(LONDON) – Bill Browder, founder of the Hermitage Capital Fund, recounted his experiences confronting Russian state corruption and oligarchic theft, a struggle culminating in the murder of his lawyer Sergei Magnitsky and the passage of the Magnitsky Act.
Browder, born in Princeton, New Jersey, comes from a politically active family. His grandfather was general secretary of the American Communist Party and ran for president twice, while his father, a mathematician, faced career obstacles due to family political associations. Browder rebelled against this background by embracing capitalism, graduating from Stanford Business School in 1989, the year the Berlin Wall fell.
He began investing in Eastern Europe, initially in Poland, turning a modest $2,000 into $20,000 within a year by exploiting undervalued privatised companies. He later moved to Russia to establish Hermitage Capital, investing in companies during the country’s post-Soviet privatisation.
Browder described a flawed economic system in which oligarchs consolidated vast wealth, controlling 40 per cent of GDP while ordinary Russians lived in poverty. Many transactions involved corruption, government collusion, and organised crime. Browder initially profited, but refused to participate in corruption, exposing illegal activity by major Russian companies, including Gazprom and oil firms.
The Russian dictator Vladimir Putin, initially battling the same oligarchs, inadvertently supported Browder’s exposure of corruption. However, once Putin asserted full control, including taking 50 per cent stakes in major companies, Browder became a target.
In 2005 Browder was deported from Russia after a decade in Moscow. Subsequently, in 2007, his offices were raided and corporate documents seized, enabling a complex fraud in which $230 million in taxes paid by Hermitage Capital was stolen. His lawyer Sergei Magnitsky uncovered the fraud and testified against Russian officials. In November 2009, Magnitsky was tortured and killed in prison.
Browder committed to seeking justice for Magnitsky, leading to the Magnitsky Act in the United States, which imposes sanctions on those responsible for human rights abuses and corruption. Browder has spent over a decade campaigning to freeze assets and restrict travel for Russian officials implicated in crimes.
Browder emphasised the failure of Western governments to act against the flow of Russian money and corruption, particularly in London, where Russian oligarchs were welcomed despite their criminal activities. He warned of ongoing threats posed by Russian state actors to global finance and democracy.
