By Lucy Komisar
August 19, 2020
As the Democratic Convention is in progress, it is fitting to look at how Democrats in Congress and the White House, with Republican collaboration, were responsible for the Magnitsky Act, the law that protects tax fraudster William Browder and his henchman Mikhail Khodorkovsky by erecting a wall against their having to face justice for their financial crimes. And ramps up hostility against Russia.
William Browder in the mid-1990s became manager of the Hermitage Fund, set up with $25 million from Lebanese-Brazilian banker Edmond Safra and Israeli mining investor Beny Steinmez to buy shares in Russian companies.
He says he started the fund, but that is a lie. He was brought in to manage other people’s money. But after some years, when the two investors either died or confronted major financial problems, Browder gained control.
Browder doesn’t like paying taxes.
Browder was an American who traded his citizenship for a UK passport in 1998 so he could avoid paying U.S. taxes on his stock profits. (CBS called him a tax expatriate.)
He didn‘t like paying Russian taxes either. In an early rip-off, he and his partners billionaire Kenneth Dart of Dart cups and New York investor Francis Baker bought a majority of Avisma, a titanium company, that produces material used in airplanes. They cheated minority investors and the Russian tax collector of profits by using transfer pricing.
You sell your production to a fake company at a low price, then your fake company sells it at the world price. You book lower dividends to cheat minority shareholders, report lower taxes to cheat the Russian people.
Browder and partners bought Avisma from infamous oligarch Mikhail Khodorkovsky on the basis of continuing his transfer pricing scam. It was revealed by documents in a lawsuit when Browder and partners sued another infamous guy, Peter Bond, the Isle of man crook handling the rake-offs for not passing on the full amount of the skim. (No honor among thieves!) The legal documents where Browder admits to the scam are linked in this story.
Browder cheats bigtime on Russia taxes
Browder‘s next corruption was to cheat the Russians of taxes from his stock buys in Russia, to the tune of about $100million. That included claiming as deductions disabled workers who didn‘t work for him, local investments he never made, profits from stock buys of Gazprom the Russian energy conglomerate that non-Russians were not allowed to buy in Russia.
Investigations started in the early 2000s for $40 mil in evaded takes and led to legal judgments in 2004. When he refused to pay, in November 2005 he was denied a Russian visa and in 2006 he moved all his assets out of Russia. But the Russian tax evasion investigations continued.
Browder‘s accountant Sergei Magnitsky was arrested for investigation of the tax evasion in 2008, and the European Commission on Human Rights ruled last year that was correct because of the evidence and because he was a flight risk. Browder‘s fake narrative was that Magnitsky, who he lied was his lawyer, had been arrested because he blew the whistle on a scheme by Russian officials to embezzle money from the Russian Treasury. In his own U.S. federal court deposition, Browder admits Magnitsky didn‘t go to law school or have a law license. See his brief video on that.
Browder gives speeches that he didn’t know how Magnitsky died
Then Magnitsky died of heart failure exacerbated by stomach disease which forensic reports say was not properly treated. Browder first said (in talks at the British foreign policy association Chatham House, London, a month after he died, and San Diego Law School — video at minute 6:20 — a year later) he didn‘t know how Magnitsky died, but after a few years he invented a story that he had been beaten to death.
That story was developed by Jonathan Winer, a former assistant to Senator John Kerry and then a State Department official. Winer was working for APCO, an international public relations company one of whose major clients was the same Mikhail Khodorkovsky. They correctly assumed the western media would do no research. Or at least would not be allowed to report it. And the mainstream media never did, except much later Der Spiegel in Germany, which the rest of the western press ignored.
The plan was to get a U.S. law that would in effect block the Russians from going after certain Americans who had cheated on taxes. They would be Browder and Khodorkovsky, who is actually named in the law.
Khodorkovsky would spend several hundred thousand dollars to buy Congressional support for the Magnitsky Act, clearly money well spent. He duly reported it as lobbying expenses.
Here is how the Democrats and Republicans colluded in the Browder Magnitsky hoax. Much of this comes from Browder‘s own writings in his mostly fake book “Red Notice.” Note the corruption of both parties.
Magnitsky died in November 2009. Only four months later in March 2010, Browder was plotting his Magnitsky hoax, attacking Russians he would claim were responsible for Magnitsky‘s death. But the bizarre part of the story is that he continued throughout 2010 to say he didn‘t know how Magnitsky died, including in a videoed Dec 2010 San Diego law school talk. He obviously assumed U.S. media and politicians would not notice or care about the contradictions.
Browder got Maryland Democratic Senator Ben Cardin to send a letter to Secretary of State Hillary Clinton in March 2010 urging her to ban visas for 60 people Browder had listed (without evidence) as complicit in Magnitsky‘s death. (Remember 9 months later in a videoed talk at San Diego Law School Browder says he didn‘t know how Magnitsky died.)
The letter to Hillary Clinton, written (Browder says in his book) by Browder acolyte Kyle Parker, a staffer at the House Foreign Affairs Committee, said, I “urge you to immediately cancel and permanently withdraw the U.S. visa privileges of all those involved in this crime, along with their dependents and family members.” Immediately? No due process, not even for children and grandparents? Cousins?
Attached to the letter was the list of the sixty officials Browder accused, without evidence, of involvement in Magnitsky‘s death and a tax fraud against the Treasury.
Browder’s fake tax refund fraud
The tax refund fraud was a scheme in which shell companies were set up to sue Browder‘s Hermitage companies claiming contract violations and damages of $1billion. The Hermitage companies immediately agreed to pay (no evidence of actual bank transfers), then demanded the Treasury pay a tax refund of $230million because they now had zero profits.
Viktor Markelov, tried and jailed for the scam, said he worked with a Sergei Leonidovich, which is Magnitsky‘s name and patronymic. Other evidence, including an inexplicable delay of months between Browder learning about the his companies being re-registered in other names and him reporting that as “theft,” indicates he was part of the scam too.
Note this: Hermitage trustee HSBC filed a financial document in July 2007 saying it was putting aside $7 million for legal costs that might be required to get back the companies. This was five months before the tax refund fraud occurred. Albert Dabbah, chief financial controller for HSBC, confirmed the document‘s authenticity in U.S. federal court. But Browder and Magnitsky (in his testimony) said they didn’t learn about the theft till October 2007.
Theft of his companies? The best defense is a good offense. Accuse others of the crime you committed.
Senator Cardin was requesting that all sixty of Browder‘s accused have their U.S. travel privileges permanently revoked.
But Hillary didn‘t buy it. Then House staffer Parker arranged for Browder to testify about the Magnitsky case May 6th at the Tom Lantos Human Rights Commission, not an official House body but a pressure group set up in the name of a Russophobic former congressman from Hungary.
The commission chairman was Massachusetts Democratic congressman Jim McGovern, who runs liberal but is a Russophobe who pretends to be a human rights advocate.
Now what is really interesting is that seven months after this May 6 testimony, on December 6, 2010, Browder was telling the San Diego law school (video 6:20 in) that “they put him in a straight jacket, put him in an isolation room and waited outside the door until he died.” Nothing about torture or killing. Had Browder forgotten his dramatic beating story?
McGovern at the Lantos Commission hearing asked for no evidence. He said he would introduce legislation, put the 60 names Browder cited in it, move it to the committee and make a formal recommendation from Congress, then pass it on the floor.
McGovern lies about sending evidence
In July 2019, almost a decade later, I saw McGovern when he spoke at the Council on Foreign Relations. I asked if he would send me evidence backing the claim that Magnitsky was tortured and killed. He agreed and introduced me to an aide. The aide referred me to Kimberly Stanton, director of the Lantos Commission, who refused in an email to provide any information. And said evidence against targeted people is not required!
I also wrote McGovern‘s press secretary Matt Bonaccorsi and legislative director Cindy Buhl. They ignored repeated requests, never sent me anything. I conclude that Jim McGovern, who pretends to be a liberal civil rights promoter, is a fake and a fraud.
McGovern introduces a Magnitsky bill in the House.
Ben Cardin agreed to be the cosponsor of a Magnitsky Act in the Senate. He sought a Republican cosponsor, John McCain, a Russophobic senator who never met a war he didn‘t like.
It wasn‘t the first time McCain helped a fraudster. McCain was one of the corrupt “Keating Five” senators who improperly intervened in 1987 on behalf of Charles H. Keating, Jr., corrupt chairman of the Lincoln Savings and Loan Association, which collapsed in 1989 at a cost of $3.4 billion to the federal government (and thus taxpayers). Many investors lost their life savings.
Keating was the target of a regulatory investigation. With powerful senators like McCain advocating his cause, the regulator backed off taking action against Lincoln. Though Keating went to jail. McCain was cited only for exercising “poor judgment.” Helping a crook doesn‘t get you thrown out of the Senate.
To get to McCain and others, Browder hired lobbyist Juleanna Glover, who had been Vice President Dick Cheney‘s press secretary and then Attorney General John Ash croft‘s senior policy adviser. She went with Ashcroft when he left government to run the Washington office of his law firm, the Ashcroft Group.
She got Browder a meeting with McCain who agreed to sponsor the Magnitsky Act. It fit with his Russophobia and friendship with fraudsters.
On September 29, 2010, Senators Ben Cardin, John McCain, Roger Wicker (Republican of Mississippi) and Joe Lieberman (Democrat of Connecticut) introduced the bill in the Senate. Anyone involved in the false arrest, torture or death of Sergei Magnitsky, or the crimes he uncovered, would be publicly named, banned from entering the United States, and have their U.S. assets frozen.
Remember again that a few months later Browder would tell the San Diego law school he didn‘t know how Magnitsky died.
Now here is how the law got passed. The Jackson-Vanick amendment put in place in the mid-1970s imposed trade sanctions on the Soviet Union to punish it for not allowing Soviet Jews to emigrate. Well, nobody could emigrate. Eventually 1.5 million Jews were allowed to leave the country.
How the Browder-Magnitsky hoax law got passed in a trade deal
Thirty-seven years later the Soviet Union no longer existed, and everybody could emigrate, but Jackson-Vanik was still on the books. It blocked American corporations from enjoying the same trade benefits with Russia as the world‘s other WTO members.
So, the U.S. business community said Jackson-Vanik had to go, and the Obama administration agreed. So did John Kerry, chairman of the Senate Foreign Relations Committee. They needed an act of Congress.
Meanwhile, Kerry opposed the Magnitsky Act which he considered untoward interference in Russia (is that like saying meddling?) and had been delaying bringing it to vote in committee.
Browder got Senator Joe Lieberman, conservative Democrat from Connecticut, to agree to block Jackson-Vanik repeal unless the administration stopped blocking his Magnitsky Act.
Lieberman and the other cosponsors of the Magnitsky Act sent a letter to Montana Democratic Senator Max Baucus, chairman of the Senate Finance Committee. The letter said, “In the absence of the passage of the Magnitsky leg islation, we will strongly oppose the lifting of Jackson-Vanik.”
So, Kerry stopped his opposition to the Magnitsky Act.
The two bills were combined. First the bill would be brought up at the Senate Foreign Relations Committee to pass Magnitsky, then it would go before the Finance Committee to repeal Jackson-Vanik, and then, it would go before the full Senate for a vote.
Kerry called for a meeting of the Senate Foreign Relations Committee in June 2012, with the purpose of approving the Magnitsky Act.
At the hearing, Kerry said that America was not a perfect country, and that the people in that room should be “very mindful of the need for the United States not to always be pointing fingers and lecturing and to be somewhat introspective as we think about these things.” (Such nuance would obviously not be allowed today.)
He was “worried about the unintended consequences of requiring that kind of detailed reporting that implicates a broader range of intelligence.” He didn‘t have to worry. Reporting? Intelligence? Actual evidence would never be required! The U.S. was setting up a kangaroo court and calling it a human rights tribunal!
The bill passed the House 365 to 43 on November 16, 2012. Voting “No” were 37 Democrats and 6 Republicans. Among them Maxine Waters and Ron Paul. And surprisingly New York Democrat Jerrold Nadler who since then became a Russophobe. Tulsi Gabbard had not yet been elected.
Kyle Parker told Browder, “There are a number of senators who are insisting on keeping Magnitsky global instead of Russia-only.” One was Cardin, but also Carl Levin, Democrat of Michigan – a political giant who spent many years fighting, holding hearings, about offshore tax evasion and must have known very well how Browder was a poster child for offshore tax-evading crooks. Also Jon Kyl, Republican from Arizona. Of course, Browder wanted Russia only, because the purpose of the law was to attack Russia, not to promote global human rights. Cardin withdrew his objection, and the bill was Russia only.
The Senate vote
The final count December 6, 2012 was 92-4. Levin and three other Democrats – Bernie Sanders and Jack Reed and Sheldon Whitehouse, both of Rhode Island – were the only Senators to vote against it. Elizabeth Warren was not yet in the Senate.
It was signed by Obama a week later. Read Title IV of the law to see how it is based on the fake claims the chief sponsors would not, could not prove. Including he was beaten by 8 guards with rubber batons on the last day of his life based on zero evidence, just Browder’s lies. (I also wrote to Cardin’s office and got no reply.)
It was the first pillar of Russiagate, where Cold Warrior Democrats joined forces with Cold Warrior Republicans. The result would be to build a wall against Russia bringing Browder to justice, including getting Interpol to refuse to issue a red notice that would require other countries to arrest him. He would name his book Red Notice as a jab at the Russians.
And the crooks Browder and Khodorkovsky, protected from the rule of law, laughed all the way to their offshore banks. Here’s the link to Browder’s Mossack Fonseca (on Panama Papers fame) bank.
(Speaking of the rule of law, it doesn’t apply to offshore banks, with secret owners of companies and accounts. They are largely run by western banks that make big profits from laundering the money of the world’s crooks. Note on any SEC filing where banks have their subsidiaries: Caymans, Isle of Man, Guernsey, BVI, etc. No local clients, just financial fakery: letterbox companies, tax evasion. It’s okay. When there’s corruption, only the little people go to jail. In the offshore system, the corrupt financial oligarchy rules.)