Episode 03: Bill Browder – CEO and co-founder of Hermitage Capital Management
AML Talk Show Hosted by Martin Woods
So, morning, everybody. I'm with Bill Browder, the CEO of Hermitage Capital, the head of the Global Magnitsky Justice Campaign, and the author of Red Notice, a self-made man, and correct me if I'm wrong, Bill, is there still an international arrest warrant out for you in your name?
Well, worse than that. So, Russia has convicted me twice in absentia and sentenced me to 18 years in prison in Russia if I was ever to go anywhere near Russia, and they're constantly going back to Interpol time and time again. They've gone eight times to Interpol to try to have me arrested. They've requested the British government for my extradition. There's new criminal cases opened up against me in Russia, and they're now going after me for murdering Sergei Magnitsky, my lawyer who I've been fighting for justice for the last 10 years.
So, morning, everybody. I’m with Bill Browder, the CEO of Hermitage Capital, the head of the Global Magnitsky Justice Campaign, and the author of Red Notice, a self-made man, and correct me if I’m wrong, Bill, is there still an international arrest warrant out for you in your name?
Well, worse than that. So, Russia has convicted me twice in absentia and sentenced me to 18 years in prison in Russia if I was ever to go anywhere near Russia, and they’re constantly going back to Interpol time and time again. They’ve gone eight times to Interpol to try to have me arrested. They’ve requested the British government for my extradition. There’s new criminal cases opened up against me in Russia, and they’re now going after me for murdering Sergei Magnitsky, my lawyer who I’ve been fighting for justice for the last 10 years.
So, you’re now in the frame for that murder. They killed him prison, brutally, and now are putting you in the frame for that murder.
Well, basically, they’re kind of losing their cool, so to speak. The Russian government has found themselves in a terrible situation where they’re being surrounded by sanctions all over the world that I’ve been able to get put in place in response to the Magnitsky murder, the murder of my lawyer, Sergei Magnitsky. So, they’re accusing me of espionage, of serial killing, of tax evasion, of fraud. They’re making movies about me. They’re doing everything because they’ve never been in a situation like this where all of a sudden the senior leaders in the Putin regime either have their assets frozen or will have their assets frozen at some point in the future.
We’ll come to that in a minute, because you bring so many points out there. For my listeners, and my listeners are primarily members of the global anti-money laundering community working in banks and other regulation businesses, and other interested parties in this space. Just for their sake, can you tell them who is Sergei Magnitsky, and what was his connection to you, and if you like, to Putin?
Sergei Magnitsky was the head of the tax practice at an American law firm called Firestone Duncan, and he was my lawyer in Russia, and I was running a large investment fund in the country, the largest investment fund in the country. After I uncovered a lot of corruption in the companies I invested in, I exposed it. In retaliation, I was expelled from the country. My offices were raided. My documents were seized, and my investment companies were fraudulently re-registered using the documents seized by the police.
Sergei Magnitsky was my lawyer in Russia. He was the smartest lawyer I knew in Russia, and I asked Sergei to try to figure out what this was all about and try to stop it. Sergei discovered that the purpose of stealing our companies was to try to steal all of our money, which they didn’t succeed in doing because I was able to get my money out of the country before they got to it. However, what Sergei did discover and what they did succeed in doing was that this group of corrupt officials was able to steal $230 million of taxes that my firm had paid to the Russian government from the Russian government.
So, Sergei figured that out. He ended up drafting criminal complaints that we filed with the Russian law enforcement. He also testified against the officials involved, and in retaliation for his testimony, he was arrested. He was tortured for 358 days in prison, and he was murdered on the night of November 16, 2009 at the age of 37. So, I’ve made it my life’s work since he was killed to go after the people that killed him and make sure they face justice.
I’ve read your book, Red Notice, which talks to this story. Is it right, they could only hold him for one year, 365 days, without charging him, and therefore, it was a deliberate attempt, well, a deliberate course of action to kill him before that year expired?
Yeah. So, the way it works is that they have to put you on trial within a year or release you, and they were torturing him in prison in the hopes that they could extract a false confession from him to say that he stole the money, and that he did it on my instruction. So, Sergei Magnitsky was a whistleblower. He discovered the theft of these criminals. They put him in jail, and they want him to retract his testimony against the police officers concerning their crime. Sergei Magnitsky just wasn’t going to do that. Most of the time, people will agree to almost anything to stop the torture, but for Sergei, the idea of perjuring himself and bearing false witness was more upsetting than the physical pain that he was being subjected to, and he refused to do that.
So, they were getting down to the deadline, so he was… 365 days was the deadline that they’d have to either release him or put him on trial. He wasn’t going to back down, and so they were faced with a terrible dilemma, which is that they’d have this highly-credible lawyer working for an American law firm on trial. It’s describing the entire apparatus of a state-sponsored corruption scheme in which they benefited to the tune of $230 million, or they could drop the charges, but he had already put up all the allegations onto the… or they could kill him. That’s it.
They meant to silence him, right?
So, he was in jail for 358 days, and on the 358th night, after being sick for a very long time, because he was very ill and they refused him medical treatment, he had gone into critical condition that night, and instead of putting him in the emergency room, they put him in an isolation cell. He was chained to a bed, and eight riot guards with rubber batons beat him until he died.
It’s a horrendous, horrible story. Actually, it’s 10 years since his death, and in that time, you’ve fought for justice for him all over the world, and you were successful in America with the Justice for Sergei Magnitsky Bill. You have had some success in the European Union, but I see you’re tweeting this morning and last night. There’s a change in the European Commissioner, and you’re pushing again for this European-wide Justice for Sergei Magnitsky bill. Right?
So, after Sergei was killed, we first tried getting justice in Russia, and there was absolutely no chance of that. Vladimir Putin personally got involved and circled the wagons. He exonerated everybody who played a role in Sergei’s murder. He gave promotions and state honors to some of the people that were the most complicit. So, we said, “If we can’t get justice inside of Russia, we should get justice outside of Russia.” So, then the question is, how do you get justice outside of Russia? The answer is that all these people who were involved in his murder killed him for money. They killed him for $230 million. That was the proceeds of their crime.
So, we said to ourselves, “Okay. Those people don’t keep that money in Russia. They keep that money in the West. They keep it in America and London and Geneva. They send their wives to Miami and their girlfriends to Milan on shopping trips, and their children to boarding school in the UK and Switzerland.” So, I came up with this idea, which is let’s freeze their assets, and let’s ban their visas. That’s not true justice, but it’s a lot better than the total impunity that they’re enjoying.
So, I went to Washington, and I suggested… I told the story of Sergei’s torture and murder and whistle blowing to Senator John McCain, late Senator John McCain of Arizona, and Senator Ben Cardin, Republican and Democrat, and I said, “Can you ban the visas and freeze the assets of the people who killed Sergei?” That became known as the Magnitsky Act. The Magnitsky Act passed the Senate, 92 to four, in November of 2012. It passed 89% of the House of Representatives, and it was signed into law by President Obama on December 14th, 2012. At the time, it was just for Russia, and Putin went crazy over this. He banned the adoption of Russian orphans by –
– I remember seeing that in the book, yeah –
– American families, and then he made it his single-largest foreign policy priority to have the Magnitsky Act repealed. He even sent a lawyer who was working for him, a woman named Natalia Veselnitskaya, to meet with Donald Trump Jr., Paul Manafort, and Jared Kushner before Donald Trump was elected, saying if he gets elected, could he repeal the Magnitsky Act?
Has the act been under threat under this president?
Well, it’s an act of Congress, and they need congressmen to repeal, and so far there’s no congressmen that would do that.
Anyway, all of my congressional allies said, “Wait a second. If Putin hates this so much, maybe we should go after other dictators.” So, they put in place the Global Magnitsky Act.
Which is why you’ve become… You tweeted about, again, President Muscat from Malta is now going to step down, connected to the murder of Daphne Caruana Galizia. You’ve become this global head or this global leader of a campaign against human rights abuses. Haven’t you?
So, my campaign for Justice for Sergei Magnitsky has grown deeper and has grown wider. People come to me with all sorts of terrible atrocities. I met these sons of Daphne Caruana Galizia about a year-and-a-half ago when they were just beginning their justice campaign, and they told me about what they were doing, and I said, “Well, you need to do this, this and this, and you need to get…” because I’ve been through it. Different than a human rights organisation, when you’ve been victimized, when you’ve been fighting for justice, you kind of know all the things that works in the system and things that don’t. But anyways, we now have… So, the US passed a Global Magnitsky Act, which goes after bad guys everywhere, and now we’ve got Canada that has a Magnitsky Act. The UK has a Magnitsky Act. Estonia, Latvia and Lithuanian have Magnitsky Acts.
A lot of really bad people have been sanctioned under the Magnitsky Act. The 17 Saudis who killed Jamal Khashoggi have all been sanctioned. We have generals in Myanmar who were involved in the Rohingya genocide that have been sanctioned. You’ve got Nicaraguan security officials who’ve been shooting unarmed demonstrators who’ve been sanctioned under the Global Magnitsky Act, and it’s become the tool of choice for victims because you don’t have to ask governments to cease relations. You’re never going to be able to get a government to stop doing business with China, but it doesn’t mean you can’t get the government to sanction six Chinese people who were involved in killing the Hong Kong demonstrators, or even worse, the unbelievable situation of the concentrations camps in Xinjiang.
Yeah. I get all that, and actually, interestingly, when Tony Blair first brought in the Proceeds of Crime Act in the UK in 2002, his idea was to take the proceeds out of the crime to stop the crime. What you’re doing is you are making it difficult if not impossible for these people to use the proceeds of their crime, and that’s hurting them, isn’t it?
Well, effectively, I would say that money is the root of all evil, and financial corruption and financial crimes and kleptocracy probably drives 95% of all human rights abuses now. It’s all about resources and assets and stealing and so on, and so forth. We’re in a globalized world where… Back in the days of the Khmer Rouge, they weren’t going on vacation to Saint-Tropez, but the Uzbek dictator that’s boiling his opponents alive is, and if they’re going on vacation to Saint-Tropez, you can say, “You can’t have Saint-Tropez anymore. Nor can you have Aspen and South Beach and Sardinia and Marbella.”
I know that these people, as well, when they’re boiling their opposition alive, they’re not accustomed to not getting their own way.
Because they think that they can use their diplomatic pressure or economic pressure or military threats to get people to back down, but all of a sudden you’ve got this new tool, which the United States, when they start sanctioning people, they’re saying to the Russians, “We can still talk about nuclear disarmament. We can talk about oil. We can talk about the Middle East, but by the way, those six people who were involved in that thing, they’re not going to be able to travel here anymore, and their money be frozen.” You can walk and chew gum at the same time.
Many of these people… I mean, was it you that said you believe that Putin’s the richest man in the world, and the oligarchs who hold assets and have substantial wealth do so because Putin allows them to do so, and they give Putin a lot of their own wealth?
Well, that’s the thing, is that Putin can’t have any of his own money. So, yes, Putin is the richest man in the world. I believe he’s worth $200 billion, and most importantly, he doesn’t hold the money in his own name. He holds the money in the name of oligarch trustees, because if he had the money in his own name, then somebody would be able to say, “This bank statement shows you’re crooked, and I’m going to show it to the world unless you give me this, this or this, or you do this for me.”
So, some of these oligarchs who own major commodity companies, they do so for and on behalf of Vladimir Putin and perhaps themselves?
Yeah. So, I guess it’s 50/50. Okay?
But that’s the thing, is that when you start sanctioning oligarchs, you’re sanctioning Putin.
Yeah, but you did this. You caused this, right? Actually, right now I have so many questions for you, and towards the end I thought about Maria, sorry, Skripal. I thought about Alexander Litvinenko, and he seems to have no boundaries in his endeavors to actually take out his opponents. You must have genuine concerns for your own welfare.
Well, they’ve threatened me with death. They’ve threatened me with illegal rendition. They’ve tried using Interpol eight times to have me arrested. They’ve sued me all over the world. So, yes, I’m a high-value target. I can’t travel to most countries in the world. I can’t even travel over most countries in the world because the Russians would literally bring a plane down.
Well, again. They’d do it again, right?
We’ve come to number one in my questions. MH17, where are you with the potential of a Magnitsky Act connected to MH17 in Australia?
Well, Australia is a very ripe country right now for the Magnitsky Act. So, from a whole bunch of different standpoints, first of all, it’s not just about Russia. I mean, China is all over the place. The kleptocracy of China is all over the place in Australia. So, there’s a strong need for it, and what I’ve found is that we have… There’s a sort of grouping of countries called the Five Eyes, which is an intelligence grouping, and those countries are the United States, Canada, the UK, Australia, and New Zealand. The intelligence services all sort of trust each other enough to share information and work together.
So, right now we have three of the Five Eyes, United States, Canada and the UK, that have a Magnitsky Act, but oddly, Australia and New Zealand don’t. So, I’ve been working with Australian lawmakers, and we have a proposed Australian Magnitsky Act, which was in play in the last Parliament, and then the Parliament ended, and all legislation ended. So, I now have some new MPs that are going to run with this hard, and I think that we’re probably 12 months away from having an Australian Magnitsky Act.
To that, okay, let’s talk about how it all interplays with banking and finance. So, Sergei identified a $230 million fraud-
… that was almost a tax rebate against taxes that companies legitimately paid, and this was money that’d been stolen from his country. He blew the whistle, and the money is now in different parts of the world.
Some of it has come to Scandinavia, I think. So, what are your views and what happened in what I’m going to call Scandal-navia?
So, the situation is this. As I said, the guys who steal the money don’t feel comfortable keeping it in Russia, because if they keep it in Russia, as easy as they stole it, it could be stolen from them, so they want to get the money outside of Russia. If you’re a Russian criminal, you can’t just wire money from VTB in Moscow to NatWest in London to buy a house, because NatWest will say, “What’s the source of those funds?” et cetera, et cetera, not because NatWest is particularly great, but money coming from Russia, that’s too suspicious.
So, they have to launder the money. So, how do you launder the money? Well, what these people do, there’s a thing called layering where you would basically create a bunch of companies, you create a bunch of accounts, and you do it in a bunch of countries, and you make it so complicated that anyone who’s trying to find it after you’re done with that, it’s too hard of work. So, what that means is you’ve got to find a bunch of accounts in a bunch of countries that will take your money. What the Russians figured out was that after the end of the Soviet Union, even though the Baltic countries became part of Europe, they hadn’t really become part of Europe in their own heads as far as compliance and honesty, and so on, and so forth.
In the Soviet Union, was Riga not the fifth most important country in the Soviet Union at one point in time, so Riga and Latvia, and there was lots of strong Russian connections between the Baltics. Right?
So, you have Latvia, Estonia. All these places were part of the Soviet Union. They might’ve gotten into Europe, but they didn’t really go into Europe right away, sort of morally, ethically, and all that way. So, the Russians found dirty bankers in these countries to take the money. So, it’s one thing to be sending the money from VTB in Moscow to London, but it’s another thing if it’s coming from an EU country. Here’s where the story gets all twisted in all sorts of ways, is that at the same time as this was going on, you had a bunch of banks in Scandinavia that were operating in the world of banking, where the bank CEOs were saying, “We need to grow our earnings and make our banks more profitable for our shareholders.” These banks were kind of quaint banks as far as… We’re sitting here in London. We can look out in the city of London, and we can see all the major world powerful banks, and they have these little quaint banks in Scandinavia run by these guys who are not so clever.
Not so international, right? They were a bit domestic Scandinavian in their outlook, right?
Yeah. I mean, not so international, and the guys were not so clever, sort of provincial bankers. They wanted to be world-class, but they weren’t really. So, they’re saying, “Well, how do we expand our business?” They said, “Well, we have this great geographical advantage because we’re very close to these newly-formed EU countries that have these banks. So, why don’t we do this geographical expansion?” So, just about every Scandinavian bank then bought a bank in Latvia or Estonia or Lithuania.
So, they acquired these banks, and they’re having their annual meeting, saying, “Look how our business is growing. Look how clever we are. We can compete with Goldman Sachs and Merrill Lynch and Deutsche Bank, whatever.” So, they were feeling all proud of themselves, and they have these highly-profitable banks. The Estonian branch of Danske Bank had a 400% return on equity. I mean, in a bank, if you have a 15% return on equity, you’re walking on air. A 400% return on equity in their Estonian branch.
Let me pause you there because I’ve met senior people from Danske Bank since the scandal broke, and the thing that frustrates me is if I’m an investor in Danske Bank, should the board of directors of Danske Bank have a duty to try and replicate that incredible business model in other parts of their network? Do they not? If they were to look closely at that to replicate it, they would’ve discovered very early on this is money laundering and fraud.
I mean, of course they knew it was money laundering and fraud. I mean, you don’t have 400% return on equity in your branch and don’t have to say, “How do they do that?” Of course, they do. In fact, we know for a fact because it’s already been disclosed that there were whistleblowers and reports and everything, but these are not talented people running these banks who wanted to-
A member of that bank’s board of directors, a non-executive board of directors, is a former head of enforcement for the FCA and is a non-executive director of some of the big institutions in the city of London.
Yeah, but being a member of any law enforcement institution in London is not a credential for-
Sorry. It’s big banks in London. Yeah, all right, regulator.Very good. I understand.
Being a regular in London, they don’t… I mean, London, by the way, we can have a whole ‘nother podcast about how deficient London is.
I had the great pleasure of speaking with Gerald Ryle four weeks ago, and I work here, I live here, it’s where I have my living. This city launders more money than any other city in the world.
It’s shocking. It’s beyond belief, and this will be the next gigantic scandal, much bigger than Danske Bank when it all finally comes out, and the Danish bankers can finally feel calm that somebody is focusing on something worse than them.
So, the British banks are fed up and annoyed at Danske Bank for taking their money away from them, albeit the laundered money?
No, the money came to them finally, after… It came directly from Danske Bank to them.
Okay. So, they got their money in the end.
They got their money, and Danske was just in the process of laundering it and charging a lot of money for doing the laundering.
So move away from Danske Bank, because we met last year already, in this very room. I’m talking about Swedbank. Come on, tell me the story of Swedbank. Once upon a time at a bank…
Well, Swedbank is the same thing as Danske Bank, which is the same thing as Nordea Bank, which is the same thing as SEB Bank. There’s nothing to distinguish. These are all-
But Swedbank came to see you and said, “Hey, we did nothing wrong. We’re a good bank.” Right?
Yeah. At the table we’re sitting at right now, the CEO and their head of compliance came here after we had outed Danske Bank and after we had outed Nordea Bank, and they say, “Are we next?” We just hadn’t had time to do the analysis yet, and we said, “We don’t know, but if you are next, why don’t you look at yourself and self-report?” They said, “Well, we’ve looked at ourselves, and we’ve done nothing.” We said, “Okay. Well, then you’re fine.” Turned out that they weren’t so fine.
Far from it, and actually, again, we spoke about, and you’re probably tracking some of the civil litigation taking place in the United States where pension funds and class action suits are now being pursued against… Danske Bank’s an example, the former CEO of Danske Bank, the former chairman of Danske Bank, because in their annual reports, these two gentlemen signed off and said, “All’s well at Danske Bank. We’re doing great.” Therefore, pension funds made investment decisions on the back of that information. You said, you just said it now, they knew that was money laundering, and that’s the case against them. I mean, is that how we’re going to change the way bankers conduct themselves? Is civil litigation going to bring them to their knees?
No, I don’t think so. I think what will bring them to their knees is if people start going to jail. So, if-
You’ve tried that all over the place, and-
We’re not done.
… Bob Mazur, a friend of mine, you met Bob, he’s tried this. It’s not happening. So, when’s it going to happen?
We’re not done yet. The wheels of justice move very slowly, but it doesn’t mean that people are not going to go to jail. Having said that, and a lot of these crimes took place a long time ago, and a lot of these perpetrators can hide behind the statute of limitations-
In some countries.
… in some countries. In other countries, not. We just keep on following the evidence where it leads. We keep on filing new criminal complaints when we find the evidence, and then we hope to rely on brave and fearless prosecutors in places sometimes you’d never expect them to be.
And you found some of those people, you think?
Absolutely, and I would say we found more of the other type of prosecutor than the brave and fearless ones, but we have 16 money laundering investigations going on right now in 16 different countries, and in some of those countries there’s some really great people doing good work, and in some of the countries, they’re not. There are some countries like the UK where they refuse to open a criminal case.
I was about to say, who, what, where has been your biggest disappointment in your quest for justice?
The largest amount of money from the Magnitsky killing came to the UK, and we shared the information with the UK law enforcement, which was the same evidence-sourced information that we shared with 16 other law enforcement agencies that opened criminal cases, and the National Crime Agency wrote to us saying, “We don’t think a domestic investigation into money laundering in the UK is the best way forward.” The person who wrote that letter to me came to me a year later. He was in charge of the…
Financial Investigation Unit?
He was in charge of the money laundering investigation unit of the National Crime Agency, and he had left the National Crime Agency. He retired, and he came to me in shame, and he said, “I just want to tell you that I recommended that a case be opened into the money laundering that you provided us with information on, and I was told in no uncertain terms by a more senior official not to do it.”
So, that brings us squarely into the realm of UK politics. We have a general election coming up. You tweeted recently about a concerted Twitter campaign and Facebook campaign against you where the Russian government promoted a video that was against you. What anxiety do you have about Russian political influence in the upcoming elections here in the UK?
Well, it’s a complicated story because the Russians are happy either way. On one hand, if they get Boris Johnson, they get Brexit, and Brexit is one of Putin’s most sort of… It’s the best thing that could ever happen to him because one of his ultimate goals is to break up the European Union, and what better way to break up the European Union than to take out one of its strongest players? So, Brexit on one hand is a great thing for Putin. It’s an even bigger bonanza on the other hand if Jeremy Corbyn gets in because Jeremy Corbyn is anti-American, pro-Russian, pro-Putin.
So, Putin’s got a problem now. He doesn’t know which one to back.
It’s an embarrassment of riches for Putin right now.
So, he doesn’t even have to interfere in the British election.
Well, come back to that case the National Crime Agency didn’t take. Do you have anxieties that certain British institutions have been compromised by Russian money?
There’s no question. I mean, we’ve seen it, and I don’t even have to make the allegation. It’s written in the newspaper. Just as an example, Lord Gregory Barker, member of the House of Lords, he used to be in Moscow, by the way. Before he was a politician, he was sort of a concierge for Roman Abramovich and doing all his sort of PR work in Moscow. Anyways, he came back here, became an MP, became minister of energy, and then became a member of the House of Lords. Then as a member of House of Lords, he was put on the board of Oleg Deripaska’s company, Enplus.
Oleg Deripaska is a Russian oligarch, one of the closest oligarchs to Putin. The United States sanctioned Oleg Deripaska for his support of Putin as part of the sanctions connected to the hacking of the elections. So, Gregory Barker, as a member of the House of Lords, started actively campaigning in the United States to lift sanctions on Oleg Deripaska. So, he was an active lawmaker in the upper house of Parliament, in the House of Lords, and at the same time, he was lobbying the US government and US Congress to lift sanctions for Oleg Deripaska. He succeeded, and he got between four and five million dollars payment.
But it’s the same Oleg Deripaska who had the former Chancellor of the Exchequer on his boat and Peter Mandelson on his yacht, so
By the way, that same former Chancellor of the Exchequer is now the editor of-
Of Deripaska’s newspaper.
Not Deripaska’s newspaper, of Alexander Lebedev’s newspaper. Alexander Lebedev was a former KGB officer. I mean, all these guys are just mixing, partying with, mixing and being employed by, being paid by, and ultimately not coming down hard on Russians.
I thought about this some time ago. So, did the Russians get smart and stop trying to corrupt the spies and MI6 and go and corrupt the money instead? So, even if you look at the NRA in the United States and the influence in that space, they go and try and corrupt the money because that’s where the power is.
Well, the NRA story is really straightforward. They gave $25 million to the NRA, and the NRA gave a whole bunch of money to Trump. So, the answer is yes, and so I actually gave evidence to the Intelligence and Security Committee. They asked me the question, “How do we deal with Russian espionage in the UK?” I said, “You guys are asking the wrong question. You’re thinking about spies going in as diplomats under diplomatic cover. I’m sure those guys are still at it, but it’s a much bigger thing for oligarchs to be enriched fraudulently by the Russian government, and then to take some of their enrichment, and then use that to invest in members of the British establishment.”
Influence, to buy influence and-
I named names in my evidence and the report on… This Russian influence report has been suppressed.
Is that the same report that Boris Johnson’s suppressing right now, before the election?
That is exactly the same report.
So, you think that in that report there is information that’s pretty damning against the British establishment for its connections to Russian corrupt money?
On a cross-party basis.
I name a labour peer. I name conservatives. I name everybody.
Now, I’ve not come across this. As you say that, you have a wry smile on your face, but you’re a tenacious man. You’re a fighter. You keep going, and you don’t… There’s irony written on your face, but nonetheless, you’re still going to keep going here, aren’t you? You’re still going to keep pursuing for justice.
Well, you know what? What I’ve learned is that the winners are the guys who stay in the game.
Right, and you’re going nowhere.
Yeah, and I’m going to stay in the game as long as I’m standing.
All right. Let’s come back to money laundering a little bit. The UK limited liability partnership and the Scottish limited partnership, what role did they play? What role do they continue to play in laundering this Russian money?
Well, this entire corporate structure business here in the UK where you set up companies and Scottish limited partnerships or British companies, or companies anywhere for that matter, a lot of them are set up out of London. Directors are created out of London. You have people that are the directors of 8,000 companies, and it’s just pure… The ones that are in London, so for example, in the Magnitsky case, there’s a whole bunch of UK companies that set up in Companies House, got accounts at banks in the foreign countries, in Estonia or wherever, laundered hundreds of millions of dollars, and they report zero balance at Companies House.
We report this to the authorities, and they just shrug. Nothing-
This is where we first connected this, but I saw it at Wachovia Bank, the UK LLP. It’s what we saw in the Magnitsky case. When you spoke to the National Crime Agency, did you put prima facie cases against some of those company formation agents, some of those accountants engaged in that practice?
Absolutely, and I should point out that we didn’t just go to the National Crime Agency. We went to the HMRC. We went to the Serious Fraud Office. We went to the Metropolitan Police, went to the City of London Police. We went to the Serious Organised Crime Agency before it became the National Crime Agency, and every one of them wrote a rejection letter saying, “I’m sorry. We can’t investigate your crime at this time.”
Is that because we’re too busy laundering money, and laundering money is a core piece of UK business?
I think so, yeah. There’s too much money sloshing around here, and nobody wants to stand up to that. Why do these law enforcement agencies not want to investigate? Maybe some of them are scared to investigate because they think they’ll lose their jobs. Maybe some of them are corrupted. Maybe some of them are just not very good. Who knows? But the system doesn’t work here.
So, of the 16, who’s your favourite regulator you’ve encountered?
My favourite regulator by far is the US Department of Justice. I mean, they’re fearless. Here and in certain other places, they won’t take up a case unless they’re sure they can win it, and a lot of times you don’t know you’re going to win a case until you’ve done an investigation.
Sure, but the volume of evidence that I was aware of and you could’ve produced to UK authorities, be it the FSA, be it a regulatory authority or law enforcement about the conduct of some of these accountants submitting the false accounts of Companies House, $300 million company, it was a slam dunk case. The paperwork convicted them didn’t it?
Yeah. I mean, I don’t know, but what I do know is that when I took the case to the US Department of Justice, boy, those guys are serious, and when they take up a case, they throw resources at it, and they make examples out of people. You don’t want to be messing with the US DOJ.
And the people who disappointed you most for the UK? Was it the FCA? Was it the National Crime Agency?
Oh, the UK is by far the worst, by far the worst, worse than Cyprus even.
Worse than Cyprus, and Cyprus is another obvious money laundering place, but we’ve had more cooperation out of Cyprus than we’ve had out of the UK.
That’s astounding. So, we have thousands of people in this city who are paid good salaries to fight money laundering, and yet the system, from what you’re saying, isn’t interested. The system is design to actually launder money.
It’s a complete failure, and everybody speaks with a nice accent here, and they’re all members of the same gentleman’s clubs, and it’s absolutely a disaster here.
Is it a disaster, or is it totally corrupt?
They’re either totally incompetent or totally corrupt, or a bit of both.
So, listen. You run the Hermitage Capital Fund now. You do have editorial rights in this, but what do you do right now? You used to be a very successful investor in Russia. You are a very successful businessman. What do you invest right now in?
I don’t invest. I devote all my time and energies to fighting for justice now.
So, you’re a total justice campaign, but you’re regulated, aren’t you, still?
I mean, I think we’re regulated, our entity is regulated, but we don’t do any more business.
Okay, okay. So, how do you make money for this justice campaign?
I don’t. I don’t. I just spend money.
Okay. So, for the good guys and girls who are listening right now, the committed, professional, dedicated financial crime professional, how can we help you, and what’s your message to them?
Well, I think that anybody who works inside an institution should just take it upon themselves not to allow this kind of stuff to happen. I mean, ultimately, it’s the private sector. It’s the people who are looking at suspicious accounts that have… We should just say no, we’re not going to do that anymore.
Any banks come to you and said, “Bill, we’d like to engage with you. We’d like you to come and present to our staff to tell them your story, to motivate them, to inspire them to do the right thing in our bank”?
Again, you got a wry smile upon your face, that I’m asking a rhetorical question. I knew the answer to that one before I asked it. I have a little set of questions I ask people, taboo. Like, curious they’re the three answers, I have taboo, like, or curious. So, let me ask you four questions in that space. What about taking the passports away from convicted money launderers?
That’s sort of an extension of the Magnitsky Act, which is-
Stopping offshore companies buying UK real estate?
Well, again, offshore companies buying UK real estate is not the problem. It’s like, who owns those offshore companies, and how do we know who owns them? So, you could disclose that, you could figure that out by just… I mean, maybe there’s somebody from America that wants to buy an apartment in London.
Sure. There’s legitimacy around it, but it’s been over-abused, hasn’t it? I mean, the UK invented the offshore world, and it’s-
I think all you have to do is disclose who’s buying it, and then people can figure out for themselves whether that’s a good person or a bad person.
But we accommodate it, don’t we? In financial services and in banking, we allow the customer to dictate the terms of engagement in the relationship. If you go fly on a plane, they ask you what’s in your bag, and you have to tell them, et cetera, et cetera.
You ask about where the money comes from, oh, that’s going to offend my client, because the money is the root of all evil here, isn’t it?
The commission, the bonus, the pay rise.
Yeah, yeah. It clouds everything. But I don’t think banning foreigners from buying property is… I mean, I came here as a foreigner. I’m now British. I’ve been here for 30 years, but banning… If a French person wants to buy a property, that’s not right, to say you can’t buy a property.
But I didn’t say a French person couldn’t, but it’s the offshore company that I have-
Yeah. I mean, fair enough. I mean, I don’t think that that’s a bad idea.
What about… We have an election coming up. You’re a wise man with much experience around the world, compulsory voting for all citizens?
I think it’s a great idea. Make everyone vote.
In all of your endeavours for justice for people around the world, what’s been your biggest disappointment?
I would say my biggest disappointment has been the British attitude towards money laundering. I think that this is something… I live here. This is supposed to be a bastion of decency and rule of law, and just below the surface it really isn’t.
But you have met some good… I mean, if I remember rightly, when you got your money out of Russia, it’s because good bankers protected you and helped you, didn’t they?
Well, when we got our money out of Russia because we saw the writing on the wall, and we were able to get our money out, I don’t think that… I mean, we worked with professionals in different banks who we have great fondness for, but it wasn’t… We got our money out, and they didn’t.
So, we’ve been talking now for about 50 minutes. Is there a message you’d like to leave to my listeners outside of what you just said a moment ago about doing the right thing? Is there something about what you’ve seen and what difference they can make, and the difference you make? You get out of bed in the morning to fight for justice, but you’re a one-man band supported by some great people in your office, who I’ve met in the past. What is it they can do when they get up in the morning and say, “I can make a difference today”?
Well, I think the main thing is that everyone needs to understand that money laundering is not a sort of victimless white-collar crime, that there’s a… Behind many of these crimes, there is blood. It’s blood money, and I would imagine that there’s a lot of people that just… It’s kind of hard for them to see the pain that it’s caused, but if they did, they probably would be a lot more vigilant about all this stuff, and I think everybody should understand, as with Sergei Magnitsky, there’s a heartbroken family. There’s a son without a father. There was pain and torture and violent murder, and when you understand that, it kind of changes the whole picture.
They need to connect the dots, join it together and say, “It’s not just a piece of money in front of me or a transaction. That transaction may have somebody’s blood on it.”
Bill Browder, all I can say is a massive thank you on two levels, one for this interview, and just for you being you and doing what you do. You actually are an inspiration to me personally, and to many of the people in the global anti-money laundering community. You’re a successful man, a man of wealth, but you dedicate your time and focus and attention to justice, primarily in this financial crime area and the blood dollars you’re seeking to root out and stop people benefiting from. So, Bill, thank you very much.