Charles Davidson for The American Interest: Bill, it’s great to see you again. This will be the third interview you’ve granted The American Interest, and I hope not the last. You’ve come to focus more on the issue of Western enablement of kleptocracy, and I was wondering if you could comment on how the Global Magnitsky Act could, or should, be used to sanction those in the West who are complicit in hiding the money of the “bad guys.”
Bill Browder: Well, before we even get into that, we should talk about who are the Western enablers and what are they doing in different categories. In the Magnitsky case, we’ve had an opportunity firsthand, to see how the Western enabling system works, because as the Russians have tried to cover up the murder of Sergei Magnitsky, and cover up legal liability, and cover up the money laundering, they’ve engaged a bunch of people from the West.
The most interesting examples are connected to Natalia Veselnitskaya and Prevezon. Prevezon received proceeds of the crime that Sergei Magnitsky had uncovered. They were prosecuted by the Department of Justice, and as part of their trying to wiggle out of their legal liability, they spent a vast amount of money on Westerners to help them. The most interesting story was the story of lawyers that they chose. Natalia Veselnitskaya chose an American lawyer with a very curious name, John Moscow. You actually couldn’t make up such a name for a story like this. John Moscow . . . but what made John Moscow so particularly interesting in our story was that John Moscow had actually been the lawyer for us, in finding the dirty money, and in introducing us to the Department of Justice. And then, once the money was found, and once we got the Department of Justice to open a criminal case, John Moscow then switched sides and became a lawyer for the Russians.
It’s a perfect example of how people in the West will sacrifice their values, their legal obligations, in order to make money for the Russians. John Moscow wasn’t the only enabler that joined the Veselnitskaya team. You also had Glenn Simpson, the opposition researcher who was an anti-corruption activist . . . or, he claimed to be a Russian anti-corruption activist prior to this whole series of events, and then he started taking money directly from the Russians to try to cover up the legal liability of Prevezon, and to try to blame me for all of the problems.
TAI: Well Bill, you’ve certainly had your experiences with Western enablement, and you’ve certainly had your experiences with kleptocracy, so this is certainly on point. I’m familiar with this story, and know a lot of these people.
Now, I’d like to jump in this regard, to the Global Magnitsky Act, specifically section 1263, paragraph four—the language regarding the authorization of imposition of sanctions on intermediaries, which refers to someone who “has materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services in support of” either human rights abusers or various acts of corruption. Who should be worried by this language? What does this mean?
BB: So the Global Magnitsky Act is really an unbelievably powerful tool. It does several things. The Global Magnitsky Act goes after human rights violators, those people who had been involved in torture and killing of people. It goes after people who are involved in high level corruption, so kleptocrats, people who are stealing massive assets from their governments. And then, most importantly, it goes after two categories of people: People who are acting as nominees for these people, their agents. That’s the first category. And then, it goes after people who have materially assisted, sponsored, or provided financial, or technological support or goods and services, for those people I’ve just mentioned.
TAI: That sounds pretty interesting. What exactly does this mean?
BB: This comes right back to the issue of the Western enablers. Basically, one could sanction, let’s say, a Nicaraguan general, who is involved in this thing, but one, in theory, could also sanction a British lawyer who is hiding the assets of the Nicaraguan general. These powers haven’t been used yet. There have been a number of Global Magnitsky designations which have been focused on the horrific human rights abusers. But I suspect, and certainly I will be involved in, advocating for the use of the Global Magnitsky Act against the enablers in the West.
It doesn’t take many cases of a lawyer, or some type of financier, to get caught in this thing, to create an absolute terror and panic among the entire Western enabler community. Right now, there are a lot of people in the West who choose, consciously, to amorally assist very bad people, who have done very bad things, in exchange for money. They view their situation as having very little downside, and only financial upside. What the Global Magnitsky Act does, particularly paragraph four of section 1263—it goes after the enablers. All it takes is a few of these stories, and we’ll see a sea change in the risk/reward calculus for these people.
TAI: If we look at the Global Magnitsky Act, or what’s now called GLOMAG—I mean, this thing is becoming so ubiquitous that it’s got its own shorthand amongst its proponents and advocates—there’s a bill that’s passed in the UK, I understand that the Baltics have passed something. I’m wondering: How do these other GLOMAG bills compare to the U.S. legislation?
BB: Well, first of all, I should say I hate the acronym. I hate it for one simple reason.
TAI: Good, I do too. It’s inelegant. It doesn’t sound good.
BB: Well, it doesn’t sound good, but also, the whole purpose from my perspective of the Magnitsky Act was to name it after Sergei Magnitsky, the victim. And to sort of bastardize that is very unappealing to me. People in government and elsewhere should continue to call it the Global Magnitsky Act.
TAI: Sounds good to me.
BB: It’s not easy to get laws passed anywhere. In fact, some people would argue that it’s easier to win the lottery than it is to get a law passed in the United States. And so, when we got the Magnitsky Act passed, and we got the Global Magnitsky Act passed, we worked as hard as we could on it, and we were extremely happy with the outcome—and were very surprised that we had such a positive outcome. In other countries, we face the same type of challenges and so, in each country, the law is different. The closest comparable law to the U.S. Global Magnitsky Act is the Canadian Magnitsky Act, which basically sanctions human rights abusers, and people guilty of grand corruption, and it publicly names their names, bans their visas, and freezes their assets.
The British law, in theory, does the same thing. However, when you get out to the Baltics, Estonia, Latvia, and Lithuania, all it does is ban their visas. They haven’t yet created legislation to freeze their assets. Lithuania is the first country among the Baltics to introduce asset freezing legislation to accompany the visa banning legislation.
And so, the way I look at this is we take whatever successes we can, and we try to harmonize these things over time. The big, big prize that we’re now a bit closer to winning is the EU. The European Parliament has unanimously called on the EU, as far back as 2014, to implement a Magnistky Act, but the bureaucracy inside the EU has been resistant. In particular, a woman named Federica Mogherini, who is head of the European External Action Service, which is their equivalent of the State Department, has rejected all of Parliament’s requests.
However, recently, the Dutch government has put its own proposal together, and on November 20th, there will be the first meeting in The Hague between Holland and 28 other EU member states, where they’re also inviting the United States, Canada, and Australia to attend, to discuss an EU Magnitsky Act. The major downfall of the Dutch proposal, as it stands now, is in an effort to appease the Russians, the Dutch have deleted Sergei Magnitsky’s name off of the legislation, which I’m absolutely not going to allow to happen. Dana Rohrabacher, Putin’s favorite congressman, tried to do the same thing in America, and it didn’t succeed; and I won’t let the Dutch succeed in doing that in Europe.
TAI: Very interesting. Certain countries within the EU—can we just very quickly, rifle through a few countries, and where they stand and what might happen there? I’m thinking Germany, I’m thinking France, Spain, Italy, and then outside of Europe, Japan also. Can we just quickly zip through those?
BB: Well, so far we have parliamentary initiatives going on in Holland, Denmark, Sweden, France, and Romania. Germany, of course, is one of the most important countries, and we’re now just gathering parliamentary support there.
TAI: What’s the state of play in Germany?
BB: Well, Germany is a complicated place because on the one hand, there are a number of parliamentarians who are quite supportive of this, and I would even suggest that Angela Merkel is not diametrically opposed to it. But Germany is a country where there is a huge amount of Russian business influence, and Russian political influence, and there’s a lot of people who don’t want to upset Putin.
TAI: Isn’t there some chairman of the board of some Russian company that used to have some high position in German politics?
BB: Well, of course, there’s the famous case of Gerhard Schröder, the previous Chancellor, who was running the country one day, and then the next day, when he finished his job as head of state, he immediately took on a job making huge amounts of money on the board of Gazprom’s pipeline company.
TAI: And he’s now chairman of Rosneft?
BB: Yes. And he attends Putin’s birthday party each year, and he’s openly using the vapor trails of his political credibility to lobby for Putin’s influence in Germany.
TAI: What about France?
BB: Well, France is an interesting country, because the French have been, as a population, historically sympathetic to Russians. The Russians have bought more real estate in France than probably any other country in the world. They love their houses in Saint-Tropez and Cap Ferret. They all have beautiful apartments in the 8th Arrondissement in Paris. They all take their mistresses shopping in Paris. It’s a real sort of oasis for the Russians. And France really appeals to them because the French really know how to do luxury, and the Russians are big into ostentatious luxury.
However, there’s a real opportunity in France, and it comes down to simple human emotion. Putin, several days before the French election, had his intelligence services hack the emails of Emmanuel Macron, who is now the President of France. As much as he appears as a clearheaded statesman in all of his international meetings, I’m certain, as a human being, that Macron is furious that Putin tried to steal the election from him. And so I think that we probably have more of an opportunity in France than many other countries, for that specific reason.
TAI: Interesting. What about the country of Prosecutor Jose Grinda Gonzalez—Spain? Anything particular to comment on there?
BB: We worked very closely with Jose Grinda on the Magnitsky case, specifically on money laundering in Spain. He’s opened a criminal investigation into money that came from Russia to Spain, that’s connected to the Magnitsky case. In the parliament, it’s a little more complicated, primarily because Spain, among all the European countries—it feels very far away from Russia. The weather is different than Russia, the language is different. And they have a lot of political turbulence right now, so it’s hard to get people to focus on international issues.
TAI: What about Italy?
BB: In Italy, the Northern League now has a seat at the table. The League is a far-right party, openly pro-Putin party. I personally won’t travel to Italy, for fear of being arrested. The interior minister of Italy is an open Putin-lover. Which doesn’t mean that we’re not trying to do something in Italy. We have parliamentarians there who are also proposing some type of Magnitsky initiative. Even in a country like Italy, it’s helpful to start putting these things into motion, because it creates an automatic debate. And sometimes outing people on the wrong side of this debate is as useful as anything else.
TAI: Well, that really sucks, not to be able to travel to Italy, I must say. Now, last one and then we’ll move on to other pastures: What about Japan—anything that you can quickly note there?
BB: Japan is on my target list. I have some friends in Japan who are in the political arena, who have offered to connect me to parliamentarians in Japan, and so I’m beginning that process right now.
TAI: As Global Magnitsky spreads—and I think we see that this is an infection that you are encouraging, quite effectively, it would seem—what are the prospects that Global Magnitsky becomes a coordinated, international framework, for fighting kleptocracy, human rights abusers, and other “bad guys”? What are the chances that we get genuine international coordination, that becomes a sort of offensive pushback containment policy, however you want to characterize it, against the general phenomenon of kleptocracy?
BB: I think we’re close to a tipping point, in terms of Global Magnitsky becoming a global standard. When I first started this process, no government wanted to talk to me, because no government wants to be in a position of challenging the kleptocracy or the human rights record of another country. But, as time has gone on, and more countries sign on to this thing, then it becomes shameful not to be signed on to it. I believe that once we get the EU on board, that’s when all the countries start to harmonize their Magnitsky programs, and that’s also when you end up in a situation where it will really be devastating for the bad guys.
But let me just back up for a bit.
I’ve always had this fantasy of making true international pariahs of human rights violators, in the same way as we made terrorists international pariahs—that human rights violations, you know, gross human rights violations, torture, murder, should be punished as badly as terrorism. I don’t think we’re that far away from that being the case. If this standard then gets used liberally, which I hope it will be, then all of a sudden, I’m hoping that it becomes a true deterrent, that people have to weigh out the costs and benefits, in their own countries, of doing stuff, because they realize that the downside for them is that they get stuck in their own countries. The worst downside of getting stuck in their own countries is that—well, a lot of these people don’t last for very long in their own countries. They know they have no place to flee to afterwards.
TAI: Right. Now, so if the world gets GLOMAGed—and we’re going to want a different verb from that, obviously—what’s next? What other legislation, regulation, or policies are needed to supplement Global Magnitsky? And, for that matter, are there any amendments you’d like to see to the existing act?
BB: People ask me that all the time, and I think the Global Magnitsky Act, in its current form, is rock solid in the U.S. I’m extremely happy with how it’s being used, and the effect that it has. I would say that what I’ve seen in my own fight against kleptocracy and impunity, outside of America, when it comes to fighting money laundering, you have a lot of good laws in place. And you have truly incapable prosecutors and police forces, who are unable to understand, identify, and prosecute money laundering. If you can get the people, through Global Magnitsky, and you can get the money through proper law enforcement of money laundering statutes, then it pretty much changes the balance of power between the good guys and the bad guys. But, at the moment, we have absolutely just shameful lack of enforcement in countries like Britain, the Scandinavian countries, various other places in Europe. And it’s so bad that you could pretty much, with almost 100 percent certainty, conclude that anybody who is guilty of money laundering will get away with their crime.
TAI: Well, if we focus just on the U.S., we have Global Magnitsky—is there any legislation, or regulations, or policies? I mean, we certainly could use a lot more enforcement resources in various areas—you and I have discussed that in other contexts. But in the best of all possible worlds, anything else? Or does Global Magnitsky, and the enforcement of existing laws and regulations, do the trick?
BB: Well, I think that there’s a whole world here in the U.S.—of money launderers, enablers, company formation agents, accountants, bankers—that is involved in assisting kleptocrats hide their money. There have been some good starts. For example, in the United States—in Los Angeles, New York, Miami—any property purchased over a certain value, you have to disclose the beneficial owners, and as a result of that, the number of cash transactions has dropped by 95 percent. Limited liability companies can’t have nontransparent ownership structures. All these types of things can greatly reduce the amount of kleptocracy that America supports.
TAI: Bill, you and I are both optimists, but we are surrounded by lots of cynics and naysayers, and opponents. So how do we answer the question as to whether or not we’re at the beginning of a rollback vis-à-vis those who you correctly call the “bad guys”? I mean, is there hope for freedom, democracy, and liberty? Because we live in a world where, by all the Freedom House measures, democracy is in retreat. Freedom is in retreat. It’s been diminishing every year. And authoritarian regimes have been on the upswing. If we look at the last decade, the bad guys have been doing better and better, and the good guys have been doing worse and worse. So, how does this play out? Do we win or do they win?
BB: Well, one could argue that all this work we’re doing—fighting kleptocracy—is like changing the deck chairs on the Titanic. I live in England where we are suffering through Brexit. And there are all sorts of cultural civil wars going on in America. The Brazilians just elected their own dictator. The Hungarians, the Turks, the Egyptians, with their dictators—it all looks pretty horrifying.
However I wouldn’t give up on any democracies just yet. I think that a lot of bad people have taken advantage of weaknesses in the system, and I think that the vast majority of Americans, Brits, and people of other nationalities, are good people that don’t want to have this happen. And our systems are not so flawed, like Russia, that we have to submit to it.
But it all looks pretty terrifying right this second.
TAI: Let’s switch gears—to the Danske Bank scandal, or whatever we want to call it. Could you explain it from your perspective, briefly?
BB: My perspective is the perspective of the Magnitsky case. Sergei Magnitsky discovered the theft of $230 million from the Russian government. He exposed that theft, and he got killed for it. For the last nine years, we’ve been tracing that money, to make sure that the people who killed him don’t benefit, and the people who helped launder that money don’t benefit. We discovered where a lot of that money went. Every time we discover where the money went, we then apply to the law enforcement agencies of that country to open a criminal case, freeze the assets, and prosecute the enablers. There are now 16 live money laundering investigations going on in 16 different countries.
In one of those countries, we discovered that a small bank in Estonia, which was a branch of the Danish Danske Bank, had laundered a significant amount of those proceeds—more than $200 million of the $230 million from the Magnitsky crime, went through the Estonian branch of Danske Bank. We applied to the Estonian prosecutors, and we applied to the Danish prosecutors to investigate. At the time of our applications, neither of them investigated. They valiantly resisted us in doing an investigation. Eventually, a small newspaper in Copenhagen called Berlingske did a big investigative piece, and they discovered that a lot more than $200 million went through the Estonian branch of Danske Bank. They estimated that the number was close to 9 billion. Off the back of their investigation, Danske Bank hired an outside law firm to conduct a proper independent investigation, and that law firm concluded that the number was close to $234 billion of Russian and other former Soviet money went through this one branch of Danske Bank in Estonia.
TAI: What strikes me about this case—among other things—is that the recently departed CEO of the whole shebang, of all of Danske Bank, was in charge of this Estonian branch when he was a regional manager. He was responsible for the part of Danske that included Estonia. I always wonder if there is any way that he could not have known what was going on…
BB: I’ve read the report very carefully, the report that was prepared by this external law firm. The report, by the way, has extremely damning information about what happened. But management paid for the report, and it exonerates him—the CEO—and the board of directors.
TAI: That seems surprising.
BB: So if they pay for the report, and it exonerates them, it doesn’t seem too surprising to me at all. In the report, there are extremely granular details of constant warnings, coming as early as 2006, about money laundering from Russia going through that branch. 2006. In subsequent years, I believe, Citibank and Deutsche Bank cut off their correspondent banking relations with the bank because they were so suspicious of the transactions. There was a whistleblower report. There was our complaint. And none of this seemed to resonate in any way with the CEO of the bank or with the Board of Directors. They allowed this to continue.
TAI: So, as our children’s generation might say, LOL?
BB: Well, this is not a laughing matter. This was money connected to a murder, the torture and murder of Sergei Magnitsky. This is very serious business.
TAI: Could the Global Magnitsky Act be used against ex-executives of Danske Bank, potentially, if they’re found to be guilty?
BB: There’s one crucial aspect of the Global Magnitsky Act, which is that it’s in place for where there’s impunity. And so, in Russia, there was impunity for all the people who killed Magnitsky. The Russian Magnitsky Act sanctioned them. If the Danish authorities refuse to prosecute one of their members of the establishment because he’s so well connected there, then this would be a case for that.
TAI: Now, a few other things, sort of as a coda for our readers, that are a bit lighter. We can maybe have a little more fun with this.
I’m wondering what your take is on the Panama Papers, and the so-called Paradise Papers, and what effect you think this will have on things, and maybe how it’s affected even the work you’re doing with Global Magnitsky—whatever comes to mind.
BB: Well, the Panama Papers provided us with a crucial breakthrough in the Magnitsky case. We had always wondered why Putin was ready to ruin his relations with the West over the Magnitsky case, and we’ve discovered it through the Panama Papers. A man named Sergei Roldugin was exposed in the Panama Papers. He’s a ‘cellist. He was exposed as having accumulated two billion dollars. He’s a man who was very close to Vladimir Putin—they were best friends in childhood, and he was the godfather of Putin’s daughter. When the details of his ownership structures were revealed in the Panama Papers, we were able to connect all that directly to the crime that Sergei Magnitsky had uncovered. And so, effectively, from the Panama Papers, we could conclude that Putin was a beneficiary of the crime that Sergei Magnitsky was killed over, which gives him a very strong personal motive to retaliate. Which is what he has done.
TAI: It’s all interconnected, it seems, wherever one goes. What about the Paradise Papers—or the Appleby Papers, as I like to call them? Are there any connections to the Magnitsky cases there, or anything worth noting?
BB: Well, the real frustration on the Paradise Papers is that I’m aware of a number of exposes that got caught in midstream, which have never seen the light of day, because Appleby sued The Guardian, and perhaps other news organizations. I know of one specific story, which is truly amazing, scandalous, and upsetting, which still sits underneath a court order not to disclose it.
TAI: Well, it sounds like there is still work to be done.
BB: That’s an understatement.
TAI: Yeah, that’s an understatement. Well, it’s better than being bored I guess. But I do think we will win eventually. I mean, I think that there is, in fact, a positive history to political reform, and we live in a very cynical age, and we tend to forget the examples of when the good guys win. So, with Bill Browder on our side, I think we will eventually win.
Now, you wrote this book, Red Notice, and I’ve heard rumors that it may become a movie or something. Is it possible to publicly comment on Red Notice in Hollywood?
BB: What I can say is that I’ve had three careers so far in my life. I’ve had a career on Wall Street, a career in Moscow, and a career in Washington, and one deals with some really hairy characters in each place. But, the one thing I can say is I’ve never dealt with as much dysfunction and dishonesty, as I have found in Hollywood.
TAI: Last item: your next book, can you give us any sort of preview?
BB: Well, I think that this interview is a good preview of my next book.
My main opponent throughout the last 20 years of my life have been corrupt Russians. But, I almost have a certain understanding of why these Russians are the way they are, because they were brought up in a totally brutal, non-religious, amoral society, where good behavior was almost squelched out. And so—I don’t approve of it, but I’m almost… I can almost empathize with how they came to be the way they became.
In the West, we have people who went to the same schools as us, worshiped at the same churches, had nice mothers who didn’t beat them, and fathers who paid attention to them, and they grew up, and some of these people decided very consciously with all the values that we all believed in, to turn over to the dark side, and work with the Russians. I have more contempt for those people than I do for the Russians.
TAI: Bill, thank you. It’s been a real pleasure, as always. I look forward to our next interview for The American Interest, and wishing you all the best.
BB: Thank you.