalf of the Russian government. If so, their anti-Magnitsky campaign work would be a violation of FARA, because they had not registered to disclose that they were working on behalf of the Russian government.
Fusion’s production of the Trump dossier, if done as unregistered agents of the Russian government, could have been part of Russia’s campaign to influence the 2016 Presidential election. Creation of the Trump dossier would of course not be intended to sway the election toward Trump. The intent would instead be to sow discord, chaos and distrust in the election among the American people – goals that would be consistent with Putin’s. Yet Fusion GPS’s Glenn Simpson, whose testimonies are covered later in this series, comes across as an extremely straightforward, credible and forthcoming witness, which would tend to negate the idea of Fusion as being in league with the Kremlin.
Because of the possibility that Fusion was acting on behalf of the Russian government, Republicans on the Senate Judiciary Committee and House Intelligence Committee interviewing Simpson focused on Fusion GPS’s work on the Prevezon case.
– rob rünt
Read more of this special series:
The Trump-Russia Web
- Part 1: Introduction
- Part 2: What’s What (Glossary)
- Part 3: Who’s Who (Glossary)
- Part 4: Timeline, Key Relationships, Key Places
- Part 5: High-Level Summaries
- Part 6: William Browder
- Part 7: Natalia Veselnitskaya
- Part 8: The Steele Dossier
- Part 9: Fusion GPS
- Part 10: Glenn Simpson and the Prevezon Case
- Part 11: Glenn Simpson and the Trump Investigation