In 1996, five years after the fall of the Soviet Union, 32 year old American Bill Browder, left his secure hedge fund manager job with Salomon Brothers, to set up his own investment firm in Moscow, Russia. Over the next decade, his Hermitage Capital became one of the most successful investment funds in Eastern Europe. Ten years later, Browder was deported from Russia by the Kremlin. Over seven years after deportation, Russia requested that Interpol issue a Red Notice to arrest Browder and return him to Russia to stand trial for tax evasion. Interpol refused.
This true story involves high finance, murder and one man’s fight for justice in Mr. Putin’s Russia. The first quarter of the book is essentially a biography of the author and the road he took to enter the “wild, wild west” atmosphere of capitalism in Russia following the dissolution of the USSR. Then, we learn about his various financial successes until 1998, when the financial meltdown that started in Asia, spread to Eastern Europe, erasing all the economic progress of the past decade.
Incidentally, this is when I arrived in Ukraine to establish the Johnson & Johnson business. In January, 2000 I moved to Moscow, when I took over the consumer business of J&J for Russia and the other 12 countries of the former USSR. Vladimir Putin was first elected President two months later. As the only J&J American employee there, my life and work in Mr. Putin’s Russia over the next seven years, was pretty surreal.
Now, back to Bill Browder. Next, we learn about his efforts to rebuild his decimated investment fund, amid an orgy of financial and corporate theft by government controlled companies and Kremlin supported oligarchs (the most rich and powerful Russian business men). He recounts that in October, 2003, the Russian government arrested Mikhail Khodorkovsky, the CEO of Yukos, one of Russia’s largest oil companies. Khodorkovsky was Russia’s richest man and widely seen as Putin’s greatest competitor in the next Presidential election. He was convicted on trumped up charges, sent away to a primitive prison in Siberia and left to rot for years. The other oligarchs got the message and have been no further threat to Putin since.
As Browder continued to build his investment business, he ran into more and more confrontation with the government and the oligarchs, publicly challenging them for their corrupt practices. Finally, in November, 2003, when returning from an overseas business trip, was denied entry in Russia and was deported to the UK, from where he has been operating since.
This meant that Browder had to heavily rely on his Russian management in Moscow. His senior staff were all persecuted by the Russian authorities and his senior attorney, Sergei Magnitsky, was thrown into jail in November, 2008. Magnitsky was tortured and mistreated, without being formerly convicted of anything. Twelve months later he was found dead in his cell. The balance of the book follows Browder’s efforts to get western governments to recognize the corrupt and murderous practices of the Russian government. He was able to get the US Congress to pass the Global Magnitsky Act, which sanctions those government officials who commit human rights violations both in Russian and other nations. These sanctions include arrest if found on American soil and confiscation of any assets held in the US. Other western countries, including Canada, the UK and the EU have also passed similar legislation.
This book reads more like a novel than a piece of non-fiction and once started, is hard to put down. Bill Browder’s story is especially meaningful today, given the unrest between Russian and Ukraine. In fact, Browder was interviewed just last Wednesday on CNN regarding his sense of the situation and what’s going on in Putin’s mind. Given that Browder has been on the run from Mr. Putin for the past 15 years, he has some pretty strong thoughts on the subject.
Invocation (words to live by):
"If a child smiles, if an adult smiles, that is very important. If in our daily lives we can smile, if we can be peaceful and happy, not only we, but everyone will profit from it. If we really know how to live, what better way to start the day than with a smile? Our smile affirms our awareness and determination to live in peace and joy. the source of a true smile is an awakened mind." Thich Nhat Hanh, via Catherine Riordan.
