By Lucy Komisar
Dec 12, 2022
Click below for the video interview by filmmaker Regis Tremblay.
Here is the essence of the dialogue.
RT: Lucy Komisar is an investigative journalist who writes about corporate and financial fraud and corruption. She started out wanting to be a teacher, because that’s what girls did, but in college she took a year off to go to Mississippi and became editor of a civil rights weekly, The Mississippi Free Press. The decided to be a journalist and write about movements for change, such as civil rights, labor unions, women’s rights. Lucy, how did that bring you to what you do today?
LK: In the 1980s, I did reporting on movements for democracy in several developing countries, including the Philippines, Zaire and Haiti. Oppositionists told me the dictator, Marcos in the Philippines, Mobutu in Zaire, and Duvalier and his heir, had looted the country and stashed the money in Swiss banks. I began to investigate and learn about the offshore system of bank and corporate secrecy. Offshore is a central part of the international financial system that enables tax evaders, kleptocrats, drug & arms traffickers and is used by government agencies such as the CIA.
RT: You have done a great deal of research (also in Russia) about Browder whom you called the greatest conman in history. I know Andrei Nekrasov, the director of the Magnitsky Act when I first really learned about Browder. How did he come under your radar?
Browder’s illicit transfer-pricing of Avisma titanium
LK: My trip to Russia, which ironically was supported by a U.S. government grant, was to investigate crime in Russia. But in Moscow I went to a seminar run by a western law firm where Browder was a speaker. In my offshore investigations I had come across evidence he was connected to a scam in which a Russian titanium company, AVISMA, which he and partners, Kenneth Dart of the Dart cups fortune, and Francis Baker, chairman of the board of Andersen Group, a publicly traded investment firm, had bought from Mikhail Khodorkovsky. Part of the deal was to continue transfer pricing through an Isle of Man shell company. That meant they would sell titanium at a fake low price and sell it on the market at the real price. They would skim the profits, cheat minority shareholders and Russian taxpayers.
When I asked Browder about that, he attacked me as one of those people who attack him because he is targeting Russian corruption. At the coffee break, the other reporters laughed. They all knew Browder is the corrupt one. I wrote about the Avisma case, though only 100Reporters, an investigative website would run it. Then I wrote about Browder’s Magnitsky hoax. Again, only 100Reporters would run it. Because we have censorship in the U.S.
RT: Describe the effect Browder has had on US foreign policy and the infamous Magnitsky Act by Congress.
LK: Here is a primer for people who don’t know the story.
Browder goes to Russia
The story starts when Wm Browder goes to Russia in late 90s and with $25mil from Edmond Safra and Beny Steinmetz set up the Hermitage Fund. He was acting for them. It was an offshore operation from the start.
Edmond Safra would hold his shares through Republic Investments (Guernsey) Ltd set up by Mossack Fonseca. It was listed in Guernsey, Channel Islands, the address of Safra’s Republic National Bank Building. Steinmetz was at the same address. Then Steinmetz appears to have sold his stake to Berkeley Advisors, the Mossack Fonseca BVI entity Browder used to hold his shares in Hermitage Capital. And Safra sold his interest to HSBC, which was Browder’s bank, in Guernsey.
Browder bought and sold shares. To evade taxes, he set up shell companies in Kalmykia, a region of Russia majority Buddhist, which gave big tax breaks to companies if 50% of their workers were disabled. He lied and paid manual laborers to say they worked for his shells, which had no employees. In the early 2000s, Russian authorities got wise and started to investigate. And discovered he had failed to pay $40mil in taxes. Ordered him to pay. He would not. He bribed an investigator to knock off the charge. The investigator would later recant and admit.
Tax investigators search offices
Search of offices in June 2007. Tax investigator searched the offices of Hermitage and of his accountant Firestone Duncan, which employed Sergei Magnitsky, who handled the Hermitage account and had set up the fake employment deals.
Tax Refund Fraud
Then starting in July 2007 there was a corrupt operation called the tax refund fraud. Some scam artists had hired out to do this for other companies. I spoke to lawyer Andrey Pavlov who admitted he took part in it. A company would set up fake shells. The shells would sue the company saying you failed to carry out a contract and cost me X amount of money. The company would say yes, we will pay. Then it would tell the Treasury we have to restate our income because we had to pay out this money. Pavlov said the demand would require a lot of detailed information from the companies books for the year. He said he didn’t know who was behind the operation, but all the evidence proved it was an insider.
Hermitage did that, said it had to pay $1billion and demanded $230 million in taxes paid. Browder says Hermitage shells were stolen. That the investigators who searched his office had taken documents they used to reregister the companies. That is impossible. The only way to move ownership of Russian companies is for the owner to go in person to the companies house or for a person with power of attorney to request it. Can you imagine if anyone could steal some documents in an office and then take over a company! Documents show that a Cyprus shell the owner of the Browder’s Kalmykia shells, gave power of attorney to an Oktai Gasanov. It was an inside deal.
When an operator in the deal, Viktor Klebnikov, testified in court, he said he worked with a Sergei Leonidovich. That would be Sergei Leonidovich Magnitsky, who supplied documents. And that Gasanov was his collaborator. Gasanov’s name is on a bill of sale to a figurehead owner. Browder says he didn’t know about the case while it was going on. But document receipts showed that legal letters from the court were received in July at the mailbox Magnitsky accessed as accountant for Hermitage. They were filed in U.S. federal court. Pavlov said there was a hearing in October and Hermitage sent no one to the hearing. They didn’t complain till after the money was paid out in December. Because all the evidence points to the Hermitage team as the crooks in the deal.
Rimma Starova the real whistleblower
And BTW the real whistleblower in the scheme was Rimma Starova, a pensioner who had been paid to be the hired name of a shell company Boily Systems set up in the BVI to take over the shell companies Markelov used in the deal. She saw an item in Kommersant about an investigation of Hermitage shell companies and was afraid the trail would lead to her, in April 2008 she went to the police. She told them about the fake reregistration of companies and the fake certificates of debt. A Hermitage press release, preserved by the Wayback machine, said she had gone to the interior ministry and made false accusations. Magnitsky, who Browder touts as a whistleblower in the scheme, didn’t mention it till 6th months later in October 2008 in testimony he was summoned to give. Browder lies that he accused the tax investigators, but he accused no one. Easy to prove since the translated testimony is filed in U.S. federal court Southern District of New York.
Magnitsky interrogated, detained on tax evasion
Investigators had interrogated Magnitsky in 2006 about the tax evasion. Then in Nov 2008 he was detained for investigation since the Hermitage executives had left for London and he was working to arrange transport to London. The European Court of Human Rights later determined he was arrested for just cause. All the time he was in prison, Browder said not a word about him, made no effort to free him. He could have freed him by just paying the taxes.
In prison, Magnitsky met Oleg Lurie, an investigative journalist who was there because a corrupt Duma member had accused him of extortion. Lurie would be exonerated and the prosecutor would apologize. But meanwhile Magnitsky met Lurie in a room where prisoners waited while being sent to court or for other reasons. He told him his employers were working to get him out. Some time later, Magnitsky told Lurie his employers were selling him out. Lurie testified to this in a deposition filed in U.S. Federal Court SDNY.
Magnitsky died of pancreatitis which was badly treated. Browder said in talks to Chathem House London and San Diego Law School that he had been left alone in a cell and had died.
#5 The Browder hoax. Browder had been denied a Russian visa at the end of 2005 (he was a big time tax evader, after all) and the case against him continued. Plus the Russians discovered he had illicitly bought millions of dollars worth of shares of Gazprom that were supposed to be only for nationals. Others had to get them at higher prices in London as ADR, American Depository Receipts. So Browder set up shell companies with fake Russian owners to buy the shares. Some of them were for the Ziff Brothers, his major clients, heirs of the US Ziff media fortune. And also big donors to the Democrats.
Browder and Winer invent Magnitsky hoax
So in 2011, with the help of Jonathan Winer, a former State Dept officials, they invented the story that Magnitsky had been beaten to death with batons wielded by 8 thugs over the course of more than an hour. There were two problems with the story. The Russian Public Oversight Commission for Human Rights Observance, a non-governmental organization that monitors prison conditions, had done an investigation. It’s report, including notes by attending doctors, did not leave an hour when he was unattended and anyone could have beaten him up. 6:30pm review by doctor on duty. Hospitalized to surgery department. 7pm Patient talks to a voice, shouts someone wants to kill him. Emergency doctor called. Anti-spasm therapy not possible because of aggressive behavior of patient. 9:15 psychiatrist examining patient. Magnitsky loses consciousness. Indirect heart massage and ventilation of lungs with Ambu pillow. Transferred to room for artificial ventilation of lungs and hormones injection. But at 9:50, patient dies. Between 9:15 and 9:50, there was not an hour for the 8 imaginary thugs to enter the room. The report is online in English and Russian.
Browder gave it with other documents and photos to the Physicians for Human Rights in Cambridge, Mass in hopes they would back up his story. They didn’t. They didn’t contradict the Public Oversight Commission.
BTW, Andrei Nekrasov, a Russian filmmaker who did the brilliant documentary, The Magnitsky Act: Behind the Scene, found that 8 people could not fit in that cell. Plus forensic photos showed no marks on Magnitsky’s body, only on ankles and wrist. Were the 8 thugs during one hour aiming only for his ankles and wrist? In fact, they were explained by his banging against the cell door.
But Browder is good at lying and also forgeries, including of a death certificate he distributed. He underlined “closed craniocerebral injury?” and blurred the “no signs of a violent death detected.” In fact, Magnitsky’s medical records showed a concussion from a fall 16 years earlier. The closed injury. His mother testified to that. But Browder is a liar.
Evidence Magnitsky died of illness
Russian thugs murdered Magnitsky is easily refuted if western media cared to do so. But the Browder hoax fit perfectly with the U.S. deep state/government/congressional policy of demonizing Russia. So promoted by Congressman Jim McGovern, whose office repeatedly refuses to provide any evidence for its claims, and Senator Ben Cardin, both Democrats, Congress in 2012 voted the Magnitsky Act. It is replete with lies. Including that Magnitsky was a lawyer Browder hired in 2007 to investigate the tax refund fraud, when he had been Browder’s accountant since 1997. When Browder was forced to give a deposition in the Prevezon case in New York – he was videoed running away from the first process server – he admitted Magnitsky didn’t go to law school or have a law license. He lied that Magnitsky uncovered a corruption scheme by Russian officials, when in fact he was a central figure in the tax refund fraud. The Magnitsky Act sanctions people who profited from his abuse and death. That of course includes the judges on Browder’s tax evasion case which was started in 2002, 6 years before Magnitsky’s arrest. His first interrogation in 2006 lists him as an auditor with Firestone Duncan. The Magnitsky Act is a surreal package of lies. When I wrote the State Department asking for evidence to back up what the Act says, I was told “we do a lot of research.” Full stop.
Browder convicted of tax evasion
In 2013 Browder was convicted of tax evasion by a Russian court. Magnitsky was judged guilty of the same charges, but the case was dismissed because he was deceased. Browder of course continues to lie about that. He continues to promote so-called “Magnitsky Acts” in order to prevent the Russians from getting him to answer the financial fraud charges, now about $100million stolen from the Russians. And it fits western policy of demonizing Russia.
The interview continues about the role of the Browder hoax as a pillar of Russiagate.
About Regis Tremblay. Among his films are “Thirty Seconds to Midnight” (2020): Nuclear power is not safe. 48 of America’s nuclear power plants are leaking and there is no way to get rid of nuclear waste. And “Who Are These Russians And Why Do We Hate Them” (2020): The escalating downturn of US relations with Russia has made the world a more dangerous place than at any time during the Cold War, including during the Cuban Missile Crisis.
I was given Browder’s book, Red Notice. I read it over the weekend and it is a very convincing narrative, to say the least — the more so if you were given it because it fit your interests as a reader of mystery and spy stories, which I am not. I was given it after a discussion about the war in Ukraine. I had never heard of Bill Browder. I recall the Magnitsky Act referenced in comments here and there, but I glossed over the references. There are enough references in the comments below the hundreds of articles an avid reader might read on the Internet to keep one referencing Google for an eternity.
A book like Browder’s though, with all its references to supposed Russian misbehaviour encouraged me to Google his name and the Magnitsky Act. By now it’s commonly accepted that the Yeltsin years embraced so much corrupt asset stripping in Russia, so much financial malfeasance, so much bribery and dishonest practices in general, that the everyday citizen experienced the Yeltsin years as much worse than the post war years in the old USSR.
In brief: I am one of those whose sympathies are with the average person. Yeltsin was according to many a incompetent drunk who let the mostly Jewish oligarchs “buy” the states assets for a song. Privatization required a degree of oversight not possible before or after the fall of the USSR.
Browder vents his spleen as though malfeasance was unique to Russia and non existent in America. Browder paints a picture of insider manipulation and power brokering in America where Senate cooperation across the political divide is guaranteed when vilification of Russia and Putin is on the agenda. Dividing up the spoils is not unique to governments anywhere, but you’d have to be Rip Van Winkle to have not noticed that the same minority is practising its noxious behaviour in the U.S. as was common in the Yeltsin years in Russia.
Putin is hardly a saint, though my sense is he is a pro-Russian loyalist, rather than a dedicated tribalist Zionist with loyalty only to Israel and the greater Jewish diaspora. Browder is obviously Jewish and loyal to only himself. His cronies are pretty much all Jews.
I have a Jewish heritage. Certain behaviours seem bred in the bone. And certain inclinations too. My take is Israel was a big mistake. Everything Jewish is insider trading. Power excessed without countervail is dangerous. Dangerous to Jews and dangerous to everyone else.
Bill Browder is no less an opportunist than any of the Oligarchs. It appears that Putin, at least is pushing back. Elsewhere in the West there is no pushback.