Moves in Browder case?

There are a couple of cases that have come to epitomize the unpredictability (to put it lightly) of investing in Russia – Mikhail Khodorkovsky is one, William Browder is another. With Russia on a renewed push to attract much needed foreign investment, there’s a realization inside the country that at least one of those cases must be dealt with.

Kommersant reports today that the case against William Browder might soon wrap up. Browder, a US-born UK citizen, was once Russia’s biggest portfolio investor and one of its biggest champions. Then his shareholder activism rubbed someone the wrong way and he was banned from the country. Then tax authorities opened cases against him. Then Browder accused various low-level officials in Russia of stealing his companies, issuing fraudulent tax refunds and ripping off the state to the tune of $230 million. Sergei Magnitsky, one of the lawyers he hired to investigate the claim, was promptly jailed, refused medical treatment in prison and allowed to die an excruciating death.

According to Kommersant, Browder has been removed from an international wanted list and his case transferred from the general prosecutor’s office to the interior ministry (police) department of Russia’s Central District (which includes Moscow). Sources told the paper the departmental transfer was an attempt to gain “objectivity” in the case. General Prosecutor Yury Chaika, recently reappointed, has come under fire both inside and outside Russia for politicization of cases. On Monday, Hermitage’s lawyers said they asked Russia’s investigative committee to open an investigation into Chaika.

The paper notes that the case will now be under the control of a department that until recently was headed by Valery Kozhokar, a former classmate of President Dmitry Medvedev’s (he was recently promoted). (So I guess they’re basically noting that if there are any positive steps in the Browder/Magnitsky cases, it’s not because Russia has suddenly developed rule of law but because Medvedev has decreed that, in this case, there be rule of law).

Medvedev, a former lawyer, has paid lots of rhetorical attention to the death of Browder’s lawyer Sergei Magnitsky. Yet nearly two years after Magnitsky’s death, the investigation is still ongoing. Some people involved have been fired – others have been promoted. (It’s a complicated story, but Browder’s fund, Hermitage, has made a series of videos explaining events here.)

Magnitsky’s death and Russia’s failure to investigate it has prompted US Senator Benjamin Cardin, backed by 15 other senators, to introduce a bill earlier this month that would apply a visa ban and asset freeze on those who violate human rights in Russia.