New Yorker’s fake Browder story

By Lucy Komisar
Aug 17, 2018

How do you get credibility for a story that is mostly lies? You throw in a few negatives about the person you are going to white-wash. Then you repeat all his unproved assertions as if they were fact. And you don‘t bother to provide evidence.

You also ignore the major story you ought to be telling: how conman William Browder got western governments and media to block the Russians from collecting some $70 million he owes on taxes and illicit stock buys. And how that helped provoke ColdWar 2.0.

width=298Joshua Yaffa‘s article about William Browder in the current New Yorker is a classic. Whatever happened to the New Yorker‘s famed fact-checkers?

First, the agenda is in the subhead “why the West should confront Putin.” Yaffa is a fellow at the neocon New America think tank. So, the purpose of the article is not to shed light on Browder‘s story, it is to build hostility to Russia.

Let‘s go through his article.

The Trump-Putin press conference, where Yaffa says, “Putin falsely claimed that Browder‘s business associates had earned more than $1.5 billion in Russia and “never paid any taxes,” and that Browder had donated some four hundred million dollars of this money to Hillary Clinton‘s Presidential campaign.”

Indeed, Putin may have gotten the numbers wrong. We know that Browder’s fund, according to Russian Forbes, in 2006 had $2.8 billion in assets. We also know from documented Russian charges that he cheated on at least $70 million in taxes and illicit stock buys. Whether that is based on $1.5 billion profits, I don‘t know. Depends on the rates.

And the donation to Clinton is also confused. Digging down, the point is that the Ziff Brothers Russian investments were handled by Browder, who helped them evade taxes on their profits through Cypriot offshores, and that they made contributions to the Democrats. So it’s a messy claim with no evidence. Putin, like the rest of us outside U.S. power structures, doesn’t know how political money moves. Yaffa explains none of this.

Yaffa talks about “Browder‘s decade-long campaign against Russian corruption.” But outside the West, Browder‘s honesty was not widely accepted. According to Anton Verzhbitsky, writing in Russian Forbes Nov 16, 2016, Brokers joked that after leaving Bill’s office, it’s worth checking to see if any of your pockets were missing, says one of the financiers who worked with him.”

Particularly, Browder made charges against Russian companies in order to profit by manipulating their stock prices. But that‘s another story.

Yaffa writes, “In 2009, Browder‘s tax adviser Sergei Magnitsky testified that the Russian police and tax authorities had attempted to steal two hundred and thirty million dollars in Russian taxes paid by Browder‘s Moscow-based investment firm, Hermitage Capital. Magnitsky was arrested, and died in a pretrial detention center in Moscow.”

That is conflating and composting (as in mulch). First of all, if the arrest followed the testimony, the careful fact-checkers at The New Yorker got the year wrong. Magnitsky was arrested in November 2008, not 2009. That testimony was nearly a year after he was imprisoned. (Dates, fact-checkers?) Makes you think Yaffa doesn’t have a clue about the chronology of Magnitsky’s interrogation and detention.

Joshua Yaffa

Magnitsky indeed said in an October 13, 2008 testimony before his arrest that “Mr. Kuznetsov, an operative official of the Tax Crime Department of the Moscow Branch of the Interior Ministry, … organized a fabricated criminal case on non-existent grounds, initiated searches in the office of Hermitage and Firestone Duncan. During such searches the officers, who conducted such searches, were given the lists of the legal entities that were controlled by my client, but have no relation to “Kameya” against which activity the criminal case was instituted.

The said lists contained also the names of the subsequently stolen companies. In the course of the searches the original copies of all statutory documents and registration documents were confiscated and without such documents it is impossible to effect re-registration of the legal entities.” He said the documents were used to re-register the companies and allow scam artists to use them to claim refund of taxes. His testimonies.


Except the stolen companies was not a discovery; it had already been reported in July 2008 in the daily Vedomosti in Moscow and the New York Times!

There is no evidence Magnitsky reported it earlier. In fact, Paul Wrench, working for Mr. Browder, filed a complaint about the fraud in July 2008. He was asked in a sworn deposition in U.S. Federal Court November 2015 who he had discussed it with. He said, “With Ivan Cherkasov. [Mr. Browder‘s partner.]” Nobody else.

Plus, Magnitsky said in another testimony that documents were not needed to re-register the companies. After they were removed, the company was able to get them copied to use for new tax filings. Magnitsky testimony June 6, 2008: “the representatives of the companies decided to produce seal replicas, following consultations with the legal advisors. The order for the replicas was placed with a commercial firm specializing in the manufacture of seals and stamps. The seals were produced using print specimens of the original seals on various documents and copies supplied by the representatives of the companies.”

Also, Magnitsky had been interrogated about Hermitage tax evasion in 2006 and twice in 2008.

Yaffa‘s claim of a 2009 testimony must refer to the statement of October 13, 2009, which was the first time Magnitsky even mentioned the June 2007 raid, first time he made a charge against the Russian officers. Oleg Lurie, a journalist Magnitsky talked to in detention, said in a U.S. court deposition that Magnitsky told him he had been pressed by his employers to make this statement.

Oleg Lurie. William Browder attacked him as a friend of Putin, but note the photo supporting the anti-Putin Pussy Riot on Lurie’s Facebook page.

By chance I had met Lurie when I was in Moscow in 2000 and talked to him about his investigation of the theft of the IMF $4.8 billion loan to Russia that went through the Republic National Bank run by Browder‘s investor Edmond Safra, so I knew he was credible as an investigator of Russian corruption.

Did Yaffa not know about the Lurie deposition?

Then the Trump Tower meeting June, 2016, where members of the Trump campaign team, offered damaging information on Hillary Clinton met with Natalia Veselnitskaya, a Russian lawyer with close ties to Russian government officials.

Natalia Veselnitskaya, photo Lucy Komisar.

 First, what officials? What does that vague accusation mean?    Second the sentence is worded to make it seem as if the lawyer offered information about Clinton, which is untrue. It was a music publicist who later admitted he invented that in an email to get the meeting. Fact-checkers?

Yaffa recounts the death of “Alexander Perepilichny (sic), one of Browder‘s chief sources of information on the movement of the stolen funds, collapsed while jogging near his home and died. The case is still under investigation. Browder, who has taken to relating to as large an audience as possible the danger he faces, has called this “a perfect example of why you don‘t want to be an anonymous guy who drops dead.”

Well, that was Browder’s line, but according to the inquest it wasn‘t true. See here.

Yaffa appears not to have seen that story and continues to promote the lie that Perepilichnny might have been murdered.

Why ignore the finding that shows that the married guy had gotten food poisoning days before at an assignation with his girlfriend at the Bristol Hotel in Paris? Isn‘t sex interesting? Not if it casts doubt on your theory.

Interesting that Yaffa notes “Browder has spoken out against the exploitation of offshore tax havens”for example, the ones detailed in the documents that were leaked from the Panamanian law firm Mossack Fonseca, in 2016… Still, Browder tends not to mention that Mossack Fonseca set up at least three firms for him and Hermitage.

Glendora, a shell company in Cyprus, was used to enable Browder’s Hermitage Fund to evade Russian taxes.

So, why doesn‘t he investigate how Browder used those shell companies? What are shell companies usually used for? Tax evasion? Hello! Is this really a reporter?

Very interesting: “In April, 2016, Robert Otto, a top intelligence official at the State Department, wrote in one of many e-mails that were later leaked online, in a hack widely linked to Russia, “I am beginning to feel we are all just part of the Browder P.R. machine.”

If he knows that, he knows the rest of the story those emails describe. But he doesn‘t write it. Perhaps for the same reason it has been rejected/censored by The New Yorker and other major media.

Yaffa said: “Browder also minimized how much Hermitage paid in Russian taxes. The government, in an effort to stimulate regional investment, had established a special zone in Kalmykia, a republic north of the Caucasus, that offered a lower tax rate. The rate went down even more if disabled workers made up a majority of a company‘s employees. To take advantage of this, Hermitage hired disabled people for its companies in Kalmykia. A banker who managed a number of Russian funds said, “We‘re not generally disciples of Mother Teresa, but Bill was singularly bottom-line focused.”

That is a lie. Browder never hired the people, he just paid them to use their passports. The Russian authorities provided evidence of where those people really worked. Why doesn‘t Yaffa say that? See evidence here.

William Browder.

“Browder received a British passport in 1998 and, rather than become a dual citizen, renounced his U.S. citizenship. … But those I talked to who knew Browder in the nineties assumed that the reasons were financial. U.K. tax rules governing foreign income are less stringent than those in the United States. A person who was friendly with Browder at the time said, “He told me he didn‘t want to pay U.S. taxes.” It was widely said. So why doesn‘t Yaffa follow that road?

“As Browder tells it in his book, on June 4, 2007, while he was on a business trip to Paris, he got a call from Moscow. The offices of Hermitage and its law firm were being raided by dozens of police officers as part of a tax-fraud investigation into Kameya, which, in “Red Notice,” Browder describes as “a Russian company owned by one of our clients whom we advised on investing in Russian stocks.” (Kameya was, in fact, one of the companies that Hermitage set up in Kalmykia.)

The allegations were curious: Hermitage had been under investigation for tax avoidance in previous years, but it was not in arrears at the time, and the Russian authorities had no active tax claims against it. During the search, police officers seized thousands of documents. They also made off with Hermitage‘s original corporate seals and stamps, bureaucratic instruments needed to register a new company and to act on its behalf.”

Not quite true. Hermitage companies were continually under investigation, first in Kalmykia from about 2003-4, then in Moscow. And as said before, the seals, stamps, etc were not required to reregister companies. That is just Browder stuff. But Yaffa cites only Browder. This is how this New Yorker reporter operates. Using only one source helps avoid contradictions. (Hey, fact-checkers!)

Yaffa gets this right: “Browder has often said that, in response to the raid, he went out and hired Sergei Magnitsky, “the smartest lawyer I knew in Moscow.” He gets it right that “Actually, Magnitsky, then thirty-five, was a tax adviser who worked for the firm that had advised Hermitage for a decade. Magnitsky, Browder, and others at Hermitage began to piece together what they believed had happened next: police had used the impounded seals and stamps to reregister Hermitage‘s companies in the name of low-level criminals, and those companies then applied for tax refunds totalling two hundred and thirty million dollars, the amount that Hermitage had paid in capital-gains tax. Two state tax offices in Moscow appeared to have approved the refunds the next day.”

So, if you know that Browder is lying to you about hiring Magnitsky, why do you believe the rest of his fake story without proof? That police didn‘t use the seals, etc. that they didn‘t steal the tax refunds. Yaffa, if you know Browder is lying about Magnitsky, how can you be so credulous? And provide no evidence, just Browder‘s claims?

Yaffa writes: Hermitage filed criminal complaints, some of them more than two hundred pages long. Magnitsky testified to Russian state investigators in June, 2008, after which his lawyer advised him to leave the country. He refused, and gave further testimony that October.”

Look at the Magnitsky testimony, please, linked here but why not in your story? The first ones were only about tax evasion. In October it‘s all about powers of attorney given to people in Cyprus shell companies Hermitage was using.

Yaffa reports that Magnitsky was arrested on charges of abetting tax evasion through Hermitage (true), and held in pretrial detention.” That he was held in terrible conditions, but not get needed medical care for gallstones and pancreatitis.” Indeed also true.

But then he falls into the fake news of, “According to Magnitsky‘s lawyer and Russian human-rights advocates who later investigated the case, Magnitsky was put in a holding cell, handcuffed to a bed, and beaten. By 10pm he was dead.”

Browder’s contradictory stories on how Magnitsky died.

There is absolutely no evidence of that. In fact, the Russian Public Oversight Commission for Human Rights which Browder links to on his website, and which was posted by the Wall Street Journal no less, confirms that prison conditions were bad for everyone, not Magnitsky alone. The unnamed human rights advocate, Kirill Kabanov, gave a deposition in the Prevezon case declaring that an initial report by his group was based on Browder claims that turned out to be untrue. Didn’t Yaffa see this?

The Physicians for Human Rights (Cambridge, Mass) which analyzed 44 documents Browder sent them, concluded that Magnitsky died of illness that was not treated by prison authorities. But Yaffa doesn‘t mention the PHR or cite other proof. He just repeats the Browder lie that Magnitsky was beaten to death. (Hey, New Yorker fact-checkers!)

But now Browder had a way in. As Yaffa reports, “Browder then approached the Helsinki Commission, an independent federal agency in Washington that monitors human rights, where he met Benjamin Cardin, a Democratic senator from Maryland.” And then it turned out that the Jackson-Vanik amendment was up to consideration. It penalized trade with countries that had restrictive emigration policies. Repeal would be required to normalize relations with Russia. Except that there were no more restrictions, but who cares. The fake deal was the Magnitsky Act to repeal Jackson-Vanik.

Interesting that Yaffa reports Browder handed hundreds of pages of documents over to the U.S. government citing people deemed culpable in the fraud and in Magnitsky‘s death and who should be punished by seizure of their assets and denial of entry into the United States.

Yaffa writes: “The opacity of the Russian bureaucracy and the lack of any prosecutions within Russia meant that much of the information Browder offered was difficult to confirm.” Apparently, Browder provided the names of 282 people, and the Obama administration sanctioned 18. No questions about what were apparently 282 fake targets? No questions raised about the remaining 18? No proof demanded? No due process? Even a kangaroo court has a court.

McFaul told me at Council on Foreign Relations to read his book, in it he tells Browder he doesn’t agree with Magnitsky Acts’s lack of due process.

Yaffa writes: “McFaul told me it had long struck him that “the spectre of the Magnitsky law and the noise around it are much more important than the law itself.” How come he didn‘t mention what McFaul writes in his new book that he told Browder he was concerned about the lack of due process? So, there is justice and there is ColdWar 2.0.

Then we get to the Prevezon case, which Yaffa acknowledges was provoked by Browder‘s December, 2012, hand-delivered letter to the New York District Attorney which was sent to the U.S. Attorney. It claimed that the Russian Katsyv-owned company “Prevezon had benefited from a part of the two-hundred-and-thirty-million-dollar theft uncovered by Magnitsky and used those funds to buy a number of luxury apartments in Manhattan.”

He calls the Prevezon case “the platform for an ever-expanding Russian campaign against the Magnitsky Act.” One can just as well see it as an ever-expanding Browder campaign against the Russians.

Yaffa talks about meeting Natalia Veselnitskaya… lawyer for the Katsyv family …an imposing, glamorous woman.”   I love these sexist descriptions. A male lawyer, an imposing, glamorous man….oh sorry, don’t know what the imagined male lawyer looks like.

He notes that the Justice Department investigators accepted “bank records, Russian court judgments, and other documents from Browder and his associates at Hermitage, but had interviewed no other witnesses or parties involved in the alleged crime. In one particularly testy moment in the deposition, the BakerHostetler lawyer asked whether the government agent had contacted the banks in question, in Moldova and Switzerland, to confirm the wire records provided by Browder. “No, I did not. They were foreign banks,” the agent replied. The lawyer countered: “Does your phone go long distance?”

He doesn’t mention that the lawyer was John Moscow who had spent about 30 years as the chief investigator for New York District Attorney Robert Morgenthau, directing cases such as that against BCCI [Bank of Credit and Commerce International], which the Justice Department ignored because of political interests until Morgenthau brought the case. Yaffa might have followed Moscow’s interrogation further.

That moves to Browder‘s attempts to avoid depositions, including running away from a New York process server in the Prevezon case  which the Justice Dept had filed as his proxy (see the video above) and his denial that he had anything to do with a company called Hermitage Global Partners, registered in Delaware, where Browder was listed as an executive officer. Yaffa writes, “When Katsyv‘s legal team sent a subpoena to the firm‘s Delaware address, they got a reply saying that it was a mistake, and that Browder had nothing to do with the company.” Doesn‘t this require more investigating?

Then a note about supposed links between Hermitage Capital‘s purchase of Gazprom shares and the New York investment firm Ziff Brothers, a longtime Democratic donor for which Browder had once made stock trades in Russia. Supposed links? Hermitage ran the Ziff Brothers‘ Kameya shell company. Which moved money through a Cyprus shell and then to parts unknown.

Yaffa notes that in July, 2016, the Russian general prosecutor‘s office requested information for legal coöperation from Department of Justice about Ziff Brothers. Veselnitskaya raised the allegations in Trump Tower, and Putin returned to them in Helsinki when he mentioned the “business associates of Mr. Browder” who “sent a huge amount of money” to Clinton. The Ziffs may have cheated on their Russian taxes, but there was no evidence of their sending money to Clinton. (Yaffa doesn’t follow up on Veselnitskaya’s contention that the Ziffs’ 2006 SEC filing failed to report Russian profits.)

Yaffa reports Browder evaded U.S. subpoenas. And when he finally was forced to testify, most of his answers were “I don‘t know.” True. Did he consult with Magnitsky‘s lawyers when he was in jail. No, he says to U.S. federal court. Yes, he says in his book “Red Notice.” But Yaffa says this is about his concern for safety. Or to protect people providing information to Hermitage. Not lying. Or maybe it was just lying.

Yaffa ignores key details of Browder’s Prevezon deposition which contradicts what he says in public, including to the Senate Judiciary Committee, about such facts as Magnitsky’s status as a lawyer. The guy was an accountant, Browder’s tax evasion accountant. Want to see that in video? Wouldn’t you want to follow that up?

He dismisses Glenn Simpson, of Fusion GPS, testifying before the Senate, who wondered whether there was something else Browder “was hiding about his activities in Russia.” He says, Glenn Simpson‘s activity on behalf of the Russian government has caused Mr. Browder and his family grave harm and has put his life at greater risk in the long term.” Another way of saying Simpson had evidence Browder was a crook, but Yaffa won’t go there.

Now we get to the Trump Tower meeting, which includes a wild unproved suggestion by a CIA guy it was a Russian intelligence operation!

And then “evidence of Russian meddling in the 2016 election” which evidence he does not bother to supply. And allegations of Russian hacking of DNC servers (ditto, no evidence), or the Skripal poisoning (which somehow didn‘t kill those who were targeted) leading to a British Magnitsky-style law, which the Brits have been smart enough to not enforce.

Yaffa‘s key point is “the law might never have passed without Browder‘s persuasion.” He occasionally raises some of Browder‘s lies: “Browder regularly claims, for instance, that Putin‘s fortune is worth two hundred billion dollars”a figure that is nearly impossible to prove with such specificity.”

That doesn‘t seem to matter. It could be said about the substance of the Yaffa article. In the new American cold war against Russia, fake stories like this one don‘t seem to consider that facts matter. So The New Yorker — with such an historically important reputation — publishes a story that is in its essence a fabrication.

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