Enemy of the State

Bill Browder helped craft U.S. policy toward Russia. Was it for the better?

Bill Browder testifies during a Senate Judiciary Committee hearing in July 2017. (Drew Angerer/Getty Images)
Bill Browder testifies during a Senate Judiciary Committee hearing in July 2017. (Drew Angerer/Getty Images)

On June 6, 2016, Bill Browder, a London-based billionaire, sent an email to Kyle Parker, a congressional staffer, with the subject line “Veselnitskaya house.” The email, which contained no text, included only a picture of the side of a house, framed with pink flowers. The house was believed to belong to Natalia Veselnitskaya, a Russian lawyer who has been battling Browder for the past several years.

The correspondence, which was later revealed in the hack of a State Department official’s private email account (and which has not been publicly confirmed by the parties involved), was part of a series of informal exchanges among Russian experts who followed the battle between Browder and the Russian lawyer.

On June 6, 2016, Bill Browder, a London-based billionaire, sent an email to Kyle Parker, a congressional staffer, with the subject line “Veselnitskaya house.” The email, which contained no text, included only a picture of the side of a house, framed with pink flowers. The house was believed to belong to Natalia Veselnitskaya, a Russian lawyer who has been battling Browder for the past several years.

The correspondence, which was later revealed in the hack of a State Department official’s private email account (and which has not been publicly confirmed by the parties involved), was part of a series of informal exchanges among Russian experts who followed the battle between Browder and the Russian lawyer.

Veselnitskaya represented Denis Katsyv, the Russian owner of Prevezon Holdings, a real estate company accused of laundering proceeds in Manhattan real estate from a $230 million tax fraud allegedly committed after stealing Browder’s companies. The fraud, according to Browder, was uncovered by Sergei Magnitsky, a Russian lawyer and accountant who was arrested and who died in 2009 under suspicious circumstances in pretrial detention.

Browder has dedicated much of the past decade to trying to punish those he holds responsible for Magnitsky’s death, a crusade that had led to the passage in 2012 of the Magnitsky Act, which levies sanctions against a raft of Russian officials. Veselnitskaya, in turn, has spent much of the past several years lobbying against those sanctions and arguing that it was Browder, in fact, who had cheated the Russian government.

While the Magnitsky Act was widely known, the dispute between Browder and Veselnitskaya was the type of convoluted Russian business dealing that only a limited number of Americans, such as Parker, had followed in detail, at least in the summer and fall of 2016. In any case, Browder had de facto won: The Magnitsky Act was the law of the land, and attempts by Veselnitskaya to lobby U.S. politicians against Browder were going nowhere.

Three days after Browder sent Parker the email, Veselnitskaya finally got a break. She attended a meeting at Trump Tower in New York with then-presidential candidate Donald Trump’s son Donald Trump Jr., then-campaign chairman Paul Manafort, and Trump’s son-in-law, Jared Kushner. Veselnitskaya thought she would finally able to make her pitch against Browder and the Magnitsky Act. Trump’s team, though, had something else on their minds.

The Trump Tower meeting, when it was revealed after the presidential election, transformed the Veselnitskaya-Browder dispute and turned them into central players in the investigation of Russian interference in the 2016 presidential election. Yet the obscure origins of that meeting have less to do with elections and more to do with a businessman’s determination to seek vengeance — a mission that has reshaped U.S.-Russian relations in the process.


Browder’s autobiography, laid out in detail in his book, Red Notice, and repeated often in interviews, is one of rebellion. He came from a family of communists, and his grandfather was at one point the head of the Communist Party USA. And so, at Stanford Business School in 1989, he decided he was “going to try to become the biggest capitalist in Eastern Europe.”

Seven years later, he went to Moscow and started Hermitage Capital Management, an investment fund and asset management company focused on Russian markets. The chaotic Boris Yeltsin years — when undervalued Russian companies were being sold off to oligarchs — proved a boon for Browder. In the 1990s, Hermitage Capital invested in Russian companies, including Gazprom, and emerged as the top foreign investment firm in Russia.

In 2000, Vladimir Putin became president, and for the first three years Browder, by his own account, supported Putin and his war on oligarchs. “I was really enthusiastic about that,” Browder said in an interview with Foreign Policy.

Browder publicly and frequently defended Putin in those early years. Daniel Fried, who was serving as the senior director for Europe and Eurasia on the National Security Council under President George W. Bush, recalled meeting Browder in the 2002 to 2003 time frame. “He came to see me, and he thought I was wrong to be as worried as I was about Putin’s attempts to destroy the independent television media,” Fried said.

The situation began to change in 2003, when Mikhail Khodorkovsky, then thought to be the richest man in Russia, challenged Putin on camera on the issue of corruption. Later that year, Khodorkovsky was arrested for fraud. Putin and company seized the shares of Khodorkovsky’s company, Yukos, and sent him to prison.

In Browder’s later telling, Khodorkovsky’s arrest was a turning point. Browder said that after Khodorkovsky was sent to prison in Siberia, the Russian oligarchs went to Putin and asked what needed to be done so that they did not end up in a similar position. Putin’s answer was “50 percent,” Browder said.

“The oligarchs became his business partners,” Browder said.

The actual time frame of Browder’s transformation into an anti-Putin crusader is a bit murkier, however. Western reporters recall Browder defending Putin against corruption charges, and Browder praised the Russian strongman after the Khodorkovsky arrest, calling him “the ultimate arbiter among those jockeying for power in the Russian economy.

Yet Browder’s time as Putin’s champion ended in 2005. In November of that year, Browder was taken from the VIP section of the Sheremetyevo International Airport in Moscow and locked up in a detention center for 15 hours. He was deported to London the next day. “After I was expelled, I said to myself, ‘When the Russians turn on you, they don’t turn on you mildly,’” Browder said.

In Browder’s telling, in 2007, his office was raided and police officers stole the documents needed to own an investment company. His companies were fraudulently re-registered into the name of a man convicted of murder and let out of jail early by the police, presumably to put his name on these documents.” The men who had stolen the companies applied for a tax refund of $230 million — the amount Hermitage had paid in capital gains tax — on Dec. 23. It was approved the next day.

Magnitsky, who worked for the law firm Firestone Duncan and served as a sort of occasional outside counsel for Hermitage, looked into the matter. Magnitsky testified that he went to the authorities in June 2008 and said he had discovered evidence of theft of the Hermitage Fund companies. The Russian government, however, claimed Browder and Hermitage Capital, operating through a series of shell companies, including Saturn Investments, had illegally evaded Russian taxes, and that Magnitsky had helped them in those efforts.

In November, Magnitsky was detained on suspicion of aiding tax evasion.

With Magnitsky in prison and Hermitage effectively shut down, Browder took his case to Capitol Hill. In the summer of 2009, Browder testified at a congressional hearing overseen by Ben Cardin, a Democratic senator from Maryland. “Browder is a good storyteller,” a congressional source said. “He’s very, very PR savvy.”

A few months after that hearing, 37-year-old Magnitsky died in prison. He had developed pancreatitis and gallstones but was denied requested medical attention after the diagnosis. Browder said Magnitsky was beaten and murdered.

At the time Magnitsky died, he and Browder were hardly close. They had met in 2002, according to Browder, and it’s unclear if they ever crossed paths again in person. A congressional source said Browder “barely knew him,” a claim backed up by another Browder associate. “Why would a lowly tax accountant [and lawyer] be palling around with the largest foreign portfolio holder in Russia?” the congressional source asked.

The man who would later become Magnitsky’s biggest posthumous supporter was also unknown to his family at the time. Magnitsky’s widow, Natalia Magnitskaya, said her husband didn’t talk about his work at home. “I know that work meant a lot to him,” she wrote to FP. “I learned that Bill Browder’s company was a client of Sergei’s only after his arrest.”

Whatever their relationship, Browder marks Magnitsky’s death as another turning point.

“Something in me completely snapped,” Browder said. “From that moment on, it was impossible for me to sort of carry on doing business as usual when something so grave and something so terrible has happened.”

Critics of Browder, who gave up U.S. citizenship in 1998, see his sudden transformation into a human rights advocate as self-serving. Proponents say it demonstrates a selfless passion for a man he barely knew. Others see a bit of both.

“I would suggest that, 20 years ago, he probably never gave two minutes’ thought to the world of human rights,” said Mark Sabah, who worked with Browder at Hermitage from 2010 to 2016. “I think there was a bit of a shock, a realization — all the money, all the power of the world couldn’t help in this circumstance.”

In the months following Magnitsky’s death, Browder launched an aggressive campaign in Washington. In March 2010, Browder tried to get the State Department to deny visas to corrupt foreign officials. He said the State Department in the early days of the Barack Obama administration reset wasn’t keen to pursue those measures. (The State Department declined to comment on the record.)

Elizabeth Rosenberg, a former advisor on sanctions at the U.S. Treasury Department, said that the reluctance had less to do with the reset and more to do with the U.S. approach to sanctions after 9/11. There was, she said, “a very serious and active debate about the utility of making human rights-oriented sanctions designations” where the primary consequence is “a ‘messaging’ effect rather than a very material impact on the system that enables this threat.”

That same year, Browder went back to Capitol Hill, launching an aggressive campaign to convince lawmakers to pass new legislation targeting those he held responsible for Magnitsky’s death. He proved more adept at navigating Congress than many nongovernmental organizations that have lobbied for years on human rights issues. “I’m very blessed in that I can do this in a way almost nobody else can,” he told FP. “I can use my own resources and spend 100 percent of my time achieving our objectives, instead of trying to run an organization.”

In May 2011, the Magnitsky Act was introduced in the House by Rep. Jim McGovern, a Democrat from Massachusetts, and then in the Senate by Cardin. The proposed legislation targeted those officials thought to be responsible for the death of Magnitsky by banning them from entering the United States and using its banking system.

Its introduction ended up coinciding closely with parallel efforts to repeal the Jackson-Vanik amendment — an outdated Cold War-era piece of legislation aimed at encouraging the Soviet Union to allow its Jewish citizens out of the country. Eventually, 1.5 million Soviet Jews were allowed to leave the Soviet Union.

The Obama administration, Browder said, wanted to repeal Jackson-Vanik so that U.S. businesses could trade with Russia, a new World Trade Organization member, without tariffs. Browder claimed that for months, former Sen. John Kerry (D-Mass.) — then the chairman of the Senate Foreign Relations Committee — kept the Magnitsky Act off the committee’s agenda. It was only when key senators threatened to block the repeal of Jackson-Vanik that Kerry let the bill come to committee, Browder said.

Kerry himself contests Browder’s account. “Bill Browder is a passionate and effective advocate and we all give him huge credit for honoring Sergei Magnitsky’s life and work by making sure the bill bearing his name became law,” Kerry said in an email to FP. “But he just happens to be wrong or misinformed about my role or my reasons for proceeding as we did.”

The legislation moved quickly through his committee, according to Kerry. “At no point did I ‘stall’ the bill,” he wrote. Compared to other legislation at the time, “the Magnitsky Act became law pretty darn swiftly.”

The Magnitsky Act was signed into law in December 2012. Shortly thereafter, Russia responded by blocking U.S. citizens from adopting Russian children. The U.S. legislation and Russian retaliation set the stage for a meeting nearly four years later, in June 2016, that now lies at the heart of a modern political scandal.


On June 9, 2016, Natalia Veselnitskaya showed up at Trump Tower armed with an English-language version of her talking points on Browder and the Magnitsky Act. After the meeting was revealed by the New York Times in July 2017, however, Donald Trump Jr. claimed it was arranged to discuss adoption, a topic that was mentioned briefly in Veselnitskaya’s memo. Trump Jr.’s emails about the meeting, which he released only when they were about to be disclosed by the Times, showed that he was expecting to receive damaging information on Hillary Clinton, the Democratic nominee for president.

Veselnitskaya’s own account roughly confirms the confused nature of the meeting. Veselnitskaya, who doesn’t speak English, was never able to pass her document on to the Trump campaign. Jared Kushner left early, and Trump Jr., on realizing Veselnitskaya had no “dirt” on Clinton, also quickly lost interest.

“Mr. Browder and those American investors were a subject matter, the one and only subject matter, of my discussion with Donald Trump Jr.,” Veselnitskaya told FP.

It’s hard to say how effective Veselnitskaya’s attempts to lobby U.S. officials proved to be, but the Prevezon court case was suddenly settled in May 2017, with both the company and the U.S. government declaring victory. 

Yet the greatest irony of Veselnitskaya’s ill-fated meeting with the future president’s son and son-in-law is that it perhaps did more to ensure the future of the Magnitsky Act than anything Browder could have done on his own. Now, with multiple investigations into Russian interference in the 2016 election, including special counsel Robert Mueller’s probe of the Trump campaign and its alleged ties to Russia, Trump has almost no choice but to support sanctions. In August 2017, Trump signed into law more sanctions on Russia.

Those who believe in the Magnitsky Act say that Browder’s motives in the end are not important. “It was far and away not just Browder. The story still works if somehow Browder is a scoundrel,” the congressional source said. “It doesn’t turn on Browder.”

And, as with all sanctions policy, the critical question is not whether Browder’s motives are pure, but whether the Magnitsky Act and subsequent sanctions have actually furthered U.S. interests. Some — Rosenberg, for one — think that’s open for interpretation.

“I’d like to see more data on what people think the material impact is,” she said, adding, “We should be really careful not to confuse tools with response.”

Fried, who oversaw Magnitsky Act implementation, said the legislation has had an effect — at least perceptually. “A lot of Russian democracy activists believe personally going after people has more of an impact than economic sectoral sanctions. Because it demonstrates that Putin cannot protect people,” he said. “That he cannot intimidate the West.”

Fried admitted that sanctions are meant to change behavior, and that punishing the people responsible for Magnitsky’s persecution and death is “not what sanctions are generally designed to do.”

But these sanctions could serve as a deterrent to those who would otherwise go after whistleblowers and human rights activists. “I believe that does have a cumulative deterrent effect over time.”

Whether effective or not, the Magnitsky Act is now fully entrenched and expanding globally. Canada and Lithuania, in October and November 2017, became the latest countries to pass versions of the Magnitsky Act — and Latvia seems to be on track to do the same.

In the meantime, Browder’s global campaign, and his war of words with Putin, continues. Russia has worked to get Browder on Interpol’s wanted list several times, and in November 2017, Putin accused him of being a serial killer. The next month, the United States announced sanctions on 52 people under the Global Magnitsky Act, an extension of the original legislation pushed by Browder that allows the United States to penalize human rights abusers anywhere in the world.

The Russian government continues to insist that Browder has manipulated the U.S. legal system in order to cover up his own criminal activities. (The Russian Embassy in Washington, D.C., declined to comment on Browder other than to point to prior official statements.)

Regardless of whether Browder is a committed human rights activist or a spurned businessman seeking revenge, the Magnitsky Act enjoys bipartisan support in the United States and looks unlikely to be repealed anytime soon. In that sense, Browder’s crusade has proved effective, at least to him.

“Why is Putin so mad at me?” he asked FP rhetorically. “Because I’m the person who figured it out. And I came up with a policy to deal with it. Which is working.”

Emily Tamkin is the U.S. editor of the New Statesman and the author of The Influence of Soros, published July 2020. Twitter: @emilyctamkin

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