A gangster state: The truth about Putin’s Russia

Red Notice: How I Became Putin’s No. 1 Enemy

by Bill Browder

(Transworld Books, £13.99)

Peter Hegarty

In a shocking memoir, Bill Browder proves that criminals and kleptocrats have captured the Russian state.  He writes with authority: he spent years in Moscow, running Hermitage Capital, his enormously successful hedge-fund and he is on first-name terms with many in the world’s political and financial elites.

During the rash of privatisations in the 1990s, Browder was one of the first foreign financiers to realise that Russian shares were seriously undervalued, and that there was money to be made buying and selling them.

As a Moscow-based financier, he was in a good position to understand the causes and extent of the corruption that afflicts Russia: by concentrating wealth in the hands of a very few – the oligarchs – the privatisations created an elite that could do as it wished in a weakened state with poorly-funded law-enforcement agencies.

Russia’s huge natural resources encourage acquisitive greed: Browder instances the theft of an entire oil-field by officials of the gas giant Gazprom.

A moral man, he felt a duty to speak out against corruption. For a time he had an unlikely ally in Vladimir Putin, who tamed the oligarchs – and has made himself the richest man in the world, Browder contends – by demanding a percentage of their profits in return for not investigating them.

As Putin’s placemen began amassing their own wealth, Browder became a nuisance, and his ordeal began. After his deportation to London, officials seized his companies and used them to claim a fraudulent tax rebate of $230 million, the largest in Russian history. Faced with threats to their lives, the lawyers he hired to investigate the theft from public funds fled the country.

One who remained and carried on his work – Sergei Magnitsky, to whom the book is dedicated – was imprisoned and beaten to death. He left behind a wife and two small boys.

A UK-based Russian who had given Browder information about the Swiss bank account held by one of the fraudsters died mysteriously near his home in Surrey. Browder himself has received death threats.

The grimmest episode of the book concerns Putin’s reaction to the American imposition of sanctions on Russia in 2012. These partially resulted from Browder’s lobbying. Putin’s counter-sanctions took the form of preventing the foreign adoption of some 50,000 Russian orphans, many of them living in terrible conditions.

In 2013, a Russian judge sentenced Browder in absentia to nine years in jail for fraud and – bizarrely – also tried and convicted the dead Magnitsky. The Kremlin asked Interpol to issue a ‘red notice’ – a warrant for Browder’s arrest and extradition. The organisation refused, but Moscow continues to seek his extradition.

Browder argues for carefully-targeted sanctions, such as the exclusion of the top 1,000 Russian officials from Europe and the US. Regarding London, he told The Guardian: “Every Russian wants to come here. It’s their bolt hole, their escape valve The West has lots of leverage.”

Red Notice confirms that Russia has become a gangster state. Why has a marked man written a book which will only annoy a murderous regime? Browder is clear: “If I’m killed, you will know who did it.”