What Putin’s Offer at Helsinki Should Tell Congressional Leaders

by JOSH ZAKHAROV, ’20

To put it mildly, the Helsinki Summit was a poor public relations move for the President. President Trump’s take on the finding of seven intelligence agencies that Russia conclusively waged an influence campaign in the 2016 election was, to say the least, not quite what Congressional leaders or his Director of National Intelligence Dan Coats were looking for. “I have President Putin,” said President Trump – “he just said it’s not Russia. I will say this. I don’t see any reason why it would be.” Relieving.

What was more interesting was an offer Putin made in response to the very next question – when he asked the United States to extradite his foremost political enemy for figuring out a successful way to answer Russian human rights abuses.

Jeff Mason, Reuters’ White House Correspondent, asked Putin whether he would consider the extradition of the twelve Russian intelligence agents recently indicted by a Mueller-impaneled grand jury for hacking DNC, DCCC, and Clinton data and offering it to the Trump campaign and an unnamed Congressional candidate.

Putin replied with an offer. He pointed to the history of mutual assistance on criminal cases between Russia and the United States, and suggested that the Mueller investigation offers another potential point of cooperation; should he allow the Mueller team to interview the 12 indictees, he expects the Americans to “reciprocate” by allowing him to interview people who have inflicted “illegal actions on the territory of Russia” – as an example, he named only Bill Browder in the press conference.[1]

The mention of Browder’s name by Putin should give some hope to Congressional Democrats and Republicans looking for an impactful and efficient way to add bite to their criticisms of Russia. Putin mentioned Browder during the press conference to allege that Browder stole millions in taxes from Russia, donated $400 million to Hillary Clinton, and defrauded the Russian government.

In reality, Browder’s name is something of a code word for the Russian government. Adoptions are code for the same thing – if you remember the Donald Trump, Jr. fiasco of the last year (his release of his emails organizing the June 2016 Trump Tower meeting), you’ll remember that the Kremlin-linked attorney who was present, Natalia Veselnitskaya, pitched the meeting as a discussion of Russia’s ban on adoptions of Russian children by American families. Both of these, in reality, point at the Magnitsky Act.

Bill Browder is the CEO of a hedge fund called Hermitage Capital, which, according to the New York Times, was the largest foreign investor in Russia by 2005, managing more than $4 billion in assets in Russia. At this time, Browder was an outspoken critic of weak Russian standards of corporate governance, to which Vladimir Putin’s government responded by eventually suspending his visa and expelling him from the country. In his absence, Russian bureaucrats staged a raid of Browder’s Moscow offices, illegally seized corporate registration and tax documents of companies held by Hermitage to steal ownership of them, and used those documents to fraudulently extract $230 million in taxes from Hermitage. Browder assigned one of his auditors – Sergei Magnitsky – to investigate. Once Magnitsky had deduced that the documents seized were given to organized criminals and bureaucrats and that Hermitage was a victim of fraud, Magnitsky himself was charged for the $230 million seizure he uncovered, jailed, and tortured to death in prison.

Since then, Browder has been traveling the world to agitate for the passage of “Magnitsky Acts,” which would issue targeted sanctions against oligarchs deemed responsible for human rights abuses. As Open Russia chairman Vladimir Kara-Murza puts it, these acts operate on the premise that those who perpetrate human rights abuses in Russia and exploit weak rule of law there should not “enjoy the privileges provided by democracy and the rule of law” in the West.[2] The acts prohibit targeted individuals from using banks, suspend their rights to travel, and freezes their assets, in the nation that passes them.

The United States passed the first Magnitsky Act, with Browder’s advocacy, in 2012. Canada passed its own Magnitsky Act in 2017; all three Baltic states passed Magnitsky Acts between 2016 and 2017; and the United Kingdom passed one just this May. President Putin immediately responded to the United States’ Magnitsky Act by suspending American adoptions of Russian children, denouncing the United States, posthumously finding Magnitsky guilty, and blacklisting 18 American officials from entry to Russia. Putin also spoke out against Magnitsky Acts in Canada and the United Kingdom.

There is a compelling logic to Magnitsky Acts. As Julia Ioffe puts it, “what made Russian officialdom so mad about the Magnitsky Act is that it was the first time that there was some kind of roadblock to getting stolen money to safety” – prior to the Magnitsky Act, oligarchs would seldom keep their money in Russia but would instead spend it abroad in major cities like London, Miami, Paris, Geneva, New York, and so on.[3] Ioffe adds that in the wake of post-Soviet mass corporate privatization, “[Russian businessmen] pillaged and nearly wiped out small and medium-sized businesses in Russia,” and, with little left to take from Russia, stashed their wealth abroad, where it was far safer from the kind of arbitrary seizures that struck Browder and even oligarchs like Mikhail Khodorkovsky and Boris Berezovsky.

This is deeply threatening to Putin, who depends a) on mutual trust and a “grand bargain” with oligarchs to preserve his power, which is jeopardized when his oligarchs feel threatened,[4] and b) his oligarchs for critical advising and financial support, which the Magnitsky Act threatens directly. Regular sanctions hit the Russian people, who are resilient and will only direct their anger back at the United States – these sanctions hit only those who exploit the Russian people, and hit them where it hurts.

That Bill Browder is the only person Putin would be willing to sacrifice Russian intelligence agents for, and that Putin would raise this on an international stage, is telling. It suggests that Putin is willing to pay a high price to exact justice for the Magnitsky Act; that he is, to some extent, afraid of Browder’s continued campaign to enact more global Magnitsky Acts; that this is what compelled Russian intervention in the 2016 election; and that leaders of Congress looking to demonstrate their opposition to Russian human rights abuses and anti-democratic politics have an effective tool with which to do so.

Today, as Senate Majority Leader Mitch McConnell allows a vote on a resolution prohibiting foreign powers from questioning American officials, we can hope that even while Trump walks back his Helsinki comments, his administration is staying vigilant. More optimistically still, we can hope this summit will push America to become a global leader on advocating for Magnitsky Acts around the world.

 

Works Cited

[1] Neufeld, Jennie. “Read the Full Transcript of the Helsinki Press Conference.” Vox, Vox, 16 July 2018, www.vox.com/2018/7/16/17576956/transcript-putin-trump-russia-helsinki-press-conference.

[2] Coalson, Robert. “Russia: U.S. Magazine Marks Putin’s ‘Grand Bargain’.” RadioFreeEurope/RadioLiberty, RadioFreeEurope/RadioLiberty, 8 Apr. 2008, www.rferl.org/a/1079279.html.

[3] Ioffe, Julia. “Why Does the Kremlin Care So Much About the Magnitsky Act?” The Atlantic, Atlantic Media Company, 27 July 2017, www.theatlantic.com/international/archive/2017/07/magnitsky-act-kremlin/535044/.

[4] Coalson, Robert. “Russia: U.S. Magazine Marks Putin’s ‘Grand Bargain’.” RadioFreeEurope/RadioLiberty, RadioFreeEurope/RadioLiberty, 8 Apr. 2008, www.rferl.org/a/1079279.html.

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