Review: Vivien Horler

Freezing Order, by Bill Browder (Simon & Schuster)

London-based financier Bill Browder is an extraordinary man. While he is wealthy enough to have a comfortable business life in London, with family holidays in Switzerland and Aspen, Colorado – which he does – he has chosen a different path.

He fights against corruption in Russia and other places, and in the process has made an enemy of Vladimir Putin. As people including Sergei Skripal and his daughter Yulia, as well as Alexander Litvinenko know to their cost, living in Britain is no protection against Putin’s murderous agents.

And yet he keeps on. When he was an 11-year-old in Chicago some big boys stole his flute, and against his mother’s wishes he testified in court against them. That firm sense of doing right in the face of wrong has stayed with him, guiding his life and probably endangering it. And yet he keeps on.

In 1989, the year the Berlin Wall came down, Browder graduated from Stanford Business School and less than 10 years later moved to Moscow to set up a hedge fund called the Hermitage Fund. He recognised there were great opportunities to make money in Russia.

But oligarchs and corrupt officials saw that the companies the fund invested in were being “robbed blind”. Browder and his team decided to research how money was being stolen and who was doing it. The plan was then to file lawsuits and brief government ministers on the damage this was doing to the country, and tell the international media what was going on.

He says this naming-and-shaming approach was “remarkably profitable” for the Hermitage Fund, but he became increasingly unpopular in Russia. In 2005 Putin expelled him from the country.

He then liquidated the fund’s Russian holdings, and evacuated his team and their families to London. Some time later, officers from the Russian Interior Ministry raided both Hermitage’s office in Moscow and the office of Hermitage’s lawyers. Hermitage’s holding companies’ seals and certificates, which proved Hermitage’s ownership, were seized.

The ministry then used these seals and certificates to fraudulently re-register the ownership of the holding company to a bunch of criminals.

Hermitage decided to fight this, and hired a team of Russian defence lawyers. Various shocking discoveries were made. In 2006, when Hermitage’s Russian funds had been liquidated, the company had paid $230m in taxes to the Russian authorities

Then in 2008 one of Browder’s lawyers, Sergei Magnitsky, found that the criminals had used the stolen companies to apply for a $230m tax refund. The refund was approved in a single day and paid out to the fraudulent companies a couple of days later.

It soon became clear the Russian plan was to frame Hermitage for the theft of the $230m. Two of Hermitage’s lawyers fled the country, but Magnitsky, who believed, against the evidence, that Russia was changing for the better, refused.

Browder realised Magnitsky needed major support, and called on the aid of a New York lawyer called, ironically, John Moscow. The relationship ultimately soured, but before that happened Moscow told Hermitage that if they wanted to find out where the money had gone, they were in luck.

It emerged that whenever money is transferred in dollars – even between two banks in Russia – it touches a US clearing bank for a fraction of a second, leaving a permanent record. The clearing banks can then be subpoenaed for their records, enabling lawyers to reconstruct the money trail.

In November 2008 Magnitsky was arrested in Moscow. Despite being treated badly and becoming ill, he refused to sign a false confession. The work being done in New York was taking too long, but there was a last hope. Under Russian law, a person could be kept in pretrial detention for a maximum of a year, after which the government had either to put him on trial or release him.

The government opted for another route out of their difficulty. After 358 days in detention, Magnitsky was beaten to death in his cell. He was 37.

This story, which makes up much of Browder’s first book Red Notice, is retold in the first 30 pages of Freezing Order. A freezing order is a legal procedure that prevents an accused from moving their assets beyond the reach of a court.

Incensed at the murder, Browder lobbied the US Congress to pass the Magnitsky Act, a law to punish Russian human rights violaters. It was signed into law in 2012 by President Barack Obama. The following year the late Magnitsky and Browder, in absentia, were convictedof tax fraud in the Russian courts.

Since then, Browder has campaigned tirelessly for other countries to adopt the Magnitsky Act, and to date 34 have, including the UK, Canada, Australia, Norway, the European Union as a whole as well as many individual countries within the union. Magnitsky Acts are also being introduced in the Czech Republic, Ireland and Switzerland.

In 2016 the scope of the US act was broadened to become the Global Magnitsky Act, which authorises the US government to sanction foreign government officials worldwide deemed to be human rights offenders, freeze their assets, and ban them from entering the US.

It was this broadened act that led to the US sanctioning the Gupta brothers.

In a recent Daily Maverick webinar, Browder said: “So, it’s the kind of thing you expect in a normal, rule-of-law country. And I’ve tried getting a Magnitsky Act in South Africa and I’ve run into an absolute brick wall… no one in the governing party wants to talk to me.”

Reporting on the webinar in the Daily Maverick, veteran political journalist Peter Fabricius wrote: “And he had realised even more starkly since Russia invaded Ukraine that the reason was simply that: ‘South Africa is siding with Russia, not Ukraine’.”

Since 2001 Browder has owned a house in South Africa, but has been unable to visit in the past 10 years. “And everybody told me: ‘Don’t come. If you come here you’ll be arrested.’ And so I haven’t been able to use my house in more than a decade because I’m afraid I’ll be arrested and handed over to the Russians if I come there.”

Freezing Order is not an easy read. It’s full of technical details and the Russian names are tricky, so that it’s not always simple to remember who’s a goody and who’s a baddy. And frustratingly there’s no index which you can use to remind yourself who’s who.

But it is an impressive reminder that motivated and courageous individuals can move mountains, despite real threats to their lives. And the publication of Freezing Order could not have come at a more apposite time.