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Esquire | 27Jul2017 | Charles Pierce

This Is How the Russian Kleptocracy Operates

WASHINGTON -- There was a hearing on Wednesday(?) [9:00 AM EDT, Thursday, 27Jul2017] called by the Senate Judiciary Committee. It ran for two hours. It was sparsely attended. There were few spectators and almost no media presence. There were hardly any senators. It was an extraordinarily important hearing, despite the fact that it occurred in a near vacuum. The only witness was a man named Bill Browder.

Browder, it should be recalled, was the founder and CEO of Hermitage Capital Management, a hedge fund that did business in Russia and that was looted of $230 million by kleptocrats allied with Vladimir Putin in the largest case of tax fraud in Russian history. Browder and his firm were hauled into court by the Putin regime on a number of trumped-up charges. Some of his lawyers and associates were beaten in the streets. The company lawyer who discovered the massive pillaging was a guy named Sergei Magnitsky, and he was arrested and "died in custody," that all-purpose fig-leaf used by corrupt cops from Moscow to Bagram to Homan Square in Chicago.

(Later, the lawyer who was looking into Magnitsky's death got tossed out a fourth floor window.)

In response, in 2012, President Barack Obama signed the Magnitsky Act, which prohibited anyone who was suspected of being involved in Magnitsky's death from entering the United States and, more important, denied them the use of any American bank. In response, Putin cut off the adoption of Russian children by American families. And that was the mildest of his response. Behind the scenes, Putin went completely wild. Browder came to the hearing with two extremely large bodyguards, and with quite a tale to tell.

Consequently, I had an interest in fighting this endemic corruption, so my firm started doing detailed research on exactly how the oligarchs stole the vast amounts of money that they did. When we were finished with our research we would share it with the domestic and international media. For a time this naming and shaming campaign worked remarkably well and led to less corruption and increased share prices in the companies we invested in. Why? Because President Vladimir Putin and I shared the same set of enemies. When Putin was first elected in 2000 he found that the oligarchs had misappropriated much of the president's power as well. They stole power from him while stealing money from my investors. In Russia your enemy's enemy is your friend, and even though I've never met Putin, he would often step into my battles with the oligarchs and crack down on them.

That all changed in July 2003 when Putin arrested Russia 's biggest oligarch and richest man, Mikhail Khodorkovsky. Putin grabbed Khodorkovsky off his private jet, took him back to Moscow, put him on trial and allowed television cameras to film Khodorkovsky sitting in a cage right in the middle of the courtroom. That image was extremely powerful because none of the other oligarchs wanted to be in the same position. After Khodorkovsky's conviction, the other oligarchs went to Putin and asked him what they needed to do to avoid sitting in the same cage as Khodorkovsky. From what followed, it appeared that Putin's answer was,"Fifty per cent." He wasn't saying 50% for the Russian government or the presidential administration of Russia, but 50% for Vladimir Putin personally. From that moment on Putin became the biggest oligarch in Russia and the richest man in the world and my anti-corruption activities would no longer be tolerated. The results of this change came very quickly. On November 13, 2005 as I was flying into Moscow from a weekend away, I was stopped at Sheremetyevo airport, detained for 15 hours, deported and declared a threat to national security.

Ostensibly, the purpose of the hearing was to recommend improvements in the enforcement of the Foreign Agents Registration Act, but the actual political purpose was to open another window into the possibility that the Russian government, through bribery, blackmail, or a combination of both, ratfcked the 2016 presidential election to the benefit of the Trump campaign. Browder was careful not to go beyond what he knew from his own case, but, when asked if Hypothetical Scenario A was something that the Russians might try, say with the son of a presidential candidate, he was not shy about answering from his own experience.

Browder said that, in his experience, he believed that there was more than one meeting with Natalia Veselnitskaya, the Zelig-like Russian lawyer with whom Donald Trump, Jr., Jared Kushner, and Paul Manafort, met in June of 2016. Throughout his testimony, Browder emphasized that the only goal Veselnitskaya had was to get Putin and his plutocrat remoras out from under the Magnitsky Act.

At the beginning, it was thought that the Republican majority on the committee would use the hearing to swing the narrative back around on Hillary Clinton and the previous administration through an examination of Fusion GPS, the opposition research firm that tasked Christopher Steele to compile his famous dossier on the president* and, through that, to concoct a new narrative by which both presidential candidates were tied into Russian influence in 2016. (At one point, Browder speculated that Fusion had at least one prominent Washington journalist on the pad.) If that were the goal, the Republicans failed miserably.

First of all, practically none of them showed up. The questioning from the majority side was undertaken only by chairman Chuck Grassley of Iowa, who has stayed too long at the fair, and the increasingly pissed-off Lindsey Graham, who pretty much seems to have had it with defending the White House against this stuff. If you want to take this as further evidence that the Republicans in Congress are also on their last nerve with this president*, I wouldn't argue with you.

Browder came to the hearing with two extremely large bodyguards, and with quite a tale to tell.

(Before the hearing, Graham told CNN that, if the president* were to arrange the firing of special counsel Robert Mueller, either directly or by firing Attorney General Jefferson Beauregard Sessions III in favor of a more pliant underling, "There would be holy hell to pay," and that it "could be the beginning of the end of his presidency." It's hard not to view his friendly questioning of Browder outside of that context.)

By contrast, the Democrats on the committee honed in sharply on Browder's expertise in how the Russian kleptocracy operates around the world in the context of the stories swirling around the Trump operation. For example, Sheldon Whitehouse of Rhode Island easily got Browder to help him bat away the lame attempts by Grassley to argue that, because Fusion did oppo research on Trump, it must've been working on behalf of the Clinton campaign.

WHITEHOUSE: You mentioned that the Russians use either bribery or blackmail. Once they have got a person in a foreign country where they want to exert influence enmeshed in a bribery scheme, are they perfectly willing to use their own bribery scheme against that individual?

BROWDER: Oh, absolutely, of course. Effectively, once you enter their world, you're theirs. Once you get stuck in with them, you can never leave.

Here's the thing. The Both Sides narrative on this particular story is not going to fly, not even if you toss in the red herring wingnut fairy tale about how Hillary Rodham Clinton sold 20 percent of this country's uranium to a Russian concern after which Bill Clinton gave a speech in Russia for a considerable fee. Grassley made a half-hearted pass at doing this early in the hearing, but gave up on it quickly, and there weren't enough Republicans in attendance to carry it forward. The Trump operation owns this tale, and it's only going to get darker and more threatening as the days go by.

Bill Browder's submission to and his testimony before the Senate Judiciary Committee is available at: